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Akram's Razor

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  • Iran Is Enjoying Oil's Risk Premium, But It Won't Last [View article]
    If you have nukes you have bargaining power. If you don't have nukes you don't. Should we be surprised that a country geographically situated where Iran is and with the largest population in the region would seek to assert itself? Personally, I am not surprised. Now, i wish they'd just ally up with someone with nukes and put an end to this, but it seems the russians and chinese are happy to let america and maybe europe stumble into another costly mess in the region before they really make some noise. I think nobody wants an America vs. Iran conflict more than those two countries at this point in time. Geopolitically it makes sense if you think about it. That being said, I don't really understand what iran's goals are here. They are an enigma. Why they have not pursued a regional economic domination approach to power is beyond me. That would seem to be the efficient path to get what they want.
    Jan 8 01:46 PM | 1 Like Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    btw-Please explain what helping people has to do with whether or not your analysis of the economy and bullish stance on the markets makes sense or is at least supported by some sort of compelling well reasoned argument?

    You chose to change the topic of conversation. You chose to cite roubini and mish as people who have 'been wrong' arguing with you which I think is just a blatant misrepresentation. You chose to only cite picks that worked. You have chosen to ignore your failure to see the financial crisis coming when it was staring you in the face. It's not like your buy everything irrespective calls were dated years before the crisis. They were weeks before the collapse began and after the mess in the system had become obvious to almost everyone involved. Caution would have been prudent, but that is not what you are about.
    Jan 8 01:12 PM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    I really have litte respect for people who can't engage in a spirited debate on the merits and think they can get buy with a collateral attack strategy that focuses on marginalizing the source. My age, ethnicity, present geographic location, education, title, amount of followers, website ownership or lack there of, and forecasting track record or stock picking ability are all irrelevant. What is relevant is the bull case you presented for markets and the economy, and my fact supported and well cited response. You could have taken the time to counter my points and move on, but that clearly requires too much effort on your part. Instead you continually skirt and attack even when I made a great effort to remain even handed by complementing a lot of the things you do well.

    If I recommend buying 200 different Biotechs because they might be bought out having one actually bought out is not a major accomplishment.

    As for your repeated penny stock comments, I don't get them. This is a SA published article. I am selling no ad space. Furthermore, I think the hypocrisy here borders on the surreal. You have gloated about how you initially set up stockpickr.com as a hype job, and had Cramer via thestreet.com invest and then promote it on cnbc with the intention of flipping it immediately. You celebrate how you were putting out 5-6 articles a day in a financial spam like manner to drive traffic and sell as much ad inventory as possible. Your "five chinese stocks that could double" article is a perfect example of this type of content. It's the tabloid world of financial information. The content is not designed with actual investment advice in mind. The sole focus is on generating as many clicks as possible, and accomplishing this by mining information in anyway you can. Hence, the inferior quality, and ultimately poor overall performance. A monkey could have thrown a dart at board and probably done better picking five names that might double.

    Furthermore, who cares about one or a hundred good picks out of a guy that makes thousands. Your problem is you dilute yourself. Focusing on the fact that you were as bullish as ever as the global economy and markets approached a devastating once in a lifetime crash is entirely acceptable. Dodging the iceberg that sinks the whole ship is kind of important in this game.

    Oh, it would be pretty cool if I was 14. So, I will not outright deny that accusation.

    btw- How did netflix go from -200% to -250% in a few hours?
    Jan 8 11:45 AM | 3 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."- Mark Twain

    The audience has weighed in on this matter James. I am clearly not the only one that was looking for more out of your response.

