Lex has long argued that Amazon, despite being a stunningly successful and wildly interesting company, is overpriced. Our astute friend Chris Rossbach, CIO at the long-term value shop J. Stern and Co., thinks we’ve got it all wrong, and wrote us the brief manifesto below explaining his view. It’s well worth a read, and makes an interesting contrast to our own view (on which more later):

Keeping Calm and Clicking On 

Lex live from the FT Banking summit.
Bank returns have been hit by increased regulation, continued low interest rates and slow economic growth. Have lower returns on equity and competition from non-banking competitors rendered many banking business models obsolete? Can universal banks, in the long term, produce better ROEs than more specialist banks?

Join us at midday UK time for a live discussion. 

There has been a range of reactions to our recent big read urging consolidation on the European telecoms carriers.

By far the most well-argued comes from New Street Research. They think Lex has completely lost the plot.

They were kind enough to send us the detailed dissent below: 

The prime minister has called a snap election for next month to help delay a tax increase. The central bank governor thinks inflation may fall below 1 per cent “for the time being”. The stock market is up a fifth in a month.

Japan is a curious place for an investor at the moment. And yet Japanese equities seem to be one of the great trades of 2015 – if Abenomics works. Lex weighs the merits, in this live session… 

Pulling out all the stops refers not to unstopping a dam for the waters to flow forth, but rather to the opening of the valves on a pipe organ. Japanese prime minister Shinzo Abe, in his bid to revitalise his country’s economy, has delivered much fanfare – and even accompanying liquidity. But, on Monday, third quarter GDP figures suggested that all this sound and fury signified nothing. The economy fell dramatically short of predictions of 0.5 per cent GDP growth quarter on quarter, instead shrinking by 0.4 per cent.

The market was quick to react to the disappointing figure, with Tokyo’s Topix index shedding two fifths of the gains it had made since October’s day of shock and awe. But the yen, another measure of market sentiment, strengthened only half a per cent. It remains 3 per cent weaker than October month end.  

A collection of US and European banks have been fined a total of $3.4bn for attempting to manipulate the FX market, but their share prices have barely moved in response. But there is plenty to worry about. Join us at midday UK time for a live discussion.  

“No more. Please.” Banks keep on whining that they are exhausted by excessive regulation. But judging by the growing number of risky leveraged loans they issued in 2014 there is a case for a new dose of heavy-handed rules to curb their aggressive behaviour.

Take a look at chart by the the Federal Reserve, the Federal Deposit and Insurance Corporation and the Office of the Comptroller of the Currency on the growth of leveraged loans (the red bars). 

Yes, that’s what we all need. Another UK regulatory investigation into banking. It must be at least a year since the last one. So the Competition and Markets Authority has decided that the idea it floated in June – a full scale, 18-month investigation into the UK’s current account and small business banking markets – was a good one.

Here is what the CMA does not like about the way the market works: 

As Lex has discussed many times, private equity firms love to talk about why public investors don’t properly value their shares. A slide from a Fortress Investment Group presentation captures the disconnect.

 

Shares in Marks & Spencer are up 8 per cent as its first half numbers beat expectations and there were (at long last) signs of life in womenswear (up a whole 1.3 per cent!) But dig just a tiny bit deeper and earnings per share are down a tenth. So can we believe in the M&S turnround story? Join us at midday UK time for a live discussion and tell us what you think of M&S’s progress under chief executive Marc Bolland.