Top value investing resources for 2014

The backyard economist team is always looking for investing insights and ideas from a wide variety of sources. Below is a list of some of my most used links for investing ideas and news. 

As always, if there are any other online sources, articles, discussion groups or Twitter accounts you find useful then please feel free to drop the details in the comments section at the bottom of the page.

Australian business news sources

• The Australian Financial Review (@FinancialReview) – This is daily required reading for any Australian investor. The recent price drop makes it more accessible to retail investors.
• Business Spectator (@BusinessSpec) – has become a valid alternative to The Australian Financial Review, plus it’s free. 
• The Sydney Morning Herald (@SMH) and The Age (@theage) – these broadsheets are becoming less relevant, but we still look at them every day.
• The Australian (@australian) – has become more relevant since its tie up with The Wall Street Journal.
• We also regularly turn to The Courier-Mail (@cmail_qld) and The West Australian (@thewest_com_au) for geographic and journalistic diversity.
• This part of the ASX website (@ASX) is useful for monitoring company announcements.
• Yahoo Finance (@YahooFinance) Australia is also useful for local news.
• The Business – We love this ABC staple, Ticky gets the big name guests and isn’t afraid to ask the tough questions.
• Inside Business – Close cousin to The Business, on Inside Business join Alan Kohler and panel of ‘experts’ to debate the week that was. (Archive only)
• Global Mail (@TheGlobalMail) – A new news outlet with some excellent long form journalism.
• MacroBusiness (@macro_business) – Excellent coverage of what’s driving the Aussie economy, plus great general coverage of the local business environment.

International news sources

• The Wall Street Journal (@WSJ) and Financial Times (@FinancialTimes) are wonderful international newspapers. Much of the good stuff is for subscribers only, but we’re fans of paying up for high quality content.
• Quartz (@qz) is a cracking new online business outlet from the team behind The Atlantic.
• The New York Times (@nytimes) also has impressive business reporting.
• We also read The Economist (@TheEconomist) and Slate (@Slate) for a different point of view.
• For following the ‘news flow’, we use Bloomberg (@BloombergNews), Yahoo Finance, Yahoo Finance UK (@YahooFinanceUK) and Google Finance (@GoogleFinSvcs).
• Traditional finance magazines like Fortune (@FortuneMagazine) and Forbes (@Forbes) are also great.

Prominent value investors

• Guru Focus (@gurufocus) is an aggregator site for information on respected value investors, as is Greenbackd (@Greenbackd).
• Berkshire Hathaway is the source for Warren Buffett’s wonderful annual letter to shareholders. We likewise never miss the annual letter to Leucadia shareholders.
• There are many fund manager websites worth visiting, but we’ve highlighted the following because of the excellent content they make available to all – GMO for the excellent research Jeremy Grantham provides, Kerr Neilson’s Platinum Asset Management, Frank Martin’sMartin Capital Management, Cooper Investors, Allan Gray, Bedlam Asset Management, Third Avenue and our own Intelligent Investor Funds Management (@IntInvFunds).
• The Heilbrunn Center for Graham & Dodd Investing at the Columbia Business School provides a useful list of value investing resources, plus publishes a free quarterly newsletter.
• The Ben Graham Centre for Value Investing at the IVEY School of Business, provides value investing research, an excellent collection of interviews with prominent investors and an extensive value investing reading list.

Investing newsletters (subscription services)

• Intelligent Investor (@value_investing) – Naturally, we recommend this newsletter for Australian stock research.
• Grant’s Interest Rate Observer (@GrantPub) is focused on interest rates and economic issues with a contrarian bent.
• Michael Lewitt’s The Credit Strategist (@credstrategist) generally looks at issues top-down, but is also contrarian.
• Value Investor Insight (@VILetter) covers similar ground, but is published more regularly.
• The Graham and Doddsville newsletter from Columbia Business School is an excellent quarterly read, and is free.

