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Jeff Miller  

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  • Weighing The Week Ahead: Will Q3 Earnings Disappoint? [View article]
    dancing diva -- Consumer confidence is not back to the old highs, and the economy is operating significantly below trend growth -- so I agree with that observation.

    In the weekly series I try to focus on what is changing. Several weeks ago my theme was a crisis of confidence that was threatening the economy. I suggested that it was something to monitor. I am surprised by the improvement in the confidence indicators for the reasons I gave. My employment model used the Michigan series as one way to estimate job creation, and it worked rather well. The relationship broke down with high gas prices and last year's debt ceiling debate. For me, this is some confirmation of improving employment.

    I don't think that technical analysis can be used on this type of data. Support and resistance work based upon the psychology of past trades at those levels, among other things.

    Interesting observations, as usual...

    Jeff
    Oct 14, 2012. 10:16 AM | 1 Like Like |Link to Comment
  • Profiting From QE3: Spotting The Mistakes [View article]
    GaltMachine -- Actually, the Colorado guys have not predicted in real time. It is a new model. It fits a regression equation to past elections. There are many ways to do this and find a "predictive" model that is actually "postdictive."

    It is something that I write about frequently in the recession forecasts that are not really forecasts.

    I have not studied their model carefully, but I do know that it is very controversial. Just pop their names in your favorite search engine.

    Partisans of both sides want to seize upon evidence that they are winning, perhaps because they think it will help them to win.

    Jeff
    Oct 10, 2012. 09:13 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    What a great collection of comments this week!

    I found it interesting, and I hope others did as well.

    The questions about bond strategies generated some great responses from people with credentials and experience. I am open to the possibility that the conventional wisdom is wrong (as so often happens), but I can see that I need to sharpen up my argument and explanation.

    Feedback is a great way for me to get new ideas, but a poor way for me to communicate the findings. I would rather do a fresh article that states the issues clearly and gives us all a chance to resume the discussion.

    Once again -- thanks to all, and more later:)

    Jeff
    Oct 8, 2012. 09:17 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Diver Dave -- I understand about the eight years. I am doing 7 years or less on my bond ladders.

    The aspect I am trying to address is how one exits or changes portfolio strategy. If I do a bond ladder with $100K at an average yield to worst of 3.5% I know what to expect. As the near-term bonds mature, I can either roll out to the long end (capturing any increase in yield) or I could allocate to something else. If I wanted to, I could be completely out in seven years, assured of getting back my principal and the expected coupons.

    How would it work for a bond fund in a period of increasing rates? I don't see the "exit strategy."

    As I said to Robert (who should feel free to join in), I may not be able to resolve this here, but I am happy for the questions and the input.

    Jeff
    Oct 8, 2012. 03:32 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Valueplay98 -- We are seeing the regular quarterly game where earnings estimates have been revised lower and then the companies beat the lowered estimates. We'll see how much of that is priced in, but the equity risk premium remains high.

    You can do a diversified bond ladder with less than $20k. I would plan to hold to maturity rather than paying commissions both ways. I have the advantage of institutional pricing. I'll do some more checking on prices and commissions, but the advantage of controlling your own portfolio is important.

    Jeff
    Oct 8, 2012. 01:07 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Robert -- I'll look some more, but I am not going to analyze it further in the comments. It is not that I lack interest, but it is not an effective way for me to analyze and present ideas.

    I think that I am explaining a widely accepted and obvious concept, supported by some history of past bond sell offs. I think we are about to see it again. So the problem (from my perspective) is not the facts, but how to explain them.

    Thanks for your interest and your question. In the next article, I'll try to come up with some better illustrations.

    Thanks again --

    Jeff
    Oct 7, 2012. 11:34 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Diver -- Did you check out a bear market in bonds?

    Or did you stick to recent years? We are at the end of a long run for bond funds.

    It is difficult to find good past examples, but maybe we can look back at the late 70's. The basic problem in your analysis is that it does not account for others selling the fund or your own exit strategy.

    Jeff
    Oct 7, 2012. 11:25 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Joseph -- Your comment is an excellent illustration of the approach of traders (really smart, and very good at what they do) versus economists.

    Your definition of fundamentals relates to headlines. Mine is based on data. I have written hundreds of articles on these themes, so I am not going to try to reproduce in this comment.

    I suggest that if you really want an answer to your question, you check out the suggested links on the blog.

    Best I can do, and good luck!

    Jeff
    Oct 7, 2012. 11:22 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    mitchad1 -- I think you have answered your own question, since there is significant underemployment.

    I also think that there is more activity in the underground economy. Lots of people take various jobs for cash payments.

    Meanwhile, congratulations on your wise lifestyle choices!

    Jeff
    Oct 7, 2012. 08:02 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Whidbey -- I manage six different programs, ranging from a very conservative bond ladder to a very aggressive stock trading program.

    One of those six programs trades ETFs via Felix. Each week I distinguish between the trading time frame and the investor time frame.