    Best of Luck
    Jan 8 06:20 AM | 1 Like Like |Link to Comment
  • Netflix: This Stock's Story Is Over [View article]
    Thanks. Send me your email and I will add you to my distribution list. And no it is not the standard for qualitative analysis which is where I like to think my edge is. But anything controversial I have learned will be a headache if you have typical industry types involved who have no desire to roll up their sleeves and get familiar with the issues. Very important to work with the right people if you are doing this type of stuff. I had the same problem with being bullish on BP after the spill mania was at its peak despite the fact that I have a legal background too. Netflix was just natural evolution for me. I was a big shorter of the movie rental chains in 2005/2006 because of them so i got familair with the model. Also, had a solid understanding of licensing deals because i got very into marvel comics stock when they released the first Spidey, which btw i was recommending as a disney takeover on yhoo message boards five years before the deal happened. So, when netflix shifted to digital streaming i started paying attention. I wanted to see how much content they would get and how the service would be priced.I then wanted to see how successful the disruption would be before the industry adopted a hostile position. Once signs of that emerged I started to outline a 1yr bear case with my focus being on the starz contract expiration date as my marker. Still think what reed hastings did in january last year with pulling annual guidance and writing that post while dumped shares was just wrong. He knew then he was going to have to make some moves to offset content cost escaltion, and he chose to postpone the bad news literally as long as humanly possible.
    Jan 7 07:40 PM | Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Market analysis is an ongoing debate. There are points, counterpoints, twists, and plenty of turns. If you really think that all those topics were addressed in what you wrote, and that everything I wrote was irrelevant there is not much for us to discuss. Note in every response you pick and choose what to reply to, and completely have avoided addressing your colossal failure in 2008 to spot the crisis or your chinese picks that all declined as much as any company filing for bankruptcy would fall. I on the other hand have responded to everything you have had to say. Btw- Again still waiting for the Iraq/Israel and India/Pakistan war risks explanation.

    As for netflix, my first article on the stock was at $156. In that article i gave a 12-16 month horizon for a 50% decline. When you go after a business model short you buy puts my friend to match your horizon to get your short exposure. But then again I can't recall when you ever came out recommending a short. Also, when I wrote that article i was bullish on opentable, which nearly quadrupled. But here is the thing. That was dead wrong as the reasons I was bullish on opentable eventually proved to be wrong even as the stock price went much higher than I expected. As I started to conclude management had failed and the model was flawed I switched my views on Opentable instead of celebrating a pick that went up four fold. Process over outcome!! Markets are fluid that is why your perma bullishness is ridiculous. You need to be able to change your views. I however, unlike whitney tilson, never backed off Netflix. Reed Hastings chose to bluff and most of the sell side was happy to promote it. But if you have ever shorted anything like a fslr, nflx, open, yoku, dang, or any other momentum stock or company where you have identified a flawed business model or super cyclicality you learn that plenty can go wrong. That's why options work better for these type of trades.

    But here is the important thing on NFLX. I was spot on in my analysis. And I held my ground not because I was stubborn, but because when you do your homework and continue to see no evidence to the contrary that your thesis is not right you have the conviction needed to stand your ground.

    I will say the only thing that has come out of this exchange is that you have disappointed me. You come off as more humble and open to criticism in your books and on tv. I was of the view that some of the stuff you throw out there on the economy is just for theatrics and that behind all that you still have the horsepower to engage in a debate on the merits. So, far no proof in this chain on that. Still you have a very interesting story and clearly have been through a lot and seem to have identified that in this day and age sharing that is just about all you need to do to get people to listen. Keep up the good work. And if you ever want to actually debate the economy and global markets, I am up for it.
    Jan 7 06:04 PM | 4 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    What planet are you on James?

    'ranty opinions not based on facts'

    That's five comments now, and you have said nothing. Not one piece of analysis out of you worthy of someone who puts himself out as person who understands markets and the economy.

    And whose backing off? I am willing to give credit were credit is due. I find some of your writing to be great, and some of your ideas to be solid. I even opened off by agreeing with you on housing. In general, this is what we call being objective. But at the same time, I have little tolerance for nonsense. Watching someone say he was spot on when it came to the economy at the end of 2010 who was telling the world that subprime and housing were contained in july of 2008 and that you should just buy and that all stocks are cheap is just sad. You don't get to say you are right when you screamed buy at the top of your lungs before everything collapsed and then needed all kinds of intervention to save you. You get to say you were wrong, and the game is over because not a single person will ever trust you with their portfolio ever again no matter what happens after that. And in this business people will be quick to remind you that when the rally came because the whole system had to be bailed out you don't get to take the credit. So, really you get the blame for the fall, but no credit for the bounce except from the press which never seems to care.

    Fact- buying financials before the crisis was a bad idea, and buying them after the crisis for anything more than a temporary short term bounce has also proved to be a bad idea. The industry is experiencing a structural shift. If you are in the space you are living through it everyday. We may be closing in on the end of the painful transition period, and that may finally spell relief for financials but that clearly not something you have given much thought to. You have just said buy pretty much every day since late 2007.

    Fact- you recommended buying 5 chinese stocks that 'might double'. All five spectacularly imploded and you washed your hands of them as you seem to wash your hands of every bad call. But then again is it a mistake when you recommend so many stocks that you know so little about or is it just reckless advising? More research and fewer picks and less headline grabbing stuff like 5 stocks that could double this year, and you might find that you will never recommend 5 stocks that all immediately lose almost all their value.