Investing podcasts/vodcasts

• Of course, none of our analysts ever miss an episode of Intelligent Investor’s Stock Take or Doddsville podcasts (free).
• We like The Big Money, part of the Slate empire.
• Financial Times’ Martin Wolf also produces an interesting podcast. As does FT’s Alphaville.
• The Economist, unsurprisingly, also produces some good podcasts.
• Peter Schiff offers up some interesting reviews in a wide variety of formats, including a weekly podcast.
• Tune in to Boardroom Radio (@boardroomradio) or Open Briefing(@openbriefing) for a range of presentations/briefings from Australian companies.
• The Manual of Ideas is another great source for overseas ideas, often from prominent investors. Check out their youtube channel too.

Favourite Twitter accounts

Wondering who to ‘follow’ on Twitter? Here’s a few of our favourites.

• @WarrenBuffett – Sure he’s only sent out a few tweets, but how can you be a value investor and not follow Mr Buffett?
• @ConversationEDU – Academics often write stuffy, excessively complicated papers that no layman can understand. The Conversation seeks to change that, with shorter more ‘journalistic’ articles from our country’s brightest.   ‏
• @ABSStats – Wondering what’s happening in Australia? The ABS is a wonderful (free) source of stats about our country, plus the guys who run the twitter account are hilarious.
• @ValueIdeasLIVE – Value Conferences runs regular online value investing conferences. Their first few outings have gathered some of the best investors in the game. The online format means tickets are far cheaper than a regular conference.
• @John_Hempton – John runs Bronte Capital, where he specialises in accounting frauds, one of the sharpest minds in the game.
• @jasonzweigwsj – Jason Zweig is a columnist with the WSJ and is best known for his annotated version of value investing bible The Intelligent Investor.
• @TEDchris – Chris Anderson is Curator at TED an organisation that holds annual idea sharing conferences.
• @ValueInvesting_ – Garry Cole is a value investor based in NY, we love his feed for the regular and useful articles he shares.
• @HarvardBiz – Harvard Business Review shares the latest blog posts, management tips and stats.
• @danariely – Dan Ariely is Professor of Psychology and Behavioural Economics at Duke University. He also writes an interesting and entertaining blog here.
• @BusinessChannel – Sky Business News’ twitter feed.
• @DanielPink – Dan Pink is a US based author and public speaker. He’s written extensively on behavioural science and how incentives should be applied in the workplace.
• @mungerisms – Excellent quotes, facts and links on value investing.

We hope you find the list useful. Enjoy.

For extended analysis head to http://www.complexityandchaos.com

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For discounted gopro, tips on how to get the cheapest, product comparisons, and travel accessories head to http://www.buyacheapgopro.com 

Summary on Piketty’s tour de force

" experiment is nothing else than a mode of cooking the facts for the sake of exemplifying the law."

What Piketty had undertaken was exemplifying an already known old fact, now supported with huge data of evidence. The final solution advised by him is sensible governmental action. How could modern democracies that depend exclusively on capitalists for country 'development', undertake actions to tame the very capital?

A brilliant book review over here:

http://www.democracyjournal.org/32/the-inequality-puzzle.php?page=all

Trade in the backyard

The Russian Federation has traditionally been Ukraine's largest trading partner. The free market has been emerging but with it a drastic fall in the GDP in the first 10 years of its independence from the Soviet Union, then experienced rapid growth from 2000 until 2008. However Ukraine was greatly affected by the economic crisis of 2008 and as a result a 15.1% decrease in Ukraine's GDP took place over 2008 and 2009.

Ukraine is relatively rich in natural resources, particularly in mineral deposits. Although oil and natural gas reserves in the country are largely exhausted, it has other important energy sources, such as coal, hydroelectricity and nuclear fuel raw materials.

