Quote of the day
Jeff Carter with advice for traders AND entrepreneurs: “Initially, start small. Focus on doing one thing great. After you have initial success, and the market validates your strategy, get bigger. If the market continues to validate your strategy, figure out a way to get really big and scale.” (Points and Figures)
Chart of the day
The homebuilders have been on a bit of a tear of late. (Focus on Funds)
Markets
The Spain playbook. (The Reformed Broker)
Weekly options are coming on strong. (VIX and More)
Why investors have rightly focused on high yield bond funds. (Buttonwood)
What are we to make of the rise of the HFT machines? (Big Picture)
Strategy
You can’t learn to trade better without actually trading. (Phil Pearlman)
Active value investing mutual fund managers would be better off buying the index. (Greenbackd)
Larry Swedroe on the death of active management. (IndexUniverse)
Does the “variance risk premium” predict future equity returns? (SSRN via CXOAG)
How cognitive ability affects financial behaviors. (SSRN)
Companies
Chesapeake Energy ($CHK) wakes up to the conflicts under its own nose. (NYTimes, Bloomberg, WSJ, Stock Sage)
Social media: the danger of buying “version 0.9 stocks.” (VIX and More)
Facebook is on the fast track into Nasdaq indices. (WSJ)
The value of a brand. (SurlyTrader)
Finance
Money market mutual funds are finding traction in their battle with the SEC. (WSJ)
Consolidation in the prime brokerage space. (Bloomberg)
Why the big banks don’t work: they are conglomerates. (Macro Rants)
A look at Lehman Brothers’ pay plans prior to its bankruptcy. (LA Times)
ETFs
Not all ETFs are created equal. Time to highlight the risk of certain segment of funds. (Breakingviews)
The stagnation of the ETF industry is greatly exaggerated. (Marketblog)
Vanguard ETF expenses keep on dropping. (Focus on Funds, IndexUniverse)
Economy
Q1 US GDP growth: no great shakes. (Real Time Economics, Calculated Risk, EconomPic Data, Money Game, Daniel Gross, Modeled Behavior)
Regional Fed surveys point to slowing growth. (Capital Spectator)
The US isn’t getting that big a boost from low natural gas prices. (Businessweek)
Rail traffic data remains mixed. (Pragmatic Capitalism)
When is digital innovation going to kickstart economic growth? (Justin Fox)
John Kay, “But to say that modern tax systems are inescapably complex does not mean that tax systems need be as complex as they are. ” (John Kay)
Real estate
More talk of a bottom in housing. (Time, Modeled Behavior)
In some parts of the country bidding wars for houses are back. (WSJ)
Earlier on Abnormal Returns
Steven Sears, author of The Indomitable Investor, talks about the plague of financial illiteracy and what we can do about it. (Abnormal Returns)
What you missed in our Friday morning linkfest. (Abnormal Returns)
Mixed media
When selling scoops constitutes insider trading. (NetNet)
The NFL draft as lottery. (The Atlantic)
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