This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• George Soros (Financial Times): Do not ignore the need for financial reform, October 25, 2009. It is not the right time to enact permanent reforms. The financial system is far from equilibrium. The short-term needs are the opposite of what is needed in the long term.

• Paul Sandison: The two main threats to democracy and modern capitalism, October 20, 2009. In the present burgeoning economic crisis, already well over a hundred million people across the globe have been thrown into poverty, despair, sickness and are struggling to avoid a premature death. Billions of people abroad are vowing never to allow the United States and the United Kingdom to do this to them again. The remaining question is whether the

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Slothful Investing: How to Beat the Markets With a Lazy Portfolio

by Louis Basenese, Advisory Panelist

MarketWatch columnist Paul B. Farrell loves to tout the performance of his eight Lazy Portfolios.

They earn their name by being comprised of nothing but low-cost, passively managed index funds - properly diversified - that require nothing but an annual rebalance.

In his latest column, he gushes about how his lazy strategy “keeps beating the S&P 500, as well as popular actively managed funds.”

Here’s my rub: Mr. Farrell doesn’t have a corner on slothful investing.

We’re Going Fishing & Beating the Market, Too!

We’ve got our own version of a lazy portfolio at The Oxford Club. We call it the Gone Fishin’ Portfolio.

And guess what?

It’s outperforming the S&P 500, too. It has ever since we created it six years ago.

It’s trouncing the most popular actively managed funds. That includes the wildly

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We live in a global economy. And, unless we destroy the global economy that now exists the way the world destroyed the first global economy starting with the 1914 conflict and proceeding through the next fifty-five years or so, we will continue to face the duties and responsibilities of operating within a world economy. And, those duties and responsibilities begin with the currency of the country.

It is hard to have confidence that the United States accepts this fact.

I know that we are in a recession (depression?). I know that the immediate pressure on the Obama Administration is to “get the economy going again.” I know that the Treasury Department and the Federal Reserve, both dependent partners in the effort to get the financial system functioning, must provide whatever means it takes to avoid further deterioration of financial markets.

Still, there is a need to listen

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Today I'm taking a look at emInvest Like a span class="blsp-spelling-error" id="SPELLING_ERROR_0"Dealmaker/span/em by Christopher Mayer. Christopher writes the emCapital amp; Crisis/em newsletter, and this book takes a look at his investment methods. After reading this book, I'd summarize it as a how-to guide for the value investor. The author's focus is to teach investors ways to uncover value by various methods (formulas for stock screens, how to follow fund managers, finding undervalued stocks, etc).br /br /The author references many, many investors, and maybe even a few too many. He refers frequently to some well known ones like Seth span class="blsp-spelling-error" id="SPELLING_ERROR_1"Klarman/span, Joel span class="blsp-spelling-error" id="SPELLING_ERROR_2"Greenblatt/span, and Bill Miller. A lot of his theory involves following these gurus, and he explains why. I wouldn't consider this just a span class="blsp-spelling-corrected" id="SPELLING_ERROR_3"recycling/span of these well-known investors, and their theories; Mayer does add some substance as to why these guys are worth following.br ...

Price Wimps of the S&P 500

by Investment U Research Team

Some of our members have asked us about penny stocks, and as a rule we stay clear of them. Most stocks trading below a dollar are there for a reason. But it certain situations, there are opportunities to take advantage of “Mr. Market’s” pricing confusion.

So with that perspective, we thought it might be beneficial to look at some serious value plays. These “Wimps” are the cheapest stocks in the S&P 500 (.INX).

Barring companies over a buck, we are presented by a number of “deep value” companies that would make Bill Miller shiver – That is if he wasn’t still curled up in a corner from his beating at the hands of the market last year.

Amongst those listed companies below a dollar, American International (NYSE: AIG) at  .35 may not surprise, but

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Stock prices are falling even faster than Alan Greenspan’s reputation or Warren’s Buffet’s mystique. Come to think of it, they are all falling at about the same pace. Hmmm…it’s as if they’re all one and the same.

Greenspan’s reputation - like AIG’s share price - is already in shambles. In fact a move to zero might be an uptick. Warren Buffett, on the other hand, still boasts a rabid following, as well as a few billion dollars in the bank. So let’s weep not for Warren.

Even so, this formerly glistening icon of “buy and hold” has become a bit tarnished. Buffett’s genius, we are now discovering, correlates quite highly with the S&P 500 Index. His genius is not quite as highly correlated with the S&P 500 as, say, Bill Miller’s, the former investment genius at the Legg Mason Value Fund. (For a little background, please click here). But an

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Bank of America Befriends a Bear   

Today, Bank of America (NYSE: BAC) announced it could need another dose of government capital to shore up its Merrill Lynch acquisition. Additionally, JPMorgan (NYSE: JPM) just announced it would write down profits by 76% on asset writedowns. Nortel Networks (TSE: NT) just threw in the towel as well.

But these developments come as no surprise to many conservative analysts.

In fact, a number of them believe that we’re seeing a bear-market rally instead of a real turnaround. If this is the case, losses like Bill Miller’s could become commonplace as value investors – who have picked the market off its November bottom ­– get hurt in another “rush to the exits.”

But optimism springs eternal. Regardless of what the unemployment rate, the federal government, the financials or the economy does, there will still be optimism

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The WSJ had a href="http://online.wsj.com/article/SB122886123425292617.html"an article about Bill Miller's fall/a (a nod to a href="http://www.indexuniverse.com/"IndexUniverse/a). You probably know most of the story. He had excellent, SPX beating returns for a very long time by buying when others were afraid. He also made concentrated bets on certain stocks like Amazon.com (AMZN) and quite a few financial stocks that either failed or came close to failing.br /br /In the article were also some interesting tidbits that I think are more useful than the bigger story. First is a comment from Chris Davis who recounted telling Miller that "one of my (Davis') goals is to just be right more than I'm wrong." Miller told Davis "that's really stupid, what matters is how much you make when you're right. If you're wrong nine times out of 10 and your stocks go to zero -- but the tenth one goes up 20 times -- you'll ...

 

The Fall Of Legg Mason's Bill Miller

Legg Mason's Bill Miller managed to outwit the S&P 500 longer than anyone else.  But eventually he was doomed to fail. And now there's little doubt that the biggest star among stock mutual fund managers has stumbled badly.

This Wall Street Journal  piece takes an in-depth look at Miller's huge bets and stunning failures in the past few years. It even quotes him as saying he was "naïve."

(One minor disappointment about this article is that it didn't touch on how Miller, as his fund as well as Legg Mason's business grew, took on more administrative functions and delegated more daily fund management duties to associates.)

But just a minor point in an otherwise fascinating look at the fall of one of the industry's greatest names. You can read it here.

 

Some Commodities

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