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David at Imperial Beach

 
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  • Sprott's Charles Oliver: Gold At $1,500 By Christmas? [View article]
    I don't see how anybody with even rudimentary knowledge of the gold market can expect it to drop by 16% in the strongest quarters of the year. Gold miners in the past have hedged at prices above this, so I expect them to hedge now until such time as the price improves.

    You can't give your wife paper gold for Christmas. She insists on wearing the real thing.
    Sep 10 02:38 PM | Likes Like |Link to Comment
  • Sprott's Charles Oliver: Gold At $1,500 By Christmas? [View article]
    Depends on your definition of inflation. The Austrian school defines inflation as currency debasement, so under that definition it is a direct contradiction exactly like the relation between interest rates and bond prices. The more usual definition of inflation is a general rise in prices throughout an economy. Under this definition there is some room for slack. Deflation can occur simultaneously with currency debasement if the velocity of money falls sharply, or credit is sharply curtailed, or both. This is because the supply of money is not the same as the monetary base. But it can't last long in the face of a determined central bank such as the Fed has been because the central bank can increase the monetary base at will.
    Sep 10 02:31 PM | Likes Like |Link to Comment
  • Sprott's Charles Oliver: Gold At $1,500 By Christmas? [View article]
    I can see why deflation would be a concern in Europe, but those days are over for the USA. If you're still worried about deflation here, you're behind the curve.
    Sep 10 02:22 PM | 1 Like Like |Link to Comment
  • A Few Reasons Why Barrick Gold Is Not A Good Investment [View article]
    I'm not at all convinced that the US economy is going to be in a position to be pushing the price of gold down. We have yet to see what effect the end of QE will have on the economy. It may well crash the stock market (again) and could even send us back into negative GDP territory (again). The dollar is currently at a high, not because of any intrinsic value in the US economy, but because the ECB has managed to be even less adept than the Fed at staving off absolute disaster. Even if we manage to survive the end of QE just fine, we still have interest rate hikes on schedule next year. The doves may stay in control and the hikes may be minimal, but in that case the FX market will be disappointed and send the dollar tumbling. The hawks may gain control and raise rates too enthusiastically, which would imperil the government budget, the stock market, the bond market, and possibly the economy. It's really a very narrow needle eye that Yellen has to thread. Note that the Fed has never successfully threaded it before, so we still don't even know that it is possible.
    Sep 10 01:58 PM | 3 Likes Like |Link to Comment
  • Mobileye - More Risk Than Opportunity Looms Following The First Public Earnings Report [View article]
    "...shares trade at around 70-80 times annual revenues..." Clearly no further justification is required.
    Sep 10 01:15 PM | Likes Like |Link to Comment
  • Apple Hasn't Solved The Smart Watch Dilemma [View article]
    Not comical at all. A watch should not require a cord. Period. You should be able to set it in a recharging tray on your nightstand along with your smartphone and both should recharge at night while you sleep. In the morning, either one can beep, buzz or send up flares to wake you and get you out of bed, as you desire.
    Sep 10 12:21 PM | Likes Like |Link to Comment
  • Apple Hasn't Solved The Smart Watch Dilemma [View article]
    A guy with a gun can have anything you carry or wear, including your watch. He doesn't even need your permission to get it if he is willing to spill blood on the street.
    Sep 10 12:15 PM | 1 Like Like |Link to Comment
  • Apple Hasn't Solved The Smart Watch Dilemma [View article]
    Huh? Bad information is worse than no information! And in general you can't expect to average bad readings and get usable data. You can do such a thing only if you know that you're dealing with unbiased noise.
    Sep 10 12:11 PM | 3 Likes Like |Link to Comment
  • 2 Years Of Dividend Growth Investing - 10 Lessons I Have Learned [View article]
    OTOH, don't fall into the trap of thinking that bonds are always safer than blue chip, high dividend stocks. No investment is truly safe if you buy it at the wrong price, including bonds. Right at the moment, about the only thing that is not overpriced is commodities. That's why I like gold right now. Also, don't overlook REITs. They tend to do better than most other investments because of their favorable tax status.
    Sep 9 09:52 PM | 2 Likes Like |Link to Comment
  • Why Warren Buffett Doesn't Take A Bite Out Of Apple [View article]
    On that point he is quite wrong. All it takes is determination, and the conviction that your company will be better off with lower cost solutions in the end. There are lots of companies out there that are willing to help you kick your IBM addiction.
    Sep 9 01:01 PM | Likes Like |Link to Comment
  • Why Warren Buffett Doesn't Take A Bite Out Of Apple [View article]
    While Buffett was searching out sure things ("companies that have a significant amount of certainty") in 1996, he was missing out on the spectacular rise of Microsoft. Sometimes you gotta take a chance on an uncertain thing in order to earn the really big bucks.
    Sep 9 12:56 PM | Likes Like |Link to Comment
  • Why Warren Buffett Doesn't Take A Bite Out Of Apple [View article]
    They are "sweetheart" deals because they are not available to the average investor.

    From wikipedia: "A sweetheart deal or sweetheart contract is an abnormally favorable contractual arrangement."
    Sep 9 12:52 PM | 1 Like Like |Link to Comment
  • Why Warren Buffett Doesn't Take A Bite Out Of Apple [View article]
    There is no flaw in such an analysis. That circumstances change over time is a given. Your assumption that "all external factors remain the same" is what is flawed. But no company can grow to become one of the top ten without meeting one or more customer needs, no matter what else may be happening. Even if all else is miraculously the same, customer needs change over time.

    Larger companies are less maneuverable, less agile in responding to changing conditions. It's harder for a larger company to meet changing customer demand. They've invested a lot of capital in plant and equipment and R&D to meet a need with a particular technology. When a better technology comes along and meets the need better, they have to throw out all that investment and start over, and they are reluctant to do that.
    Sep 9 12:48 PM | 1 Like Like |Link to Comment
  • Tesla: Nevada Gigafactory Decision Pushing Shares To New Highs? [View article]
    Even though (TSLA) is "kinda high right now" it is destined to go even higher when we start seeing Model X prototypes, and then the first Model X deliveries. Shorts should be aware that they are going to be bucking a trend of good news announcements month after month. I'm not cynical about Musk. I generally take his statements at face value. But it does seem to me that making statements about TSLA being "kinda high right now" encourages shorts, and sets them up for a short squeeze.
    Sep 9 12:14 PM | 8 Likes Like |Link to Comment
  • Party continues for Mobileye [View news story]
    The value of the company consists mostly of intellectual property. I don't think there really is a rationality line. It all depends on how long the stock is bid up before a credible contender appears on the market, or they get bought out.
    Sep 9 11:54 AM | Likes Like |Link to Comment
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