This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• John Hussman (Hussman Funds): Clarity and valuation, December 21, 2009.
When will we accept more risk? Easy – when the expected return from accepting risk increases, or when the expected range of outcomes becomes narrower. Presently, two things would accomplish that. One is clarity, the other is better valuation.

• Brett Arends (The Wall Street Journal): “Hot stocks for a new decade?” Wait a minute! December 20, 2009.
These days investors have relearned that the investments everyone is talking about are usually ones you don’t want to buy. The risks of chasing a highflier generally outweigh the rewards. It takes a 100% profit to recover from a 50% loss. The best investments are usually the ones nobody is talking about. Ten years ago, everybody was talking about which technology stocks to buy. Almost nobody was talking about gold. The Bank of England could barely give the stuff away at $260 an ounce.

• Robin Goldwyn Blumenthal (Barron’s): They said what? Bankers’ behavior, December 21, 2009.
The last of the big banks have repaid their TARP funds, but that won’t end the debate over their rescue and subsequent success. President Obama has jumped on the bandwagon of populist outrage at what he terms “fat-cat bankers.”

• Eliot Spitzer, Frank Partnoy and William Black (The New York Times): Show us the e-mail, December 19, 2009.
We end this extraordinary financial year with news that the Treasury is in discussions with American International Group about selling the taxpayers’ 80 percent ownership stake in that company. The government recently permitted several banks to break free of its potential oversight by repaying loans made during the rescue. But with respect to A.I.G., the Treasury should not move so fast. There is one job left to do.

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