27 Jan 2012 One Cure for Accounting Shenanigans
Auditors work for the same company for so long that instead of being independent, they end up co-dependent.

25 Jan 2012 Wells Fargo: The Bank That Works
Wells does what banks are supposed to do: take deposits  and then lend the money back out. Interest margin drives half its revenues. Fees from mortgages, investment accounts and credit cards generate the other half. “I couldn’t care less about league tables,” says Stumpf, throwing out a line ­custom-made for the Wells aphorism book. “I’m more interested in kitchen tables and conference room tables.”

22 Jan 2012 The High Price of Safety
Over the past three years, $172 billion has been withdrawn from U.S. equity mutual funds, while $628 billion has flowed into bond funds. Ten year U.S. treasuries yield less than 2%, and yields on six-month German sovereign debt are actually negative -- investors are willing to deliberately lose a small amount of money lending to Germany because they're so fearful of potentially losing even more.

22 Jan 2012 Falling prices fuel natural gas demand
Historically low natural gas prices, resulting from a glut in global reserves, have caused home heating bills to plummet to levels not seen in a decade. Experts anticipate the prices dropping further before they self-correct, with expectations that a long-term surplus could keep prices cheap for years.

20 Jan 2012 The bond/equity disconnect

17 Jan 2012 Flat-panel displays
REMEMBER the old joke about the dim tailor who takes a loss on each piece of clothing but hopes to make it up in volume? In the business of flat-panel screens for televisions, it is not a joke.

15 Jan 2012 Inside the Fed in 2006: A Coming Crisis, and Banter
The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

15 Jan 2012 The stock market chart your broker won’t show you
Start with that 9.2 per cent return, take out a 2 per cent fee for the management of your mutual funds, pay a quarter of the gains in tax, and then see inflation run at 4.1 per cent and you’re left with a return of about 1.3 per cent. That’s not much to live on despite the market’s apparently strong results before all these factors are taken into account.

14 Jan 2012 Why Warren Buffett Disdains The Private Equity Crowd
The Oracle of Omaha has never retreated from his long standing revulsion at  the Leveraged Buyout Crowd who tried to camouflage their profession by calling themselves  The Private Equity Crowd.    He and his curmudgeon partner Charlie Munger also show their disdain for Mitt Romney’s  wheeling and dealing at Bain & Co. by calling the Private Equity Crowd The  Two and Twenty Crowd for the obscene 2% management fees and 20% carried interest  The Private Equity Crowd demand for their services.( A recent report said Bain even charged  a 30% carried interest .

14 Jan 2012 Should Greece Devalue?
Defenders [of devaluation] think that devaluing would fool workers into a bout of “competitiveness,” as if people wouldn’t realize they were being paid in Monopoly money. If devaluing the currency made countries competitive, Zimbabwe would be the richest country on Earth. No Chicago voter would want the governor of Illinois to be able to devalue his way out of his state’s budget and economic troubles. Why do economists think Greek politicians are so much wiser?

27 Jan 2012 Prem Watsa boosts stake in RIM to 5.12%
Mr. Watsa, Fairfax, and other companies related to them bought 6,499,500 shares of RIM on Wednesday and an additional 7,550,700 on Thursday, according to filings with U.S. securities regulators.

26 Jan 2012 Whitney Tilson Does a Victory Dance Over Netflix, J.C. Penney
Mr. Tilson, who is long Netflix, says he won’t be trimming his stake after today’s sharp rally on better-than-expected quarterly results.

25 Jan 2012 Pzena Investment Management - Q4 2011 Commentary
The cumulative pain of the last five years is palpable, and has been compounded by the market decline and incessant volatility of the last six months. Add to that the proliferation of high-frequency trading, ETFs and other new market participants, and investors are questioning the very foundation of value investing: the notion that, over the long term, the value of a good, but undervalued, business will ultimately be recognized by the market. We are hearing echoes of 1999, the last time the death knell of value investing gained currency. Investors are asking whether there is a new paradigm, one in which the long term view is overwhelmed by short term traders reacting to macro events half way around the world. Will value investing ever work again?...

24 Jan 2012 Tweedy Browne - Q4 2011 Commentary
Our returns for the year were driven in large part by continued strong results in the traditionally more defensive components of our portfolios, i.e. consumer staples ( food, beverage, and tobacco stocks) and healthcare companies (pharmaceuticals). Top performing issues for the year included stocks such as Philip Morris International, Diageo, Unilever, Johnson & Johnson and Roche. The more cyclical components of the portfolio, i.e. (industrials, financials, oil & gas, and media stocks), which returned to strength in the fourth quarter, struggled for much of the year clouded by growing concerns that the global economy was slowing, and the possibility of a disorderly monetary crisis in the Eurozone. Our fourth quarter results were led by continued strength in consumer staples stocks such as Philip Morris, Diageo, Walmart and Unilever, and a significant uptick in some of our more cyclical holdings including Axel Springer, Total, Royal Dutch, and Union Pacific.

Portfolio activity was modest during the quarter with only a few new buys and complete sales. However, we did take advantage of the volatility to add to and trim a number of portfolio positions. In terms of meaningful new buys, we began building positions in ABB, the German engineering company, United Overseas Bank, the Singapore banking company, and SCOR, the French insurance company. In terms of sales, we sold our position in SK Telecom across all four of our Funds despite its attractive valuation metrics after they decided to go forward with what we felt was an ill-advised acquisition of a company in an entirely unrelated industry. We added to our position in Bangkok Bank, Novartis, G4S PLC, NGK Spark Plug, and Royal Dutch among others, and trimmed our positions in Fraser & Neave, Munich Re, Zurich Financial, and Linde.

All four of our Funds continue in large part to be positioned in larger, more globally diversified, underleveraged businesses that sell a plethora of products that are of growing interest to emerging middle classes around the globe. We continue to maintain significant positions in consumer staples and healthcare stocks, but also have substantial positions in more cyclical areas such as insurance, industrials, energy and media. While the spread in valuation between the more defensive and the more cyclical parts of the equity market has widened of late, the overall valuation for our portfolios remain quite reasonable to attractive with a forward 2012 weighted average price earnings ratio for our Funds’ equities, which range between 11.4X and 12.3X estimated earnings. Also, the equities in our four Funds had an average weighted dividend yield ranging from approximately 3.5% to 4.5%.

n terms of our outlook, we remain cautiously optimistic particularly when we look further out on the investment horizon. In the near term, we are all bobbing around on the macroeconomic pond as issues such as the Southern European debt crisis, accelerating deficits in the U.S., the Arab Spring, and the potential for a slowing China, just to name a few, continue to buffet global equity markets. If you are willing to look out over a reasonable period, say three to five years, we believe we will probably be in a better place, and the businesses we own on the whole should be bigger and stronger.

23 Jan 2012 Video: Yacktman Fund Named Top Mutual Fund
The Yacktman Fund has landed in the top 1% of its peer group. Donald Yacktman, Yacktman Asset Management president, offers insight on the fund's strategy.