Archive for December, 2016

Berkshire Hathaway Outperforms the S&P 500 in 2016

By Dr. David Kass. Originally published at ValueWalk.

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Warren Buffett

In 2016, Berkshire Hathaway class A shares rose 23.4% vs. a 9.8% increase in the S&P 500 (with dividends included.)  Over the 51 year period from 1965 – 2015, Berkshire’s compounded annual gain equaled 20.8% vs 9.7% for the S&P 500 (with dividends included.)  From 2012-2016, the most recent five year period, Berkshire’s compounded annual gain equaled 16.3% vs. 12.2% for the S&P 500.

Berkshire’s closing share price of $244,121 on December 30, 2016, represents a price to book value ratio of 1.5, based on a book value of $163,783 on September 30, 2016.  Its price to book value ratio has averaged 1.6 over the past 30 years.  Warren Buffett has previously stated that he would buy back shares when Berkshire’s price to book value is below 1.20.

Photo by GDS Infographics

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Tesla Sued Over Model X “Spontaneous Acceleration”

Courtesy of ZeroHedge. View original post here.

Is Tesla having the worst year ever?  Over the course of 2016, we’ve written frequently about Tesla’s many setbacks including several auto-pilot related crashes, hackers taking control of moving vehicles, egregious levels of cash burn and a very controversial merger with SolarCity.

Now, as 2016 draws to a close, Tesla once again finds itself in the spotlight as a Model X owner has filed a lawsuit alleging that his electric SUV suddenly accelerated while being parked, causing it to crash through the garage of his home and into his living room, injuring the driver and a passenger.

In the lawsuit filed Friday in California, Ji Chang Son said that one night in September, he was slowly pulling into his driveway as his garage door opened when the car suddenly sped forward.  Unfortunately for Tesla, the lawsuit seeks class action status noting at least seven other complaints from owners of similar incidents.  Per CBC News:

“The vehicle spontaneously began to accelerate at full power, jerking forward and crashing through the interior wall of the garage, destroying several wooden support beams in the wall and a steel sewer pipe, among other things, and coming to rest in plaintiffs’ living room,” the lawsuit said.

The lawsuit, filed in U.S. District Court in the Central District of California, seeks class-action status. It cites seven other complaints registered in a database compiled by the National Highway Traffic Safety Administration (NHTSA) dealing with sudden acceleration.


Not surprisingly, after conducting a “thorough investigation,” Tesla concluded that their cars are still extremely awesome and therefore any malfunction in operation was certainly due to user error.

Tesla said in a statement that it had “conducted a thorough investigation” of the claims made by Son.

“The evidence, including data from the car, conclusively shows that the crash was the result of Mr. Son pressing the accelerator pedal all the way to 100 per cent,” a Tesla spokesperson said in an emailed statement.

Tesla said it has various ways to protect against pedal misapplication, including using its autopilot sensors to distinguish between erroneous pedal application and normal cases.

Of course, the only question now is how many “plumes of smoke” have to be discovered before Tesla investors start to worry that there might actually be a fire?


Dividend Safety Scores: A Review of 2016

By Simply Safe Dividends. Originally published at ValueWalk.

One of the most important components of Simply Safe Dividends is our Dividend Safety Score, a metric that rates the safety of a company’s dividend payment by scrubbing through its most important financial metrics.

Dividend Safety Scores are available on our site for thousands of dividend-paying stocks and can help you avoid riskier investments and build a more resilient income stream. You can read more about how our scores are calculated and view their real-time track record by clicking here.

Dividend Safety Scores range from 0 to 100, and I usually suggest that conservative investors focus on stocks that score at least 60. Scores can be interpreted as follows:

Dividend Safety

As you know, I believe in complete transparency in all that I do. From reporting detailed performance information about our dividend portfolios each month to owning up to investment mistakes I make (and there will certainly be more), I will always do my best to tell it exactly how it is.

The only way to grow as an investor is to be open and honest with ourselves, tracking and analyzing our entire decision-making process and the results we achieve (good and bad) in order to continuously improve. If we give into human temptation to ignore our investment mistakes, we do ourselves a great disservice and are more likely to make the same errors over and over.

The same is true for our Dividend Safety Scores. Instead of blindly shoving thousands of scores out there on the website and hoping they have some meaning behind them, I track their performance in order to gain powerful insights that can be used to make our scores even smarter as time goes on. I know many of you rely on Dividend Safety Scores to help guide your investment decisions, and I take your trust in our metrics very seriously.

