Jason Zweig, “It takes years of deliberate effort for investors to become even partially effective at counteracting their own genetic biases.”  (Total Return)

Chart of the day

The ongoing divergence between the Dow Industrials and Transports.  (Bespoke also Tyler’s Trading)

Markets

Up to a point the stock market wants more inflation.  (Crossing Wall Street)

A look at the positive relative strength of the energy sector.  (All Star Charts)

Another look at pairwise asset correlations by market.  (All About Alpha)

The Dow is for most purposes just fine, thank you.  (Free exchange)

Media headlines will lead investors to ruin.  (StreetTalk Live)

Strategy

Why traders constantly subvert their own processes (and success).  (SMB Training)

On the benefits of portfolio rebalancing.  (Capital Spectator)

Research into an enhanced dollar cost averaging strategy.  (SSRN)

Why does the currency carry trade work?  (Buttonwood)

Religion and stock price crash risk.  (SSRN via Money Game)

Technology

Why Microsoft ($ MSFT) should embrace the iPad.  (Fast Company, AppleInsider)

Why Apple ($ AAPL) should buy Yahoo! ($ YHOO).  (Eric Jackson)

How much does it cost to build an iPhone?  (Asymco)

Everything is a gadget now.  (SplatF)

Finance

How the Volcker Rule could recreate Glass-Steagall.  (Dealbook)

Three plus years into bankruptcy, Lehman Brothers still lives.  (research puzzle pix)

Wall Street is gearing up for credit ratings downgrades.  (Term Sheet)

Checking in on the most crowded hedge fund positions.  (Street of Walls)

ETFs

Why does the iShares S&P National AMT-Free Municipal Bond ETF ($ MUB) trade at a premium to NAV?  (Morningstar)

What happens next with $ TVIX?  (Kid Dynamite)

Now the SEC is sniffing around ETFs.  (Reuters)

Global

Why savings rates spiked during the Great Recession.  (voxEU)

The Aussie dollar is weakening, look out Euro stocks.  (The Source)

Hold your applause for the Greek debt deal. (Felix Salmon, ibid)

Other markets have big elections coming up in 2012.  (MarketBeat)

Economy

Just how much “pent up demand” is there in the US consumer economy?  (FT Alphaville)

What is going on with housing inventories?  (Big Picture)

Agriculture subsidies are scrutinized amidst a farm boom.  (FT)

Earlier on Abnormal Returns

Controversy is catnip for the financial media.  (Abnormal Returns)

What you missed in our Wednesday morning linkfest.  (Abnormal Returns)

Mixed media

Look out Facebook, “interest-based social networks” like StockTwits are the new, new thing.  (TechCrunch also Howard Lindzon)

In praise of Reid Hoffman and Ben Casnocha’s The Start-up of You.  (EconLog)

All the incessant talk ABOUT television ruining the viewing experience.  (Atlantic Wire)

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Scott D. Anthony author of The Little Black Book of Innovation, “If you want to innovate, it is always good to start with a degree of humility. “  (Globe and Mail)

Chart of the day

Emerging Asia hearts gold.  (Gregor Macdonald)

Markets

The market is NOT closed for President’s Day.  (bclund)

You have been warned:  financial advisors love big cap, dividend payers.  (Money Game)

High dividend stocks should outperform as long as the Fed remains in easy money mode.  (Sober Look)

Why aren’t the industrial metals rallying?  (Bonddad Blog)

Strategy

What does ‘passive investing‘ really mean?  (Portfolio Probe)

The many ways in which overconfidence affect investors.  (SSRN via CXOAG)

Companies

Pfizer ($ PFE) is contemplating a carve out of its animal health business.  (FT)

Can Yum Brands ($ YUM) finally turn Taco Bell around?   (The Reformed Broker, Money Game)

All of General Mills ($ GIS) outperformance comes during recessions.  (research puzzle pix)

Finance

ETFs

The VelocityShares Daily 2X VIX Short-Term ETN ($ TVIX) is the new darling of $ VIX traders.  (VIX and More)

Dear Eric Sprott, Reg FD is a real thing.  (Kid Dynamite)

Global

Trade Greek stocks at your own risk.  (FT Alphaville)

Emerging market bond investors cannot live on credit ratings alone.  (beyondbrics)

Iran may have a hard time finding buyers for its oil, post-sanctions.  (FT, NYTimes also TRB)

Japan has a trade deficit problem.  (Sober Look, FT)

