World Beta Blog

Back in June we did a blog on some of the most interesting new companies being run by brilliant entrepreneurs (also older, lifestyle post here).  Below is an update with a few interesting websites from Time Magazines 50 Best Websites 2012:

Learnist:

Everybody knows enough about some topic — be it English, science, yoga or bourbon — to teach other people about it. Every topic is covered by content scattered around the web. And the idea behind a new site called Learnist is to give everybody a spot to teach through curation. The site, which is also available as an app for iPhone and iPad, features user-created lessons that bring together web pages, videos, Google e-books and other items on a specific topic. At the moment, only a relatively small group of people approved by the site — including some real teachers — can create these “learnings,” but anyone can check them out.

Devour:

No mere mortal could ever watch all the videos on YouTube. Even the ones actually worth watching. And that’s where Devour comes in. Its simple, clean design puts the 15 top-trending and most fascinating clips right in your face. 

Songza:

When you’re listening to online music, you can painstakingly create your own playlists.  Or you can drop into Songza, where the hard work of constructing playlists is done by the site’s music experts, and the only technology they use is their own good taste. The Music Concierge feature lets you choose a scenario (such as “Cooking Breakfast” or  ”Unwinding After a Long Day”) and helps you narrow in on a genre (like “Smooth Rockabilly” or “Frat-Rap House Party”). 

If This, Then That:

If This Then That helps wrangle together all the apps and websites you use on a daily basis, conjoining them like the cutest two-faced cat imaginable. The site thrives on those tiny yet tedious tasks you probably do without even realizing. Do you favorite a tweeted article and then send it to your Instapaper account? Take a photo using Instagram and then send it to Gmail to print later? One popular recipe can check the weather at a certain time and text it to you. 

Coursera:

Once upon a time, the only way to take a course taught by a professor employed by a great university was to attend a great university. With Coursera, you don’t have to leave your seat. Instructors from Princeton, Duke, Caltech and 13 other schools conduct online classes on everything from math to music, complete with video lectures, quizzes and homework.  And the site is free — no scholarship required.

Uncrate:

 Every day, Uncrate publishes sexy pictures and brief write-ups of stuff that guys might want to buy. What kind of stuff? Everything from a Sam Adams beer milkshake to an Adirondack chair made out of whiskey barrels to the most powerful car Peugeot’s ever produced. You can read the site in blog format or Pinterest-style grid view. It’s good manly fun to peruse, whether you’re actually shopping or just daydreaming.

Read more: http://techland.time.com/2012/09/18/50-best-websites-2012/#ixzz26wF5VEzr

Apple is up about 74% in 2012, which is not bad considering that performance follows years of 26%,  53%, and 147% the prior three years.  This stock has made careers for a number of fund managers.

Will it continue?  Research from Rob Arnott suggests it is certainly challenging for the largest company in a sector or market (Apple is both) to keep up the momentum.

Below are the nine hedge funds where Apple (AAPL) represents the highest % of their long stock holdings according to the most recent 13F (HT: RM, via AlphaClone):

Raiff Partners Inc. 28.1%

Coatue Management 16.7%

Greenlight Capital 13.9%

Tiger Global Management 13.5%

JAT Capital Management 12.7%

Tiger Veda Management 11.6%

Appaloosa Management 11.5%

Kleinheinz Capital Partners 10.9%

Kingdon Capital Management 10.5%

Nice PDF from Morningstar on the  ETF Managed Portfolios space.

A few stats from the paper:

Morningstar is currently tracking nearly 490 strategies from 120 firms with total assets of $50 billion as of June 2012.

Pretty cool online value conference coming up in a few weeks.  I wonder how quickly most of the conference biz will get disrupted by online ventures?  Outside of networking/happy hour (which isn’t insignificant I understand), there’s pretty much no reason to travel in person anymore.

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Also, if you haven’t signed up for The Idea Farm, check it out, it’s free.  Great, great research piece this weekend.  Quote below:

“Wriston’s Law of Capital can explain nearly everything: “Capital will always go where it’s welcome and stay where it’s well treated… Capital is not just money. It’s also talent and ideas. They, too, will go where they’re welcome and stay where they are well treated.” 