By logging real-time dividend cut announcements and recording the Dividend Safety Score we had for a company right before its dividend reduction was reported, we can view the effectiveness of our Dividend Safety Scores, learn more about why companies cut their dividends, and discover ways to further improve the risk assessment capabilities of our scores.

We began tracking all dividend cut announcements in April 2016 (see them all here). The chart below incorporates data recorded…
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A Golden Age for P&C Insurance Companies?

By SC Messina Capital. Originally published at ValueWalk.

ALso check out S&C Capital

Steve Eisman of The Big Short fame recently stated the stock market was entering a Golden Age for the financial sector, specifically banks. The argument goes, deregulation under Trump and rising interest rates, coupled with rising leverage and higher risk, will be extremely beneficial for banks in the near future.

We don’t disagree with Eisman, but we think it is more likely we are entering a Golden Age for Property & Casualty (P&C) insurance stocks. Whereas deregulation and rising leverage seem to be required steps in Eisman’s thesis for the gilded age for banking stocks to play out, P&C insurance companies can remain at their existing leverage ratios and insurance regulation can remain status quo – the mere rise in interest rates from the zero bound alone has the potential to catapult ROEs in the P&C sector into a gilded era.

As a fund, S&C Messina Capital is happy with the status quo as successful underwriting has been generating healthy ROEs for our portfolio companies, but an increase in interest rates would boost the returns of the portfolio even further; the portfolio would also experience multiple expansion.

With interest rates finally rising from the zero bound, we are entering a Golden Age for P&C insurance companies. As long as rates continue to rise, we shall see the earnings power of P&C carriers continue to rise as well, all else being equal. There is no telling how long this gilded age for P&C insurance carriers will last.

Figure 1. Interest rates have bottomed out.

The relationship between an increased ROE & share price performance

Share prices of P&C insurance carriers tend to track their long-term ROEs. For instance, a carrier earning an annual ROE of 10% is likely to see its share price grow 10% per year through various insurance and economic cycles.

Figure 2. Share prices performance follows growth in underlying book value

Figure 2. Share prices performance follows growth in underlying book value

Why does earnings power increase?

To ask simply, why do rising rates benefit the earnings power of P&C insurance carriers? This is because most of their assets are invested in fixed

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Warren Buffett On The David Rubenstein Show

By VW Staff. Originally published at ValueWalk.

In this interview which aired on Bloomberg, Warren Buffett discusses topics ranging from his value investing techniques, his purchase of the Washington Post, playing Bridge, and how he analyses stocks and businesses. He also gives some insights into what he values most in life (time, not money). Talking about his beginnings as a value investor, Warren Buffett discusses how he was influenced by David Dodd.

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Warren Buffett

Warren Buffett On The David Rubenstein Show

Warren Buffett

The post Warren Buffett On The David Rubenstein Show appeared first on ValueWalk.

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Narrative Smashed By Stats – “Most Americans” Did Not Vote For Hillary Clinton

Courtesy of ZeroHedge. View original post here.

Submitted by Salil Mehta via Statistical Ideas blog,

Happy New Year!  As we wrap up another successful year of the statistics blog (now with >50k followers), we would be remiss not to recognize some nice friends who are still feeling disappointed over the outcome of the recent U.S. election.  It is worth exploring a little more about the election results, based on the most updated voting records.  Particularly as the Democrats have pivoted the tête-à-tête from recount and FBI director Comey, to popular vote and Russian president Putin. 

What does it mean to now imply that “most Americans” voted for Democratic ideals, given the results (looked at through the prism of a popular vote tabulation) showed Hillary Clinton won by only a couple percent? 

It turns out that this sort of conclusion is false, and instead it leads to one party presuming to hold a mighty moral high-ground from their ¼ voting share? 

From a peak in 2008, now through 2016, those not caring to vote (in white below) continuously rose to 45% (from 43%).  This is a higher voter apathy than in virtually all other advanced countries.  And frankly, it is the largest American segment of 114m (up from 99m).  Last-minute undecideds (including me) rose.

