A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
For me, Christmas comes every month in the form of Business Insider's "Most Important Charts in the World." BI's Sam Ro calls every prominent asset management firm in the United States and asks them for what they believe is the most important chart for investors to recognize. There are 97 of them and almost every one has an important lesson for investors.
The "Vacant Mall Problem" chart from an economist at Bloomberg was fascinating, but the most eye-catching was the U.S. dollar chart from Real Vision (no, I hadn't heard of them either) which comes with the dire warning that "considering the [U.S.] dollar is the world's funding currency, this has the ability to create havoc on the unprecedented $5-trillion carry trade – with China at the epicenter."
"Wall Street's brightest minds reveal the most important charts in the world" – Business Insider
Amazing as this sounds, it looks very much like a secretive commodities trading firm is looking to corner the market on physical copper. Bloomberg View's Matt Levine reports that a single firm, rumoured to be hedge fund Red Kite Group, has acquired rights to more than half of all warehoused copper at the London Metal Exchange.
Mr. Levine is somewhat incredulous about the whole thing, noting that enormous sums of copper are mined daily and the supplies at the LME are a pittance in comparison. But finance blogger Streetwise Professor is far less sanguine:
"Such an accumulation can facilitate a corner of the market, or could be a symptom of a corner: A large long takes delivery of virtually the entire deliverable stock (and perhaps all of it) to execute a corner. So the developments in LME copper bear the hallmarks of a squeeze, or an impending one."
I can't believe I haven't heard about this previously and it's a bizarre enough occurrence that I'm not sure what to think about it yet.
"Somebody owns a lot of copper" – Levine, Bloomberg View
"Matt Levine passes off a bad penny" – Streetwise Professor
See also: "@soberlook Chart: Speculative accounts short copper - pic.twitter.com/veEv7npzg3 "
Learn Signal provided an excellent breakdown of why Warren Buffett has become arguably the most successful investor in history, through a combination of leverage and risk management:
"Estimated leverage used by Buffett is 1.6-to-1. In a world where major hedge funds managers leverage their portfolios between 1.5 and 2-to-1, this is not exactly a moderate risk-taking.
The Buffett "trick," therefore, is a combination of good risk management, relatively average leveraging and something else that allows him breathing space when margin calls should force liquidations of positions."
"Buffett's magic: Cheap leverage and risk control" – Learn Signal
The sugar industry is a bit of a hobbyhorse for me. The combination of social, government policy and psychological factors never ceases to fascinate. In this video, John "The New English John Stewart" Oliver rips into Big Sugar and rightly so:
"Big Sugar's efforts to hide its role in the obesity epidemic" – Vox (Some NSFW language)
Tweet of the day: "@adamcarstens Transparency about one's finances is a threat to #signaling and consumerism in general. nytimes.com/2014/10/27/you… pic.twitter.com/bNrVdVL1xC "
Diversion: "Why we long for the zombie apocalypse" – The Dish
Follow Scott Barlow on Twitter @SBarlow_ROB
Scott Barlow