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Six PMs Describe How They Read

the News

June 10, 2016

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Table of Contents
Rob Martorana
Brian Gilmartin
Anonymous
Jeff Miller
Marc Gerstein
Ed Stavetski

Slides 3-4
Slide 5
Slide 6
Slides 7-10
Slides 11-18
Slides 19-23

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Rob Martorana
Bookmarks
Save the bookmark as an icon, which allows 40 bookmarks on the browser bar.

Top stories each morning as reported by WSJ, NYT, & Google:


1.

Wall Street Journal, Page One:


http://www.newseum.org/todaysfrontpages/?tfp_display=gallery&tfp_region=USA&tfp_sort_by=state&tfp_state_letter=N&tfp_page=1&t fp_s how=100&t fp_id= WSJ

2.
3.

NY Times Page One: http://www.nytimes.com/pages/todayspaper/index.html


Google Top Stories: https://news.google.com/news

Interpretation: Compare page one for each source

What is the top story in each? What is the angle? Overlap?


What stories does one site capture that the others do not?
When does a story defy the political leanings of a website?
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Rob Martorana
Ycharts
https://ycharts.com
Rapidly create charts comparing security prices to economic
indicators, corporate earnings, etc.
Subscription required, or contributor account on
www.seekingalpha.com

Fund Analysis by Factors


https://www.portfoliovisualizer.com/factor-analysis
Analyzes beta exposures of ETFs and mutual funds

My Personal To-Do List (tips I learned from interviews)

Fred Dashboard: Set up personal set of charts


Twitter search: Augments Google search
Feed reader: Set up favorite blogs in www.Feedly.com
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Brian Gilmartin
Briefing.com: Inexpensive annual subscription; very quick.
Twitter search: Yields a link-fest of results, and it forces you to read certain stuff
Earnings: Factset, Thomson Reuters
Misc.

Value walk
Josh Brown
Street-only research
Morningstar for intrinsic value (Robs comment: Great for corporate historicals)
Schwab (consistent quality and reliability for broad range of material)

I publish for myself: It forces me to organize my thoughts.


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Anonymous
Break Down the News Into Buckets of Information
Intra-day
Daily
Periodic
Batch Process
Sort research and white papers by topic
Save in folders
Read in batches: Then youre reading five articles on the same
topic. Its a better use of time than a scattered approach.

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Jeff Miller 1

You do not get paid for yesterdays news


http://dashofinsight.com/you-do-not-get-paid-for-knowing-yesterdays-news/

Be aware of consensus, but your edge comes from:


Superior interpretation
Non-consensus sources: Science, health, and research
Contrarian bets

Information you need, and do not get


http://oldprof.typepad.com/a_dash_of_insight/2012/10/information-you-needand-do-not-get.html

Dramatic
No fact-checking
Recency bias + tweets = A.D.D.
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Jeff Miller 2

Recession Forecasting and Misinformation


http://oldprof.typepad.com/a_dash_of_insight/recession-forecasting-misinformation.html

Objective standards
Few variables
Stable inputs

The Fed and QE


http://dashofinsight.com/fed-policy/

Confusing correlation with causation


Injecting political opinion
Misunderstanding the Feds motives
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Jeff Miller 3

Daily Reading
Abnormal returns every day, AP every day. FT for foreign coverage.
Feed reader that rotates among blogs: Occasional vs daily.
The news does nudge economic data and trading programs
sometimes. (And how the market reacts to the news.)
This is opportunistic, and I take more of a directing role. Mike and I
then decide.

Books
We all need to read more
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Jeff Miller 4
Below the Radar
You need sources out of the mainstream for an edge. Readers send
things to me (e.g., articles from Zero Hedge)
Gilead Example
All the biotechs took the hit. These are easy political targets and
could be dead money for a year. But there is no chance of a limit on
drug prices since cooler heads will prevail.
Tools Have Improved
Chuck Carnevale and YCharts are good.
I can rank regional banks by tangible book quickly and cheaply.

Its the interpretation, not the data.


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Marc Gerstein 1: Intro

Marc is model-driven and does not focus on individual


corporate news releases. He is more likely to focus on
the big picture, and on stories about health, science,
politics, or general human interest.

Reading too much is counterproductive.


Models are based on data.
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Marc Gerstein 2: Economics


Go to FRED and set up a dashboard. Use the longest
time horizon it allows.

I prefer charts to commentary.