Economy

Is it time to start worrying about inflation?  (Time)

$ 4 gasoline is going to pinch consumers.  (Horan Capital)

Closing the gap: alternative to the Keystone pipeline project.  (Econbrowser)

The real crisis of capi

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talism is unemployment, especially youth unemployment.  (Pension Pulse)

The week in review/preview

On falling risk and the prospects of a housing recovery.  (A Dash of Insight)

Where markets stand at week-end.  (Global Macro Monitor, ibid)

The economic week in review.  (Bonddad Blog)

The economic schedule for the coming week.  (Calculated Risk)

Mixed media

The world is shrinking.  (Howard Lindzon, Seth Godin)

Some tips on not pissing your fortune away.  (Business Insider)

Moneyball comes to ticket pricing.  (Crain’s Chicago)

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Finance

Andrew Haldane, “‘We have arrived at a situation in which the ownership and control of banks is typically vested in agents representing small slivers of the balance sheet, but operating with socially sub-optimal risk-taking incentives.”  (London Review of Books)

An exploration of low volatility investing.  (Advisor Perspectives)

Relative strength in portfolio management: a primer.  (Systematic Relative Strength)

Hedge fund manager Seth Klarman is in a battle over a Canadian mega quarry.  (Fortune)

Farming is the new banking.  (Reuters)

Companies

Is Apple ($ AAPL) a software company or a hardware company?  (Daring Fireball)

How Nike ($ NKE) has remade their marketing machine.  (Fortune via TRB)

On the huge opportunity standing before BillGuard.  (Pando Daily)

T. Rowe Price ($ TROW) has found it tough going cracking the Indian market.  (WSJ)

How McKinsey & Co. “hijacked the NHS.”  (Daily Mail via The Browser)

Economics

Francis Fukuyama talks innovation and stagnation with Peter Thiel.  (The American Interest also Noahpinion)

Christina Romer with five books to help you understand the Great Depression.  (The Browser)

More money is not necessarily the best fix for US infrastructure.  (Bloomberg)

What does a post-campus America look like?  (Megan McArdle)

What would your plan for Greece be?  (Crooked Timber via TRB)

Psychology

Jonah Lehrer, “The fatal misconception behind brainstorming is that there is a particular script we should all follow in group interactions.”  (New Yorker)

Alexandra Samuel, “The new unplugging doesn’t require you to quit Facebook or throw out your iPhone. What it requires is careful attention to the sources of our discomfort; to the challenging qualities of online interaction, or of simply living in a networked world.”  (The Atlantic)

What Jeremy Lin tells us about the difficulty in identifying talent.  (The Frontal Cortex)

How laptops transformed one school district (for the better).   (NYTimes via Apple 2.0)

Book excerpts

How companies learn your secrets an excerpt from Charles Duhigg’s The Power of Habit: Why We Do What We Do in Life and Business.  (NYTimes)

Excerpts from Tracie McMillan’s The American Way of Eating: Undercover at Walmart, Applebee’s, Farm Fields and the Dinner Table.  (Slate, part 2, part 3)

To what degree are musicians made or born, a look at Gary Marcus’ Guitar Zero: The New Musician and the Science of Learning.  (Brain Pickings)

The Wall Street bombing that made J. Edgar Hoover and the FBI.  An excerpt from Tim Weiner’s Enemies: A History of the FBI. (Bloomberg)

Mixed media

Author Tess Gerritsen on what constitutes a great thriller.  (The Browser)

The geography of investment grade wines.  (New Geography)

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Abnormal Returns

The returns of two-way trading.  (Dynamic Hedge)

Markets at a glance: key ETF performance.  (Bespoke)

News from 2011:  the launch of the Pimco Total Return ETF ($ TRXT) is a big deal.  (Reuters)

The Libor probe has taken on a life of its own.  (FT)

The dilemma facing MF Global customers:  sell their claims now or wait.  (WSJ)

You really shouldn’t be holding out for QE3 at this point.  (NYTimes)

Measuring the degree to which the zero bound is influencing Treasury notes and bonds.  (Econbrowser)

The long term fundamental case for a much higher Apple ($ AAPL) stock price.  (Slate)

Pinterest is officially mainstream.  (WSJ, NYTimes)

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Abnormal Returns

Source: Credit Suisse

In addition there is a bunch of country level return data as well.  In short, this document is a must-read.  Sell-side research comes in for a lot of criticism of late from all corners of the blogosphere.  However a document like this shows that there still is some great research being produced.  And the price is right.  You can thank me later for the recommendation….

