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Gary Gordon

 
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  • Why The Rich ETFs Keep Getting Richer [View article]
    BST,

    >>...blame private interests but I am amazed at how the unions,
    >>government pensions always get a pass, as they are huge part
    >>of why our states and cities are broke and why our total debt is
    >>skyrocketing.

    Indeed! The public sector employee/director/higher level leader is in better shape than his/her private sector counterpart. In particular, some of that "better financial shape" is derived from no-risk redistribution of wealth.

    I manage the assets for wealthy people from all walks of life. I am not speaking ill of firefighters, teachers or those employed by a government entity. Nevertheless, the financial realities are astonishing. Public sector pensioners are, on average, twice as wealthy as the equivalent employee in the private sector, particularly when wealth is defined by one's future income stream.

    >>The poor have the left working hard to help them,
    >>the rich have the right (mostly- many liberal left
    >>are getting rich at fed policies) working for them but
    >>if you are middle class, you have no one working for you.

    The left genuinely have the interest of the poor in the forefront of their thinking, but it usually ends up being the tyranny of good intentions. Rather than expanding the size of the pie, which is wealth-generating, efforts tend to be aimed at providing an "equal" and "fair" slice from a pie that does not expand in the economic oven. In fact, redistributing the wealth eventually leads to less production by the producers of that wealth, effectively making the pie smaller.

    Yet the left are not merely thinking about the poor. They are also thinking about public service workers... those who do not have a profit motive. It is difficult for me to believe that leaders on the left are unaware of the fact that the public sector has been getting wealthier at the expense of the private sector employee. It appears as though many on the left favor "public service" over private work.

    The right-of-center conservative looks out for the wealthy, of course. And their solutions tend to reside in the notion that when the rich get richer, the rest of society benefits. Well, that doesn't always work either. The Federal Reserve has made the wealthiest even wealthier on the same idea of top-down wealth creation... which is why I wrote the article on income disparity.

    Theoretically, of course, the central bank of the United States is neither on the left or the right. Regardless of who currently supports the Fed's policies, the facts are undeniable... Fed policies are based on wealth being created in a top-down manner. And yet, the rich are getting richer with QE and zero-interest-rate, with only a small amount of that wealth-creating economic expansion benefiting the rest of society.

    Best,

    Gary
    Nov 14 04:58 PM | 3 Likes Like |Link to Comment
  • The Bears Are Deep In Their Caves [View article]
    We both know one perma-bear that never hibernates for more than thirty seconds. :)
    Nov 14 11:37 AM | 2 Likes Like |Link to Comment
  • Why The Rich ETFs Keep Getting Richer [View article]
    Morr,

    I did not write that most of the poor do not want to work. I wrote,

    "The assumption here is that everyone wants to work equally hard for a better life. Where is the evidence that each and every one of us pursues the best grades in our respective educational environments, or willingly logs 60-hour work weeks to climb a financial ladder? We're different."

    I find it difficult to believe that you genuinely think that all people, rich or poor, work equally hard. Some people work harder than others... at school, in their relationships, in the careers. That's just a simple reality of the unique nature of being human.

    On the other hand, you have made a generalization that Americans are "not collectivist." That's incorrect. Some lean toward collectivism, some lean toward capitalism, and some do not give a rat's arse one way or another. Again, we are different.

    Clearly, we do not agree on the primary cause of income disparity. You believe it is the "capitalist foxes" whereas I believe it is 13 years of low interest rate policy and dollar devaluation by the Federal Reserve.

    It follows that, since we do not concur on the primary cause of income disparity, why would we agree on a solution to solve income disparity. At least we can both agree that income disparity is a problem, and for that, there's a place to begin a healthy debate on how to solve it.

    Gary
    Nov 14 11:25 AM | 3 Likes Like |Link to Comment
  • Financial ETFs, Homebuilder ETFs: Casualties Of The October Jobs Report [View article]
    User,

    Labor force participation is not "THE argument," though it is most certainly relevant to the extent that "jobs" are relevant to market-based securities. The percentage of workers in the workforce has been decreasing since 2000, as one would expect from an aging population. If you read what I wrote about in the article, however, I referred to the increasing pace of the decline since 2008 (a la the Great Recession.)

    If the labor force continues to shrink at this pace, stagnant wage growth and stagnant employment growth will hinder consumption as well as the economy. From my vantage point, this is quite relevant. Stock prices and home prices will not be able to endlessly thrive on Fed stimulus alone.

