Wednesday, July 29, 2009

Going Back to Cali


I wanted to give you a brief update on the happenings in my life and the direction I expect the blog to take in the coming weeks. My belongings have officially begun their journey to Los Angeles. Today I booked a one way ticket from New York to LA, which will be the new headquarters for the blog. Orientation for school starts in early September and I anticipate being very busy with classes, networking, blogging for UCLA’s websites, and trying to find a value-focused shop that wants to hire me (if you know of any funds or money managers out in LA that I should contact, please email me). As a result, I am not sure how often I will be posting my usual long (winded) content. I hope to produce at least two pieces a week but of course I cannot be sure until I figure out what my weekly schedule looks like. Accordingly, today I am starting a new posting strategy with the goal of compensating for fewer lengthy posts and quenching the insatiable demand for my content.

From now on I will try to post a few links that I think are must reads or videos that that I find to be the most informative. I expect this to be the type of material that fits in the category, “if you have time to read/watch one thing today…”

So, here goes. As always, I would love your comments and suggestions.

1. This is the August letter from Bill Gross. In it he continues to expand on the concept of the “new normal” and suggests that the robust 5% GDP growth that many developed countries have come to rely on to keep unemployment low and service debts may not be on the table for many years. He also presents a number of implications of this fact that I think all investors should keep in mind.

2. This is a great set of videos that I got from Simoleonsense. If you are not familiar with the site, it is run by my friend Miguel Barbosa and I would argue with anyone who thought there was a better link and video aggregation site in the blogosphere today. This particular set of videos was referenced by fund manager Jeremy Grantham in his most recent letter and Miguel diligently went out and found the appropriate links. The YouTube series of videos is entitled “The Most Important Video You Will Ever See: Arithmetic, Population, & Energy” and if you think energy security and sustainability are important you might agree with the title. In this lecture the presenter describes just how dangerous something as innocuous as a 7% growth rate in energy consumption will be in the future. He goes through some very simple arithmetic that suggests that there is nowhere near as much oil or coal as many people claim there is. If you have the time, watch this. I promise you won’t be disappointed.

3. Finally, here is an article I got from James Kwak at the Baseline Scenario. It is an op-ed in the Washington Post from M&T Bank CEO Rogers Wilmers in which he goes after the risks taken on by the investment banks during the subprime securitization boom. This is his attempt to separate the regional banks from the (former) investment banks with the goal of drawing the public’s ire away from banks like M&T that were reasonably conservative during the credit bubble. As James Kwak points out, there has been a degree of solidarity among the banks and this is one of the first cases in which ranks are broken.