Quote of the day

Floyd Norris, “This is the rally that few believed and many missed.”  (NYTimes)


Earnings have been great this quarter.  (Crossing Wall Street)

Sentiment still bullish.  (Bespoke, Trader’s Narrative)

Paulson & Co. rallies in October.  (WSJ)

Canada blocks the BHP (BHP) bid for Potash Corp. (POT).  (Bloomberg, WSJ, FT Alphaville)

Implied volatility usually DROPS after an event is announced.  (Don Fishback, Condor Options)

Which Latin American equity markets are overvalued?  (beyondbrics)

Sometimes ETFs only dilute your investment hypothesis.  The case for individual equities.  (Abnormal Returns)

Strategy and Tactics

Why size matters for investment managers.  (the research puzzle)

Ray Dalio wants hedge funds to be more than glorified index funds.  (Fortune Finance)

How technical setups work.  (Ivanhoff Capital)

Taking stock of the influences on your market participation.  (Attitrade)

How the introduction of ETPs can change underlying market dynamics, the case of VIX futures.  (AR Screencast)

Further reading

If you have been out of the market for the past 18 months, you listened to a ‘stockblocker.’  (The Reformed Broker)

Part four of an interview with Buffett-biographer Alice Schroeder.  (Simoleon Sense)

Burton Malkiel recommends five books on investing.  (Five Books)

Links to some free data sources.  (MarketSci Blog)

Wall Street

“..we need to understand that capital isn’t really about withstanding losses; it is about maintaining confidence.”  (Deus Ex Macchiato)

Bank of America (BAC) is trading at roughly half its book value.  (Bloomberg, Clusterstock)

Bank of America is getting out of the Blackrock (BLK) business.  (Dealbook, Dealbreaker, Deal Journal, FT Alphaville)

GM and the Feds disagree on IPO pricing.  On the bright side, auto sales were up in October. (Bloomberg, EconomPic Data also Forbes)

The SEC bans ‘naked access‘ to exchanges.  (WSJ)

Quantitative Easing

QE2 is here.  The yield curve steepens.  (NYTimes, Money Game, FT Alphaville)

The Federal Reserve statement in plain English.  (Planet Money also Calculated Risk, Aleph Blog)

Ben Bernanke, why the Fed did what it did.  (WashingtonPost, Felix Salmon)

Has QE2 already done what it is supposed to do?  (Econbrowser)

QE2 is about asset prices, not the economy.  (Gavyn Davies)

What do we mean when we ask whether QE2 will ‘work‘?  (Free exchange, Money Game)

How long can the Fed continue down this path?  (Data Diary)

Did the Fed undershoot?  (NYTimes, Felix Salmon)

The Fed is about to get more hawkish.  (Money Game)

Quantitative easing pushed equities higher in Japan, for a while.  (Pragmatic Capitalism)

Not everyone is happy with QE2.  The case of the emerging markets.  (NYTimes, Credit Writedowns)


Looking ahead to the October employment report.  (A Dash of Insight)

Higher food prices are here.  (WSJ)

Eric Reguly, “It is impossible to exaggerate the importance of potash.”  (The Globe and Mail)

Just Because

The taste of Coke is all in your head.  (The Frontal Cortex)

In praise of Zenyatta.  (Deadspin, 60 Minutes)

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