The Buffett party.Many kinds of investing success are mean-reverting. You buy some stuff, it goes up, you sell it at a profit, you feel like a genius, and now you have to do it all over again. It is not so easy to do it over again. Other kinds of investing success, though, are self-reinforcing. You short a company, you say it’s a fraud, it turns out to be a fraud, you make a lot of money, and now you go short another company and say it’s a fraud. “This guy knows frauds,” people say, and the minute you announce your short the stock craters and you make money. You can’t live off this forever—you need to keep making correct calls for it to keep working—but it helps.Warren Buffett has had a fair amount of self-reinforcing investing success, of several kinds. One simple dumb one is that he has a reputation for buying stocks that will go up, so when he announces that he’s bought a stock, other people tend to buy it and it tends … [Read more...] about Will Buffett’s Successor Have His Appeal?
Fair pay and safe workplaces executive order
More Hovnanian!The way bonds work is, I give you $100, and in exchange you give me (say) $6 every year, and then at the end of (say) five years, you give me back the $100. That's if everything goes right. If things go wrong, then after (say) three years, you stop making those $6 payments, and you come to me and say "I know I was supposed to pay you back $100 but here's $40 instead, sorry." This is called "default." The $40 -- an arbitrary number, but traditional in these illustrations -- is called the "recovery."The way credit default swaps work is, to a first approximation, the same, except that (1) you aren't the company that borrowed the money and (2) they are "unfunded," meaning that I don't put up the $100 in advance. If everything goes right, you pay me $6 a year every year for five years, and at the end of the contract we go our separate ways. (You can think of this as me paying you the $100 at the end, and you paying it back immediately, if you want a tidy … [Read more...] about Hovnanian’s Weird CDS Trade Gets Weirder
To report corrections & clarifications, contact: Please indicate whether you're responding to content online or in the newspaper. The following corrections & clarifications have been published on stories produced by USA TODAY's newsroom: April 2018 News: A previous version of this story misstated Elliot Rodger's weapons. He used both a knife and a gun. https://www.usatoday.com/story/news/2017/03/31/masculinity-traditional-toxic-trump-mens-rights/99830694/ Video: A previous version of this video misstated the number of Americans living with unhealthful levels of pollution. https://www.usatoday.com/media/cinematic/video/33952141/8-of-americas-10-most-ozone-polluted-cities-are-in-this-state/ Opinion: Because of an editing error, a headline in an earlier version of this column incorrectly described Amy Wax's job status. https://www.usatoday.com/story/opinion/2018/04/20/black-students-law-school-amy-wax-column/510510002/ … [Read more...] about Corrections & Clarifications