QOTD: Nokia Edition ($NOK, $AAPL)

From Bloomberg Businessweek’s article on Stephen Elop and Nokia (NYSE: NOK), Stephen Elop’s Nokia Adventure:

At its peak, in 2002, [Nokia] contributed 21 percent of all of Finland’s corporate tax revenue

Elop’s message to his employees in the factory town of Salo was that, despite the 450 million phones the company sold in 2010—402 million more than Apple (NASDAQ: AAPL)—almost everything Nokia had done since 2007 was wrong.

It’s a good article, full of interesting information about the challenges . . .

→ Read More: QOTD: Nokia Edition ($NOK, $AAPL)

David Winters finds value in developing markets (Video)

David Winters is a deep value investor who runs Wintergreen Advisers, a Maine-based mutual fund manager. He was recently interviewed by Bloomberg, where he shared his thoughts on where opportunities can be found today. Here’s the video:

Talk to Frank about David Winters

The Seeds of Bad Governance are Sown in Good Times

In a new NBER working paper, researchers Antoinette Schoar and Ebonya Washington investigate the proliferation of poor governance measures, finding that these measures are passed at special meetings following periods of abnormally good performance. Here’s the abstract (emphasis added):

This paper examines the extent to which the corporate governance structure of a firm arises endogenously in response to its performance. We demonstrate that following periods of abnormally good performance managers are more likely to call special meetings and to . . .

→ Read More: The Seeds of Bad Governance are Sown in Good Times

Surprise! Lobbying led to riskier loans, greater bailouts

In a new NBER working paper, A Fistful of Dollars: Lobbying and the Financial Crisis, researchers Deniz Igan, Prachi Mishra, and Thierry Tressel analyzed the relationship between lender lobbying and subsequent performance of those firms’ loans. Here’s the paper’s abstract (emphasis added):

Has lobbying by financial institutions contributed to the financial crisis? This paper uses detailed information on financial institutions’ lobbying and mortgage lending activities to answer this question. We find that lobbying was associated with more risk-taking during . . .

→ Read More: Surprise! Lobbying led to riskier loans, greater bailouts

Bronte Capital: “Mega-Cap Equities are Generationally Cheap” ($HPQ, $GOOG)

John Hempton of Bronte Capital recently published a “Letter to a Client” in which he discusses the opportunities that currently exist in the market. It is an interesting read and I agree with much of it (though, I think he is missing an opportunity on Hewlett Packard (NYSE: HPQ) in favour of the Google (NASDAQ: GOOG) investment):

Own equities.  Don’t kid yourself.  Mega-cap equities are generationally cheap compared to other assets – and certainly compared to the cash/bond/levered asset complex.

Just . . .

→ Read More: Bronte Capital: “Mega-Cap Equities are Generationally Cheap” ($HPQ, $GOOG)