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David Jackson

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  • Seeking Alpha as a Predictor of Stock Movements and Earnings Surprises [View article]
    Hailaing, it's fascinating to see this research. Thank you, to you and professors De, Hu, and Hwang.

    Unlike many stock picking services, our goal at Seeking Alpha hasn't been to push stock picks at our users, but to present our readers with a variety of opinions about stocks, ETFs and the overall market, and let them make up their own minds. Sometimes, even a lousy stock picker can write something amazingly valuable that helps you to reach a better conclusion. Or a single comment on an article (we have over 40,000 comments per month) can change your perspective for the better.

    Because of that, we've never tried to measure the accuracy of articles on SA (which you have done using sentiment analysis). So your work comes as a pleasant surprise.

    The Seeking Alpha team will be excited to see this. But even more so, this is a huge affirmation for our contributors.
    Apr 14 06:18 AM | 37 Likes Like |Link to Comment
  • Just One Stock: Heavy Upside From a Leveraged Play on Rising Silver Prices [View article]
    Lance, you misunderstood the framework. Just One Stock, as the intro says, means "what's your top pick?". Nobody sane thinks you should hold only one stock in your portfolio.
    Jan 28 05:44 AM | 23 Likes Like |Link to Comment
  • The Why Behind The How: The Quality Of Comments On Seeking Alpha Articles [View instapost]
    Rocco,

    Thank you for such an insightful and thought-provoking post.

    The fact that people behave online in a way they would never do face-to-face is an issue that impacts anyone who uses the Web. Is it because we forget that we're interacting with real people? Is it because the tone is set by those who behave the worst, and they encourage otherwise reasonable people to be be aggressive or rude?

    We made a crucial decision about comment moderation on Seeking Alpha. Initially, we cared most about free speech. As long as a person's comments weren't abusive, eg. racist or contained personal attacks, we'd publish them. But with time we understood that, to build a site that helps people invest better, we'd need to set the bar higher. For example, there are some people who just annoy everyone else, even though their comments aren't technically abusive; and they drag the discussion down and draw out the worst in other commenters. So now we're willing to delete comments if we think they meaningfully detract from the quality of the discussion.

    It all comes down to what your goals are. We don't view Seeking Alpha as a platform for free speech as much as a community of investors, where inclusion is earned by constructive participation.

    Sometimes this policy is misunderstood. For example, when we try to stop useful discussions about investing degenerating into acrimonious political rants and slogan-trading, we're sometimes accused of censoring positions we don't agree with. But we never do that.

    We simply want Seeking Alpha to be highly useful to investors, and certain behaviors detract from that.
    Mar 27 03:08 AM | 13 Likes Like |Link to Comment
  • Microsoft, Don't Buy Back Shares - Here's Something Else [View article]
    Two advantages of paying a higher ongoing dividend vs. a one-time buyback:

    1. Management might be wrong that the stock is undervalued. Maybe MSFT's low stock price and multiple compression accurately predict lower future profitability. (That's what the market is telling you, right?) In which case, buying back stock in an attempt to raise future EPS may be an inefficient allocation of capital which would reward short term shareholders at the expense of long term shareholders. In contrast, raising the dividend payout ratio as the author suggests in this article would reward longer term holders. Leave it to the market to decide whether the increased dividend yield justifies a higher stock price.

    2. Buying back stock rewards option holders who have no interest in being long term owners of the stock, whereas raising the dividend rewards owners and penalizes option holders. As such, stock buybacks have historically facilitated excessive options grants. Managements often claim that options align employees' interests with shareholders', but that's often not true. By paying a dividend, MSFT management and employees with options would want to exercise their options and hold the stock so they earn the dividends. But only, of course, if they believed in the company and its stock...
    Jul 15 08:08 AM | 12 Likes Like |Link to Comment
  • Facebook buying WhatsApp [View news story]
    If FB is paying $19bn for WhatsApp, and many of those users already have Facebook accounts, perhaps this means FB isn't as sticky and its moat isn't as wide as many investors thought.
    Feb 19 05:56 PM | 11 Likes Like |Link to Comment
  • An Investor's Guide To Identifying Pyramid Schemes [View article]
    Bruce,

    Welcome to Seeking Alpha, and congratulations on a superb article.

