All Articles Finance Modern Money ICYMI - December 6

ICYMI – December 6

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Modern Money

A collection of stories from SmartBrief publications and around the web…

Buffett’s special investing sauce revealed: This paper from Yale University dissects the winning investment strategy that transformed regular ol’ Warren Buffett into the Oracle of Omaha. The paper is fascinating in that it reveals a strategy that isn’t really all that complex. Buffett has utilized leverage of around 1.6-to-1 to purchase undervalued stocks that he then holds through market volatility. The “secret” comes in choosing the right stocks to buy and when. But when you consider Berkshire Hathaway’s portfolio, it’s not like Buffett picks firms unknown to everyone else in the market.

Gensler walks out the saloon doors: Tuesday’s CFTC vote on the Volcker rule reminds me of some old Western movie. Chairman Gary Gensler appears happy to cast one last dramatic vote before exiting through the swinging saloon double-doors.

RUKM?: This is not going to end well. Whats next? A triumphant boom in naked credit default swaps?

Formalize the government guarantee for Fannie and Freddie?: Phillip Swagel from the Milken Institute says it is time to call a spade a spade when it comes to the GSEs. “It would be better to formalize the government guarantee and have it priced so that taxpayers are compensated for providing a backstop in housing finance rather than allowing the government guarantee to remain implicit and unpriced.”

From the sports page: The World Cup draw was today and Team USA is set to face Ghana, Portugal and Germany in group play. I am not as chagrined about the prospects for Team USA as some of the headlines say I should be. Certainly Groups E and H would be a bit friendlier, but fans of the Yanks should be grateful the U.S. is not in Groups A, B or D. Bottom line is Ghana and Portugal are beatable sides. And by the time the U.S. plays Germany, the Germans might be coasting on 6 points.

Yanks fan should also note that IF Team USA actually escapes the Group stage, they will play a team from the relatively weak Group H. That puts the Quarterfinals within reach.

The big winners are American TV production crews because the story lines for all three U.S. games are tantalizing:

  • The revenge factor against Ghana.
  • The sexy Cristiano Ronaldo hits U.S. TVs for 90 minutes (Nike has to be counting its lucky stars).
  • Jurgen Klinsmann takes on Germany! Could he possibly go from the hero who led Germany to glory on the field and coached them to the semis in 2006 to the Lucifer who knocks them out in 2014?


  • USA beats Ghana 2-1 (finally).
  • USA ties Portugal 2-2 (a truly pedestrian side should Ronaldo get hurt or sent off in a testy opening game against Germany).
  • USA ties Germany 1-1 (And Klinsmann can safely walk the streets of Berlin).

Bring on Belgium?!?!