Market Capitalization as a Percentage of GDP

(ritholtz.com) Another interesting pair of chart from Ron Griess of The Chart Store. These two look at NYSE and NASDAQ relative to nominal GDP.

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Gartman: Warren Buffett Isn't An "Idiot" .. But He Allowed "Inexcusable" Losses

(cnbc.com) Newsletter writer and frequent CNBC guest Dennis Gartman isn't standing behind his reported "Warren Buffett is an idiot" quote.

But Gartman does tell CNBC it's "inexcusable" that Berkshire Hathaway fell roughly 45 percent in one year because Buffett didn't do enough to "mitigate" his losses in a tough market environment.


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So whatever happened to Paul Volcker?

(thedeal.com) As the details pile up about what Treasury will formally recommend on regulatory reform Wednesday, you do have to wonder what happened to Paul Volcker and his suggestion in February of a new kind of "Glass-Steagall-like" separation of financial institutions. Volcker, who heads up Obama's Economic Recovery Advisory Board, made the comments at a conference, setting off some discussion among the pundits. Then, silence. Volcker himself hasn't been seen very much -- certainly not like Treasury's Tim Geithner and the seemingly irrepressible head of the Council of Economic Advisors, Larry Summers. A piece on The Huffington Post in May did report that Volcker is talking to the economics team in Treasury and advising Obama, but his office space in the Executive Office Building is empty and the HuffPo suggested that if he has an "office," it's that of CEA member Austen Goolsbee in the White House.

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Why Most Investment Managers Have it Backwards

(www.advisorperspectives.com/Seth Klarman) For value investors, last fall’s crisis provided an unprecedented opportunity. Down markets are a great time to buy securities, as Graham and Dodd said in Securities Analysis, since the average investor can usually only get them “at prices that the future may cause him to regret.”

For Seth Klarman, founder and president of the Boston-based Baupost Group, last fall was a period that offered many of those opportunities. He delivered the keynote lecture at the annual meeting of the Boston Security Analysts Society last week. Klarman also was the lead editor of and authored the preface to the sixth edition of Graham and Dodd’s Securities Analysis, published in 2008.

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This Rally May Need a New Source of Fuel

(nytimes.com) IN early March, when stocks fell to 12-year lows, many investors were confident of at least one thing: stocks were cheap.

Three months later, after huge gains, that consensus on stock valuations is breaking down. It’s quite possible that the rally will soon become a victim of its own swift success.

Liz Ann Sonders, chief investment strategist for the Charles Schwab brokerage firm, said that after seeing the Standard & Poor’s 500-stock index jump to above 940 from around 675 in just 14 weeks, a market that had been undervalued is now “fairly valued.” So a major tailwind that propelled stocks since March has disappeared.

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How Do I Know You’re Not Bernie Madoff?

(nytimes.com) Tony Guernsey has been in the wealth management business for four decades. But clients have started asking him a question that at first caught him off guard: How do I know I own what you tell me I own?

This is the existential crisis rippling through wealth management right now, in the wake of the unraveling of Bernard L. Madoff’s long-running Ponzi scheme. Mr. Guernsey, the head of national wealth management at Wilmington Trust, says he understands why investors are asking the question, but it still unnerves him. “They got their statements from Madoff, and now they get their statement from XYZ Corporation. And they say, ‘How do I know they exist?’ ”

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Buying Stocks or Bonds is ‘Gambling’: John Bogle

Why would anyone listen to John Bogle anymore? Does anyone?

(cnbc.com) Nobody should buy a stock and nobody should buy a bond, said John Bogle, founder and former CEO of The Vanguard Group.

“You’re betting on prices — you’re betting on buying them from those who don’t know how much they’re worth and selling them to somebody who thinks they’re worth more,” Bogle told CNBC.

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