Top 1000 finance blogs, PE revisited, investor bashing, collywobbles etc.
Posted on March 12, 2007 by Richard Beddard
Filed Under Investing |
Flogging the week: The best of the financial blogs…
ValueWiki has a list of the Top 100 finance blogs. Depending on how you measure it, we are No. 5, or No. 74. I know which method I prefer, but I fear our Alexa page rank (which puts us at no 5) is inflated by association with our illustrious mother ship: www.iii.co.uk, which gets squidillions of hits. We’re not quite as hot, according to Technorati. Scanning the Top 100, I see we’re the only .co.uk site, although the FT’s Alphaville is in there of course.
Private equity
Talking of Alphaville, it reports Private equity will be in trouble when the debt bubble unravels in 2008. Until then funds will keep on growing because the bigger they get the cheaper they are to run. They’ll keep on growing that is, as long as the pension funds that invest in them don’t wake up and smell the falling returns I reported last week. Meanwhile the Treasury is going to review the way private equity finances deals, but on the Today Programme, it didn’t sound like the buyout bullies have much to worry about. McIntyre Hudson, an accounting firm, puts the odds on the Chancellor removing interest relief on corporate debt in the Budget at 100 to 1.
Alphaville picked up my interview with Guy Fraser-Sampson (The truth about private equity). So did Salvius at On Corporate Finance. He, or she, backed up Guy’s criticism of the size of buy-out funds:
PE people I know once had a genuine interest in investment opportunities. Now, when you see them coming back from fund-raising rounds, they seem to have undergone a cure of anabolica and cortisone… And when you are so big that climbing up a flight of stairs makes you break out in sweat, you need to concentrate on few opportunities. The killing machine as a sloth.
Even the Bridge Lover’s Blog linked to the interview (see the second half of the page).
Value investing:
A mildly conflicting picture from the scholarly end of finance, courtesy of the CXO Advisory Blog. A study says virtually no private investors beat the market between 2000 and 2006 (something I just don’t believe) and another one says herd-like institutional investors stampede into growth shares, leaving value shares undervalued (that’s more like it).
But no sooner than they’re on the up, the mighty hand of John C. Bogle slaps them down again. He invented the index tracker, which is, when you think about it, the epitome of herd following: The bigger a company gets the more shares you buy. According to Bloomberg, Bogle devotes a chapter of his new book to value investing, or rather dissuading most investors from attempting to buy good companies on the cheap. We haven’t the time and we’re not smart enough, apparently. He quotes Benjamin Graham, the granddaddy of value, a year before he died:
I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, but the situation has changed a great deal since then.’
But, says Bloomberg’s James Pressley:
The situation has changed even more in the 30 years since Graham made that remark. Gone are the days when value investors had to slog through the Standard & Poor’s and Moody’s manuals to find stocks selling below book value. These days, they can use computer search engines to “screen the entire world to find investment candidates that fit our criteria…”
It’s got they’re juices flowing over at Value Investing News, I can tell you. Perhaps they will find comfort in a new book, John Neff on Investing. Value Blog Review likes it.
The collywobbles:
Did you panic? Feel a bit squeamish even? During the scare a week or so ago? Henry Blodget says you shouldn’t be in the market if you’re inclined to be spooked by it. Sage advice from the man who now writes a column about bad advice, but was banned for life from the securities industry for giving it, allegedly.
It’s a motion seconded by Chris Dillow, Investors Chronicle columnist and blogger: He says:
There’s only one good reason why anyone should pay close attention to the stock market - it’s an inherently interesting laboratory for studying behaviour under uncertainty…
And this makes it all the more unforgiveable that so much market reporting is not just gibberish, but boring gibberish.
Aye, better stop now then 
I’m off to find out what so b#@@|>¥ good about the Top 10 financial blogs.
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Nice article