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James Gornick
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Currently holding levels of PMD, and CCT; an economist who created theorems being bantered about for the Austerity v. Coase oppression investing, and new nest egg investing lifestyle rules. The theorems are measuring affects on markets and human unit plights over these next decades. I have been... More
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  • The Deals Presented by The Market - IRAs Cracking The Alerts To Equities
     “Americans weaned on post-war affluence have come to expect an extended period of leisure at the end of their work life.” — The Center for Retirement Research, October 2009 

    For baby-boomers, this terse scrutiny touches a painful nerve since 2007-2010. Instead of simply kicking back and reaping the rewards. The baby-boomer thought they had enjoyed the longest continual sustained bull markets in stocks, bonds, and real estate in decades. Many boomers must now perform a hard reality check on their retirement expectations in the post-crash world.

    Surviving a “perfect storm”

    In key respects, 2008 was a perfect storm leading into 2009. A storm for America’s retirement system, as the meeting of two generational trends.

    The Great Moderation coincided with what we might call the Great Pension Realignment. Millions of workers were shifted from defined benefit (DB) to defined contribution (DC) plans, including the first wave of baby boomers who are now at or near retirement age.

       
    Recent history has underscored the rewards and risks in both DB and DC approaches. Employees covered by a DB plan can look forward to assured lifetime annuities; all they have to worry about is staying employed. However, DB plans have proven untenable over the long term for many plan sponsors in an era of "global competition and shrinking margins". Thus, further view is growing in numbers of DB plans have been frozen or terminated, they have receded in importance for the American retirement system through discovery by extensive research to date.
     
    In contrast, DC plans are more affordable for sponsors (Employers), and increasingly prevalent, and provide workers with a tax-advantaged platform for investing being frequently combined with employer contributions. However, the traditional DC plan requires the participant to supply all the initiative and expertise, from the initial decision to contribute to the finer points of asset allocation and risk/reward trade-off.

    With hindsight, it is clear that this total, open-ended transference of responsibility and investment risk to participants is far from optimal. The crash can be viewed as an exclamation point to that observation. 
     
    Research has brought the belief that the retirement system must evolve to bridge the gap between the DB and DC approaches. Some of the security inherent in DB plans can and should be developed for individual retirement investors, both inside and outside of DC platforms. Before examining some promising ways to accomplish that, one must first briefly take stock of the damage to the retirement landscape, as a graphic reminder of the urgency of the task of building foundations for retirement before all seeking a resolve of risk to reward they are faced with. 

      
    The CRR cites several factors behind this trend:
     
    • The length of retirement is increasing with longer life expectancies, while the age for receiving full Social Security benefits is being pushed back to 67 from 65.
     
    • More workers are vulnerable to market exposure and investment mistakes as part of DC plans, as discussed above. The median 401(k)/IRA balance for participants approaching retirement was found to be just $78,000. “In theory,” the study notes, “401(k) plans could provide adequate retirement income, but many individuals make mistakes at nearly every step along the way.”
     
    • Most of the working-age population saves virtually nothing outside of their employer sponsored pension plan.
     
    • Fixed-income and annuity yields have fallen, so accumulated assets are generating smaller income streams. However, there is a partial offset to this with the availability of lower interest rates for reverse mortgages, which makes it less costly to borrow against home equity. 
     
    The graph above summarizes the eight percentage point worsening in the NRRI by source. It is worth noting that while more than twice as much equity market value was wiped out than housing equity, the latter affects many more households and is responsible for 4.9 percentage points of the negative change.

    Keep all your trades weighted properly. It is wise to have a professional adviser. An adviser who is an active money manager works your portfolio when working within this current market environment.


    Disclosure: Holding Options Long and Short Puts and Calls in BAC, GS, GLD, SIL, SMH, TLT
    Tags: BAC, PNC, GS, XLF, GLD, PIE, TLT, OIL, IYG, FAS, FAZ, SMH, CSCO, MSFT, SIL, NGAS, IRA Protections, Bulls Pausing, Market Portfolio Management Theory, Austerity Investing
    Nov 09 5:10 PM | Link | Comment!
  • Reasons Options Offering Trick or Treats
    You might be surprised at the implications of measuring profits by the taps of a media devices key board.  An article appeared the other day titled, "A Web Pioneer Profiles Users By Name". 

    Emily Steel gives us an alert, directly warning to push the pause button on our next journey on the World-Wide Web. 

    Her statements resonate an accuracy in these tracking service companies as reported as Rapleaf, Inc., Double-Click and other noted providers pointing why we may need to worry. Why Worry? The retail banking. Banks, such as, Wells Fargo, JP Morgan Chase, Bank of America, and a host of other concerns know their marketing campaigns better than we do.

    A quick review of a section of her article piece published October 25, 2010 in Wall Street Journal, as she stated, 

    In the weeks before the New Hampshire primary last month, Linda Twombly of Nashua says she was peppered with online ads for Republican Senate hopeful Jim Bender.
    It was no accident. An online tracking company called RapLeaf Inc. had correctly identified her as a conservative who is interested in Republican politics, has an interest in the Bible and contributes to political and environmental causes. Mrs. Twombly's profile is part of RapLeaf's rich trove of data, garnered from a variety of sources and which both political parties have tapped.
    RapLeaf knows even more about Mrs. Twombly and millions of other Americans: their real names and email addresses.
    This makes "RapLeaf a rare breed", (Steel). It was a clear statement she puts forward the notion of looking at the advantages modern technology having the pluses and certainly the minuses. It could provided for a lot of empty "Houses" waiting to frighten the new owners away with RRP concerns.  

