Cagdas Ozgenc

Cagdas Ozgenc
Contributor since: 2013
I didn't say that a low probability event can be ignored. Read the text again and don't twist my words. I think you are fighting too fiercely for a 5% placement on gold. Nobody will create such a big fuss for 5%. You sound more like you lost more than that.
Here we are considering general collapse in Fiat system. If you are going to consider a local event, then it should be obvious to you that you can keep a basket of fiat currencies instead of gold where you can earn interest on the basket but nothing on the gold.
Successful investing requires multi dimensional thinking. Concentrating on one risk factor so much makes you vulnerable to other risk factors. And collapse of fiat system is just one risk factor. There is actually a more and main important risk factor. It is called the "market risk". That's what has materialized on people who held gold/silver in the last 3 years, which led to 40, 60% loss respectively. Blindly sitting on a sliding investment and repeating the fiat currency tale didn't help anybody. It is a case of Homer Simpson: "but but but my poncho".
Collapse of fiat system is a low probability risk. Such risks are called tail risks. And those kind of risks are better not to expect reward on but rather insure against. So if one thinks of gold as an insurance premium against collapse of fiat system, one should also not expect gains. Why? Because insurance policies have negative returns on the average. Otherwise insurance companies cannot make money. Basically one cannot hold gold as an insurance policy and hope to make money. One doesn't buy a life insurance policy with the hope of dying tomorrow. You actually pray that it doesn't happen. And in case it happens you are compensated only up to your coverage. For example a car insurance will only replenish your totaled car. It will not make you money. The only way to make money on insurance is to actually commit insurance fraud.
How do you envision the scenario where the fiat system collapses? Do you think in such a scenario you will be safe in your home? Is your gold going to be safe? If it is safe is it going to have an utility or non-radioactive water and a full tank of gas will have more utility?
Many people seem to think the end of the world scenario but don't seem to comprehend what it may entail.
It is OK to be wrong but it is definitely not OK to stay wrong when it comes to investment. One must swallow his pride and live to fight for another day.
So you haven't been buying gold before, but you will start buying now as it went out of favor. Is that what you are trying to say? Or you have been buying and losing money for the last 3 years and now you are whistling down the dark road with that "dollar keep going up and gold going down speech" trying not to wet your pants?
That is very true. For some reason goldbugs think that stocks are paper assets. Well they are not. You are buying a company. If that company serves a true need in society and profitable then it is a much harder asset than gold.
When it comes to investment people tend to lose objectivity. When they win its their successful analysis of the situation, when they lose it must be the fault of the system.
It is very true that everything is evolving. Many people try to justify holding on to gold with its historical status as store of value. But when you look objectively you may find many things that had very long history but the perception has changed dramatically eventually. For example "paper". With the invention of computers and recently tablets this historically very important product will cease to exist. "Tobacco". It took thousands of years to people realize that it causes cancer.
How many more years are required to realize that gold is a yellow conductor, that I don't know. But if had lost 40% of my investments I would have been quite upset. Nevertheless as a sane investor I would have sit down and think where I did wrong instead of cursing at the unfair system.
"First and foremost, we're writing for long-term investors here and if you're trying to trade gold or expect what we say today to be what happens next week - then read something else. We have no idea what gold will do this week, next week, or next month - but when it comes to a longer term horizon then there is some value in what we focus on - fundamental analysis of the gold industry and the macroeconomic climate."
One of the worst advice that I have read these days. You should be always in control of your portfolio and ready to liquidate be it gold or anything else. Volatility is a proxy measure for risk, and any such downward spiral that gold experienced should have triggered a preset risk management cut-off for any sane investor already.
If you start to visualize anything for a very very long term then one should look into very long term risks such futuristic as space mining, gold synthesizing in nuclear reactors or particle accelerators. Basically you are lengthening your investment horizon to ignore the short term risks, that's fine as long as you don't exceed the meaningful life span of humans (we need to eat at some point) and couple that with long term risks such as technological breakthroughs that may make gold investment obsolete.
After all that criticism on my comments and personal attacks you managed to destroy 50% capital YTD.
Good job.
What do you think is the probability that Venezuela will be forced to liquidate their $15bln physical gold reserve?
Let's set things straight. I have nothing against Apple as an investment, solid company, powerful brand, loved products, good valuation, real earnings. I wrote an entire article on this.
iOS will not get as sticky as Windows until Apple starts dominating the enterprise world. IBM deal is a good step towards that direction. Some hit games that people play for a while won't due the trick. Today Candy Crush, tomorrow 2048, or whatever.
I also appreciate the music collection, payments, and health as good anchors. Now for these to boost stickiness, Apple should start providing the server side solutions for these as well. Enterprise health data storage service, payment processing back-end, etc. They already have the music side set with iTunes. Now those servers should get into hospitals, banks. If not competitors will proliferate the market with their front end solutions.
I never made a single comment regarding whether FB stock is a good investment or not. How you managed to take what I wrote there is a mystery. FB passed the tipping point. It is difficult to contest its presence for a long time. Whether they can monetize it or not, or whether you should put your money on FB stock is a totally different discussion.
You are just providing cherry pick examples with no basis to population drift.
Average time spent on FB is increasing. FB is the new generation Television that will be around for a long time. They locked in retail users just like Microsoft locked the enterprise users. And if some startup makes some jitter they already showed the world that they will buy and integrate it. Competitors have nothing big to integrate to, and these small systems work much better as part of a bigger system.
