Anton Johnson

Bleeding in the Labor Market

We must use the same unemployment number when making comparisons over time. What are the relevant comparisons using U6? A number in isolation is very nearly meaningless.


On Dec 05 02:02 PM dw57 wrote:

> but thats the u3 number, which is manipulated to make it look good.
> the really good number is the U6, which if you looked at it was more
> %12
>
> On Dec 05 12:37 PM User 185823 wrote:

Bleeding in the Labor Market

The exploitation of statistics for journalistic impact is irresponsible. Don’t contribute to fear mongering. Emphasize the relevant employment statistic, which is the 6.7 percent unemployment rate. Although not perfect and subject to revision, the unemployment rate compensates for population changes and is the appropriate metric to apply when comparing time periods. The November 6.7 percent rate is significantly lower than the 10.8 percent level in 1982 or the 20+ percent levels that occurred during the 1930’s. For real perspective, the November 2008 monthly increase in unemployment is only the 41st worst as a percentage of total employment. The unemployment rate is trending up, and perhaps we will approach prior high levels, but currently we’re not even close. These are the statistical truths that should be reported.

5 Potential Buyout Targets in Biotech - Barron's

Years ago, I thought that I could divine the future of the biotech companies. Account damaging stock gaps from failed “sure thing” phase–three studies and unexpected drug side-effects required a reassessment of how to successfully invest in the sector. Fortunately, before long I realized that foretelling a novel compound’s efficacy and long term safety was beyond my prophetic ability.

Most industry group sub-sectors have a high price change correlation among component companies; however this is not the case with biotechnology. This characteristic suggests that a shotgun approach will be a logical path to success.

The biotech industry in aggregate creates many successful marketable compounds, with ensuing product profits much greater than the sum of cash burn, and long safety issues with resultant litigation expenses, etc. Thus, a more effective way to gain exposure is by using an eight stock or greater basket, or an ETF; select an ETF carefully though, as company weighting methodologies can vary greatly among ETF managers. For example, currently BBH has a huge 39.5% allocation to DNA, whereas XBI has a maximum of 6.1% in any one company. Also, as you would expect, with diversification we can expect a less-wild ride; using daily closing price, the sixty-day standard deviation of XBI is 25.7%, whereas the same for BIIB is 83%, and for ELN a gut-wrenching 209.2%.

Choosing Your Portfolio Risk Tolerance

Geoff,

Do you use adjusted historic prices when calculating asset correlation?

RAJ

Choosing Your Portfolio Risk Tolerance

Geoff,

Thanks for the reply. Perhaps 'sum of all intra-portfolio correlations' is a better definition.

RAJ

Choosing Your Portfolio Risk Tolerance

Exceptional article, one of the most thorough I’ve seen on this site. Within the scope of your analysis, do you have data on weighted correlations of the portfolios, and various rebalancing methodologies?

How to Default on Your Mortgage and Stay in Your House

User 194013, after reading your truly sad real estate story, and as insensitive as this may read, I must ask; why did you over-pay for a new house, in an obviously inflated market. And why didn’t you have insurance on your MIL? And why did you have an invalid living in the basement? And why didn't you install a lift (if absolutly necessary) in your existing house? It seems like poor decision-making on your part has led to your financial woes.

How to Default on Your Mortgage and Stay in Your House

Personal responsibility is a moral choice, just like honesty, keeping your word, etc. People have a choice, and someone that uses a technicality to steal is the same as a common thief to me, whether it is a corporation or an individual that gets victimized. It's simple amoral greed; no one twisted the borrowers arm to sign the loan contract.

How to Default on Your Mortgage and Stay in Your House

Mr. Salmon is this article’s title unfortunate or are you advocating this despicable behavior?

How to Default on Your Mortgage and Stay in Your House

What has happened to personal responsibility, it shouldn’t be strategized or legislated away. If don’t pay your debts then pay the piper.

Baltic Dry Index Almost Back to Record Highs

Is there an ETF or Mutual fund that tracks the Baltic Dry Index, and if not what stocks have a high correlation to it?

Country Funds En Masse Could Be the Answer

I regularly look at alternative ETFs to further diversify my portfolio. I often wonder whether country funds or regional funds offer better results when viewed from a practical sense. The 1 year daily correlation is over 80% between most country indices and their respective regional and/or type indices. Shorter term correlations can diverge significantly however, during brief spurts of country specific event driven volatility. These correlation characteristics imply that a short term rebalancing regime would be needed to capture relative price dislocations among similar country funds found within a broader index. Longer term, these price disparities should be arbitraged away thus providing little if any additional return. Thus, I believe country specific funds are only beneficial to portfolio methodologies that are short term oriented.

As an aside, what should be the goal when constructing a diversified portfolio; should it be a weighted net correlation of 0% (based desired investment timeframe), or maybe + or – 10% or something completely different?

Defining Alternative Asset Classes

I find the 90 day correlation of DBU to SPY is 59.32% and DUB to IEF is (-39.29)% . That is ok but not low enough for significant diversication benifits.