    We tapered QE1, then started QE2. We tapered QE2 and "Op Twisted." We tapered the twist, and ushered in QE3. It is a fairly safe assumption that if and when we taper QE3, the lack of extremely vibrant job growth/wage growth means that it won't be long before we begin yet another round of central bank assistance.

    What remains unclear is whether future programs will juice stocks as much as they have in the past. The Federal Reserve's policies have already pushed investors to do things they normally wouldn't do.

    Gary
    Nov 12 11:23 AM | Likes Like |Link to Comment
  • ETFs If The Fed Encourages A Housing Bubble, ETFs If The Fed Lets Some Air Out [View article]
    Bbro,

    Forget Carney for a moment. The absolute value of the index has always been suspec... you are correct about that.
    http://bit.ly/1arMs4W

    On the other hand, I don't think this is much different than the way investors should evaluate P/E ratios. You should not look at a single P/E, knowing that accounting games are played to produce a particular "E." P/Es are not worthless, however. You can look for an average P/E for a given company or given sector across 5 or 10 years to arrive at a useful trend or valuation.

    In the same manner, it is worth looking at long-term moving averages and sharp spikes/declines. Not to mention the fact that if wages are flat, home prices are going up, and yields are climbing... affordability is going to slide. Rather than focus solely on the absolute value of the index, it is pretty clear that affordability is declining rapidly... and this is the bigger point, is it not?

    You also bring up the 1990s. Well, that's where the country's household income is at... back to the mid-90s when adjusted for inflation. I do not believe you would suggest that homes are more affordable today (157 reading) than they were then (avg 125). Indeed, they are far LESS affordable, even with lower interest rates.

    So again, I can't speak for Carney or his motives. I can say, without question, home affordability is being stretched. Will the Fed try to make things easier or will they concern themselves with the possibility of creating another bubble?

    G
    Sep 11 06:20 PM | Likes Like |Link to Comment
  • Best ETFs For A September Stock Market Crash [View article]
    BB,

    The article had no goal of discussing the use of leverage or the ways one can short stocks. Moreover, a title is often meant to spark interest, not express every idea or concept.

    The day after writing the article, a huge down day for stocks is providing evidence for what should work well in a "crash." Indeed, some of the best non-leveraged, non-short ETFs today are EDV, FXY and VXX.

    GG
    Aug 27 01:46 PM | Likes Like |Link to Comment
  • Choose ETFs With Relative Strength As Well As Defensive Attributes [View article]
    Snowcoat,

    You checked the bid ask spreads on Yahoo/MSN after hours? The bid-ask can only be accurately determined during market hours.

    The bid-ask spread is typically negligible on PJP and RTH... perhaps 6-10 basis points (0.06% to 0.10%). I would never recommend, nor purchase, an investment with a 12.00%-15.00% spread, let alone one with even a 1.0% spread.

    I have owned both RTH and PJP for quite some time... and trust me when I tell you... they are extremely liquid. Check the bid-ask spread during trading hours on your brokerage site.

    G
    Aug 21 06:33 PM | 1 Like Like |Link to Comment
  • Is Gold Just Another Metals ETF? [View article]
    Fishfryer,

    Nice. And I definitely enjoyed your SAT question, although I'd like to answer "(E) Only A and B."

    G
    Aug 8 05:59 PM | 1 Like Like |Link to Comment
  • 5 Reasons To Pursue Alternatives To More U.S. Stock ETF Exposure [View article]
    bsorge,

    In the article, I wanted to discuss why one should hold, but not add significantly to, U.S. stocks. Moreover, I wanted to outline reasons why one should pursue alternatives to U.S. stock exposure if he/she has excess cash. I offered Vanguard FTSE All World excl US (VSS) as one possibility.

    G
    Aug 2 02:45 PM | Likes Like |Link to Comment
  • Choose ETFs With Relative Strength As Well As Defensive Attributes [View article]
    Eye,


    You have not been reading me for long, have you? I am the last person in the world who would ever recommend a person buys-n-holds anything.

    Have a look here:
    http://bit.ly/11RtnHW

    Best,

    G
    Jul 10 01:11 PM | 1 Like Like |Link to Comment
  • Choose ETFs With Relative Strength As Well As Defensive Attributes [View article]
    Number,

    Nobody should put all of their money in those 2 sectors. This is where one might consider adding additional money at this time.