Additionally, the voting share for the popular vote “winner” (in blue below) fell to 48% (from 53%), or as a portion of the entire eligible population (as opposed to as a portion of voters) it fell to 26% (from 30%).  So on net, even as the population grew, a small fraction voted (and within that an even smaller fraction voted for the popular vote “winner”).  This results in Hillary Clinton not epitomizing the views of “most Americans” even if she “won the popular vote”, but rather supported by only 66 million Americans (down from 70 million who voted for Barack Obama in 2008).

I’m with her?  Observe their share of the pie, below!  Democrats have simply seen a continuously dwindling moral-standing to speak for all Americans, even as the population has grown in the past 8 years.

So now back to my friends who are still feeling sour over the Presidential election and looking for relief.  I feel a particular sense of responsibility since my polling probability research was read by millions and continuously solicited/shared by one party, and

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Euronomics Decomposing, Raise a Glass of Cheer!

Courtesy of ZeroHedge. View original post here.

This article by David Haggith was first published on The Great Recession Blog: 

By ECB - European Central Bank ( [CC BY 2.0 (], via Wikimedia Commons

Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi. 

Keeping up the tradition of central bankers looking out for other bankers, Mario Draghi, chief of the European Central Bank “agreed to lower the minimum capital requirements for Deutsche Bank on Tuesday, ‘giving the lender more leeway to structure bonus payments and dividends.’” (Zero Hedge).

Thank God for that, huh? The needs of the stockholders and top execs have been taken care of before one of the world’s oldest megabanks falls on everyone else. While Deutsche Bank’s stocks sit at all-time lows after it has been required to pay $8 billion in fines, at least the golden parachutes are in top condition.

Italy surrenders to Germany

Meanwhile, the world’s oldest bank in Italy got nationalized for Christmas so that the losses of capitalists — many of whom exist outside of Italy — could all be socialized to the people of Italy. However, when the People’s Republic of Italy became the new owner of the bank, they found out the hole in the bank’s core was bigger than they thought. (Surprise.)

The ECB now estimates the hole to be 8.8 billion euros, rather than the 5 billion of additional capital they formerly believed it needed. That’s a 75% increase in the bank’s capital shortfall that took place from November through December. What a sleigh ride!

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Asshat of the Year Award: Doug Kass

Courtesy of ZeroHedge. View original post here.

It was a year replete with Asshats, men and women making complete fools of themselves — as mankind tends to do on a continuous basis. But, just like in the book Animal Farm, some fools are more equal than others.


Enter Doug Kass.

During the height of Hillary Clinton’s campaign, buoyed by a biased media and rigged polls, Mr. Kass took time out from his day to venture on over to have a chat with the strange man at Bloomberg, who is seemingly obsessed with bow-ties and what college professors are up to, Tom Keene. During his interview, accompanied by an analyst from Citi, Kass predicted, quite effervescently and with ample degrees of energy, that Donald Trump would, in fact, DROP OUT of the race for President of the United States.

Both him and the Citi analyst were practically orgasmic over the specter of such a humiliating occurrence — which would, of course, equate to the ascension of the first female president of the United States, Hillary Clinton.


As the campaign carried on, I kept tabs on Mr. Kass to make sure he knew that he owned that video and would one day pay for it.

.@DougKass Wondering if you still believe Trump will drop out of the race? Thanks in advance.

— The_Real_Fly (@The_Real_Fly) September 19, 2016

Today is that day.

Congratulations Mr. Douglass Kass for winning 2016′s Asshat of the Year Award. You certainly earned the distinction.

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Pentagon Admits US Airstrike On Hospital “May Have Killed Civilians”

Courtesy of ZeroHedge. View original post here.

Submitted by Jason Ditz via,

Adding to concerns about the civilian toll of the US air war against ISIS targets, the Pentagon yesterday admitted that they carried out an airstrike against the parking lot of a Mosul hospital, conceding that they “may have killed civilians” in the attack.

The Pentagon’s Combined Joint Strike Force said in a statement that they were after a van they suspected of carrying ISIS fighters, and they blew it up in the parking lot of what “was later determined to be a hospital.” The US has previously insisted all hospital sites in Mosul were well known and that they were taking extreme care not to hit civilians.

Yet this is the second time this month the US-led coalition has bombed a hospital’s property, with a previous attack deliberately targeting the city’s main hospital complex at the behest of the Iraqi government. The Pentagon insisted at the time they “did not have any reason to believe” they killed any civilians, but conceded they had no idea if there were even patients at the hospital.

The Pentagon has made a habit of dramatically underreporting civilian casualties in the ISIS war, with some reports suggesting that the actual toll of civilians killed by the US may be as many as ten times the “official” figures.

