The Stingy News Weekly (07/12/2015)
New from StingyInvestor
Ride out market tempests
"diversified portfolios often sail through storms in reasonably good shape. Sure, it can be hard to watch them slip underwater for a few years. But they'll likely emerge and grow again. It's something to keep in mind when you're on the beach this summer and the storms come in." [$]
Extreme saving gone wrong
"At some point a fanatical devotion to saving is counter productive. After all, you can't take it with you. That's why extreme savers (with more than enough money in the bank) should have a spending goal rather than a saving goal."
O-score and distress risk
"Value investing always wins, even after controlling for distress. And value investing really wins among the most distressed firms. Oddly enough, expensive firms that are distressed earn 14.44% less than cheap firms that are distressed." [Value Investing]
Why momentum investing works
"Even if you aren't a practicing value investor, the value anomaly is easy to explain - buy at a discount and then wait. The momentum factor is based on buy high, sell higher or alternatively, cut your losses and let your winners run. Value investing is based on a long-term reversion to the mean. Momentum investing is based on that gap in time that exists before mean reversion occurs. Value is a long game, while momentum is usually seen in the short- to intermediate-term." [Momentum Investing]
Poorer than Greece
"Europe's great Greek crisis is often cast as the downtrodden Hellenic heroes versus the ubermasters of austerity in Berlin. In reality, however, it is smaller nations that have faced crisis themselves, swallowed the austerity medicine and lived to tell the tale who are most hostile to another bailout for Athens." [World]
Greece's culture of victimhood
"There are many issues at play in the Greek tragedy, but the fundamental thesis being tested is this: do states have a budget constraint? Is there a limit to how much a country can spend and borrow or - as the Syriza government and its academic apologists seem to suggest - is there not?" [World]
Refracking is the new fracking
"But in an industry that is desperately trying to cut expenses after oil fell below $60 a barrel from over $100 a year ago, the technique's low cost has great appeal. Because the first step in the fracking process is already done -- the drilling of the wellbore -- the outlay is just a fraction of the $8 million or so it costs to tap a new well." [Tech]
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