According to the Global Competitiveness Report 2012-2013 "the country’s most important challenge is the needed overhaul of its institutional framework, which cannot be relied on because it suffers from red tape, lack of transparency, and favoritism"

Although the majority of trade come from Russia, they are not keen to allow the Ukraine to slip too far towards european free trade. Russia has deep cultural and political ties with the Ukraine, and to allow unfettered free trade will Europe will see a drift into the West’s sphere of influence.

Russia joined the World Trade Organisation in 2012, but it is less interested in strengthening the multilateral trading system than in building its own regional trade block. Fyodor Lukyanov, editor of Russia in Global Affairs, a foreign-policy journal, notes that with America trying to conclude sweeping trade agreements with its neighbours in the Pacific Rim and with Europe, “the whole structure of world trade is changing towards a more fragmented system. That’s why Russia is trying to build something of its own.”

What Russia is truing to do, either through force or might is set up its own regional trade agreements (RTA). One of the more recent ones being gas with China. Arvind Subramanian of the Peterson Institute for International Economics calls the rise of ever larger RTAs an “existential threat” and gives warning that “multilateral trade as we have known it will progressively become history.”

The debate about whether RTAs help or hurt the multilateral trading system has gone on for decades. Supporters argued that wherever two countries entered into an RTA, they would create incentives for others to join or to negotiate their own RTA. Trade barriers around the world would fall, one by one, and political support for multilateral deals would increase. Detractors claimed that once inside an RTA, countries would discriminate against outsiders and lose interest in multilateral liberalisation, undermining the authority of the WTO. They would divert as much trade as they created and introduce big distortions.

With the balance of trade comes the balance of political power. Brazil, Russia, India and China (the BRICs) see themselves as countries still poor enough to need protection for their industries while the rich ones lower their own barriers, especially to agriculture. But the rich world increasingly views the BRICs as full-fledged economic competitors whose state capitalism is incompatible with a free and open global economy.

“For too long, much of the economic force and sacrifice in Geneva to produce global trade agreements has come at the expense of the US and EU,” says Ron Kirk, who was Mr Obama’s first trade negotiator. “We have been lectured over and over by our colleagues from the emerging markets that they have the economic heft and prestige to demand a seat at the table. And we agree.” But that, he says, means they too need to make sacrifices by opening up further to America and Europe.

Emerging markets often want protection not just from rich countries but from each other, particularly from China. The battle for the South China sea at the moment is a shining example of this. Roberto Giannetti da Fonseca, an official with FIESP, Brazil’s largest industrial association, ran a trading company in the 1980s that sold Brazilian manufactured products to China. He struggled to find anything worth buying from China, often settling for arts and crafts. “I could not imagine that 20 years later they’d be invading Brazil with hundreds of products and we’d be crying that we cannot compete.” His organisation is a vocal critic of China’s mercantilist practices and has urged the Brazilian government to negotiate free-trade agreements with North America and Europe.

The Trans-Pacific Partnership is a proposed expansion of the 2005 Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4), a trade agreement among Brunei, Chile, New Zealand, and Singapore. It seeks to manage trade, promote growth, and regionally integrate the economies of the Asia-Pacific region.The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement that is presently being negotiated between the European Union and the United States. According to the ECU it aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.

Trade liberalisation is now proceeding along two different tracks. One, preferred by America, goes “behind the border”, focusing on things such as harmonising safety, health and technical standards, currencies, national treatment of foreign investors, the protection of intellectual property, services such as telecommunications, and enforcement of labour and environmental protection. The other, preferred by China, concentrates on reducing tariffs—outside sensitive sectors.

In practice, this means America is most likely to strike deals with countries at a similar stage of economic development, such as the European Union and Japan, or with developing countries willing to meet rich-world standards in exchange for market access, such as Mexico and Chile. America’s comprehensive free-trade deal with South Korea is the model for the TPP.

