“Investors herded together for safety at the peak of the financial crisis, driving normally disparate sectors of the stock market to move in near lockstep. Now, the herd mentality is dissipating.”  (MarketBeat)

“Whatever else you might want to say about the virtues of international diversification, in this cycle it has done little to balance the risks of investing in any one market.”  (Floyd Norris)

“The real lesson of the past year isn’t a new one: it’s an old one that had been widely forgotten. Those who have too much of their money in the stock market may end up regretting it. Man (and woman) cannot live by equities alone.”  (ROI)

“Three cures are most commonly prescribed for investors worried about a weakening dollar: foreign currency, gold or a diversified basket of commodities.”  (WSJ)

David Rosenberg, “The rally in the U.S. equity market has been so pronounced that it is no longer just pricing in the end of the recession. It is pricing in two years of recovery.”  (Barron’s)

Recent rally notwithstanding the Dow has done nothing in the past eight years.  (Bespoke)

The sentiment picture is a bit schizophrenic of late.  (Trader’s Narrative)

Is the endowment model broken?  (World Beta)

The United States Natural Gas (UNG) plans to issue new shares.  What will that mean for the fund’s premium to NAV?  (IndexUniverse)

The new Thomson Reuters/Jefferies In-the-Ground CRB Global Commodity Equity Index (and coming ETF) that focuses on commodity equities as opposed to futures.  (Barron’s)

Investors believe that highly admired companies have higher expected returns and lower risk.  (SSRN)

Just how useful are “thematic ETFs“?  (IndexUniverse)

Why do overnight non-trading periods tend to show higher returns than when the market is open?  (SSRN)

Hunstman (HUN) has come out on the other side of a failed acquisition a stronger company.  (Deal Journal)

Lehman Bros. died so he rest of Wall Street could live.  (NYTimes)

Where did quant models go wrong this time around?  (NYTimes)

“The real Lehman shock was that the contracting U.S. economy and the failed U.S. financial system could drag the global economy into its first recession since World War II.”  (Slate)

Have the bailouts created a riskier financial system?  (EconLog also Big Picture)

On the risks of a double-dip recession.  (Econbrowser)

“The economic model has broken, for good. It’s time to stop pretending it describes our world.”  (Edge via Infectious Greed)

“Of all the levers a business has at its disposal, price is often the most powerful.”  (GigaOM via The Reformed Broker)

For better or worse, the blogosphere is getting professionalized.  (Atlantic Business)

Markets are just as apt to cause suffering as genuine happiness. (TraderFeed)

How our social networks affect our health and happiness.  (Wired)

“When I say, then, that in wine there’s no correlation between price and quality, what I mean is that there’s no correlation between price and quality except for in the 99% of cases where in fact the correlation is very strong — the cases when you know, more or less, how expensive the wine you’re drinking is.”  (Felix Salmon)

Abnormal Returns is a proud member of the StockTwits Network.