    - David
    Oct 11 03:00 PM | 11 Likes Like |Link to Comment
  • How Should We Improve Seeking Alpha's Comment Rating System? [View instapost]
    Thanks for your ideas and suggestions so far.

    Eli: Love the idea of being able to "mute" or "ignore" someone. Question: should the number of people who have muted you be somehow shown to users, or integrated into a ranking of how many followers they have?

    Mick: you make a strong case for getting rid of the "vote down" option. Thank you for laying this out so clearly.

    Mark Anthony: You've put your finger on something important: if we keep the negative ratings, we need greater transparency about users' rating history with respect to specific authors. I need to know if someone *always* trashes an author's comments.

    dieuwer and daveddawg: The problem with article ratings is that the problems we're seeing with misuse of comment ratings gets magnified with articles. We did have ratings on articles a while back, and we removed them for this reason. We found, for example, that if someone wrote a bearish article on AAPL, a large group of readers who are diehard Apple fans would negatively rate the article. They didn't differentiate between AAPL the stock and Apple the company. That would understandably frustrate the authors, who would suffer from the negative ratings. We concluded that the number of Followers an author has is a better indicator of quality, although it's not granular to the level of the individual article.
    May 13 03:11 AM | 11 Likes Like |Link to Comment
  • Israeli researchers find flaw in Samsung security platform [View news story]
    "However, Samsung said an initial investigation found that the problem isn't as serious as the Israeli researchers make out."

    They would say that wouldn't they >> fox guarding the hen house?
    Dec 24 08:23 AM | 9 Likes Like |Link to Comment
  • What the Thumbs Up with That? [View instapost]
    Just wanted to leave a quick update on this thread. Today we removed the thumbs-down on comments. We considered more complex ways of preventing mis-use of the thumbs-down button, but in the end, after reading the input from all of you and looking carefully at the alternatives, decided that while there are clear disadvantages to removing the thumbs-down button, it's the least imperfect solution we could find.

    We've also made some other changes to protect the quality of comments on SA. Most important, comments by first time commenters are moderated by our editors. This is a lot of work for us, but almost entirely eliminates spam from the site. It's now also impossible to vote for your own comments.

    As before, we still rely on you and our other readers and contributors to let us know when comments are abusive so we can delete them and possibly ban their authors. "Abusive" includes spam, or comments containing ad hominem attacks on article authors or other commenters, or people who systematically degrade the experience for other readers. Please help us by clicking the "report abuse" link when you see an abusive comment. We review abuse reports round the clock.

    Finally - a big "thank you" to Dialectical Materialist for the blog post, and all of you who commented.
    May 16 10:33 AM | 9 Likes Like |Link to Comment
  • Think Your Dividend Yield Is High? A Warning for Income Investors [View article]
    David, you wrote: "If, on the other hand, your investment objective is to maximize income at some point in the future--say the day you retire--then higher stock yields (and lower prices) are good news. You can lock in high yields on cost that will benefit you for as long as you own the stocks."

    But isn't that exactly Jason's point? If you believe Jason is right that stock prices will be significantly lower a year or two from now, then why wouldn't you sell your stocks now and buy back the same dollar value when prices are lower? You'd sacrifice 3-8% in income while you waited, but you'd then be buying stocks at much higher yields, and you'd be set for the next 30 years.

    But you then write: "That's a key concept: If you are investing for maximum total income at some future date, you will not often sell the instrument--the stock--that grants you the rights to receive that income. Why would you? So price variations don't matter very much, and therefore risk to price doesn't bother you very much."

    However, the price variations do matter, because if they are really large, then you'd want to get out of the market now and get back in when prices are lower and dividend yields are higher.

    As I said in my earlier comment, I don't buy the Elliot Wave analysis, and I have no idea whether, in reality, stocks will fall as much as Jason is predicting.

    But he does make a point worth considering. Many people think that stock prices can't fall much because that would imply dividend yields of 7-15%. But he's saying that they *can* fall that much, and it's not unthinkable for yields to go back to long run historical norms.

    Again, I'm not sure I agree with him, but it's not "punditry" or "fuzzy thinking".
    Oct 5 09:52 AM | 9 Likes Like |Link to Comment
  • Don't Let Talk of a Bubble Scare You Out of Bonds [View article]
    Abegaz, you're confusing currencies with bonds. They're two separate things. Cullen is right: if you hold a ten year Treasury bond to maturity, you won't lose your principle (at least in nominal terms; in inflation-adjusted terms is another matter altogether).

