Readings By Vthibault: janvier 2016

jeudi 28 janvier 2016

ackman on index funds

http://assets.pershingsquareholdings.com/2014/09/Pershing-Square-2015-Annual-Letter-PSH-January-26-2016.pdfbill ackman on index fund
The problem of asset flows without regard to valuation is compounded by the fact that the most popular indexes are market-cap weighted. This means that the larger the market cap of the company, the larger its representation in the index. In other words, as the stock price rises, its weighting in the index increases, and the index fund is required to buy more of the company. While value investors typically buy more as stock prices decline (assuming intrinsic value has also not declined), market-cap weighted index funds do the opposite. They are inherently momentum investors, forced to buy more as stock prices rise, magnifying the risk of overvaluation of the index components.

lundi 18 janvier 2016

why big companies keep failing

http://techcrunch.com/2016/01/18/why-big-companies-keep-failing-the-stack-fallacy/

vendredi 15 janvier 2016

howard mark memo : on the couch

https://www.oaktreecapital.com/docs/default-source/memos/on-the-couch.pdf

interesting facts
1)the effect of a slowdown in china is almost negligible to the us account for less then 1% of s&p 500 profit and export to china = less then 1% of gdp

2) the low oil price amount to the equivalent of a reduction in taxes of 100's of billions
fear of lower car sale due to higher interest when the cost to drive oil is going down are unwarranted

3) psychological contagion : last week most stock exchange we're down approximately 7% even if the global event should have totally different repercussion on them