    Now as I said before you win some and lose some, and that seems to be something you embrace when it comes to giving life advice. However, when it comes to the market you don't seem to be willing to embrace this credo. And to call into question the work of guys like MIsh and Hussman is pretty sad considering the thorough nature of what they provide. And referring to every critic as 'some guy i have never heard of' is a classic dismissal move and attempt to weaken the source without having to rely on the merits of your own argument. Who cares if they were wrong to be bearish or cautious in 2010. On balance, I know they will never tell me everything is worth buying a few weeks before the entire market will begin a 60% collapse. And bottom line is no matter how wrong they were, I will always give more respect to what they have to say on markets because they take the time to flush out an argument. I'm more interested in the process than the outcome. You seem to be the opposite. You start with a conclusion like dow 20,000 or new highs by x date and work backwards from there looking for anything you think can add some credibility.

    As for giving away you book, thanks for the disclosure now. As none of your other books are free, and to my knowledge neither is booking you for an appearance or one on one consulting session. That being said, I love the title and idea behind FAQ ME and will check it out.

    Sorry, if i don't believe your only goal is to help people. Not like anyone would hold having other goals against you, but using that as a counter is a bit much James. I am sure you have other goals too that just managed to slip your mind in the two seconds before you wrote that.

    Oh, I've read The Forever portfolio. I liked the part on luxury good retailers being recession proof. I'd call them more recession resilient, but still a good point. Though I'd argue it was more emerging market organic demand growth than western market recession resilience that boosted these brands and their shares. I also liked a lot of the themes you outlined, but then again understanding demographics and societal trends is a core part of investing. However, if you ask me there is no such thing as a forever portfolio. I find it funny to hear someone so fascinated by dynamism and innovation argue that we can just buy and hold forever. You published that book in late 2008.....the title is the forever portfolio.....so i am curious what performance horizon are we talking about here? From publication date or from before the market collapsed? This is a beta rich portfolio so that is important. Also, if the portfolio is the forever portfolio, the jury is still out.

    Anyways, patiently awaiting a response to anyone of my article points or to both your geopolitical concerns. Just want to hear why India/Pakistan Iraq/israel war are concerns of yours.
    Jan 7 04:10 PM | 1 Like Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Ricard he was better of not responding. Every post just makes him look worse and worse.
    Jan 7 11:03 AM | 3 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Collateral Attacks appear to be all you have. I'm anonymous? What person seeking anonymity uses his real first name? And not exactly a common real first name. If you took the time to read my response and had clicked on the link to 'The Big picture' article you'd have the last name too. But is this what this is about? Names? Identities? You have made three comments and not once discussed the merits of my article. Not a single point I made. Literally no substance out of you. How many times are you going to write "on the economy, you give opinions but no facts... I only gave facts" ???

    People are going to start thinking you are delusional and in denial if you keep saying that. My response is filled with plenty of facts and also much rigorous analysis of those facts. You overlooked the FACT that the 8 money center banks now hold assets worth over 70% of gdp vs 16% when the LDC problem started. When you are assessing systemic risk that is important.(so to is the difference between financial markets then and now as far as derivatives go) You disregard the FACT that effective taxes paid are the lowest they have ever been relative to the corporate tax rate. You completely misinterpret the reasons behind the cash being at all time highs number, and seem to have no desire to understand what that means. Same for buybacks. Go look at whose bought back the most stock over the last five years, and tell me how their shares prices have faired. Is there anything to conclude from msft, hpq, csco, bby, wmt, and xom buybacks?

    As for being right, and those guys being wrong. You are truly delusional.

    Before the Crash you were saying everything is cheap and recommending for people to buy the whole market. Forget your fears and just buy is exactly what you were saying.

    http://yhoo.it/w6bi2e;

    then a few months later even as it became more obvious things were getting messy you were out saying housing and subprime were baked in.......and "you can't go wrong in stocks"

    http://yhoo.it/ryOrTY

    or how about your five stocks poised to double article...all five have been obliterated....literally as close to buying five stocks that went almost bankrupt as you can get.

    http://bit.ly/AB4B1K

    So, what were you right about?