China, by contrast, has pursued a variety of bilateral deals with its neighbours, mostly in the hope of persuading them “that it sought a peaceful rise as an emerging superpower”, says Chin Leng Lim, a trade-law expert at Hong Kong University. China’s free-trade agreements are numerous but shallow, often leaving out sensitive sectors and subjects. Its agreement with the Association of South-East Asian Nations, for example, allows signatories to classify 400-500 tariff categories as sensitive and thus eligible for slower tariff reduction.

Regional trade liberalisation is better than no liberalisation at all, yet it interferes with globalisation in several damaging ways. By excluding sensitive sectors or imposing onerous rules of origin, it complicates life for multinational companies whose supply chains cross multiple borders.

FTAs by status: Total Asia (cumulative), selected years (http://forumblog.org/2013/05/can-free-trade-agreements-support-factory-asia/) 

Trade pacts are frequently politically contentious since they may change economic customs and deepen interdependence with trade partners. Increasing efficiency through "free trade" is a common goal. For the most part, governments are supportive of further trade agreements.

There have been however some concerns expressed by the WTO. According to Pascal Lamy, Director-General of the WTO, the proliferation of RTA “...is breeding concern — concern about incoherence, confusion, exponential increase of costs for business, unpredictability and even unfairness in trade relations.” The position of the WTO is that while the typical trade agreements are useful to a degree, it is much more beneficial to focus on global agreements in the WTO framework such as the negotiations of the current Doha round.

The anti-globalization movement opposes such agreements almost by definition, but some groups normally allied within that movement, e.g. green parties, seek fair trade or safe trade provisions that moderate what they perceive to be the ill effects of globalization.

The Uruguay round in the 1990s is thought to have produced a gain of 0.5-1.3%. Even the TPP will boost participants’ output by only 0.5%, much the same as Doha would, reckons one study by Peter Petri of Brandeis University and Michael Plummer of Johns Hopkins.

In theory, a successful TPP or TTIP could become a magnet for other countries, eventually achieving multilateral trade liberalisation by default. In practice that seems unlikely. China’s and Russia’s interventionism and attachment to state capitalism are difficult to reconcile with the “behind-the-border” liberalisation America and Europe are seeking. And having had no say in designing the pacts, China and Russia may be reluctant to join later.

The decline of multilateralism may not make much difference to big countries able to negotiate regional agreements on their own terms. Small countries without such leverage may be harder hit. But the marginalisation of the WTO as a deterrent to protectionism would hurt everyone. And increasingly such protectionism is taking on new forms that are hard to deal with.

TPP Counties Status and Date

For extended analysis head to http://www.complexityandchaos.com

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The Wolf Of Wall Street - Perth

Jordan Belfort, has been recently played by Leonardo DiCaprio in The Wolf of Wall Street. He is now touring to share his success again. 

Gone is the stockbroker whose Hollywood-scale excesses became the subject of the hit movie based on his best-selling autobiography. He has learned from his mistakes to become one of the top speakers on entrepreneurial achievement, in constant demand around the world.

Belfort, who never hesitates to admit he far overstepped the line, has authored two books published in 22 countries, selling millions of copies, while The Wolf of Wall Street has already taken more than $375 million at the box office. He is also a frequent guest commentator on CNN, CNBC and the BBC.

Belfort’s extraordinary drive, ambition and power to influence is crystallised in his Straight Line System, which has helped to create more than 12,000 millionaires.

I have access to discounted tickets, for a group booking. Please email if you are interested in seeing him talk in Perth on the 19th of June. 

For extended analysis head to http://www.complexityandchaos.com

Mine planning and mine analysis tips please head to http://www.mineplanningtoday.com

For discounted gopro, tips on how to get the cheapest, product comparisons, and travel accessories head to http://www.buyacheapgopro.com 

Computer repairs, computer upgrades and Web design in Perth head to http://www.personalcomputerrepairs.com 

Nobel Laureate economist Gary Becker has passed away - complexityandchaos.com

Gary Becker was one of the greatest economists of the past half century. The 82-year old Becker was a pioneer in using the tools of economics to analyse things that are frequently thought to be outside the realm of economics. He made important contributions to the family economics branch of economics. Neoclassical analysis of family within the family economics is also called new home economics.