*Hat tip: The Source

Abnormal Returns

It’s pretty quiet out there, volatility-wise.  Maybe too quiet.  (Money Game)

By these measures the market uptrend is intact.  (Ivanhoff Capital)

The Roubini indicator is flashing.  (MarketBeat)

Are investors too complacent with the Fed’s pledge of zero interest rates through 2014?  (Economic Musings)

Why join them when you can beat them?  Hedge funds and their clones.  (Pension Pulse, ibid)

Consumer credit continues to rebound.  (EconomPic Data)

We have not heard the last of the European crisis.  (Pragmatic Capitalism)

One investor is betting big on Irish and Hungarian bonds.  (NYTimes)

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Abnormal Returns

Farhad Manjoo, “Honeywell seems to have patented a bunch of great ideas in order to just sit on them.”  (Slate)

Chart of the day

Risk on!  Offensive sectors lead the market higher.  (StockCharts Blog)

Markets

Does a falling earnings beat rate presage an earnings peak?  (Crossing Wall Street)

A long term model of S&P 500 valuations points to fair valuation.  (EconomPic Data)

Larry Fink may have misspoken when he said go to “100% equities.”  (MarketBeat, ibid, Bloomberg)

Volatility

It’s business as usual for the $ VIX.  (VIX and More)

Check out the gap in implied volatilities.  (SurlyTrader)

A friendly reminder that the $ VXX is but a trading vehicle.  (Adam Warner)

The Dow

Why do we still care about the Dow?  (NYTimes)

Dow Theory adherents are on pins and needles.  (Big Picture, MarketBeat)

Natural gas

Natural gas may have bottomed, but finding a good play is tough.  (Peter L. Brandt)

$ UNG may be the “worst investment in the world.”  (Dan Dicker)

Check out the surge in natural gas futures contracts outstanding.  (FT Alphaville)

Strategy

A market timing rule that actually works.  (Falkenblog)

Is there really such a thing as a “permanent portfolio.”  (research puzzle pix)

On the difference between “risk capacity” and “risk tolerance.”  (Morningstar)

Why models need to be augmented with “common sense and experience.”  (HistorySquared)

Paul Kaplan’s Frontiers of Modern Asset Allocation is not for beginners.  (Reading the Markets)

Companies

Facebook governance critics should check their outrage at the door.  (Dealbreaker also Term Sheet)

Apple ($ AAPL) is looking for partners in its TV program.  (GigaOM, SplatF)

Miners have not typically been vertically integrated, Glencore-Xstrata hopes to change that. (FT, Deal Journal)

Finance

It is hard to buy tail risk insurance if no one is selling.  (FT also Finance Addict)

What is capital structure arbitrage?  (Distressed Debt Investing)

Should the SEC allow ‘mini-float’ IPOs, like Caesars Entertainment ($ CZR)?  (WSJ, Term Sheet, 24/7 Wall St., Breakingviews, Kid Dynamite)

On the safe asset shortage.  (FT Alphaville, Real Time Economics)

The best disclaimer language ever.  (Big Picture)

ETFs

The relationship between ETF providers and index firms is becoming “more complex.”  (FT)

ETFs, by and large, avoid the issue of fees on fees.  (ETF Replay)

Permanent portfolios come to the world of ETF fund of ETFs.  (IndexUniverse, ETFdb)

Global

The downside of the German “jobs miracle.”  (Reuters)

Is QE still working?  (Gavyn Davies)

Economy

The rebounding US economy is being led by oil & gas and manufacturing.  (WSJ, ibid)

Job openings are on the rise.  (Capital Spectator)

Deleveraging is history.  (Calafia Beach Pundit)

The virtual ‘app economy‘ creates real jobs.  (Mike Mandel)

Earlier on Abnormal Returns

What you missed in our Wednesday morning linkfest.  (Abnormal Returns)

Mixed media

Do multiple monitors actually increase efficiency?  (NYTimes)

Ratings systems always end up getting scammed.  (Crooked Timber)

The economics of the big ski resorts.  (The Atlantic)

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Eric Falkenstein, “ We are nicer, better, less short-sighted, when we have to compete.”  (Falkenblog)

Chart of the day

The impressive rally in German (and European) stocks year-to-date.  (Pragmatic Capitalism)