    Actually what happened is the economy crashed and so did the market. You then just doubled down and got more bullish. But we all know that is not how this game works. Nobody with a portfolio would still be standing had they followed your advice in 2008 so everything you had to say a year later wouldn't have mattered. I also can't understand how you would celebrate genworth, dendreon, and goldman. You could have cited other names as evidence of good investing, but you chose those. Three stocks that would collapse because of major fundamental issues. You think anyone who made money long enron is still walking around citing that as evidence of his ability to spot a good investment? That is not to say Goldman is Enron or that you have not written some great stuff on apple and google, but come on get serious already. You were recommending three broken business models that managed to get swept along with the risk on wave driven by govt assistence, and then immediately collapsed once the fundamentals of their models were focused on again. As that goes you win some and lose some. But my point is you tend to not back anything up and just seek to be the guy who is the most bullish. Then when challenged you offer very little in return. Anyone dealing with markets makes their fair share of mistakes, but some of us learn. You seem to have just decided you will be the most bullish person no matter what. And i think i know why. When you are bullish like you are, people don't really ask too many questions. So it easy.

    Btw- I can live with you not responding to the merits of the article or anything else. But I am dying to know why our biggest risk to a bull market is war between Iraq and Israel or India and Pakistan?
    Please ever since i saw you mention that on tv i have been dying for a more detailed explanation. Here I am like a fool focusing on Iran war risk as it is being brought to its economic knees when Iraq/Israel india/pakistan are the real stories. Just that info is all I ask.

    Oh, and let's be clear about your blog and you not promoting. Not that i have a problem with promoting, but just to be clear.

    The opening of your most recent post....
    "Every Thursday from 3:30-4:30 I answer questions on twitter. Then I summarize and expand in a post. Then I’ll expand further in a book coming soon: “FAQ ME”

    FAQ ME....seems you are trying to pull off a Shit My Dad Says type of self help book through twitter promotion....not a bad business idea...but also doesn't allow you to say you are not selling anything as you have 7 books for sale and are using your site to promote one on one consulting and speaking engagement bookings. James you are an ULTIMATE PROMOTER, learn to accept that. You make money of selling you. Nothing wrong with that except when you pretend that is not part of your model.
    Jan 7 10:35 AM | 7 Likes Like |Link to Comment
  • Iran Is Enjoying Oil's Risk Premium, But It Won't Last [View article]
    I am a little confused by the title. Iran is being economically squeezed for geopolitical reasons. How are they enjoying the risk premium? It is coming at their expense as even the asians are cutting imports. As for the saber rattling I agree, they couldn't really afford to disrupt oil in the strait for very long. But the U.S. is backing them into a corner in which they will reach a point soon were they have very little to lose. And it seems the rest of the world is content to stay out of this for now. So, when Iran lashes out you are going to have a hard time objectively telling me we had no choice but to step in. Iran's regime is going to have a very easy time rallying the populace around a conflict that pits it against enemies who are seeking to cripple their economy. Reminds me a bit of Japan WWII oil embargo. By keeping oil out, we forced their hand. Same goes for Iran, except its by not letting oil out that their hand is being forced.
    Jan 7 05:54 AM | 4 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Ricard,

    At some point you just get tired of the nonsense. You can complain and do nothing, or you can take 45 minutes and make an effort to improve the debate. The blogosphere makes that possible. Quality content will eventually find an audience. The press has little tolerance for guys like Hussman, Faber, and Hendry because to understand what they are talking about takes more than 30 seconds. People like that will never just say something without expecting to be able to support it in great detail. In fact, they prefer to explain their reasoning more than their conclusions, and that sadly is not the norm.

    Btw- You keep it up too.
    Jan 6 11:53 AM | 5 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Wow I am surprised an online content contributor and tech fanatic like yourself doesn't understand how this works. I submit an article to SA. They publish it. Then tons of little spammer types on the internet pick up the link. They aggregate this free content and sell the ad space to penny stock pushers. Goolge anything you write and see how many financial spam blogs pick it up

    Btw- I am betting you didn't even read my article or else you wouldn't be saying I don't have a single fact or source. That is just a straight up ridiculous statement. The Bank/ LDC data is cited directly to the FDIC report on the LDC crisis. The current data on bank assets of top US financials is cited to the National Information Center and calculated based on current gdp. The corporate tax graph is from the same FRED group of charts you used for PCE and After tax profits. The real pce yr/yr data and household debt service is from the BEA. And the sp500 earnings yield/treasury yields spread is compiled data that is readily available.

    I am now losing respect for you James. I thought you were a talented writer with a knack for financial entertainment, and clearly creating a media personality. Now, you are behaving like a little kid. You were better off not responding at all than posting what you have posted. This isn't cnbc. You can't just blurt out five sentences and expect people to nod or not really question a single thing you say in any direct manner. In the democratized world of online content which you love to preach about, the burden of proof is a lot higher.

