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Ivan Kitov  

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  • Modeling Stock Prices: Cummins Inc. May Fall To $130 [View article]
    I do understand your concern. Nobody can exclude a sudden fall in stock market any time soon. However, the current model has passed the Great Recession as you may see in Figure 2. Why shouldn't it pass the new turbulent period? It could be a good test for the model as well.
    The actual problem with CPIs is of different nature. The differences between various CPIs have longer periods of linear trends. An example has been discussed on Seeking Alpha - http://seekingalpha.co... . When the linear trend for a given pair of driving CPIs (say, HFO and MF) comes to end the relevant model also reverts at once. This was observed for energy companies - http://bit.ly/OpICCF
    It may happen for CMI.
    Apr 7, 2014. 01:25 AM | Likes Like |Link to Comment
  • Predicting Stock Prices: Textron May Grow To $45 In May [View article]
    The model implies that the index of pets, ... does NOT affect the share price. This is the dynamic reference rather than driving force.

    Just a simple example how to understand the term "dynamic reference". Imagine that a swimmer needs to swim 20 km along a river. Let's assume that for this experienced swimmer the average speed is 5 km/h (professionally high). How much time does s/he need? One cannot answer this question without knowing the (river) stream speed and its direction. This is the dynamic reference for the swimmer. Same is with stock prices - knowing the driving CPI is not enough, one needs to know "the stream spead" . The CPI representing the dynamic reference is selected from the set of 90 CPIs to minimize the LSQ model residual. There is no other interpretation of this reference CPI except the statistical one.
    Apr 3, 2014. 07:19 AM | Likes Like |Link to Comment
  • Predicting Stock Prices: Textron May Grow To $45 In May [View article]
    Table 1 answers your question. the model is the same since 2009, when it was first estimated. This is an example of out-of-sample forecast.
    Apr 3, 2014. 07:05 AM | Likes Like |Link to Comment
  • Predicting Share Prices: Texas Instruments To Hold [View article]
    Yes, this is the index which best represents the evolution of prices NOT affecting TXT. The model includes one driving index (NDUR) and one independent index (PETS). The latter is the dynamic reference.
    Apr 2, 2014. 02:33 PM | Likes Like |Link to Comment
  • Modeling Share Prices: Advanced Micro Devices [View article]
    In statistical terms, with sterr=$2.91 reported for the AA model on Nov 12, 2012, the (adjusted) closing price $7.92 on Nov 15 does touch $5 per share. That's why the model uncertainty is reported.
    Mar 23, 2014. 02:31 AM | Likes Like |Link to Comment
  • Modeling Share Prices: Advanced Micro Devices [View article]
    The same model predicts a 50% growth for Avon Products (http://seekingalpha.co... ), and nobody complains. Funny. Should I publish only positive news?
    Mar 22, 2014. 02:23 AM | 1 Like Like |Link to Comment
  • Increasing Income Inequality Is A Political (Taxation) Problem  [View instapost]
    I am not sure that the change in income sharing started in 1980 can be interpreted as a bifurcation. However, I do not exclude so called "self-organized criticality" in economic system. For example, high income distribution follows a power law or Pareto law, which is observed in many sciences.
    Mar 21, 2014. 03:04 PM | Likes Like |Link to Comment
  • Increasing Income Inequality Is A Political (Taxation) Problem  [View instapost]
    Yes, I would say that this is a period of higher turbulence in many economic parameters. In my view, this "instability" still exists but many parameters are back to track. In one sentence, this post says that the richest 1% does not eat income from 99% of population, which they receive as labor compensation, but receives this extra money from tax reduction.
    Mar 20, 2014. 01:08 AM | Likes Like |Link to Comment
  • Sustainable Linear Trends In CPI And Core CPI [View article]
    Flash9,

    Formally, you are right and the rate of inflation is not negative. But the actual raet is very close to zero (GDP deflator and PCE). As the BEA reports, the uncertainty in real GDP estimate is approximately 1%. By definition, the real GDP is the difference between the nominal GDP and the GDP deflator. Therefore, the uncertainty in the GDP deflator is also approximately 1%.
    Also take into account that my estimate was done in 2005 and published in 2006 (http://bit.ly/1iyBiyy) , i.e. before the 2008 crisis, when everybody predicted inflation runaway. The internal uncertainty of the inflation prediction is around 1.5% as it was based on a labor force projection made by the CBO in 2005.
    Mar 12, 2014. 02:36 AM | Likes Like |Link to Comment
  • The Headline And The Core Consumer Price Index [View article]
    I've published a few papers on real GDP and inflation which also claim higher inflation in the USA. On the other hand, I should support the BEA and BLS in their measurements. They are doing an important job when collecting data according to clear rules and guidelines. This is the only source of sound information we have.
    You may take a look at my papers:
    http://bit.ly/WJJk0q
    http://bit.ly/VpvB8f
    Dec 24, 2012. 02:54 AM | Likes Like |Link to Comment
  • Successfully Sold The S&P 500 Index [View article]
    I will stop following the past trajectory when deviation is too large. My analysis shows that the S&P 500 index follows the growth in real GDP - http://seekingalpha.co.... Real GDP is driven by a specific age population and the 2010 census indicates a possibility of recession in 2013 - http://seekingalpha.co.... This suggests the index to go down in 2013 as the blue curve in Figure 1 shows.
    I do not find standard market terminology useful: "bear market" means nothing for me. The market is not driven by random decisions. It is driven by the age pyramid.
    Dec 16, 2012. 02:54 AM | Likes Like |Link to Comment
  • Successfully Sold The S&P 500 Index [View article]
    It's just for fun. No additional efforts when editors let it through.
    Dec 15, 2012. 09:30 AM | 1 Like Like |Link to Comment
  • The Rate Of Unemployment May Fall Below 6% In A Year [View article]
    But you cannot ignore the fact that a much larger portion of population can afford college now compared to the time when MCD salary was enough to pay off. Or you want to deny their right to get education in order to pay $35 for rent?
    Dec 14, 2012. 02:22 AM | 1 Like Like |Link to Comment
  • The Rate Of Unemployment May Fall Below 6% In A Year [View article]
    You were lucky that your father was able to give college education to children. Only 35% were enrolled in 1967. In 2011, this figure is 50% and more farthers are lucky to give college education to their children. It's better time now. and it was poor time for more people in 1967.
    Dec 13, 2012. 09:22 AM | 1 Like Like |Link to Comment
  • The Rate Of Unemployment May Fall Below 6% In A Year [View article]
    http://1.usa.gov/SR8ndi
    Dec 12, 2012. 10:57 AM | Likes Like |Link to Comment
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