CSLA Pay Homage To Great Market Minds Greenblatt, Burry, Grant, Marks And More

In attempting to acquire and communicate wisdom from the world’s best investors, traders and even investment bloggers, the team at CSLA has a significant job on their plate. In a July 8 “Bits & Pieces” analysis they attempt to consolidate the wisdom of economic and market thinkers such as James Grant, Joel Greenblatt, Howard Marks, Ben Graham and Michael Burry among others. While we won’t use 38 pages and four volumes of reports to communicate the issues, we will attempt to pull the best of the best (on a subjective basis). If a trend is to be discerned it is keep investing simple and go against the grain.

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James Grant on emotion in markets and central bankers

Even in the age of computers and algorithmic systems increasingly pushing price activity, markets are driven by emotions, James Grant points out. To assume that a stock’s value is derived from nothing other than corporate earnings discounted by the prevailing interest and tax rates is “to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them… Martians had landed.”

In the end markets are as efficient as human emotions, which is why at times both can be very volatile.

When Grant looks at the banking sector, it is his quote on “too big to fail” that is perhaps most on point. “Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich,” Grant famously wrote.

It is the role of banking and bankers that has changed dramatically over the last 30 years or so, which in part can be seen in the role central bankers play in markets. “Central banks have gotten out of the central banking business and into the central planning business…” But in the end “the Fed can change how things look, now how things are.”

Michael Burry goes against the crowd to find “rare birds”

Stock value is not found by investing in companies who have already been identified in the mainstream. Proper value investing is sometimes about making unpopular choices, finding that diamond in the rough that everyone else maintains is nothing more than a dis-guarded piece of rubbish.