    Look at the feedback on here......the criticism is more about your failure to provide substance than it is about your predictions for dow 20000......considering the boldness of that prediction...that is remarkable.
    Jan 6 09:47 AM | 8 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Well, you can't win them all. Might want to check what I have written about on SA, and what has transpired to those stocks. And there is nothing wrong being long treasuries if you prefer waiting for more reasonable prices in the broader market. Considering how many equity markets fell 20% last year that was not such a bad call, and they still outperformed US equities.

    Altucher reads headlines and then feeds them back into a very bullish construct. Anyone getting on TV and celebrating Black Friday headline sales like it is some sort of indicator of a strong economy isn't spending much time analyzing anything. And when has the chatter been about an Iraq war with Israel? Or an India war with pakistan? That tells me he barely understands the geopolitics of today. Yet, is willing to get on tv and pretend he does without even being aware of how ridiculous he sounds. If dow 20000 was not attached to his reason for a personal appearance; the mainstream media would not trot him out and if they did they would rip him to pieces when he makes such statements like Europe's relation to the US can be boiled down to exports as a percentage of gdp being less than 2%. Look at the sp500....europe accounts for 14% of sales and 20% of profits, and in tech that number is much higher. How many times has he laid out his europe crazy hypo on tv? 4-5 times....how many times have these basic facts been brought up to counter him? How many times has anyone asked him whether or not the mass discounting and extension of the black friday period is worth the headline chasing? He was celebrating goldman, genworth financial, and dendreon. Basically, three structurally broken companies that were on the verge of imploding as evidence of his great calls. He came on tv and gloated about those names at the end of 2010, but have you seen anyone put him on the spot with respect to them and his uber bull predictions in 2011.
    Jan 6 08:41 AM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Debating with you really is pointless. But as I like to everyone a shot, I won't just cite our previous back and forth on china as evidence that you just don't get it. To be clear two things jump out off the bat....

    1) His post is on the 2011 economy, and the outlook for markets in 2012. 2011 is not a post crash year.
    2)In every year I cited nominal GDP was at a record and so was personal consumption. Corporate profits also were largely at an all time high right before every single recession, but it is more of a volatile number because of the occasional financial sector losses hits that it reflects. Sill the trend is pretty obvious...up...and it has a lot more to do with the globalization of us mnc's, taxes, and recent margin moves that come with a long term demand cost


    And then takes this a step further. James is headlines guy. He is always on tv citing any number that he thinks reflects a reason for new highs. Lately, its been buybacks and blackfriday sales that he is in love with. That's fine, but some of us like to think about what's behind the number, and whether a big number in some instances is a bad thing.

    For me what Black Friday has morphed into is a disaster for retailers. They are increasingly desperate to show that the number is rising so they have gradually extended the hours to the point that it is no longer 'black friday'. And they are discounting more and more to entice consumers to shop. That affects post promotion behavior and demand. At some point the discounting is not worth the volume it generates, and I would argue we are at that point. Now good luck reversing the behavior of the consumer.

    Sames goes for buybacks. If management best and place to dump cash is in the hand of shareholders to boost eps, I don't get excited. I want to see companies with ample places to take cash and reinvest in their business, and that is not the case today. So, I accept the reality of a lower long term multiple
    Jan 6 06:05 AM | 2 Likes Like |Link to Comment
  • Debunking Altucher's Bull: 'I Could See, But Now Am Blind' [View article]
    Thanks. But if you've watched altucher for a while i dont think you'd say i am being too hard. He loves soundbite style comments, and the problem with that is that he often ends up tackling a lot with a little. The delevg is good news without question, but we are talking about a guy here who has been on tv every other day for the last year saying dow 20000 because he likes his ipad 2 and black friday is now black thursday and friday. And says things like where is the dow when the apple is at 50x earnings.....or that europe is irrelevant because US exports to them account for 1% of gdp......or even more ridiculous things like what worries him..."war between iraq and israel or between india and pakistan"......"more people dying is a bad thing" ....don't know but for me watching the zombies who interview him say nothing about comments like these gets old after a while. so, giving him a point by point refutation was worth my time....and his response says it all...a few words consisting of a collateral attack and absolutely no real analysis. its not as easy as it is on tv is it...........
    Jan 5 11:24 PM | 6 Likes Like |Link to Comment
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