Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Warren Buffett is not infallible but history tells us two things about Berkshire's investment in Home Capital Group. One, the research and analysis was methodical and in-depth, and included an estimate of potential risks arising from underwriting standards and future legal issues. Two, Mr. Buffett believes he is buying the Home Capital stake at a deep enough discount to fair value to offset these possible risks.
The investment is very small by Berkshire Hathaway standards and again, Mr. Buffett might be wrong and lose money. But, I've seen some "Buffett doesn't know what he's doing" reactions this morning and that's not a reflexive position I'd like to take, personally. The staunchest housing finance bear should reassess their stance in light of Mr. Buffett's investment, if only to reaffirm their conclusions.
"Buffett's Berkshire Hathaway comes to Home Capital's rescue" – Pellegrini, Report on Business
"Berkshire Hathaway Invests in Embattled Lender Home Capital" – Bloomberg
"Warren Buffet's company buys into troubled Home Capital Group" – CBC
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We knew intellectually that this day was coming, but the announcement that Sears Canada was about to file for protection from creditors is still a bit of a shock. There is also the related question of 'Who's going to buy HBC's real estate assets?"
"Sears Canada Plunges After It's Said to Near Creditor Protection" – Bloomberg
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I am a big fan of Morgan Housel, former Wall Street Journal and Motley Fool writer, in large part because we think very similarly about successful investing habits. Mr. Housel, now with The Collaborative Fund (which I highly suggest reading by the way), recently took part in a Q&A session with blogger Chris Reining. When asked what the most important thing for new investors to focus on, Mr. Housel responded,
"Knowing themselves. Finance is overwhelmingly a game of psychology, and it's absolutely imperative that people understand their own temperament, flaws, goals, and skills. Whether or not you can tear apart a balance sheet or learn how to price derivatives doesn't really matter, especially in the beginning. Realizing that you don't have much tolerance for loss, or truly aspire for early retirement, does."
"Morgan Housel on What You Need to Know to Be a Successful Investor" – Reining
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The misery continues for energy investors. Can 'maximim pessimism' be that far off?
"A wave of equity analysts downgraded dozens of oil-industry stocks on Wednesday, a day after crude slipped into a bear market, falling more than 20 per cent from its highest close this year. Analysts took an increasingly pessimistic view of the world's ability to soak up the global oversupply of petroleum.
'This is like a falling knife – you wouldn't catch it right now,' Amrita Sen, the chief oil analyst at London-based Energy Aspects Ltd., told Bloomberg TV in an interview. 'We've had people call us and say this is the worst they've seen sentiment in 20 or 30 years.' "
"Downgrades Abound as Oil Analysts Turn Gloomy on Supply Glut" – Bloomberg
"Oil Gains After Falling Into Bear Market as U.S. Supply Rises" – Bloomberg
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The heat wave in Arizona is ridiculous,
"The United States Border Patrol stepped up safety messages, saying 'it is physically impossible for the average person to carry enough water to survive.' "
"The science behind Arizona's record-setting heat wave" – Pacific Standard Magazine
"It's So Hot in Arizona Right Now, Puppy Feet Are Frying" – Gizmodo
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Tweet of the Day: "@markmobility Job losses in 2017: Coal: 2.8k Department Stores: 26.8k bloomberg.com/graphics/2017-… h/ @meganmurp" – Twitter
Diversion: "Inside the Mind of a Hypocrite" – The Atlantic
Scott Barlow