    These RRP concerns will help NEW HOME sales, boosting the ability for New Home builders to  move their inventories. It could mean more construction jobs in the near foreseeable future do to RRPs and the unwinding of Foreclosuregate. 

     


    Starts raising the concerns of this weeks theme. Could it be a Trick or Treat? Why are foreclosures going to continue at record paces as the bank servers are on a Green Light?

    The other question of concern is how target marketing will find successes in keeping banking profits up in the coming quarter's. 

    Rival companies; companies we know as brand names of Google, Yahoo, Microsoft, BIDU and RapLeaf Inc., are tracking companies gathering minute detail on individual Americans. Steel is able to clearly convey in her piece when stating, "they know a tremendous amount about you. But most trackers either can't or won't keep the ultimate piece of personal information--your name--in their databases. The industry often cites this layer of anonymity as a reason online tracking shouldn't be considered intrusive"(Steel).     

     Click on Video Picture for Interviews

    One more reason to understand the hidden dynamics of trying to calculate the Earnings Advantages of the reporting corporations.

    I am going long the banks since yesterday. The key reasons come from the announcement out of Goldman Sachs for 50 year notes they are offering. Other similar offers were filled by Bank of America, Wells Fargo, Citigroup, and JP Morgan Chase. These notes secure their final assaults of closing off the foreclosuregate and giving further depth to the time horizon to off load these properties slowly back into an economic recovery of the housing and general main-street economies.

    How will Rapleaf, Inc., affect us in the long run as investor's? I am looking at the ability to know where your loyalties were or really are. 

    In the article; you find the eye opener giving me my answer. The abilities to push marketing based upon campaigns of known behavior flaws or our strengths are uncharted territory.

    The message clearly today sends; "Happy Trading" or is that, Trick or Treat? 

    Sending messages knowing you might have more than a few partners with you during your trading day. 

    Far-fetched, Not this time... 

    Remember; Halloween really is more about a day of Prayer or praying for all deceased souls (All Souls Day). So I wish all a Happy Souls Day...
    J.G. 


    Disclosure: Call Options in BAC, GS, JPM, C, AIG, MET, PRU, WFC, MS, XLF,CSCO, INTC, GOOG, ORCL, MSFT, BIDU,YHOO, DCLK, and BLK, With Long Positions Held In: XLE, GLD, DRWI Short positions in ISSI
    Tags: BAC, GS, JPM, C, AIG, MET, PRU, WFC, MS, XLF, XLE, GLD, DRWI, ISSI, CSCO, INTC, GOOG, ORCL, MSFT, BIDU, YHOO, DCLK, BLK, Options Investing, Happy Halloween for Trading, Far-fetched, Getting It Right investing, Banking Bench Notes, Foreclosuregate, Austerity Investing, Coase Oppression and Austerity Theorems, James Gornick, Teleios
    Oct 26 11:03 AM | Link | Comment!
  • You Must Respect The Message Sent By Nextinning Paul McWilliams on ISSI Today
    After reviewing all of the market analysts on Integrated Silicon Solutions (ISSI). There are four currently and what I call the boutiques such as seen through Zack's, Street.com, and other sources. It's time to send the same message coming out of www.nextinning.com/ 

    Nextinning.com is run by it's principal editor as a well respected gentleman Paul McWilliams.  I respect his wisdom of over 30 years of calling the Semi space. His call originally brought me into this issue a year ago when it sat around $2.58, which had me holding ISSI over this past year. I would say ISSI is going to be coming into some difficult headwinds for their share price to maintain the $10 targets.

    This is based upon catching a model flaw within the business model for long-term price appreciation. I gathered the depth of reason after reading McWilliams assessment.

    I am putting it on my SELL and take your profits list. You can build option type positions if your a high risk trader. Options such as spreads and more complicated ones other than just simple single type calls or puts. This is only suggested if the issue is one you like to work daily and are still incline to make profits from this company.

    Keep your stop-loss tight on this issue now if you have entered it over the last week. It can still move due to earnings, but there is again some signs of cracks seen now that warrant prudent investing to keep profits and hold down losses.

    My hope is all who follow my articles; you were able to get in when I had made the call at the lower range for this issue months ago. If you have entered in this past week or days than again, keep a tight stop-loss.

    The past week was when the issue was in the low $7s. If you were able to get in originally at the buy price of the $6.50 range area. The stock has seen about a 27% gain from initial entry signals.

    *DISCLAIMER: Stock and options trading involves substantial risk. The valuation of stock and options may fluctuate, and as a result, in some cases, clients could lose more than their original investment. In no event should the content of this correspondence be construed as an express or an implied promise, guarantee or implication by or from James Gornick and/or Seeking Alpha and or their affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided in this correspondence is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. 

    Far-fetched, not this time...


    Disclosure: Have sold all positions today and no longer holding options.
    Tags: ISSI, Coase Oppression Investing, Austerity Investing, Far-fetched
    Oct 05 3:53 PM | Link | Comment!
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