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It has been a while since I have put pen to paper. Only a few months, but it feels like an eternity. The last time I did so, I discussed how the current structure of the stock market–driven as it is by quantitative and passive investing strategies–has caused more than its statistical share of herding behavior. The resulting biases and market structure, I argued, create opportunities that [...]

If you have never witnessed the formation of a bait ball, it is a sight to be seen. To protect themselves against predators, thousands of fish come together and create a gigantic gyrating ball. It is majestic and at times seems to take on a life of its own. The idea is a simple one. Safety in numbers. Any deviation from the ball is asymmetrically penalized. This [...]

What tighter regulation might mean for Google’s all-conquering advertising business. UE-GOOGLE Valuing Alphabet, Google’s holding company, requires multiple hats. There are many moving parts to consider as well as a lot of negative headlines. My preferred method of analyzing Alphabet’s stock price is to place a reasonable value on all of the company’s non-advertising-related businesses (such as its infamous Other Bets, YouTube, and cloud-computing [...]

The economic nature of share repurchases defies simple generalizations. Countless times I have heard beliefs expressed that mischaracterize the effects that buybacks have on value creation for companies, their stakeholders and the economy. This misunderstanding creates an environment where false premises can lead to bad policy proposals. Give and Take GERD ALTMANN Read complete article