This idea of using economics to analyse non-market things seems normal these days. But when Gary Becker started doing this it was very new. And he truly taught people to see the world in new ways.

Becker’s Nobel Prize lecture is titled The Economic Way Of Looking At Life and in it, Becker briefly goes over how he used economics to analyse such topics as crime (why people commit it), discrimination against minorities, and family life.

Criminology first rose his interest when he was short for time one day. He had to weigh the cost and benefits of legally parking in an inconvenient garage versus in an illegal but convenient spot. After roughly calculating the probability of getting caught and potential punishment, Becker rationally opted for the crime. Becker surmised that other criminals make such rational decisions. However, such a premise went against conventional thought that crime was a result of mental illness and social oppression.

In his powerful intro, he makes two important points. One is that economists who presume that everyone is selfish (maximizing their own utility) take too narrow a view of human motivation. People are motivated to act for all kinds of reasons (jealousy, spite, etc.). His other point is that while productivity has provided abundance in many areas, the one resource that we’ll never have more of his time. Time will always run out, and there will always only be 24 hours in a day. For this reason, we’ll never have Utopia, because that scarcity will always be there.

Please head over to my new blog complexityandchaos.com for more

Using Gretl for Econometrics

Love it or hate it either way Gretl is a freeware econometrics package. 

Economics needs to have the practical backing. This package has proved very useful in econometrics study. 

There is a great deal of information on how to use this software. However, to get to the point and use this efficiently I recommend one blog - Hishamh over at the Economics Malaysia blog has put together a series of post that guides the user through all the major uses of Gretl. .

• In the first post the author shows how to input and format data.

• In the second post the author shows how to run and interpret a regression.

• In the third post the author shows how to ensure that the test that has been run is robust — in this he shows the reader how to test for independence and normal distribution.

• Finally, in the fourth post the author shows how to introduce dummy variables to control for seasonal variation in the data.

This series will help you get through some of the steps to start with gretl.

There has alway been some debate over the effectivity of econometrics, however it pays to understand the subject.

As well as this there some more contentious relationships that can be tested and used very provisionally in making forecasts. 

The author of the series’ own example — that is, the lagged effect of exports on imports in a small open economy — is a good example of this. As would be, for example, the import/export elasticities of demand (i.e. how exports/imports are affected by income and the exchange rate) or multiplier estimations. But again, such relationships likely miss more than they capture and they are sure to be unable to incorporate anything of real interest.

But if you’re going to do econometrics, and you’re going to use Gretl in particular, the above series is great for either the beginner or those that want a refresher course.

Update: The new version of the excellent Gretl manual by Lee Adkins is out now and can be downloaded here.

List of Free Market Historical Data Sources - For MATLAB, Excel, GRETL Econometrics

Where to get data for imports:

Sites with Summaries

• scraperwiki.com (The community collects free data from the web and converts it into CSV, etc.)
• wikiposit (The author collects free data from the web and converts it into CSV, etc.)
• (recommendation) Quandl (Successor of wikiposit: great full-text search, XLS, CSV, JSON export)
• Matlab Trendy (The community collects free data from the web and converts it into plots)

Foreign Exchange, Forex, FX

• www.forexite.com (Forex, 1 minute ticks), CSV download
• ratedata.gaincapital.com (Forex, tick data), CSV download
• www.oanda.com (Forex, daily), CSV download
• www.truefx.com (Forex tick data) after login
• www.dukascopy.com (Forex, ticks), CSV
• fxtop.com/de/historische-wechselkurse.php?MA=1 (Forex, long histories), Table

Bitcoin

• (new in the list) http://bitcoincharts.com/charts/mtgoxUSD (Daily, many exchanges), Table

