These are very exciting times in Brazil – forget the protests and the soccer action, I’m talking about the current decline in Brazilian equity prices – somewhat selective, yes, but it is starting to generate interesting opportunities. In times like these we are always reminded of the power of Cash, that benevolent King, and this post about Seth Klarman’s 2010 letter has great tidbits on the subject. But I’d like to highlight a longer post called Don’t Panic.
H/T to Abnormal Returns for posing a tough question – “would a mandatory savings program be net-net beneficial to society?” – and for getting many financial bloggers to answer it. To be taken with the necessary pounds of salt as I don’t know how much work went into the answers, how much time they had to think about it and how much each individual respondent actually knows about this subject. It is a question that has been bothering me tremendously when considering Brazil and demographics.
I’ve just read a Stanford paper on the decision-making process of Proxy Advisory firms such as ISS and Glass Lewis. I will write more in-depth about this in the future, but in summary this paper highlights the dangers of “outsourcing research” – be it in Corporate Governance, people, financials, business models, competition, whatever – and the temptation of trying to systematize/quantify an investigation that is, by nature, subjective and case by case. The paper itself falls into to some of these traps.
Great post by Bronte Capital’s John Hempton on (well, kind of) exotic risk management. Quick, fun and thought-provoking read that raises the will to re-visit other texts.