Oddly Relevant May-15-2013

Why dedecimalization is a bad idea: The Spread Pricing Liquidity Act allows companies with public float of less than $500 million and average daily trading volume under 500,000 shares to select to have their securities quoted at increments of either 5 or 10 cents, while maintaining trading between the quoted ticks. So while the brokers and the algobots will still continue to trade in penny increments, smaller investors — and quite possibly bigger investors, too — will only see prices quoted in multiples of 5 cents or 10 cents. [Note: this is one step backwards]…Source: http://blogs.reuters.com/felix-salmon/2013/05/14/why-dedecimalization-is-a-bad-idea/

Harvard-for-Free Meets Resistance as Professors See Threat: the argument is that online lecture cannot substitute face-to-face faculty-student interactions. While an incredible resource, this way of teaching can also be a way for faculties to dodge lectures and focus on their own research. [Note: Being there minimizes distraction, which really is the prerequisite for learning]…Source: http://www.bloomberg.com/news/2013-05-15/harvard-for-free-meets-resistance-as-u-s-professors-see-threat.html

London Value Investor Conference 2013 Ideas:

Long: Hospira (HSP) : Hospira had been a growth story until the FDA shut down one of its largest plants. The share price went from $45 to $28 overnight. The growth investors sold to the value investors. Price thinks that the company will have completely recovered in two years.

Long: Hess (HES) : Hess is a case where the management have stumbled. Hess is involved in a proxy fight with Paul Singer’s Elliott Associates. It trades at a 50% discount. Price thinks there is likely to be four or five new directors. The company with be divided into two parts and share buybacks with be agreed.  Assets will be sold off. John Hess is likely to step down. The outcome of the vote is due on May 16.  It is also possible that Hess may get bought out.

Bolton: (1) He likes companies that have a possible M&A angle. He looks for a discount to asset value. He looks for unrecognised growth. Changing businesses can create opportunities. What he has found by looking at his mistakes over the years is that they mainly have two causes: a poor business model or too much debt. He thinks that the road to social reform over the next ten years will be difficult for the Chinese. In the short term of a year or so he is expecting a big move up in Chinese equities.

Source: http://www.marketfolly.com/2013/05/notes-from-london-value-investor.html