The Stingy News Weekly (07/30/2017)
New from StingyInvestor
Stocks with room to grow
"The Safer Canadian Dogs provide a nice pack of large high-yield stocks for conservative investors. But some people are more adventurous and want to buy smaller stocks that have room to grow. That's why I went to the pound this week to look for some pups."
Robert Robotti Interview
"Robert Robotti on the role of active management in the modern world" [audio] [Value Investing]
Tie me down and make me rich
"Back in the 1980s, Twentieth Century Gifttrust, a fund specializing in small growth stocks with high potential returns and equally high risks, required investors to sign a legally binding contract that locked them into ownership for a minimum period - often 10 years and more. Investors loved the fund during the bull market of the 1980s and 1990s, often boasting about how satisfying it was to own a fund that would protect them from their own worst instincts to bail out every time there was a temporary downdraft in the Dow. Then came the bear market that began in 2000, in which Gifttrust generated huge losses. The same investors who had liked being bound to the fund suddenly hated it." [Behaviour]
Compound your face off
"Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat. Wes is the founder of Alpha Architect, a firm which manages quantitative equity strategies for clients using factors like value and momentum. He also advocates for a more concentrated, pure approach to factor investing, which listeners know is music to my ears." [audio] [Value Investing]
"We've seen this act before. If you didn't own the nifty 50 stocks in the early 1970s, you underperformed and, thus, money continued to go into them. If you were a growth stock manager in 1998-1999 and you were not buying 'net' stocks, you underperformed and were fired. More and more money went into fewer and fewer stocks. Today you have a similar case with the FANG stocks. More and more money is being deployed into a narrower and narrower area. In each case, this trend did not ended well." [Markets]
"As a reporter and editor covering Wall Street for 18 years, I studied the industry's aggressive approach toward the press: Financiers, and the multibillion-dollar companies they work for, are friendly and charming as long as you see things their way, and they do everything they can to win reporters over. But when reporters don't buy their line, the Wall Street answer is to get intransigent journalists removed from stories." [Media]
The math behind futility
"The underlying statistical issue is underappreciated. Even if there weren't fees and expenses, the odds are you'll underperform." [Markets]
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