Monday, June 3, 2013

Article on Turkey

Great article on the consequences to the Turkish economy of the current political/civil unrest from the FT.
The current situation clearly shows that the people felt the unfair and disproportionate intervention of the police over the protesters in Taksim square, further aggravated by the apparent careless attitude of Erdogan.
I hope that Erdogan gets back to his senses and understands that this is not only an "internal" question but a issue that if escalated can seriously damage the progresses achieved by the Turkish economy in the last few years.
Link for the FT article: http://blogs.ft.com/beyond-brics/2013/06/03/guest-post-economic-implications-of-turkeys-occupygezi-movement/

Monday, May 20, 2013

Boomerang

I just finished reading Boomerang by Michael Lewis, I found it a very entertaining overview of the sovereign debt crisis.

Michael Lewis travels to Iceland, Ireland, Greece, Germany and California and speaks to people who played some role on the crisis (either in creating it or in solving it).

The key message of the book can be summed up in the following sentence (you can replace "Americans", by the citizens of any other crisis hit country and "Wall Street" by the corresponding financial centre): “Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They'd been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans."


Overall I found it an interesting read, the only thing missing in my view was a visit to Italy, Spain and Portugal.

Thursday, May 2, 2013

Two good books on Value Investing


"The Little Book That Still Beats the Market: Your Safe Haven in Good Times or Bad"

In this book Greenblatt explains his Magic Formula, a simple formula based on fundamental indicators (ROA and EV/EBIT) that leads to great investment results (according to the results presented in the book).

I really enjoyed reading this book, is an easy read, accessible to even the most novice of investors. I particularly liked the fact that all the formulas used are clearly specified in the appendix.





"Quantitative Value: A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors"

This book purpose is to identify a formula build upon the principles of Value Investing that will eliminate behavioural erros while at the same time generating very good returns.

The book runs trough several methods of identifying good (and bad companies) such as the F score or EV/EBIT ratio.

After arriving at the formula that provides the best results (according to the results provided in the book) the authors test it against other formulas such as the Magic Formula or a simple Index tracking strategy.

The book concludes with a checklist that investors should follow in order to achieve an optimal result.


Wednesday, March 28, 2012

Goldman and Copper River

Very Interesting article from The New York Times on how Goldman is, allegedly, behaving towards its clients.

"According to Mr. Cohodes’s deposition, Copper River often sold short shares that were hard to locate for borrowing purposes and therefore extremely costly. As such, Copper River paid Goldman handsomely to make sure its trades complied with securities laws, Mr. Cohodes testified. He was unhappy about these fees, he said, but assumed that they were the cost of doing business and that Goldman was charging the market rate for following the rules.
 ...

Nevertheless, the stocks climbed, and Goldman began requiring Copper River to unwind its short positions by buying back the shares. This upset Mr. Cohodes, he said, because the firm’s account was in compliance with its federal regulatory margin requirement. Moreover, the fund was not leveraged; it had not made its bets using borrowed money. Instead, he said, he suspected that Goldman had never borrowed the shares for Copper River’s short positions and was trying to close out the trades to eliminate the problematic naked short positions. Because Goldman had a duty to borrow the shares, it could have risked regulatory questions about compliance, under Mr. Cohodes’s account.
...
As the stocks continued climbing, Mr. Cohodes came to believe that Goldman was buying the stocks that he was short ahead of him, driving up their prices and making Copper River’s short-covering purchases even more costly, he testified. "

Interesting to read in conjunction with this one also from The New York Times

EU agrees mobile roaming price cuts

The EU is really a great thing! I can barely wait to be able to check my mail wherever I am without spending a fortune.

"The charge for using data services such as email and web browsing will be capped at 70 cents a megabyte, a fraction of the €2-€5 charged by most operators across the EU. The cap will fall to just 20 cents by 2014, all but eliminating a lucrative sideline for telecoms operators."

This is even better than I ever dreamed of:

"From 2014, mobile phone customers will be able to sign up with one company for domestic calls and another for their overseas trips, while retaining the same number."

 Via The Financial Times

Tuesday, March 20, 2012

Size of Internet Economy

The following chart shows the size of the Internet economy as percentage of the GDP for G20 countries in 2016.
Source: All things D





Sunday, March 18, 2012

Eurozone growth expectations for the year

I decided to give a go at creating a very, very simple macro model to sort Eurozone countries according to their growth potential for the year. The data used comes from the IMF and the map was made using Freemap.




As always this is not to be regarded as investment advice or anything remotely similar to investment advice.