Hagstrom has written about this alrady, but its important. Steve Hsu has a great write-up on Poundstone´s book here:

http://infoproc.blogspot.com/2005/11/fortunes-formula.html

Posted by Guy Spier at 04:16 AM | Permalink | Comments ()

So You Want to Be an Activist
By James Altucher
RealMoney.com Contributor

6/1/2005 4:16 PM EDT
URL: http://www.thestreet.com/p/rmoney/jamesaltucher/10226105.html

Market Commentary
Many investors aspire to activism, using their heft to help out the little guy.

The 13-D is a remarkably effective tool, used well by Dan Loeb and Robert Chapman.

The management team at Expeditors International also uses filings to its advantage.

Continue reading "So you want to be an activist" »

Posted by Guy Spier at 10:20 AM | Permalink | Comments ()

MBIA, and Bill Ackman locking horns with them has been written up in Fortune Magazine.

Many managers I know have purchased puts on MBIA debt.

Bill Ackman's analysis of MBIA from a financial standpoint is excellent. Probably - for this neophyte, at least. It's some of the best financial sleuthing around.

The bottom line is that when it comes to leverage and hiding bad loans, there is no question that MBIA gets away with things that, mere mortals were to try it out, the regulators would shut them down in short order.

But MBIA continues to do what it does. It seems to me that there is a horse - trade between the advocates of financial prudence - in which case Ackman wins hands down - verses MBIA's political card - which is to muster huge amounts of political support from municipalities and other borrowers by raising the specter of significantly increased borrowing costs if MBIA loses this battle.

It gives me the distinct impression that there are parts of the US financial system that are no different to the emerging markets - because this is how one would analyse a bank in an emerging market - its all about political power, and very little about financial analysis.

For my part, the conclusion that I come to is that much of what happens to MBIA is outside of the realm of financial analysis, and requires the type of political analysis that one would do if analysing a government sponsored bank based in South Korea, or Russia.

Continue reading "MBIA - the Mystery of the $890 Billion Insurer - Fortune.com" »

Posted by Guy Spier at 12:08 PM | Permalink | Comments ()

My sense is that AIG is the subject of a witch hunt, and a board of directors that, in a post Enron world, is just a little trigger - happy.

Article on AIG for Knowledge@Wharton

For a very useful background & set of introductory links to Finite Risk insurance check this engtry on Doug Simpson's blog.

I reviewed posts on the Yahoo.com AIG message board yesterday. A number of commenters imply that AIG's woes with Elliot Spitzer are reminiscent of Enron, Worldcom etc.

Two things strike me. Firstly, the nature magnitude of the transactions in question is dwarfed by AIG's earnings, which themselves are exceeded by AIG's cash flows from operations. Secondly, upon reviewing the recent 8K in which AIG announces a possible charge to book value, I am struck by how the transactions tended to have a zero effect on Net Income, but instead, were used ot manipulate profitability in a particular line of business.

One transaction, for example, converted losses in the Auto Insurance line into capital losses - which would have been reported elsewhere in the income statement.

This to me points to Greenberg's hubris, and desire to make the results reflect his vanity more than wholesale attempt to mislead.

Posted by Guy Spier at 07:48 PM | Permalink | Comments ()