David Fuller and Eoin Treacy's Comment of the Day
Category - Autonomies

    Email of the day on robotics, Crowd Money and The Chart Seminar

    As Robotics is a theme mentioned with some frequency on FT Money I wanted to enquire whether you are aware of a relatively new Robotics ETF, with the Nasdaq ticker ROBO, and which was listed on 22 October 2013. I would appreciate if ROBO can be added to the chart library, as I believe it is the first purely robotics ETF of its kind and mirrors the performance of the world's top robotics companies, from the US, Japan, Taiwan, Korea and Europe. Following is the link to the Robo-Stox website, listing the fund's holdings, its prospectus and an updated report, as well as other useful insight into the global robotics industry. http://www.robostoxetfs.com/fund-holdings.aspx  

    The October report was of particular interest as it provides details of holdings by company by country. The link is: http://www.robostoxetfs.com/Data/Sites/16/docs/fp0008959_ETC-RoboStox_Semi-Annual_2013_FINAL_web.pdf  

    As this is a theme of personal interest, I would appreciate David or Eoin's insight as to whether this represents a reasonable method to participate in the robotics story without taking on single-company risk, and given Nasdaq's current overextension relative to its 200 day MA, whether ROBO's more international exposure would provide some insulation should the Nasdaq correct and revert to its mean. Thank you for your service.

    I have almost finished reading "Crowd Money", and even though I have been a long term FT Money subscriber since the hard-copy days of the 80's, I must admit that I am guilty of regularly committing every single costly mistake Eoin identifies as typifying mass investor psychology. Consequently I feel that the only logical next step for me is to sign up for the Chart Seminar and Global Strategy Session next month in Sydney! I will be in touch with Sarah shortly. Best wishes to you and your family for healthy and successful 2014. Kind regards.

    Read entire article

    "Mini-kidney" grown from stem cells

    This article by Ben Coxworth for GizMag may be of interest to subscribers. Here is a section: 

    Little points out that while the work is indeed promising, human trials with full-size lab-grown kidneys are not likely to be happening anytime soon. In the meantime, however, the mini-kidneys could be used to test drug candidates without exposing human test subjects to harmful side effects.

    A paper on the research was recently published in the journal Nature Cell Biology.

    Earlier this year, scientists at the Massachusetts General Hospital Center for Regenerative Medicine created a functioning rat kidney. In their case, however, they did so by stripping the cells from an existing kidney, then "reseeding" the resulting collagen scaffold with endothelial cells.

    Additionally, a team from Italy’s Mario Negri Institute for Pharmacological Research has created kidney-like “organoids” that perform the same functions as kidneys when implanted in rats.

    Read entire article

    Email of the day on selecting which companies to include in the Autonomies

    "Hope all is well with you and yours?

    "Could you ask either David or Eoin what selection/filter process is used to include a stock in the Autonomies list?

    "All the very best to you all for the forthcoming festivities.

    "Many thanks"
     

     

    Read entire article

    Chocolate Eaters Drive Record Cocoa Output Deficit

    This article by Luzi Ann Javier, Marvin G. Perez and Isis Almeida for Bloomberg may be of interest to subscribers. Here is a section: 

    Global sales of chocolate confectionary will gain 2.1 percent to a record 7.3 million tons next year, after a 2 percent gain in 2013, estimates Euromonitor International Ltd. Sales in China more than doubled in the past decade, outpacing gains in Western Europe, the biggest consumer. Tighter supplies will mean higher costs for food makers including Nestle SA, Barry Callebaut AG and Lindt & Spruengli AG.

    "Demand for chocolate is great" said Ashmead Pringle, the president of Atlanta-based GreenHaven Commodity Services, which oversees about $340 million. "A lot of the world population is moving to the middle class and will have more money to spend, in particular in emerging markets and Asia"

     

    Read entire article

    On Target on diabetes

    Thanks to Martin Spring for this edition of his ever topical report. Here is a section on diabetes:

     

    Unless the condition is controlled, the consequences are very unpleasant. Complications include problems with the eyes, kidneys, cardio-vascular system and the nervous system. The mortality rate for sufferers under 60 averages 28 per cent in Europe, 38 per cent in North America and the Caribbean.

    The root cause is well known. Most people who develop the more common form of diabetes, type 2, are eating more calories than their bodies are using.

    According to the US Centers for Disease Control, diet and exercise changes can more than halve the risk of pre-diabetic conditions such as elevated blood sugar content developing into diabetes type 2.

    Diabetes cannot be cured, but it can be controlled through weight loss, low-carb diets, exercise, and a range of medical treatments.

    The most important drug is synthetic insulin, which is injected into the bloodstream to compensate for the shortage of the pancreatic hormone.