Markets

The great big global stock-bond disconnect.  (Money Game)

The great equity market valuation debate.  (Dr. Ed’s Blog, Fortune)

The least volatile stocks over the past decade.  (Bespoke)

The new gold rush:  farmers are set to plan record acreage this Spring.  (Bloomberg)

The Brent-WTI spread is blowing out again.  (Sober Look)

Strategy

Dividend investors should focus on companies with that can increase their dividends.  (Marketblog, Big Picture)

Equities don’t do that great in periods of HIGH inflation.  (The Source)

What happens when everyone starts using risk parity strategies?  (Aleph Blog)

Why your trading strategy needs to fit your lifestyle:  the case of geography.  (VIX and More)

Conserving financial willpower:  the power of automation.  (Bucks Blog)

Companies

Does an Amazon ($ AMZN) retail store presence make sense?  (SplatF, Big Picture)

Just in case you needed a reminder, apparel retailing is a fickle business.  (research puzzle pix)

Hollywood by the numbers.  (Asymco)

You don’t see CEOs “giving up” $ 100 million these days.  (WSJ, footnoted)

Facebook

At least Facebook is going a good job with their financial disclosures.  (Grumpy Old Accountants)

Just who counts as an “active user” on Facebook?  (Dealbook)

The rise of the fresh, young CEO:  enthusiasm vs. experience.  (WSJ)

Finance

Can the money market mutual fund industry withstand proposed, new SEC rules?  (WSJ, MarketBeat, Felix Salmon)

Are credit ratings massively overvalued?  (Economics Intelligence)

Keep an eye on the repo markets.  (Finance Addict)

The picture at MF Global is slowly emerging.  (FT Alphaville)

Banks are accelerating the process of getting bum mortgages off their books.  (Bloomberg, Felix Salmon)

ETFs

A cheat sheet for all the alternative-weighting schemes.  (ETFdb)

ETF stats for January 2012.  (Invest With An Edge)

Global

Looking forward to the second tranche of the LTRO.  (Sober Look)

Some Euro banks have passed on using the ECB’s LTRO program.  (WSJ)

Jerome Booth, “Not investing significantly in emerging markets is a form of gambling.”  (FT)

Economy

Now is the time for jobs growth to accelerate.  (Bonddad Blog)

The optimistic economic case from a notable pessimist.  (Planet Money)

Why the Fed is saying no Fed funds rate hikes until 2014.  (Free exchange)

On the relationship between policy uncertainty and growth.  (voxEU)

Earlier on Abnormal Returns

Download the Credit Suisse Global Investment Returns Yearbook 2012 and thank me later.  (Abnormal Returns)

What you missed in our Tuesday morning linkfest.  (Abnormal Returns)

Mixed media

Letters to a young analyst.  (Tom Brakke)

Earning estimate resource Estimize profiled.  (IBD)

A podcast with Betterment CEO Jon Stein on the importance of making investing less complicated.  (Tradestreaming)

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Abnormal Returns

MG Siegler, “Apple’s iPhone business alone is larger than all of Microsoft’s businesses combined.”  (parislemon via SplatF)

Chart of the day

Remember that whole S&P downgrade of the USA?  (Money Game)

Markets

Hard to see much wrong with the market advance, besides the jump in “junk stocks.”  (Dynamic Hedge)

On the lookout for a correction.  (Derek Hernquist)

How the rise of ETFs have affected small cap stocks.  (MarketBeat)

Strategy

Confusing politics and economics is a money loser.  (The Reformed Broker)

Technical analysis is done in two very different ways.  (Condor Options)

Why you should still be holding some cash to take advantage of temporary dislocations.  (Pragmatic Capitalism)

Charles Kirk, “The challenge, as all of us will learn soon or later learn, is that Mr. Market doesn’t listen or care about anyone’s else opinion but his very own.”  (Kirk Report)

Chess, “Mr. Market has a great knack for turning even the most polished of veteran chartists into incorrect fools.”  (chessNwine)

Facebook

Facebook ($ FB) and the St. Petersburg Paradox:  valuation matters.  (Jason Zweig also Big Picture)

IPO reason #1:  Zuck is going to have to write the Feds a BIG fat check.  (FT, NYTimes)

The Facebook-Zuck options situation is going to raise some eyebrows, tax-wise.  (Musings on Markets)

The investment proposition that is handing your money over to Zuck.  (Slate)

The Facebook IPO is going to get new investors interested in equities.  (MarketPsych)