This is the result of the Pentagon largely not investigating allegations of large figures they deem “not credible,” and revising downward the numbers slain in already well-documented incidents by the time they get around to putting them in the reports.

Ben Graham Centre’s 2017 Value Investing Conference

By VW Staff. Originally published at ValueWalk.

Ben Graham Centre’s 2017 Value Investing Conference

April 19, 2017

Toronto, Ontario

The Ben Graham Centre for Value Investing will hold its 2017 Value Investing Conference at The Fairmont Royal York in downtown Toronto.

Ben Graham Centre

Ben Graham Centre for Value Investing

The Ben Graham Centre for Value Investing at the Ivey Business School at Western University will hold a conference on Value Investing on April 19, 2017 at the Fairmont Royal York in downtown Toronto.

The mission of the conference is to promote the tenets of value investing as pioneered by Benjamin Graham, to expose conference participants to the various value investing methods used by practitioners, and to encourage and support academic research and study in the area of value investing.

The conference will provide a forum to explain, discuss and debate the principles, practices and various applications of value investing from a global context. Corporate executives offered an industry perspective of how to look for value creating opportunities and how to create value.

“George runs a Value Investing Conference the day before our meeting…I highly recommend it – he has some outstanding speakers and it is well worth your time to attend.”

– Prem Watsa

Chairman and CEO, Fairfax Financial Holdings Ltd

from the 2016 Fairfax Annual Report

Conference Organizer and Chair

George Athanassakos, Director, Ben Graham Chair in Value Investing, Ivey Business School

Luncheon Keynote Speaker

Will Danoff, Vice-president and Portfolio Manager, Fidelity Investments’ Contrafund, Boston, Massachusetts

Topic: “A Growth Manager’s Perspective on Value Investing”

Value Investor Session

Michael Van Biema, Founder & Managing Principal, Van Biema Value Partners LLC, New York, NY.

Thomas A. Russo, Partner, Gardner Russo & Gardner, Lancaster, Pennsylvania

Topic: Global Value Equity Investing

Mohnish Pabrai, Managing Partner, Pabrai Investment Funds, Irvine, California

John Phelan, Co-Managing Partner and Co-Founder, MSD Capital, L.P.

Andrew Brenton, Chief Executive Officer, Turtle Creek Asset Management, Toronto, ON

Corporate Executive Session



For more details and to register:

The post Ben Graham Centre’s 2017 Value Investing Conference appeared first on ValueWalk.

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Phil's Favorites

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice


Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

Three decades of behavioural experiments show consumers given too many choices are more likely to make a bad or no choice.

Courtesy of Robert Slonim, University of Sydney

Do you think you are paying more than you should for energy, banking, insurance, internet and phone services? You are not alone, and you are probably right.

Companies offer a growing number of deals that supposedly enable you to choose what is best for you. Every basic economics textbook tells us greater choice should deliver cheaper prices. But in reality this isn’t necessarily the case. ...

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Insider Scoop

Baird: Broadcom Lowers Full-Year Revenue Outlook On High Channel Inventory

Courtesy of Benzinga.

Broadcom Inc (NASDAQ: AVGO) lowered its full-year revenue guidance, dispelling hopes of a recovery in the back half of the year, according to Baird.

The Analyst

Tristan Gerra maintained an Outperform rating on Broadcom and reduced the price target from $300 to $280.

The Thesis

Earlier ... more from Insider

Zero Hedge

Hong Kong Rocked By Biggest March Yet After Extradition Bill Pulled; Millions Demand Lam Resign

Courtesy of ZeroHedge. View original post here.

Despite City Executive Carrie Lam's major concession to the protest movement - that is, the (not really) 'indefinite' suspension of the extradition bill that catalyzed the protests - a planned protest march went ahead as scheduled on Sunday, marking the second consecutive Sunday of street protests in Hong Kong.


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Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

Reminder: Pharmboy is available to chat with Members, comments are found below each post.


Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...

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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble.

Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

This chart looks at the Gold Bugs Index (HUI) on a weekly basis over a couple of decades. The index has spent the majority of the past 20-year inside of rising channel (1).

The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

Joe Friday Just The Fa...

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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

More from RTT Tv

Chart in video

Click for popup. Clear your browser cache if image is not showing.

If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.


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More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...

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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism


The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>