Sunday, May 20, 2007

May 19 Linkfest

Links to a few interesting articles I read this past week:


Too Much Cash Pouring Into Emerging Markets: Overseas investment will flood emerging markets with $469 billion this year, according to the Institute of International Finance in Washington. That will bring the total since 2005 to almost $1.5 trillion, twice as much as in the prior three years. While fueling growth, all that cash is bringing side effects that threaten to turn booms into busts. (Bloomberg)

Want to Measure Actual Inflation? See the Core/Headline CPI Spread: One way to actually measure how absurd the US core inflation measure is to look at what has happened to the spread between headline CPI and Core CPI. If Core CPI is understating inflation, than the spread should be widening. If it is accurate, the overall ratio between the two should be relatively steady. What does the data show? The spread has increased substantially since the US adopted an ultra low rate/easy money policy under Greenspan.

Whenever I hear the phrase "excluding volatile food and energy" I just laugh. Can a pricing group be considered volatile if it merely goes up each month in an orderly fashion -- for years and years? That's not volatility, thats a trend. (The Big Picture)

Insight: Dollar story no thriller, but it’s compelling: Jim O’Neil writes in the FT that the USD, despite its present weakness is not that awful compared to European currencies. Compared to BRIC currencies though, the LT trend is almost certainly down. (Financial Times)


The New Era of Tech Investing: Three great rules of technology investing:

  1. Look for the Hockey Stick: This has nothing to do with sports. Instead, the “hockey stick” describes a highly desirable pattern in a company’s sales growth.
  2. Look for the Killer App: the software program, piece of hardware, product improvement or whatever – that everyone has to have is the key to hockey-stick growth.
  3. Look for a company with sustainable high margins

These days you won’t find many companies in the technology sector which fit into the above-mentioned rules. But in the energy sector, the three rules of technology are still a great fit. Take a look at Color Kinetics (CLRK), Transocean (RIG), Satoil (STO), Tenaris (TS) and Johnson Controls (JCI). (Jubak’s Journal – MSN Money)

Why Investing is Safer Overseas: With U.S. markets growing more risky and global markets looking safer every year, savvy investors need to recalibrate their views. Here’s how to assess the new world order.

I think you need to compare markets one by one to look for those where investors, who tend to stick with the conventional wisdom until something whacks them over the head, have mispriced risk. The countries that I find particularly interesting as investment targets are those that have made the biggest strides in getting their houses in order. Of course, you still need to find good companies in those markets, but when you do, I wouldn't let old prejudices against risk cause you to pass up higher returns because they used to be more risky. (Jubak’s Journal – MSN Money)


Too much of a good thing? Vitamin link with cancer: Men who pop too many vitamins in the hope of improving their health may in fact be raising their risk of the deadliest form of prostate cancer. In men who took too many multivitamins, the risk of aggressive cancer increased by one third, and the risk of fatal prostate cancer doubled compared to those who took no multivitamins, according to the study, published in the Journal of the National Cancer Institute.

No studies have yet found that people benefit from taking multivitamin and mineral supplements, and some studies have found that vitamins like A and iron are toxic at high levels. Beta-carotene has been found to increase the risk of lung cancer in smokers. (Reuters)

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