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Alan Johnson

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  • When Good Models Go Bad [View article]
    Jeff, I really enjoyed your article. It confirms my feeling that our thinking is similar.

    I'm inspired to redouble my efforts to get my SPC/SQC article written and published!
    Jan 31 02:22 PM | Likes Like |Link to Comment
  • Goldman responds to clients on overvaluation call [View news story]
    Goldman may be right. On the other hand, they may be wrong.

    So what's the benefit of these forecasts?
    Jan 21 12:23 PM | 1 Like Like |Link to Comment
  • The S&P 500 Index Trapped In QE [View article]
    Bank of Japan is also concerned about distortion effects mentioned in my third paragraph above. See
    Dec 7 06:40 AM | Likes Like |Link to Comment
  • The S&P 500 Index Trapped In QE [View article]

    Sorry. Poor wording on my part. Should have said "Would the market know how to interpret this?"
    Dec 5 01:19 PM | Likes Like |Link to Comment
  • The S&P 500 Index Trapped In QE [View article]

    I've had similar thoughts along those lines. Also, I'm beginning to wonder if "transparency" can be taken too far. That is, what if they just cut by $5 billion per month without telling anyone? Would the market notice?

    A flip side to this is the conduct of big money managers. Does Warren Buffett announce in advance that he is about to buy a significant block of shares in a public company? Of course not. The price he would have to pay would go through the roof.

    So, taking that thought a bit further, "transparency" on the part of the Fed becomes, in effect and even though perhaps unintended, another form of market manipulation / distortion (but also see my previous comments here about the Fed's not having a mandate to prop up markets).
    Dec 5 12:15 PM | Likes Like |Link to Comment
  • The S&P 500 Index Trapped In QE [View article]
    Sometimes my writing style, while intended to be thought provoking, produces unintended interpretations. My last point was that I do not share the author's view that the Fed is looking at this same graph and "is afraid to stop QE, fearing that the market will correct by a lot..."

    They may fear that job creation will halt, but supporting the market is not one of their mandates.

    To the extent that one is related to the other takes us full circle back to the issue of correlation and causation, chickens and eggs, and the potential dangers of plotting data such that curves line up and then drawing conclusions about cause and effect.
    Dec 3 05:46 PM | Likes Like |Link to Comment
  • The S&P 500 Index Trapped In QE [View article]
    If there truly is causation between total value of Fed holdings and the stock market, then wouldn't one expect that if the Fed simply held the balance sheet constant at current levels, then the S&P 500 would flatline at its current level as well?

    Or, to keep the stock market growing at, say, 8% p.a. then the Fed could simply grow their balance sheet at 8% p.a. as well.

    Of course, stock market index growth isn't included as one of the dual mandates of the Fed...
    Dec 3 02:16 PM | 1 Like Like |Link to Comment
  • Bitcoin: The Future Of An Illusion [View article]
    @Jamin Chen,

    ...But of course that was then. In the future, if you need a boat ride in a hurry, which of the following is best to have as barter:

    a) U.S. dollars
    b) euros
    c) bitcoins
    d) gold
    e) food
    f) potable water
    g) gasoline / fuel
    h) batteries
    I) tobacco
    j) alcoholic beverages
    k) clothing
    l) medical kit
    m) gun and ammunition
    n) morphine / drugs

    Kind of depends on the situation, I guess. Not sure I would want to live in a world where everything else on this list would be preferred over (a).

    But that's me (an aging baby boomer).
    Dec 3 10:38 AM | Likes Like |Link to Comment
  • Bitcoin: The Future Of An Illusion [View article]
    "And therein lies its central fallacy: fiat currencies are bad because you can't trust national central banks, but cyber currencies are good because you can certainly trust unnamed strangers with no fiduciary duty, no regulation, no balance sheet or street address."

    Apologies in advance if anyone is offended, but I can't help but point out the (sometimes) parallel to SA articles.... Namely, contributors with a background in financial services and capital markets are bad because they are only working their own agenda, but you can certainly trust commenters who hide their identity behind a pseudonym with no accountability for their claims, forecasts, and investment advice.

    Thanks for a very logical and thoughtful article.
    Dec 2 12:44 PM | Likes Like |Link to Comment
  • On the hour [View news story]
    "Slight gains for stocks in midday action"... S&P 500 is up "only" 0.28% midday. That's "only" 102% CAGR based on 252 trading days in the year. Yawn. This New Normal is a lot different than the one PIMCO envisioned several years ago.
    Nov 20 12:19 PM | Likes Like |Link to Comment
  • Thoughts On Forward Guidance: How Much Should Bernanke Say [View article]
    "we, the investors, should be responsible for focusing on the cental bankers' actions, rather than their guidance"

    I strongly agree. I also believe that much of what passes for "information" is really "noise." Statements about what might happen in the future (which no one, not even central bankers, can actually know) are noise. Facts about what happened in the past are information.

    Thanks for a well-written and timely article!
    Sep 26 07:39 AM | Likes Like |Link to Comment
  • The Fed Postpones The Moment Of Truth [View article]
    I really enjoyed reading your article, right up to the last paragraph and your discussion about Janet Yellen as the "odds-on favorite."

    I learned an important lesson yesterday about prognosticators. They produce noise, some of which later becomes information.

    There's no value in my allowing myself to be swayed by those that try to outguess who will be the next Fed chairman, and whether or not the appointment will mean the Fed will remain dovish or turn hawkish.
    Sep 19 04:15 PM | Likes Like |Link to Comment
  • Troll Hunting [View instapost]
    Followed David Jackson's link to this article. Really enjoyed it and will probably refer to it in the future. Thanks for sharing!

    Would also like to add my own pet peeve -- when I comment on an article I always check the notification box in case someone comments on my comment.

    I find it annoying when I see a new comment, go to the article, and the comment is about some sports team -- which generates even more comments about the sports team.

    Because I have no time to waste with such distractions, I have to reluctantly turn off the comment notification in order to avoid further distractions.

    Wish SA would put a sports team filter on such comments.
    Sep 17 07:22 AM | 3 Likes Like |Link to Comment
  • Do Retirees Need A Dividend ETF Or A Portfolio Of Individual Stocks - Part Two [View article]
    Have any of you considered a platform like dittotrade ( ) ? (Note: this is not an endorsement of the site.)

    I met an individual at a trade show earlier this year who used to be a registered investment adviser but said he gave it up in favor of dittotrade.

    A "lead trader" (presumably one or more of the DGI investors mentioned in these comments) has his portfolio at dittotrade. Other investors ("followers") open an account at dittotrade and designate a lead trader. Whenever the lead trader makes a change to his/her portfolio, the same changes are made in the follower portfolios.

    The lead trader is, in effect, a fund manager.

    Again, my comment is not an endorsement of the dittotrade service and I have not done a thorough investigation of their business model.

    I offer this comment for consideration and to see what others think of this as a potential way to pursue their interest in having a DGI fund manager as a primary or backup to their own activities.
    Sep 9 07:19 AM | 3 Likes Like |Link to Comment
  • Drilling Down On Volatility Decay [View article]

    Try putting "volatility decay" in quotes (as you did in your comment) in your Google search. I did and got 2,400 hits.

    Hope this helps.
    Sep 8 03:39 PM | 1 Like Like |Link to Comment