The slide in global markets in recent weeks has cut prices near and far, but the steepest declines for the trailing five-year return – a proxy for the value factor – are still linked with the dive in commodities. That was true for the deep-value list in October and the profile is intact in today’s update, which reflects trading through yesterday (Nov. 14).
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Death toll rises to 56 in Northern California’s fire: NBC
Liability costs from California fires threaten electric utility PG&E: CNN
China outlines trade concessions to US ahead of G20 meeting: Bloomberg
Two UK ministers quit after May announces cabinet backs Brexit deal: Reuters
Israel’s political turmoil creates challenges for US Mideast peace plan: Bloomberg
Fed Chairman Powell is “happy about the state of the economy right now”: MW
Business inflation trend in Nov ticked down to annual 2.2% pace : Atlanta Fed
US consumer inflation trend edged up in Oct as core inflation slipped: MW

It’s old news that managing expectations is usually the main challenge in finding success with an investment strategy. To paraphrase Pogo in the quest to earn a respectable return through time, we’ve met the enemy of prudent behavior and he is us. Less obvious is the tendency for this behavioral risk to go to extremes early on in the period immediately following the establishment of a new investment. By comparison, a decade or more into the holding period — assuming you make it that far — is relatively safe from a behavioral perspective.
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UK and EU reach provisional agreement on Brexit: CNBC
Democratic gains rise a week after mid-term elections: NY Times
China’s retail spending trend slows as industrial output picks up: Reuters
German economy shrank in Q3, first decline since 2015: Bloomberg
Japan’s economy contracted in Q3 due to natural disasters: Japan Times
Several bearish factors continue to weigh on crude oil prices: MW
Spain will ban all gas-powered cars by 2040: Gizmodo
Analysts expect headline consumer inflation to rise 0.3% in Oct vs. Sep’s 0.1%: MNI
US small business optimism held near record high in Oct: NFIB

The recent run of strong growth in GDP is welcome news, but from the perspective of policymakers there are signs that the economy may be approaching its maximum output capacity. In turn, this analysis provides the Federal Reserve with another reason to continue squeezing monetary policy.
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Audio recording seems to link Khashoggi killing to Crown Prince: NY Times
Democrat wins US Senate race in Arizona: CBS
Lawsuits and accusations swirl as Florida recount battle deepens: WaPo
N. Korea maintains secret missile bases, defying promises to US: Reuters
Gaza launches barrage of rockets at Israel: CNN
Amazon chooses New York and Northern Virginia for HQ2 locations: WSJ
SF Fed President: more rate hikes needed with full US employment: MNI
Moody’s: global credit conditions expected to weaken in 2019: P&I
US gasoline prices slide for a fifth straight week: 24/7 Wall Street
Expect rise in number of economic surprises for the US: Vanguard
Crude oil falls for 12th straight session, longest decline on record: Bloomberg

Roughly half of the major asset classes posted gains last week, led by a strong increase in US real estate investment trusts (REITs), based on a set of exchange-traded products.
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A grim milestone for deaths in California’s fires: BBC
At WWI ceremony in France a warning: ‘old demons are rising again’: Time
Is climate change becoming too complex and divisive to solve? Axios
Global oil producers close to cutting production: Fox Business
Does Australia’s long-running expansion hold lessons for US policy? Bloomberg
US dollar close to 17-month high in early trading on Monday: Reuters
China says it will further open up its economy: Reuters
The vote recounts in Florida, Georgia and Arizona are razor close: NY Times
US wholesale inflation surged in Oct, highest pace in over 6 years: CNBC
US wholesale inventories in Sep rose a bit more than previously estimated: CNBC
US Consumer Sentiment Index for Nov still reflects upbeat economic outlook: MW

● Merger Masters: Tales of Arbitrage
By Kate Welling and Mario Gabelli
Summary via publisher (Columbia University Press)
Merger Masters presents revealing profiles of monumentally successful merger investors based on exclusive interviews with some of the greatest minds to practice the art of arbitrage. Michael Price, John Paulson, Paul Singer, and others offer practical perspectives on how their backgrounds in the risk-conscious world of merger arbitrage helped them make their biggest deals. They share their insights on the discipline that underlies their fortunes, whether they practice the “plain vanilla” strategy of announced deals, the aggressive strategy of activist investment, or any strategy in between on the risk spectrum. Merger Masters delves into the human side of risk arbitrage, exploring how top practitioners deal with the behavioral aspects of generating consistent profits from risk arbitrage.
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The Federal Reserve left interest rates unchanged yesterday, but the central bank continued to signal that a hike at next month’s policy meeting remains a possibility. The reasoning is that the US economy continues to post solid growth. But a closer look at the numbers suggests that the pace of expansion is slowing. There are also hints that the reflation trend over the past year or so may be rolling over. If so, the case could be weakening for more policy tightening.
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