Kind of a foggy day here in SF, but have had fun catching up with old friends and new meetings as well.  Drop me a line if you’re in town as I’ll be here through tomorrow…

Chatted with Maz at AlphaClone, which is demonstrating some solid evidence of the benefits of 13F investing and AC’s  strategies are having a great year…AlphaClone has a new ETF out (ALFA) that is one of the more interesting ETF launches in awhile.  It combines 13F algorithms with some tactical risk management that most of you will be familiar with.  (FYI Disclosure:  New readers may not know I co-founded the company and still have a stake.)  Some of the names we have talked about for years are having great years (JANA & Appaloosa top 10 holdings are both up > 30%).

Had a interesting conversation with Chris from ETFReplay.  His site is a great resource for those looking to backtest ETF strategies similar to what we have done in some of our white papers and books and is worth a look.

In other news, Shiller has announced some cool new indexes based on his CAPE work but applied to sectors.  You know I like the concept, and our recent paper Global Value is quickly becoming our third most popular white paper…Though I’m not sure why in the world they would structure the products as notes or structured products.  Interesting to notice that the new “modified CAPE” includes momentum in the calculation…

“The Shiller Barclays CAPE US Sector Index takes a long position in four favoured sectors, that are undervalued and possess relatively stronger price momentum over the past 12 months. Each month, the Index ranks the 10 US sectors based on modified CAPE ratio and 12-month price momentum, equally allocating across top 4 ranked sectors.”

And lastly, for those investors in the sporting arena, a really interesting behavioral application to betting on sports…west coast teams have an edge for night games…SF -6.5!

Overall, the equity markets are fairly cheap (updated through August).  Background on the below from my new paper Global Value:  Building Trading Models with the 10 Year CAPE.   I sent this out to The Idea Farm a few weeks ago as well

I’m having fun getting to read all of these great newsletters and pass them along to readers of The Idea Farm.  The new website should launch in a week or so.  So far we’ve featured our Global Value paper, Macro Research Board, and up next is Grant’s Interest Rate Observer.

What research/newsletters do you follow?  Email me any must read shops and we’ll add them to the list, it’s already booked up into October so looking for some great names!  If you’re a publisher, likewise shoot us an email…

Have a great long weekend all.

I’ll be hopping on the phone at the close tomorrow to chat markets, feel free to dial in and ask some questions!

This is for “financial professionals” only:

Thursday at 4pmEST/1pmPST:

We’ve had a number of blog readers win research prizes for white papers over the years.  I just saw a new contest sponsored by S&P for $30,000.  Also below are a list of contests that are worth entering (most are offered once a year with various deadlines).

Research Papers

S&P SPIVA ($30,000 + $15,000)

AQR Insight ($100,000 prize)

Whitebox Research ($25,000 prize)

NAAIM Wagner Award ($10,000 prize)

MTA Dow Award ($5,000 prize)

Investment Idea 

Ira Sohn contest (winner presents at conference)

SumZero/VIC (winner presents at conference)

Skorina/Drobny (winner presents at conference) One time.

Capitalist Collective (six figure hedge fund job)  One time, hired two people.

I put together a fun white paper that summarizes some of the work we have been doing on valuation and turning the ideas into some practical trading systems with some pretty cool results.  I sent this out to The Idea Farm list yesterday but a few reported the link didn’t work so I thought I’d post it here.

Global Value:  Building Trading Models with the 10 Year CAPE

ABSTRACT

Over seventy years ago Benjamin Graham and David Dodd proposed valuing securities with earnings smoothed across multiple years.  Robert Shiller popularized this method with his version of this cyclically adjusted price-to-earnings ratio (CAPE) in the late 1990s, and issued a timely warning of poor stock returns to follow in the coming years.  We apply this valuation metric across over thirty foreign markets and find it both practical and useful, and indeed witness even greater examples of bubbles and busts abroad than in the United States.  We then create a trading system to build global stock portfolios based on valuation, and find significant outperformance by selecting markets based on relative and absolute valuation.

Summary chart from the paper: