We’ll take a break from the newsletter next week. For all those in the U.S., happy Thanksgiving!
“If you buy a business. If you buy a farm, do you go up and look every couple of weeks to see how far the corn is up? Do you worry too much about whether somebody says this is gonna be a year of low prices because it’s exports are being affected or anything like that? No. You buy a farm and you hold it.”
Markets & Investing
It’s Time for a Venial Value-Timing Sin [AQR]
“However, the last almost two years have been different. Value has continued to suffer, but lately for less fundamental and more just price reasons. We think the first eight-plus years of value’s recent 10-year losing streak were ‘rational’ (for want of a better word).”
Ben Carlson looks at some of the Howard Marks’ comments about negative interest rates from his most recent memo.
A nice article about idol worship and sunk costs.
“I hope that this entire episode will put to rest the notion of smart money, i.e., that there are investors who have access to more information than we do, have better analytical tools than the rest of us and use those advantages to make more money than the rest of us.”
Company & Strategy
“He was permitted to halt all of eBay’s ads on Google for three months throughout a third of the United States. Not just those for the brand’s own name, but also those targeted to match simple keywords like “shoes”, “shirts” and “glassware”.
The marketing department anticipated a disaster: sales, they thought, were certain to drop at least 5%.
Week 1: All quiet.
Week 2: Still quiet.
Week 3: Zip, zero, zilch.
The experiment continued for another eight weeks. What was the effect of pulling the ads? Almost none. For every dollar eBay spent on search advertising, they lost roughly 63 cents, according to Tadelis’s calculations.”
Podcast of the Week
Why Current Stock Market Highs Could Be A Warning Sign To Investors: Wealth Advisor [IBD]
GFinancial advisor Duncan Rolph of Miracle Mile Advisors joined “Investing with IBD” this week to discuss why current stock market highs have led him to adopt a defensive investment strategy for his high-net-worth clients.