Bovespa’s Corporate Sustainability Index (“ISE”) is about to turn 10 in November and it has outperformed the flagship Bovespa Index. We are firm believers in active, case-by-case, in-depth investigative investing in our fund, but it doesn’t blind us to the potential benefits – for some – of index investing. The devil is in the details of any index’s formation, criteria, balancing and so on. Furthermore, the dangers of an inflexible mandate are well-known.
The Financial Times had an interesting story on Brazil’s struggling “elected champions”. What seems to start off as another piece on Eike Batista’s woes is, thankfully and much more relevantly, a report on the federal government’s rising interventionism.
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!
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.
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”.
Financial Times: “Brokers trying to hawk Brazilian shares to international fund managers in New York and London have had a tough time of it recently. (…) ‘The question we always get is what will be the next sector in which the government plans to intervene?’ says one analyst with a foreign bank.”
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.
Transparency, governance and accountability are two of the main issues I am concerned with regarding politics, government and society in general. I have discussed it here in terms of citizen initiatives such as Wikileaks and its offspring, but governments can also try to push it in that direction. We’ve seen a recent push in Brazil, […]