WSJ: What Is EBITDA?

By SIMON CONSTABLE

When portfolio managers and analysts talk about stocks, they often praise or bemoan a company's Ebitda.

Huh?

That's an accounting acronym and stands for earnings before interest, taxes, depreciation and amortization.

The somewhat complicated formula aims to get at something very simple: how much cash a business generates from operations. See original post here.

WSJ: Why The Individual Mandate May Cost You More

By SIMON CONSTABLE

With many things in economics more is better. More food, more production, more profits — generally all good. But when it comes to health insurance more might actually be worse.
In June the Supreme Court ruled that the health-care law requiring us all to have health insurance was constitutional. A lot of people cheered saying it would pave the way to solve the nightmare problem of health-care costs in the U.S. 

Not so fast. Insurance may actually be the root of the problem with our health-care costs. Or in other words, more people having insurance could actually make things worse. Read more here.

Photo by Diana Polekhina on Unsplash

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WSJ: Barton Biggs: ‘Charming Man of Deep Intellect’

By Simon Constable

Sad news. Famed hedge fund investor Barton Biggs died over the weekend after a distinguished financial career.

It was particularly meaningful to me as I’d had the opportunity to meet or speak with him a number of times over the years both here at WSJ and at my previous employer, TheStreet TV. Most recently I spoke with him about his father and last year he invited me to his home in Greenwich Connecticut where we taped The Big Interview. There were other occasions also.

While some people found him to be somewhat crabby, I found a charming man of deep intellect. There are many people who throw back sound bites during interviews. Not so with Biggs. He pondered each question, thought it through and called on his many years of experience.

He was also modest. Once he proclaimed that he wasn’t very good at timing his investments. That’s something small investors might want to consider. If even a veteran of markets and investing found it tricky to jump in or out of a stock, what chance do the rest of us stand?

He will be missed. See original post here.

WSJ: What Are Covered Bonds

By SIMON CONSTABLE

Is there a path to higher yield and lower risk in the bond market? Apparently there is, if you believe the promises of so-called covered bonds.

These are a type of mortgage security, issued mainly by financial institutions in Europe, that offers fixed-income investors a double layer of protection against default.

Covered bonds differ from typical mortgage-backed securities in the U.S. in that the issuing bank retains ownership of the underlying mortgages. "The fact that it's on [the] balance sheet means that the issuer has skin in the game," says Kristion Mierau, a portfolio manager and covered-bond expert at Pacific Investment Management Co., or Pimco. See original post here.

Barrons: Why Commodities Are Set to Tank

By SIMON CONSTABLE

Investors in commodities need to watch out.

Fresh data show the U.S. economy is weakening. The economy added a paltry 80,000 jobs in June, not enough to keep up with population growth. Earlier last week, we learned the manufacturing sector contracted in June for the first time since July 2009. Other indicators have been equally uninspiring. 

Why does this matter to commodities? The raw-materials sector tends to get hit harder than the rest of the economy in a recession. See original post here.

WSJ: Anna Schwartz, Mother of Monetarism, Was Intellectual Giant

By SIMON CONSTABLE

If it’s rare to find one’s self in the presence of greatness, it’s even rarer to know it at the time.

Yet, the one and only time I met the late economist, and so-called mother of monetarism, Anna Schwartz, I knew she was awesome. She died Thursday aged 96.

How did I meet her?

At the height of the recent financial crisis on March 30 2009 she was part of a panel discussion on the Great Depression that I moderated at the Council on Foreign Relations here in New York City. Watch video from the event below.



The others on the panel all showed their smarts, but intellectually she dwarfed us all. That’s not meant to take anything away from anyone else, but rather to point out that even on a panel of distinguished intellectuals she stood out.

In that 60 minute-long discussion three years ago it was all I could do to keep up with Schwartz. Afterwards my mind was fried.

Although it’s an unfashionable view in some quarters now, she made it clear she hated Keynesianism: the idea that government spending could stimulate growth. She also hated the bailouts. Policymakers might want to take note of those things.

Schwartz, along with Milton Friedman, invented monetarism: the idea that monetary policy can stimulate economic growth. If he was its father, she was its mother.

Friedman got more credit for inventing monetarism that than she did, but likely that is a function of a time when women got less recognition than men, even for the same achievements.

The two authored the 1963 tome A Monetary History of the United States, 1867-1960.

See original post here.