This Review is an update of the previous Shale Oil Review written in 2014(5). Since then oil prices have declined from over $110 to around $50 per barrel and considerably changed the economics of shale oil drilling plus other forms of production as well. In this review we show the history of oil pricing since the 1970s, show how shale oil costs compare to the other major oil production sources, review the economics of shale oil production at these lower crude prices, and briefly discuss the impact on oil sands, LNG and rail shipping. We review the reasons for OPEC allowing a crude price decline and conclude with the overall suggestion that shale oil production is likely to slow down and crude oil prices will ultimately likely recover.
This Review is an update of the 2012(6) Review “Liquidity” which followed Roger Ibbotson’s great presentation at the CFA Society Toronto’s 2012 Annual Pension Conference. Subsequently Ibbotson and his team wrote an award winning article for the Financial Analysts Journal and presented their update at our Society’s 2014 Annual Investment Forum - again very well received. In this update we discuss the four factors: size, style, momentum and liquidity - of which liquidity ranks second to value over 40 years. We also note the risk of the four factors, the returns from combining pairs, and the returns of a regression of all four factors. Finally we show how the authors’ work meets William Sharpe’s criteria for style analysis. In summary we think the work of Ibbotson and his team is a very significant contribution to the existing field of factor analysis and is very valuable research.
This is a Review of the guide and outlook for 2015 of three year-end publications; The Economist, Bloomberg Businessweek, and Fortune. A number of articles from each magazine are briefly summarized along with a link for each magazine. I personally applaud all three publications for their very good articles and hope our readership finds these useful.
This is a Review of the major Canadian banks - a unique and very attractive sector with outstanding long-term performance, both in Canada and globally. In this Review we: 1/quote a long forgotten but important FAJ article which highlights the Canadian banks, 2/ comment generally on the superior performance of dividend stocks based on work by Jeremy Siegel of Wharton, 3/ quote some data from the websites of the major Canadian banks, 4/ show the very good performance of the Bank sector vs. the next two largest TMX sectors, and 5/ note a recent study by Professors Calomiris and Haber, of Columbia and Stanford respectively which discusses financial crises in Canadian vs. US banks, and why Canada has a much better crisis record than the US. We conclude by comparing the Canadian banks with two other excellent performers – Prem Watsa’s Fairfax Financial Holdings and Warren Buffet’s Berkshire Hathaway.
This is a Review of the very good June 16, 2014 issue of "Fortune" magazine, specifically the "Fortune 500" issue, which is about the ranking of the US's 500 largest companies. It is the 60th anniversary of this listing and the first time the total profits of this group have exceeded $1Trillion. In this Review we provide notes on ten articles, all of which I believe can be found online.
This is a Review of Simon Lack's presentation to the CFA Institute Annual Conference, May 4-7 in Seattle, Washington on hedge funds. I attended this presentation and it was an excellent review of research on this important alternative asset class – currently estimated at some $2.7T. The research is based on Simon Lack's recent book: "The Hedge Fund Mirage, The Illusion of Big Money and Why It's Too Good to Be True". The presentation concludes "If all the money that has been put in hedge funds had been put in treasury bills instead, the results would have been twice as good."
This is a Review of Warren Buffett's Berkshire Hathaway 2014 Annual Meeting which long-time friend John Watson and his wife, Josie, very kindly invited me to this year. The meeting was truly a very impressive, memorable and very educational event and I am very grateful for the opportunity to attend. John's guests write notes and John assembles them as "Observations". I have included these (slightly edited) along with some related articles that came out in the press around the time of the meeting.
This is a book review of Michael Lewis' new book. It is an enjoyable and very informative read while making sense of some fairly complicated topics. The theme of high frequency trading (HFT) is quite relevant to all in our community and to Michael Lewis' credit he brings the topic to our attention in a book that no doubt will join his list of best sellers.
This Review is an update of one of the original six reviews - InvestorLit 2011(6) "US Small Cap". As noted in that Review: "US small cap has outperformed US large cap by over 2% per annum since 1926, although underperforms at times and is more volatile than large cap. But, being a less efficient market, it also allows manager alpha, typically expected to be about 3% per annum." Three years later, in this Review, we note US small cap has performed very well. To the extent that some managers are cautious about its prospects this Review examines performance, reasons, and offer some views going forward.
This Review is about fracking of shale oil fields and the resulting gas which comes with this drilling. There has been a great deal of optimism associated with the new production of shale oil and gas since it began around 2005 and some very optimistic and wide ranging implications of this for the economy. There are some cautionary notes though which cause one to question the
extreme optimism. In this review we examine the arguments on both sides, noting the additional drilling required to meet the optimistic forecasts, and then discuss some of the economic implications of the findings – which are on the cautious side.