    Read entire article

    Bond Mutual Funds Headed for Record Withdrawals This Year

    Here is the opening for this informative article from Bloomberg:

    Bond mutual funds are headed for record redemptions in 2013 amid signals the U.S. Federal Reserve will reduce its stimulus.

    Investors have removed $70.7 billion so far this year from bond funds, TrimTabs Investment Research said today in an e-mailed statement. Unless the trend reverses, the redemptions would surpass a record $62.5 billion that investors removed from bond mutual funds in 1994, according to TrimTabs.

    Investors have been pulling money from bond funds since May, when Federal Reserve Chairman Ben S. Bernanke first hinted that the central bank might begin scaling back its unprecedented asset purchases. The yield on the 10-year Treasury note is 2.8 percent, up from 1.93 percent on May 21, the day before Bernanke spoke about the possibility of tapering its stimulus.

    “The ‘taper talk’ that started in May proved to be a huge inflection point for the credit markets,” David Santschi, chief executive officer of TrimTabs, said in today’s statement, which didn’t provide details of redemptions across various categories within fixed income.

    Bill Gross’s Pimco Total Return Bond Fund (PTTRX), which lost its title as the world’s largest mutual fund in October, had its seventh straight month of withdrawals in November as investors continued to flee bonds. The $244 billion fund suffered $36.9 billion in estimated redemptions in the first 11 months of the year, according to Chicago-based Morningstar Inc.

    Read entire article

    Email of the day On when to buy individual Autonomies

    “In view of your comment about buying autonomies low.

    “In practice it's so difficult to interpret what is causing them to be low! Take a look at Experian (EXPN on LSE).  Do I say "no this has clearly lost its upward trend consistency, keep away" or "here is a unique opportunity to buy this autonomy low"? 

    The recent downdraught was caused by a sell rating from Goldman Sachs, fearing lower growth.  Other analysts have buy ratings.  What to do?

    “In the past I have been guilty of always buying into good trends, which then topped out and went down. I am a little afraid to get into the opposite habit now of ignoring the good trends because the shares are too extended, and just buying losers.”

    Read entire article

    Cutting Research on Warren Buffett

    Here is the opening for this informative article from Bloomberg:

    Warren Buffett isn¡¯t just a great investor. He¡¯s the best investor, an economic study has found

    An index measuring returns adjusted by price fluctuations shows the billionaire chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A) has done better than every long-lived U.S. stock and mutual fund.

    The ratio is also larger than all 196 U.S. mutual funds that have been around for 30 years. The median Sharpe ratio for them is 0.37.

    The review of Buffett¡¯s investments concluded he has been rewarded for his use of leverage, coupled with a focus on cheap, safe, quality shares.

    The study said Buffett is willing to take on borrowing to finance investment, then picks stocks that have low volatility, are cheap -- with low price-to-book ratios -- and are high quality, meaning they are profitable and have high payouts.

    By breaking down Berkshire Hathaway¡¯s portfolio into ownership of publicly traded stocks versus wholly owned private companies, the authors also found the tradable equities performed best. That suggested to them that Buffett¡¯s returns are due more to stock selection than to the pressure he puts on companies he has stakes in to improve their management.
    ¡°Buffett¡¯s performance appears not to be luck, but an expression that value and quality investing can be implemented,¡± said Andrea Frazzini and David Kabiller of AQR Capital Management LLC and Lasse H. Pedersen of Copenhagen Business School. ¡°If you travel back in time and pick one stock in 1976, Berkshire would be your pick.¡±

    Read entire article

    Herbalife Audit Will Clear Borrowing for Buyback Bass Says

    This article by Saijel Kishan and Leslie Patton for Bloomberg may be of interest to subscribers. Here is a section:

    Once the Grand Cayman-based company completes its three- year audit in the next 60 days, it will be able to access capital markets and borrow 2.5 times earnings before interest, taxes, depreciation and amortization, he said today in a Bloomberg Television interview with Stephanie Ruhle.
         
    “We’re catalyst-driven investors, and in this case the catalyst is coming in the next 60 days when they have their three-year audit done,” Bass said, adding that Herbalife is a business that generates “significant” cash flows, has no debt and is growing. Dallas-based Hayman owned about 436,000 Herbalife shares, or 0.4 percent of the stock outstanding, as of Sept. 30, according to data compiled by Bloomberg.

    Herbalife has recently been under scrutiny amid allegations by hedge-fund manager Bill Ackman that the company is a pyramid scheme. While Herbalife has consistently denied Ackman’s claims, the activist investor last month said he will take his bet against the company “to the end of the earth.”

    Read entire article