When I want to know what the economy is doing, I look
at the charts myself. I cant read numberstheres no
context. But I can digest the chart.
The narrative may be completely different in the news
story. Stories are driven by novelty of the moment,
extrapolation, and consensus expectations.
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Marc Gerstein 3: Reading the News


I start the day with WaPo and NYT. Economist on weekends.
Having worked at news and publishing, I know how the sausage is
made. The headline IS the story.
Standard Practice
Summary headline, supporting quote, contrasting quote
News is written as an inverted pyramid with key info first.
Read surgically and look for themes
Example: In a story on unemployment
Which is the upper quote? (consensus)
The lower quote? (contrary view)
What does management say?
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Marc Gerstein 4: Problems with Todays News


Recency bias: Earnings commentary in the media focuses too
heavily on recent results and consensus expectations.
Random theme: The narrative is driven by who picks up the
phone first. (Budgets are collapsing, taking quality with it.)
Tabloid Practices: An obsession with pageviews dominates
editorial choices:
The two rules of tabloid journalism are:
1. Simplify
2. Exaggerate
Too much emphasis on witty headlines and not enough
on context, research, and clarity.
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Marc Gerstein 5: Politics as a Leading Indicator


Politics reflects the mood of the country, and there are
long cycles.
The political will eventually determine the economic.
Its long lead time, but it eventually works. Listen for the
key narratives in the market.
(Robs comment: Presidential campaigns have been
bearish on intl trade. Eventually will hurt exporters.)

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Marc Gerstein 6: Monetary Velocity


The biggest economic problem at the moment is weak
monetary velocity.
Fundamental imbalances in the economy are showing
up in the velocity. Velocity is a choice made by
individuals and businesses. Fear of job losses is
paramount.
Business: Who is going to buy what I produce? Organic
demand drives decisions far more than the cost of
capital.
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Marc Gerstein 7: Partisan Insights


There is no such thing as objective news. The headline
tilts the story one way or another. The quotes also tilt
the story.
Its better to give the opinion up front and give the
evidence for it.
The left/right divide is inherent and global. Accept it.
Villains are necessary: Every good narrative needs an
enemy. (e.g., professional wrestling). The NBA lacks
villains and thats a problem.
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Marc Gerstein 8: Sample News Feeds


NY Times
Washington Post
Federal reserve
Bloomberg
Huffington Post
SEC
FT
Twitter: Youd be amazed at what you can get.
Real Time Economics
Harvest Exchange
PIMCO
Harvard Bus Review
Forbes
Salon
Bill Gross
Doug Kass
Donald Trump

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Ed Stavetski - 1

Core assumptions and rules of thumb


1. Skepticism: You cant take news at face value, whether
bullish or bearish.
2. Action and reaction: All actions have a reaction, and
every law has unintended consequences. (Example:
Unemployment is falling but food stamps are rising. Is
this prosperity? What kind of prosperity? For whom?)
3. Getting a balanced view takes work: Good news gets
out on its own since PR is a powerful tool ( just consider
the image of Warren Buffet). Therefore you must
proactively seek the bad news to get a balanced view.
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Ed Stavetski - 2

Certain websites find the potholes first

People: Marc Faber, Jim Rogers, Doug Casey, Jeremy


Grantham
Themes: Prepper websites, gold bugs, crypto-currency
advocates, etc.
The opinions are 90% garbage but they find the
potholes first. This serves as a torpedo alert for certain
types of news.
Example: Ammo purchases by IRS, DoE, Amtrak, etc.
(National Review called this the Great Ammunition Myth, BUT it
uncovered militarization within the DoE.)

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Ed Stavetski - 3
Comments on Articles Reveal Public Anger

It took a while for conventional wisdom to recognize public anger


as the driving force behind the 2016 election cycle.
The comments section of any major website has shown this for
years.
People are angry about getting deceived.
People are angry about the prospects for the next generation of
Americans.
Concerns range from public deficits to the bubble in higher
education (grads with $50,000 in debt earning $15/hour)

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Ed Stavetski - 4
Political Analysis

Ian Bremmer
Strategas
Eurasia Group
Chartwell Asia
Central Bank notes
Jim Grant

Debunking Technotopia (science as salvation): Examples

The Web empowers both free speech and paid trolls


Drones reduce privacy and micro drones eliminate it
Failed states profit from rogue technology without limits (illegal
drugs, biological agents, hacking, gene modification, etc.)
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Ed Stavetski - 5

You must have an


independent view on the
markets or the media will
force a view upon you.
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