Skip to main content

Scott Barlow

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web

There is some artifice surrounding Berkshire Hathaway.

Warren Buffett's avuncular facade camouflages a ruthlessness that helped him absolute fleece the alleged geniuses at Goldman Sachs during the financial crisis. The apparently conservative, value-oriented Berkshire investment style is, unbeknownst to many, boosted by significant leverage through the company's insurance holdings. Still, when hedge fund manager Bill Ackman writes, in an email to Charlie Munger, that "Valeant shares a lot of similarity to Berkshire", this is more than a bit of a stretch,

"Valeant shares a lot of similarity to Berkshire in its decentralization, its approach to capital allocation, and its shareholder orientation. Pearson's management approach is similar to 3G's in the company's extremely cost-disciplined and rational approach to operations… Valeant is not a roll up which has used a high-value currency to buy lower-multiple unrelated businesses."

"Here's the email Bill Ackman sent to Charlie Munger to complain about Munger's Valeant comments" – Business Insider

=====

I am a big fan of Merrill Lynch chief quantitative strategist Savita Subramanian, but this morning, I wish I put less faith in her analysis,

"In an appearance on BloombergTV yesterday, Bank of America Merrill Lynch Head of U.S. Equity & Quantitative Strategy Savita Subramanian warned of a "vortex of negative headlines" coming in June that could soon push the S&P 500 to 1,850—back near February lows. Among the factors she cited are the upcoming 'Brexit' vote, the June decision from the Federal Reserve, and the U.S. election… She added that the Fed is in a tightening mode during a corporate profits recession, which is not typical."

"Bank of America Strategist Warns of Imminent 'Vortex of Negative Headlines' Sending U.S. Stocks Plummeting" – Weisenthal, Bloomberg

=====

The Wall Street Journal implements the "man bites dog" journalistic template to argue that for investors, dividends are the problem, not the solution,

"The lack of growth and inflation will hurt dividends, too. Investors tend to extrapolate from the recent past, a period which has been great for dividends… Dividend swaps and dividend futures, not open to ordinary investors, are pricing growth of just 1 per cent a year for S&P 500 dividends over the next decade.. The three-decade bull market, however, had a tailwind from falling bond yields, which can't be repeated."

"Dividends Aren't the Answer. They're the Problem" – Wall Street Journal

=====

Macleans magazine posted an in-depth report on the extensive flow of Chinese investment into the housing markets of Vancouver and Toronto. The piece provided good context, but really mostly whetted my appetite for upcoming reports on the extent of international investment from the CMHC,

"On Juwai.com, an online listing service where Chinese buyers can look for international real estate, inquiries about specific properties in Ontario rose 143 per cent in 2015, with the total value of those homes hitting $11.2 billion. .. By breaking down the numbers according to the age of the building in question, [CMHC] provided the first reliable indicator of accelerated foreign buying. In Vancouver, for instance, foreign ownership of condos built before 1990 stands at just two per cent. For structures completed since 2010, that number climbs to six per cent."

"China is buying Canada: Inside the new real estate frenzy" – Macleans

=====

Tweet of the day: "@michaelsantoli Noted to @Kelly_Evans: No bear market arrives without Sotheby's getting there first. Been nearing the worry zone... pic.twitter.com/WQ09qWPB98 " – Twitter

Diversion: "Injectable Gel Generates New blood vessels" – M.I.T. Technology Review

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe