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Charles Lewis Sizemore, CFA

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  • Is Gold's Golden Era Over? [View article]
    Yes, you goldbugs have it ALL figured out. When you join the money management profession, "They" teach you the secret handshake and take you into the secret underground room where they do the secret Skull and Bones initiation ceremony. We then all renounce our U.S. citizenship and simultaneously swear allegiance to Ben Bernanke, Satan, and "the international banking establishment."

    "They," you know, "Them."

    Do you people never get tired of sounding like Mel Gibson in "Conspiracy Theory"?
    Jan 31 12:16 AM | 19 Likes Like |Link to Comment
  • Why Take Risks When Blue Chips Are on Sale? [View article]
    From what I can see, there is a clientele effect at work. Hedge funds aren't interested in large blue-chips because, in order to justify their fees, they feel the need to buy something more exotic. Meanwhile, retail investors are piling into bonds. Inflows into traditional mutual funds have been quite anemic of late.

    So, America's best companies have, for now, slipped off the radar screen. This is fine by me. It gives us an opportunity we might not see again for a long time.

    Aug 17 09:57 AM | 15 Likes Like |Link to Comment
  • Why You Do Not Want to Invest in the 'New' General Motors [View article]
    The Obama Administration ran over the rights of bondholders during the bankruptcy by giving the UAW--which had a subordinate claim--preferential treatment. Now, again, the company is saddled with UAW obligations it can never pay. Luckily for Obama, he will be out of office by then, and it will be someone else's problem. Ultimately, the US taxpayer, via the Pension Benefit Guarantee Corporation or by some kind of "special" bailout, will end up picking up the tab.

    Regular taxpayers--most of whom are hoping to retire with just their own savings, Social Security, and their 401k--will subsidize the extravagant retirement of spoiled unionized workers with political connections. Nauseating. Just flat-out nauseating.
    Aug 31 07:04 PM | 13 Likes Like |Link to Comment
  • Is Gold's Golden Era Over? [View article]

    What you are saying is that silver's real return over that period was absolutely zero and that its real return over the next 20 years will be zero. That doesn't sound like a great investment to me.

    Jan 30 11:50 PM | 11 Likes Like |Link to Comment
  • Why Take Risks When Blue Chips Are on Sale? [View article]

    Here are the four AAA-rated American companies:

    * Automatic Data Processing (NYSE:ADP)
    * Johnson & Johnson (NYSE:JNJ)
    * Microsoft (NASDAQ:MSFT)
    * ExxonMobil (NYSE:XOM)

    Aug 17 09:52 AM | 11 Likes Like |Link to Comment
  • Why I Still Don't Like Gold [View article]
    Actually, read my original post that I reference at the beginning of the article (the one that generated all the hate mail). I went through a little phase of being a gold bug myself, and I got lucky. That phase happened to coincide with the start of the big bull market in gold.

    The reason I "hate" gold is that I see too much of the bullish argument wrapped up in political ideology rather than real economics.

    And yeah, it didn't help that I lost money shorting it either... :)
    Nov 22 09:46 AM | 10 Likes Like |Link to Comment
  • The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
    Thanks, Abec. I judge the quality of a recommendation by the amount of hate mail I get from it. And by that criteria, this must be the best advice I've ever given in my life...

    Good luck navigating the storm,
    Aug 8 05:24 PM | 9 Likes Like |Link to Comment
  • Whitney Tilson: Why We Covered Our Netflix Short [View article]
    Good, honest article. In this business, you really have to leave your ego and your emotions at the door if you want to have any kind of longevity. It takes discipline and emotional detachment to take a loss like Tilson is doing here, but it is the right thing to do. You keep your investors' funds intact and you live to trade another day. I've certainly had to eat my share of crow over the years for calls that I had to reverse later. Readers and investors respect the honestly though.

    I agree with Tilson. Netflix is far too expensive, but I wouldn't feel comfortable shorting it. I might be a little biased though because I just finished watching the Tudors on the company's streaming service :)
    Feb 11 02:31 PM | 9 Likes Like |Link to Comment
  • Is Gold's Golden Era Over? [View article]

    Silver and precious metals do indeed hold their value IF, like any other asset, they are purchased at a reasonable price. Pity the poor fool who bought during the last bubble when the Hunt brothers tried to corner it, and pity the fools buying today after it's already had a fantastic decade-long run.

    And I might add, a dime invested in the S&P 500 in 1964 would be worth a lot more today than a dime's weight of silver. Just sayin'...

