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How Investors Should Deal With The Overwhelming Problem Of Understanding The World Economy

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The article is very long. It is long for two reasons: first, it is was originally a two-part article that I folded into one; and second, I am dealing with the very complex topic of investing in today’s global economy. I wrote this article a year ago, and some themes like “be careful of MLPs” are…

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Why I Love but Won’t Buy Its Stock

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You should look at your portfolio and want to throw up a little — this is how one value manager described what a true, die-hard value investor’s portfolio should look like. The two stocks I wrote about in my latest article — American Eagle and Aéropostale — have a tendency to elicit that unpleasant reflex…

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Additional Thoughts on The Fed Model and Profit Margins

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Last week I’ve shared with you my  Institutional Investor article on some important but quite boring topics that include the Fed Model, the price-to-earnings ratio, and profit margins. I imagine for most civilians (people who don’t do investing for a living) reading about these topics is as exciting as watching a live debate between two…

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The Not-So-Big Picture on Financial Models

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Rarely do I disagree with fellow investor and financial blogger Barry Ritholtz, but the time has finally come. Last week Barry wrote a column for Bloomberg View called “Why ‘Peak-Earnings Models’ Are Nonsense.” Though I don’t agree with everything I read, and I hardly ever expend the energy to write a long response, this time…

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Practitioners, Prognosticators and Portfolio Pain

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“Asphyxiation is a condition in which the body doesn’t receive enough oxygen.” That’s how I started my last column, in which I explained how the recent U.S. equity market highs have been creating “altitude sickness,” or value asphyxiation, for investors. If you look down from 30,000 feet, the market is trading at a significant premium…

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Qualcomm’s Competitive Advantages Are Too Numerous to Ignore

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Asphyxiation is a condition in which the body doesn’t receive enough oxygen. A common side effect of asphyxiation is death. Before then, of course, there are hallucinations; we start seeing things that don’t exist. When the market is making new highs, valuations are high, and you get altitude sickness. It is typical to suffer from…

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How to Capitalize on the Bakken Oil Boom

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 Stocks in the refining industry never really attracted us in the past. They were usually highly leveraged, barely earning a return on capital, and there were no tailwinds for their earnings — consumption of gasoline in the U.S. has been on the decline for years (our cars are now more efficient, and we drive less).…

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The Process – from VALUEx Vail

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Investing is a peculiar industry because randomness is so deeply embedded in everything we do. I am always fascinated by the investment processes of other successful firms. The outcome of every decision we make results from two inputs: our skill and our luck (randomness, whether good or bad). When you analyze anyone’s investment decisions solely…

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