Happy Thursday, Viewfinders. It's that time of day again. On with the annotated links to fun stuff I've been reading.
In the bizarre-financial-news department, the day's biggest story by far came from a company called Fantex Inc., which filed to raise $10.6 million in an initial public offering at $10 a share. Its main revenue source would be Houston Texans running back Arian Foster, who pledged 20 percent of his football-related earnings to Fantex, including endorsements, in exchange for a one-time $10 million cash payment. Fantex says it plans to make similar deals with other pro athletes. Now get this: The arrangement with Foster is eerily similar to the kind that author Michael Lewis predicted would become commonplace in a 2007 Portfolio magazine article called "The Jock Exchange." The links take you to today's Bloomberg News article about Fantex, the company's registration statement and the piece by Lewis.
A conversation with Eugene Fama
A week before he was awarded a Nobel Prize in economics, Eugene Fama was interviewed by John Nersesian of Nuveen Investments at a conference in Chicago. Evan Simonoff recounts what he said in a lengthy article for Financial Advisor magazine. Fama was unrepentant on modern portfolio theory. He acknowledged markets aren't "perfectly efficient." (Any financial reporter who has ever written an article that tanked a stock could tell you that.) And he's a fan of private-equity funds, but not hedge funds. From the article: "Fama related the story of `good friends' who have started hedge funds and failed three times. 'Reputational theory' says they should only be able to do it once. Nersesian noted that they must be good at something. 'Losing money' was Fama’s response."
In case you were thinking of buying shares of Twitter...
This is a new website for me, called An Objective View, run by a firm called Objective Capital Management. Anyway, the folks there say "if you aren't invested in Twitter already, you may want to stay on the sidelines for the IPO." And I like their plain talk: "You and your advisor should be concerned with positioning your portfolio to best fit your goals in life, not a gamble on how well an investment bank is going to bring a hot company to market." (Surely the same must apply to Fantex.)
Where have you gone Kay Bailey Hutchison?
Ted Cruz, the Tea Party senator from Texas who helped shut the government, got a blistering editorial from the Houston Chronicle, which endorsed him in last year's general election and now seems to regret it. The headline: "Why we miss Kay Bailey Hutchison." Excerpt: "We're not sure how much difference one person could make in the toxic, chaotic, hyperpartisan atmosphere in Washington, but if we could choose just one it would be Hutchison, whose years of service in the Senate were marked by two things sorely lacking in her successor, Ted Cruz. For one thing, Hutchison had an unswerving commitment to the highest and best interests of Texas at all times. This revealed itself in a thousand different ways. Hereabouts, we miss her advocacy for NASA, the Port of Houston and the energy industry. And we know she worked just as hard for Dallas, San Antonio and a hundred smaller Texas cities and towns. And dare we say it? We miss her extraordinary understanding of the importance of reaching across the aisle when necessary. Neither sitting Texas senator has displayed that useful skill, and both the state and the Congress are the poorer for it."
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)