You can use Google over VPN by paying VPN service less than $100 a month. You don't need a new company for that. They will know what you do but they will not know who you are. Unfortunately Apple cannot keep most of what they do proprietary regarding HCI because they are in hardware business whereas algorithms of Google are highly proprietary and locked within the servers of Google without public access, hence cannot be copied without corporate espionage.
Market doesn't believe in the stickiness of Apple ecosystem as much as Google search or Facebook network. When objectively evaluated one should agree that it would be easier to dethrone Apple than Facebook. That's why a new revolutionary product is expected of Apple. Google search is still the same Google search for me as customer experience for the last 10 years. But nobody is pouring billions to challenge Google on a large scale, only a few local contenders in non-latin alphabet searches like Russian and Chinese. Google locked in the key people in AI world and it is a huge asset. It is very difficult to replicate without those people as the algorithms require very high academic competency. Manufacturing processes are much more widespread knowledge.
Nevertheless Apple is a very solid company and will keep delivering. One should buy the dips with good returns.
You cannot make a monte-carlo simulation like that and conclude 86%. All those portfolio's generated in a time frame are correlated.
I wonder what theory zerohedge will come up with this time.
Obviously as I mentioned there are some differences. But I can come up with similar arguments for Gold. For example Gold is recycled and has a huge inventory build up, unlike Palladium where supply must be delivered otherwise prices of Palladium will shoot to sky. On the downturns people don't have disposable income to purchase Gold either. As you can see Gold gets hit both on the supply and demand side. I am not telling you these to show the weakness of Gold. I am trying to make the point that each metal will have some differences, but at the end they are all metals with some utility to humans.
Nobody was complaining when it was at 1900 about manipulation. I think you should ask yourself why the Gold vs Palladium gap opened significantly back then? Now it is closing. Every argument people attach to Gold applies to other metals (of course with some differences). So it will be very strange to be bullish on Gold but not be bullish on Palladium. But I don't remember anybody promoting Palladium back then either. It was blindly gold, gold, gold. And the preachers paid the price of neglecting the absurdity of such spreads between gold and other metals. And the gold bubble popped with a few awful years for investors. What will happen in the next few years remain to be seen. But religious investing will not get anybody anywhere, that I know for sure.
Nice try. We all know your bearish comments on Apple. By diverting attention to Blair you are attempting covertly to cover your own behind . Sorry you lost it like Blair. It is the time you guys shut it up really. Again nice try. You guys have 0 credibility.
Braeburn, you don't make any sense. The kind of volatility author is trying to avoid is upside volatility not downside as he is short. All those things you mention is contributing to the lift.
Poor attempt to look smart.
RSXJ is not liquid enough. You will be clogged over 50K. Basically you cannot shove all in on that one, if you believe it is a double bagger.
There is no such thing as hedging unless you have a real business behind. You are either long or short. Buying options is just a bandaid especially for a volatile stock like Apple. You will bleed the premiums. So please drop the BS hedging speech and admit that you lost a chunk of money.
Exactly. I have been buying Russia for a month now together with Vietnam. Almost a sure bet. Very cheap valuation accompanied by double dip technical. Easy 40% till end of year.
I speculate that the wearable Apple will come up with will be very health focused. I understand that there is no huge demand for a stupid watch. However I really believe that the world is full hypochondriacs who will check their blood pressure, sugar level, calories, heart rhythm every 5 minutes on top of those who really need one to monitor their health due to some known illness. That's why it may get really big.
Apple is hitting the debt market at the best possible points (the previous one at the peak of bond market and now again at the peak of bond market). If one is expecting a large downturn in US equity markets, the best course of action is to borrow like crazy at this point. When hell breaks loose you can buy back both debt and the stock with discount from the suckers. I love the fact that Apple is managed in a very well balanced fashion. Apple is cooking products in the kitchen at the same time; don't be blind.
Prof. Damodaran,
If you think of total risk as
Total Risk = Intrinsic Risk + Stock Risk
there may be some justification of stock split. Clearly stock split has nothing to do with the company's intrinsic value but it seems to affect the stock trading mechanism (round lots, exchange matching), liquidity, and ownership concentration (i.e. sudden hedge fund liquidations).
What's your take on this?
If you write 20 articles per month on any stock, I don't see any chance for you to make money on that stock. I assume you are simply making money from click-bait articles.
As you can see professionals reserve themselves to 1 article per 3-6 months on a certain topic.
Please short it. When new products pop you may be crushed like a bug though.
"The first has to do with the fact that share buybacks essentially insist that the company make a valuation judgement about its own stock price, something way outside the core competencies of a tech company like Apple."
Have you just graduated from high-school or are you kidding us? You are basically claiming that Apple's treasury,finance, M&A departments don't consist of people from notable investments banks, which is far from the truth. Moreover you are claiming that if that is not enough Apple doesn't have the means to hire the top consultants in the market to value its business.
What a joke...
Stock of a company and the company itself are different things. The effect of a stock split obviously does not effect the company's intrinsic value, but it effects the stock. Nevertheless this effect is still not properly identified by academics, and the research continues. One clear issue is the change in liquidity of the stock and institutional ownership of the stock. Of course it can be always argued that these things are not relevant. But I personally think that there are risks associated with a stock in addition to the risks associated with the underlying company. Hence mitigating the risks associated with the stock should increase the stock price based on the fundamental risk/reward theme of investment.
The bulldozer is coming...This is usually what happens when a giant moves his pinky.
That might be the plan behind the 7:1 split. The good thing is that if it joins DOW, index tracking ETFs and other funds will be forced to buy Apple stock by definition, which is an additional boost to stock price.