Not even oil is sacred in Brazil, it seems. In Petrobras it’s mostly about government intervention, in OGX – down a whopping 27% today – it’s mostly about terrible expectations management. This post is by no means an evaluation of either stocks’ prospects and attractiveness as investments. The only point is that there’s maybe a lesson here about optimistic expectations: taking with lots of salt not only what emanates from the companies, but also how much you can really know about factors such as political risk, a certain local amateurism in expectations management and so on.
An interview with Tom Russo highlights an interesting and recurring theme: sometimes stocks get hammered because they’re associated with out-of-favor geographic regions despite being much more globally exposed. In Mr. Russo’s example, big-brand “European” companies.
I love getting reader suggestions, this one via LinkedIn and a first from this reader. Given the quality of the article, I hope for many more. His recommendation is an 2009 article by Jonah Lehrer at the New Yorker magazine about “that famous marshmallow study”. A great read and it raises interesting questions.
We’ve talked about the art market in light of incentives, insiders, asymmetry of information and price formation in Oct ’11. In an article called “How the art market thrives on inequality”, the NY Times writer goes in pretty much the same direction and highlights why the “art fund” attempts have had, so far, less than stellar results.
This blog’s most frequent contributor just recently reminded me of a source I had been neglecting of late: Bronte Capital. As the most recent post “The macroeconomics of Chinese kleptocracy” shows, it’s always entertaining and provocative, even though I sometimes don’t agree with their arguments. Since the statements sometimes jump the necessary explanation, it’s not easy to tell when they’ve done the homework.
Reading the beginning of David Brooks’ article “The Creative Monopoly”, I was immediately drawn to Prof. Clayton Christensen’s work on disruptive innovation. Then the article took an unexpected turn and I have a couple of gripes with his conclusion, but it’s still worth the mention here.
The truths spelled out in Paul Graham’s email for entrepreneurs apply to larger, more established companies – and for all moments as well. The article links to a 2008 presentation by Sequoia Capital called “R.I.P. Good Times” that also has “timeless” parts. A few highlights from both documents inside.
Meet the “zombie funds”: funds that suspended redemptions in the 2008 meltdown and are yet to liquidate, despite holding some $50 billion in assets. A NYT article discusses the problem and possible legal strategies.