    It is often correct for traders to step back while other should be following Warren Buffett's advice about being greedy when others are fearful and vice-versa.

    I don't think your sarcasm adds much to constructive dialog. I talk to many individual investors and few have a sound asset allocation.

    And nothing I write is investment advice. As I constantly repeat, each investor is unique -- different needs and a different risk profile. I think the readers are smart enough to know if they are one of the ones that is trying to time the market with their entire portfolio

    Jeff
    Oct 7, 2012. 07:59 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Cautious Investor -- The growth decline in various periods suggests to me the effects of the recession, Europe, and changes in immigration policy. Long term growth in the US will (eventually) be a product of population growth and productivity.

    We won't know the trend growth for sure until we get unemployment back down to the 5-6% range.

    So my viewpoint is not so different from your IMF source. You can always find headlines like this. The problem is to translate what you refer to as "revenue constraints" into earnings and stock prices.

    What about improvements in housing? Things in Europe look better. Do you think China will stand idly by?

    As always, it depends on what you think is already "in the market."

    Thanks for commenting!

    Jeff
    Oct 7, 2012. 02:07 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    GaltMachine -- I try to change around the sources and charts a bit. I have encouraged people to watch Doug's frequent updates, and I certainly do.

    The industrial production decline is the only worrisome series. I have written that business has (at the margins) cut back on expansion while waiting for the resolution of the fiscal cliff issues and the election outcome.

    I will talk about earnings more in the next week or so, as the season ramps up. At the moment, I think that expectations are pretty negative, but we shall see. Usually the bar gets lowered enough so that the "beat rate" is OK.

    Good questions:)

    Jeff
    Oct 7, 2012. 02:00 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Stanley ---

    You seem to have a message in mind which you write in the comments whether it pertains to my article or not. You are making some sweeping statements about investment professionals and what they think and their track records and including me in that group.

    For the record: I do not have a disdain for individual investors. I try to help them. I do this by taking the time to write down the best of the information I found during the week, the most recent results from some proprietary models, the key things to watch for, and a few of my own conclusions. Since it is working well for me, I hope it does the same for others.

    I am not a defender of the "industry" and (unlike you) I have never worked for a big firm. My experience started with Chicago options traders who always had their own money at stake. I still have that personal touch. I design a program for each new client and only after an interview to determine suitability. If a client needs something that I don't offer, I say so. I do not push products to get a higher fee.

    I do not make big sweeping market calls like you do. I certainly don't use the a Fibonacci number to determine when the next correction will come, since I believe that events matter. I don't think you can predict the market without paying any attention to fundamentals.

    Perhaps your methods work just fine for you. There are many ways to succeed as an investor and as a trader. All I am saying is that these approaches do not make sense to me.

    I saw you on CNBC a short time ago. When I saw that it was you, I turned off that mute button and dialed back the TIVO to watch. That is high praise in our office! The gist was that you see a 15-25% correction coming in a few weeks (the interview was on 9/27), a European collapse with the Euro maybe going to parity, a collapse in commodity prices. Brian tried to pin you down on how low and what the timing was and you said something about "support levels."

    Brian said you were bullish back in March, so I went back and watched that interview as well. You didn't like Apple (then about 585) since retail investors could only buy 3 or 4 shares, but you said that the fundamentals were good. You expected a lower market but said that it could go higher first.

    I am putting in the links for both interviews. (There are lots of others as well).

    To summarize, I suggest that if you want to write about how terrible investment managers are, their arrogance, and the poor track records -- well - -just write an article and post it! It is not appropriate to do so and start it off with your amazement at "Jeff and other pundits."

    http://bit.ly/Ro0EBs

    http://bit.ly/QNUbBX

    I'll look forward to seeing you again on CNBC. You are very articulate and effective in your presentation.

    Jeff
    Oct 7, 2012. 01:48 PM | 8 Likes Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    daro -- I want to be clear that those are the current positions in trading accounts. I offer six different programs. Two of them are (more or less) fully invested unless we have a big recession fear, high risk on the SLFSI, or extreme over-valuation. None of these are true at the moment.

    Time frame matters:)

    Jeff
    Oct 7, 2012. 12:52 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Hi Robert,

    If it does not make sense to you, then I need to do a better job of explaining! I'll take another look. For the purposes of discussion in the comments, I suggest that we focus on how you exit from the position. The holder of individual bonds can simply wait until maturity. The holder of a mutual fund does not have that choice.

    Here is one effort at explaining, including the possibility of panic selling if rates rise: http://bit.ly/RJFPCE

    And here is another piece with a pretty good explanation. http://bit.ly/SUPTFY

    So what would you do if your bond fund's price started to decline, something that will happen in a higher rate environment even in well-managed funds? You can keep collecting the yield, but eventually you may want to get out.

    Jeff
    Oct 7, 2012. 10:54 AM | 1 Like Like |Link to Comment
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