Debt/Interest Rates

• historical time series
  • www.euribor-ebf.eu (Interest-Rates: “Euribor, Eonia”), Excel download
  • www.databank.rbs.com (Exchange Rate, Interest Rate, Consumer Price Inflation (CPI), Commodities: “Brent Spot, Henry Hub Spot, I P E Brent crude futures 1-pos, I P E Natural Gas Index, OPEC Fixing, US EIA Crude Imports, WTI Daily”), Excel download
  • www.ecb.int Interest-Rates and Government Bonds, web tables and partly Excel download
  • (German) www.boerse-duesseldorf.de (Bonds, daily), Website table only
  • (German )www.bundesbank.de German money and interest-rate statistics
• current
  • (German) www.baadermarkets.de (Bonds)
  • (German) www.westlbmarkets.net (2012-07-12: Just went offline, hopefully online again soon), Swaps, Caps, Floors, CSV download
  • www.boerse-stuttgart.de (web table only) yield curves of bonds per rating and maturity
• interest-rate derivatives
  • (new in the list) erstegroup.com Caps, Floors and Collars in form of Warrents

Stock / Indices

• historical time series
  • finance.yahoo.com/(Stocks, Indices), Excel download
  • www.google.com/finance, partial Excel download, otherwise website table only
  • www.ariva.de, (Stocks, Indeces), Excel download, German only.
  • www.nasdaq.com (Nasdaq), Excel download
  • mba.tuck.dartmouth.edu (portfolio data), text download
  • (German) finanzen.handelsblatt.com
  • www.investopedia.com, Website table only
  • www.nasdaq.com, Website table only, intraday, daily
  • www.standardandpoors.com (S&P 500, daily, yearly)
• current
  • finance.yahoo.com (Stocks, Indices)
  • www.bloomberg.com (Stocks, Indices)

Investment Fonds

• Issuer
  • Union Investment (CSV)

Energy

• EU http://www.epexspot.com/de/marktdaten/intraday-handel (German), Website table only
• US http://www.gdfsuezenergyresources.com/index.php?id=33 CSV download

General Historical

• (German) www.onvista.de (Stocks, Indices, Warrants, ETFs …, daily Quotes) Website
• www.indexmundi.com World-wide econometric data and commodities
• www.measuringworth.com US, UK, Japan, China with interest rates, GDP, inflation, gold and silver prices, cool long term, Website table only
• www.historicalstatistics.org Many countries, especially Sweden, GDP, population and much more, links to other sources

Economic data

World

• www.indexmundi.com World-wide econometric data
• OECD.StatExtracts includes data and metadata for OECD countries and selected non-member economies.
• Google Data e.g. Market Capitalization in GDP: Google Data on Marcet Cap in % of GDP

European Union

• Eurostat
• www.ecb.int
• www.destatis.de Statistisches Bundesamt

United Kingdom

• www.statistics.gov.uk

United States

• Federal Reserve Economic Data – FRED
• www.census.gov
• www.bls.gov
• www.ssa.gov
• www.treasury.gov
• www.sec.gov
• www.economagic.com (Web, Excel download after login)
• www.standardandpoors.com/indices/sp-case-shiller-home-price-indices (Shiller-House Price Index)
• www.data.gov Public data of all US government organizations

Live Cams

• www.boerse-frankfurt.de (German Dax)

Buy Data:

(I did not try any of these, but they look interesting.)

• www.cmegroup.com (derivative prices)
• www.ivolatility.com (Implied volatilities)
• commodities.euronext.if5.com (Cocoa Future, Robusta Coffee Future, White Sugar Future), 15 min delay, XML
• www.eoddata.com (End-of-Day Stock), Excel download and more
• www.historicaloptiondata.com (Option price data)
• www.livevol.com (Implied volatilities)

Conclusion

Please leave a comment if you have other good sources or is any link breaks.

Thanks!