Gustavo Ballvé on February 2nd, 2017

There is a certain beauty and corresponding reverence to the scientific method. The “problem” is that humans are using it: we are subject to biases and, most importantly, incentive systems. I highlight a Wired article about a young billionaire who has declared “a war on bad science”. His foundation’s work seeks to shed light on the instances of bad use of the scientific method, when data was perhaps ignored and corners perhaps cut. Analysts know what I am talking about: brushing away data points that seem “incoherent” with a theme, weighting independent factors disproportionately… We have all been there, no matter how hard we fight to be 100% rational and intellectually honest.

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Gustavo Ballvé on August 25th, 2016

It was my birthday yesterday and I want to share a great information source with my readers: the Valor Intrínseco blog (translation: Intrinsic Value), which joins our blogroll. The blog posts are only in Portuguese, but its subject matter is Value Investing and the material they source is, 99% of the time, in English. I am more than glad to help this “competitor” out because great work always deserves praise – and because there is so much noise in the investment world, we need all the help we can get to hone in on the good stuff.

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Gustavo Ballvé on October 31st, 2015

My notes on Guy Spier’s book, The Education of a Value Investor. The book is much better for beginners, but there are very interesting tidbits for experienced investors. Some of what he shared about productivity and about finding a group of people you both admire and trust so you can debate ideas with them resonated a lot with things I had been thinking about, or doing, without necessarily having an idea of where it could lead to.

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Gustavo Ballvé on December 30th, 2014

This LEX piece on sell-side research reflects several old, recurring and ever more vital themes I try to address at conflict of interests, incentive systems, the power of brands, halo effects and whatnots – and ultimately how hard it is to actually KNOW something when it is so hard to filter out the noise. All this is more evidence that trustworthy, independent analysis is growing in value by the second.

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Gustavo Ballvé on June 20th, 2013

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.

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Gustavo Ballvé on January 17th, 2013

In the second update to our “Is investing in banks too hard?” original post, a reader has sent us a Howard Marks interview that has his views on analyzing banks. In summary, says the Oaktree Chairman, “they just don’t have analyzability”. Thanks again for our reader and please keep the stories coming!

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Gustavo Ballvé on January 7th, 2013

We posted last Thursday about a long article at The Atlantic arguing that banks are increasingly “too hard to understand”. As in all bank matters, the Epicurean Dealmaker couldn’t resist writing about that article and his response is the best so far. If you haven’t read last week’s post yet, you’d do well to start with this one instead.

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Gustavo Ballvé on January 3rd, 2013

Thought-provoking cover story (and I mean this in the “is it signal or noise?” realm) in The Atlantic: “What’s inside America’s banks?” To summarise the official story line, the article argues that a growing list of heavy-hitting investors are simply giving up on trying to understand banks’ balance sheets, thus considering big banks “uninvestable”.

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Gustavo Ballvé on September 3rd, 2012

Almost two years ago I posted about spotting lying CEOs, which was a reader suggestion. Now the same reader (keep’em coming!) has sent me an article from the CFA Institute, based on the same research on spotting liars, also mentioning the researcher’s book. I also link to other posts on related subjects.

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Gustavo Ballvé on August 29th, 2012

Credit where credit’s due: we’ve linked to material from Bronte Capital before, but we hadn’t yet made them a Blogroll inductee. That is now fixed as their recent posts on Focus Media make for a highly entertaining investigative series. Again: everything you read here, even when written by us, should be taken with the necessary precautions – the main one being the classic “trust your own diligence”.

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