    Jan 31 12:07 AM | 9 Likes Like |Link to Comment
  • Why I Still Don't Like Gold [View article]

    I'm no Keynesian. Keynes had some insights, of course. He was one of the only economists of his day who focused on the "demand" side of the equation. Prior to Keynes, Say's Law ("supply creates its own demand") was accepted almost as religious dogma. Keynes correctly pointed out that sometimes supply does NOT create its own demand.

    An example would be the U.S. consumer economy today. Consumers are deleveraging, and demographic trends suggest that this trend has staying power for at least the next several years. "Supply side" economics are not likely to have much of an impact in this environment.

    You mention the Austrian school. I find the Austrian school to be full of insights, namely the notion that economics is a SOCIAL science, not a hard science, and thus it is impossible to accurately model economics using elegant mathematical models. I also support the emphasis on free trade and markets. Markets are the most efficient way of allocating resources. Agreed.

    I do find the Austrian fixation on central banking to be somewhat tiresome, however. Yes, I get that artificially low rates encourage malinvestment and retard the creative destruction process. I get that. But at some point, Austrian economics begins to resemble a utopian ideology. Life before the Fed wasn't paradise, people. During the "free banking" era we had plenty of booms, busts, bank runs, panics, disasters, debacles... And rigid adherence to the gold standard did make the Great Depression a lot "greater" than in needed to be.

    It's easy to beat your chest and bellow that the Fed and Treasury should have let the banking system fail in 2008. But would you have felt that way if unemployment had risen to 20% and YOU were out of a job?

    The Fed, for all of its faults, provides a measure (however thin) of stability. Modern central banking is a lot like what Winston Churchill said about democracy: "It's the worst system...except for every other system that's ever been tried."

    Nov 22 04:22 PM | 9 Likes Like |Link to Comment
  • Seven ETFs to Invest Like Peter Schiff [View article]
    The question to ask is why anyone in their right mind would want to invest like Peter Schiff. The man is not an investment manager, he's a political ideologue.

    How else do you explain some of his investment recommendations. The dollar is "bad" and tethered to an economy with too much debt...therefore buy euros and European stocks? That was one of his higher profile recommendations in 2007 and 2008.

    What I see in this market is a lot of people, like Schiff, investing based on emotionally-charged political ideology. It has all the characteristics of a cult with people like Schiff playing the role of messiah.

    There is value out there for investors willing to roll up their sleeves and <gasp!> read an income statement or balance sheet. "Macro gurus" like Schiff are best ignored.
    Aug 26 04:45 PM | 9 Likes Like |Link to Comment
  • Nokia and Microsoft: Winners and Losers [View article]
    Would you be surprised if, after six more months of watching its sales stagnate, Nokia abandons MSFT and finally jumps on the Android bandwagon?

    I have a feeling that had Nokia announced they were adopting Android, the stock would be UP rather than down over 10%.
    Feb 11 12:36 PM | 7 Likes Like |Link to Comment
  • Gold: A Bad Investment and Getting Worse, Part II [View article]
    Well said, Rich!
    Feb 9 07:06 PM | 7 Likes Like |Link to Comment
  • Is Gold's Golden Era Over? [View article]

    For once, I actually agree with you concerning Shadow Stats. I've met Mr. Williams, and he is a decent and very intelligent guy, but he does seem a bit ideologically committed to seeing inflation under every rock. You could argue just as well--as Gary Shilling does in his most recent book--that inflation is actually overstated due to hedonic adjustments that are too conservative, the lack of accounting for substitution effects, and questionable index weightings.

    It is fashionable--particularly among goldbugs--to mistrust any statistics that come from the government. Fair enough. But they shouldn't be quite so eager to then immediately accept ANY alternative numbers put out by anti-government ideologues because they happen to like their politics. View all numbers--not just ones from the government--with a healthy bit of skepticism.

    Jan 31 02:28 PM | 7 Likes Like |Link to Comment
  • Gold: A Bad Investment and Getting Worse Part I [View article]

    I've read stats like that before, and they can be very seductive. But be careful with this line of thinking. Remember, the world economy has grown exponentially in the past 30 years. Markets that scarcely existed 30 years ago--China, India, etc.--now sport large, successful companies. Established markets too have grown by leaps and bounds, the current debt crisis notwithstanding. Over time, as earnings grow, global equities should GROW relative to gold. As gold bugs are eager to point out, gold is a commodity with limited supply. Meanwhile, the global capitalist economy--which populist goldbugs appear to hate--continues to march forward and grow.

    20 years from now, a share of, say, Wal-Mart, will be a piece of a much bigger company paying a much bigger dividend. A piece of gold will still be a piece of shiny yellow metal. I'd rather have a slice of Wal-Mart. But then, I don't "get" it.

    Jan 18 03:38 PM | 7 Likes Like |Link to Comment