The ‘Eggs in One Basket’ Index:  how dependent are the big tech firms on various revenue sources.  (SplatF)

Thanks to Facebook Silicon Valley engineers are finally getting their due.  (Pando Daily)

Finance

“The IT revolution cannot be unwound; finance is now an IT industry. But it MUST be seen as a special case…”  (MacroBusiness)

The global financial system can’t really go back the good old days.  (The Epicurean Dealmaker)

The suspect economics of publicly traded, private equity managers.  (Clusterstock)

Where are we in the IPO cycle?  (NYTimes)

Private, secondary markets can only take you so far.  (Dealbreaker)

Will weather derivatives ever be anything more than a nice product for farmers?  (Economist)

Funds

Is the crackdown on insider trading to blame for recent poor hedge fund performance?  (Forbes)

Don’t believe the correlation excuse from money managers.  (WSJ)

Expect more me-too ETFs in 2012.  (ETFolution)

Economy

More good jobs news.  (Money Game, Carpe Diem)

Who are the long-term unemployed?  (The Atlantic)

What is the Fed going to do if the economy turns out to be better than expected?  (Tim Duy)

The secular trend for economic growth is down, down, down for the developed world.  (Floyd Norris)

Does manufacturing need special treatment?  (NYTimes)

Earlier on Abnormal Returns

Top clicks this week on Abnormal Returns.  (Abnormal Returns)

What you missed in our Saturday long form linkfest.  (Abnormal Returns)

Super Bowl

How Indianapolis used sports to transform itself.  (New Geography)

The one sure winner from the Super Bowl:  Lucas Oil.  (LiveScience)

The Super Bowl is over (usually) when this happens.  (WSJ)

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Floyd Norris, “More than almost any other dispute in economics, gold often seems to be a matter of theology. “  (NYTimes)

Chart of the day

With the stock market in rally mode a look at the weekly chart.  (Afraid to Trade)

Markets

Daily stock market volatility is coming down.  (Bespoke)

Financial conditions continue to improve.  (Calafia Beach Pundit)

Why hedge funds have performed so poorly of late.  (Macro Rants)

Gold bugs are bullish once again.  (Mark Hulbert)

Strategy

Steven Place, “Remember, when you get long $ UNG, you are not bullish natural gas.”  (Investing With Options also VIX and More)

A graphical reminder that inflation (and taxes) matter.  (World Beta)

You can only succeed at trading if you “check your ego at the door.”  (bclund)

Can you benefit from a trading philosophy even if you misunderstand it?  (Finance Trends Matter)

Facebook

John Gapper wonders why Facebook is going public in the first place.  (FT)

The biggest risk to Facebook is….fickle users.  (Slate)

What are private exchanges going to do without Facebook to trade?  (Dealbook)

The fallout from the Facebook IPO may be more interesting than the company itself.  (Howard Lindzon)

Just because it is a tech IPO does not mean it is going up.  (YCharts Blog)

Finance

Asset managers are fighting back against the HFT machines.  (Institutional Investor)

The Carlyle IPO is an “affront to shareholder rights.”  (Fortune)

Bank of America ($ BAC) keeps shrinking.  (HuffPo)

401(k) rules are changing.  (WSJ)

Global

What Europe might look like without the Euro.  (voxEU)

Tim Duy, “At this point, I am starting to wonder what was the bigger mistake – to allow Greece into the Euro in the first place, or to force them to stay?”  (Economist’s View)

Economy

It is hard to argue with the strength of the January employment report.  (Calculated Risk, Bespoke, Big Picture, Capital Spectator, Felix Salmon)

Hold on, the US still has a long term unemployment problem.  (Term Sheet, Money Game, Calculated Risk, EconomPic Data)

Now the ISM services index is perking up.  (Market Montage, Money Game, Pragmatic Capitalism)

Public sector construction spending never did take up the slack.  (Slate)

Economists are failing to take into account technological changes over the long, long run.  (FT Alphaville)

Earlier on Abnormal Returns

A short guide to the best financial industry blogs, including Abnormal Returns.  (AdvisorOne via TRB)

What you missed in our Friday morning linkfest.  (Abnormal Returns)

Mixed media

Netflix’s ($ NFLX) DVD rental business is “only going to get weirder.”  (ReadWriteWeb)

Check out a trailer for Confidence Game a documentary about the last days of Bear Stearns.  (Market Folly)

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