Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

As regular readers will know I regard Japan as a fascinating region.  A great series of interviews joined together by Jeremy Schwatz of WisdomTree here.  A couple of highlights are below - with a particular focus on the hugely important bond market - but there is so much good stuff at the full link:

'JGB yields are quite difficult to forecast. I think 3% is most likely. The government wants to reach a primary budget balance to be cut in half next year and then go from deficit to surplus by 2020. If the government is successful, 3% is the most likely scenario and positive. If the Japanese government fails to fix the deficit and personal savings goes down, then Japan may look like Greece, and the 10-year bond rate goes up to 8%'

and

'The ability of the government to maintain relatively low volatility in the JGB market, whether through the BOJ or captive domestic investors, is important. There are 10-day periods when the benchmark JGB doesn't trade. Volatility has completely collapsed. My bond trader friends take three-hour lunches, and I congratulate him on having brilliant Sharpe ratios. This is a potential risk. The earnings yield has gone up because no one knows the true risk free rate'

This report will be out on Monday but this write-up from The Financial Times is kind of interesting (and I agree with it):

'The 16th annual Geneva Report, commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a “very, very long” time to enable households, companies and governments to service their debts and avoid another crash'

Investment spend is better but...still not great.  That is saying something about corporate psychology at the moment.  Great chart. 

(h/t @mbusigin)

Interesting on bitcoin '...yuan trades comprised more than 70% of trading volume'.  Link here.

I am not a big fan of index investing but I thought this was a well-written/researched article on the subject

On a similar subject, this made me smile: 'I work at Vanguard, and I own actively managed funds'

Liked this chart which indicated that, in the UK market, mid caps can materially outperform large caps from this link.  Totally agree that the sweet spot is never in mega caps: in the UK it typically is in my view the £500m-£1.5bn market cap companies and globally the US$2-5bn sphere.

(h/t @TheIdleInvestor)

An interesting interview with the founder of the ultra successful quant hedge fund Renaissance Technologies here.

(h/t @MarkBrant1KM)

Is this why the US / UK have a better economic recovery (as well as a more aggressive use of QE)?

(h/t @nickatFP)

The discipline of only having one internet browser open at one time.  Interesting post here.

Buybacks have tipped down...interesting.

Got to love the enthusiasm in earning US$12 via Craigslist 

Very good Steve Jobs infographic here

Company-related observations:

Nice write-up on John Deere - a stock that I like - here with plenty of charts.

I share a lot of sympathy with the view expressed on the much-maligned Tesco here.  Meanwhile The Sunday Times says that the whistleblower who raised the accountancy issue failed to get any traction with the previous senior management team.

Great 'bendability' testing insight on a range of phones including Apple, Samsung, LG and others here.  The key quote to me was: 'While nothing is (evidently) indestructible, we expect that any of these phones should stand up to typical use'. 

Talking about Apple this story from The Financial Times is going to rumble on: 'Apple will be accused of prospering from illegal Irish taxpayer subsidies for more than two decades when Brussels this week unveils details of a probe that could leave the iPhone maker with a record fine of as much as several billions of euros'

Talking about technology companies, any Yahoo/AOL link-up doesn't even get close to Google on metrics like this: 

Via Seeking Alpha: 'SoftBank is in talks to buy DreamWorks Animation in a deal that would value the company at $3.4B, states The Hollywood Reporter. Under the proposed deal, DWA founder and CEO Jeffrey Katzenberg would sign a five-year contract to remain with the company. SoftBank is said to have offered $32 per share for DreamWorks, a substantial premium to the stock's Friday closing price of $22.36'

Great LVMH brand graphic:

And finally...

This made me smile/think...

 Have a good week