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Quote of the day

John Authers, “Benchmarking therefore gives managers a huge incentive to stay fully weighted in large, risky securities. This eliminates any risk premium these stocks might have had, and leads to the inversion of risk and return. ”  (FT)

Chart of the day

Markets are always tempting us to make mistakes.  (A Wealth of Common Sense)

Markets

The stock market has risen in the face of widespread skepticism.  (Barry Ritholtz)

Markets cannot be boiled down to simple stats.  (The Reformed Broker)

Don’t focus too much on the most recent news/data point.  (Aleph Blog)

Strategy

What Julian Robertson looks for in a stock.  (Market Folly)

Optimistic analysts are more likely to get hired by the companies they cover.  (FT Alphaville)

The adverse effect of fund fees compounds over time.  (Pragmatic Capitalism)

Companies

How Apple ($AAPL) creates leverage and the future of Apple Pay.  (stratechery)

Google ($GOOG) is trying to catch up to Amazon in the cloud.  (WSJ)

Now Amazon ($AMZN) wants to extend free shipping via Amazon Prime to other retailers.  (Business Insider)

Why acquisitions fail: tying the technology together.  (Fortune)

ETFs

On the diversification benefits of REITs.  (Morningstar)

Investors often overlook the credit risk in bank loan funds.  (Dealbook)

Currency ETPs are struggling to capture assets in a low volatility world.  (FT)

ETF investors are buying the dip in Russia.  (beyondbrics)

Global

Low inflation is hitting European countries differently.  (WSJ)

What does “adjusted for inflation” mean over long time horizons?  (John Kay)

Economy

The October ADP report shows decent growth in private payrolls.  (Capital Spectator, Calculated Risk)

Falling unemployment rates have not yet sparked wage growth.  (Real Time Economics)

The October ISM services data was weaker than expected.  (Bespoke)

Earlier on Abnormal Returns

What you might have missed in our Tuesday linkfest.  (Abnormal Returns)

Mixed media

Working the late shift is killing people.  (BBC)

The iPad Air 2 is built for work.  (Fortune)

A lot of what people are doing at work isn’t actually work.  (The Atlantic)

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