    While my clients currently own broader-based ETFs like IWB, IJS and VYM, I would not be comfortable adding large amounts with the S&P 500 at 1650 and the earnings season likely to provide weak forward guidance. If you are looking to add new dollars, Pharma via PJP and Consumer Defensive/Consumer Discretionary via RTH are reasonable risk/reward possibilities.

    Gary
    Jul 10 12:00 PM | 1 Like Like |Link to Comment
  • Touring The Asset Classes Via Vanguard ETFs [View article]
    User,

    Again, the article was about Infrastructure ETFs being overrated, not about Agribusiness (MOO). I used MOO in that article as an example of an investing theme. In a sentence, I used the word "struggled" to describe MOO since inception.

    Once more, most stock assets also struggled in the time period. "Struggled" was just a word used to describe 4.6% annualized performance in a single sentence in an entire article about an investing theme known as "infrastructure." MOO outperforming the S&P 500... nothing to do with the commentary about Infrastructure ETFs.

    You may (or may not) have a different perspective if you review the article. Perhaps then, one can at least see the context.
    http://seekingalpha.co...

    Best,

    Gary
    Jul 10 11:06 AM | Likes Like |Link to Comment
  • Touring The Asset Classes Via Vanguard ETFs [View article]
    Randy,

    It's not that you haven't made some terrific points... it's the way that you make them. Every comment does not need to be filled with vitriol.

    When you write 1000s of articles, you are going to make mistakes. Your pointing them out can be a good thing... for everybody. Still, if you are always looking to prove others wrong, you may miss the ideas/thoughts/opinions that one has shared.

    For instance, Agribusiness (MOO) compounding at roughly 4.6% since inception with 20% more beta risk than the S&P 500... that might be described as "struggling." Most stock assets may have "struggled" in that time period. It is just a word that had been used in a sentence in an article that expressed an opinion about Infrastructure ETFs being overrated.

    Regardless of how you feel about me or my opinions, I wish you well in your investment pursuits.

    Gary
    Jul 5 05:12 PM | 4 Likes Like |Link to Comment
  • The Continuing Case For Defensive Equity ETFs [View article]
    P,

    "You might consider dollar cost averaging into the defensive equity ETFs that I listed above." Revisit the article for those ETFs that I listed.

    Or read this article:
    http://bit.ly/124DSSz

    Or here:
    http://bit.ly/124DSSA

    Or you may read any of the recent articles that I have written by clicking on my name at SA.

    Regarding the Economist... my opinion differs on what constitutes value.

    G
    Jun 28 11:44 AM | Likes Like |Link to Comment
  • ETFs For When The Fear Of Fed Tapering Subsides [View article]
    ContrarianAdvisor,

    To be clear, I did not recommend TIP... I used it to demonstrate deflation expectations and to discuss why the Fed will keep buying bonds. As investors begin to anticipate the Fed's likely course, they will once again buy stocks and the correction will subside. RTH is a good vehicle for the scenario that I believe will play itself out in the intermediate term.

    A bear is certain eventually... and an epic bust may also occur. Yet I do not agree that the time is now.

    Let's keep in mind, the global bust that you describe... it has been discussed in great detail since the beginning of 2009. I imagine that you felt the same way about assets collapsing and not recovering in many corrections in 2010, 2011, 2012 and now here 2013. That's okay... the analysis is well-reasoned. Rosenberg, Roubini, Faber, Mauldin and friends... they just seem to be very early to the "end-of-the-world" party.

    For those who have been certain that a deflationary spiral would squash risk taking, it must have been awful to miss out on all of the gains on the way up. Those who read me regularly, however, understand that I use stop-limit loss orders and trendlines to minimize the risk of participation. When I am right, small gains and big gains benefit client portfolios. When I am wrong, small losses minimize the risk of having participated.

    More on risk management here:
    http://bit.ly/11RtnHW

    In other words, there's no problem with buying during a downswing when you maintain a sell discipline. On the other hand, there is a problem when you treat a sensible theory as a certainty. You miss out on a whole lot of upside, no matter how irrational the up move is.

    In sum, if and when the epic bust occurs, I will have my clients largely in the safety of cash... long beforehand. The markets themselves are surprisingly good at telling investors when it's time to step aside from a disaster.

    Gary
    Jun 21 01:59 PM | 1 Like Like |Link to Comment
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