    If you're concerned about the dollar, you can hedge your currency exposure in other ways.
    Sep 29 07:09 AM | 9 Likes Like |Link to Comment
  • Don't Watch CNBC [View article]
    That's exactly why we carry summaries of Jim Cramer's recommendations on Seeking Alpha.


    On Mar 13 10:57 AM Speedspirit wrote:

    > I believe to become an intelligent investor or speculator one must
    > know what ideas are influencing the crowd. It doesnt mean that one
    > has to agree with anything being said on CNBC or Fox but if the masses
    > are being influenced in one direction then a well informed member
    > of say seeking alpha will trade in a diffrent direction.Thats how
    > it works, no.
    Mar 13 11:23 AM | 9 Likes Like |Link to Comment
  • Farewell For Now Seeking Alpha [View article]
    Sean, this is a remarkable article. We'll miss you, but the door is always open for you to come back.
    Jul 22 12:04 PM | 8 Likes Like |Link to Comment
  • What We're Doing To Stop Stock Price Manipulation, And How You Can Help Us [View article]
    Rick,

    Thanks for your comment -- it goes to the core of what Seeking Alpha is about.

    The objectivity you're looking for is the traditional media model. Main stream media companies were often in a position of influence (such as one of only two newspapers in town), and therefore aspired to objectivity. In finance, for example, that meant insisting that their journalists weren't allowed to own stocks. They claimed that they were trustworthy and objective. But in reality nobody is objective. Everyone has a viewpoint. Everyone has friends. Everyone has influences. And every publication has an owner with interests. Today, most people accept that most mainstream media companies have an angle.

    Meanwhile, the investment newsletter industry tried to create gurus, and promote them as people who investors should follow unquestionably. That phenomenon morphed on the web into sites like TheStreet.com and Motley Fool.

    Seeking Alpha has a different model and a different aspiration. We don't try to be balanced at the individual article level. We welcome contributors *because* they have an agenda, *because* they have skin in the game. Instead, we try to provide balance at the platform level, by offering different perspectives on each stock from a variety of contributors, and by encouraging our readers to agree with or challenge contributors with comments. (If you look at the articles which George apologized for, you'll actually see that the authors were immediately challenged in the comments.)

    One of the biggest differences between mainstream media and Seeking Alpha is our attitude to our readers. Mainstream media companies present themselves as unbiased and authoritative, and expect their readers to follow what they say. For example, newspapers published endorsements of political candidates.

    At Seeking Alpha, we don't think our readers should blindly accept what any of our contributors say, and there's no "Seeking Alpha house view". We think our readers should consider the arguments on both sides, in the articles and the comment discussions, and make up their own minds. That's why our tagline is "Read. Decide. Invest." We treat our readers as intelligent investors who should decide for themselves. Our job is to present them with the arguments on both sides.

    Finally you should know that we do have processes to penalize manipulation. In addition to the steps which George discussed in this article, contributors sign a compliance agreement with us where they agree to disclose positions, they have to vouch that they aren't receiving payment for their article by anyone other than SA, and they agree not to trade the stock immediately after the article's publication. Most important, we know the real names of our contributors, and will hand over their names to the SEC or other authorities which subpoena us in an investigation of stock manipulation. Our contributors know that.

    Is there a danger that someone will land on a Seeking Alpha article, not read the comments, not read articles with an opposing perspective, and naively assume that the single article is authoritative, as they've been taught to think by mainstream media? Yes, there's a risk of that. But we've built Seeking Alpha for people who aren't naive, and who can decide for themselves.

    Read. Decide. Invest.

    Best Regards,
    David Jackson
    Jun 2 12:29 PM | 8 Likes Like |Link to Comment
  • The Dumbest Portfolio For The Smartest People [View article]
    A quick thought on expense ratios. You could split your equity position (using whatever weighting you choose) into:
    1. Vanguard Total Stock Market ETF (VTI), expense ratio 0.06%
    2. Vanguard FTSE All-World ex-US ETF (VEU), expense ratio 0.18%

    Doing that would lower your average expense ratio below the 0.22% for the Vanguard Total World Stock Market Index ETF (VT).
    Feb 28 06:42 AM | 8 Likes Like |Link to Comment
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