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Jeff Miller

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  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    OG -- I am delighted about your investment success and not surprised that you are cautious with personal finances. I guess I did not understand the "link within a link" especially in the context of the first example.

    Continued good trading --
    Jeff
    Nov 18 02:05 PM | 1 Like Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    OG --
    Your link goes to an anonymous blogger (writing at Ritholtz and using Ely charts). He calls the Fed a hedge fund. Maybe that should be a clue. There is a fringe element (Ron Paul has about 20% of the GOP voters) that does not want a Fed. The GOP candidates seem to hate Bernanke, a Republican who was appointed by a Republican. I am not interested in trying to change the minds of people who have reached these conclusions.

    My interest is in making winning investments. If you are basing your decisions on the idea that the Fed has excessive leverage or might go broke like Lehman, you are mistaken.

    Could the Fed suffer losses on current positions instead of the profits they have been showing? Sure. That is what I said. They are not trying to make money, they are conducting monetary policy.

    Separating your political viewpoints from your investment decisions is vital. I encourage you to join me as a political agnostic -- willing to profit no matter who is in power.

    Jeff
    Nov 18 12:20 PM | 3 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    elwaine -- 'throwing money at problems" is a slogan, not an argument. I maintain that various parties will join in if and when there is a structure in place that allows them to invest in a way that maximizes their self-interest. Your conclusions about investment and social reform are far too broad. Look at the US investment in China, to take one obvious example. Expanding trade and investment has helped to foster more world cooperation.

    I have monitored the Chinese lecturing to Europe. They are not going to do a bailout. They might well do something like stepping up bond purchases from the EFSF, especially if there is the proposed SPV to absorb the first losses. Or maybe they will get some trade concessions. Or some other inducement.

    If the work in progress reaches a conclusion, I think you will see some self-interested Chinese participation.

    Jeff
    Nov 18 11:57 AM | 2 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    Tuck's comment about "my book" reminded me that anyone can check out many of my positions and ideas online. I was recently invited to join a new site with a group of very sharp people. I am writing an investment diary with a few entries each day.

    http://bit.ly/v8rPmt/

    Jeff
    Nov 17 03:29 PM | 2 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    skiman -- I was thinking about that example when writing this, actually. We could have bought all of the houses for far less than the ultimate cost to the economy. The problem was convincing people about what was at stake. The response was slow, misguided, and ultimately more costly than necessary.

    A good question is whether the lesson is not lost on European leaders. There are certainly many voices reminding them.

    Good point.

    Jeff
    Nov 17 03:26 PM | 3 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    Screamin --- The list of comments here pretty much proves my point about the prevailing attitudes, so my position is contrarian by definition.

    I have notice that people often use "naive" and other name-calling when they run out of real arguments. My argument --- stated over several articles -- is that there is no European solution like a magic bullet. There is an outline, a framework, a work in progress. It is getting built through negotiation and compromise.

    If you knew more about political science you would realize that this is actually a very sophisticated argument.

    I urge you to keep an open mind as this plays out.

    Jeff
    Nov 17 03:20 PM | 3 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    OG -- Tack's response is correct. Since the Fed can create money, it is not like a regular bank. Pento's analogy is flawed.

    The problem is deeper. Pento notes that the Fed has $52.5 billion of capital. He did not mention that the Fed sent the Treasury about $80 billion in profits last year. The decision of how much capital to maintain is somewhat arbitrary.

    There is a point in the Pento argument. The Fed is borrowing short and lending long, profiting from the spread. Again, this is not the same as a regular bank, since the Fed has some control over these rates. We'll see how it turns out when the Fed unwinds positions. Here is a very nice story on the whole process from an objective source that I frequently cite: http://bit.ly/vWtpuT

    And now you see the problem. Even debunking a single statement requires a fair amount of work and it does not help as many people as an article might. This explains why so many things like this goes unchallenged.

    I am kept pretty busy just defending my own stuff!

    As to sources -- the Forbes editor and many others are on a highly political mission right now. Part of that mission is scaring the daylights out of people before the election. Tune in to an episode of Kudlow when he is on. As I continually warn, we must keep our politics separate from our investments.

    Thanks for joining in. We are having a good discussion on this one.

    Jeff
    Nov 17 03:11 PM | 2 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    tuckfinitee -- A part of my long-term edge in investing has been understanding and interpreting policy decisions. As a public policy prof and later as a market analyst, I have studied thousands of decisions ranging from the smallest local matters to the most important. If I am going to write something that will be helpful, I have to draw upon that experience.

    For some reason you see this as "hubris, delusion, and authoritarianism." It is merely a considered opinion, based on experience. Could I be wrong? Certainly, but the historical odds are on my side.

    What if I had written: "The big money usually wins"?
    Perhaps you would have found that more persuasive.

    As to "talking my book" --- you obviously have not been reading my weekly columns. I take great pains to explain positions each week, more transparency than anyone else. I have five different investment programs so that I can adjust to individual needs. Four of the five are in very defensive positions. I think that long-term investors should be using the volatility to buy cheap stocks, and I see a many of them.

    Anyway, I welcome discussion on the merits, but I am surprised at being compared to some radio guy.

    I had to look up who he was!

    Jeff
    Nov 17 02:39 PM | 2 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    optionsgirl -- Sure. Selling fear is a profitable business, much more so than mine. I get a list of things like this in my email every day. I know from your past comments that you are both intelligent and knowledgeable. So let me ask this: Do you really think that the Fed would go bankrupt from a 2% move?

    These pieces are well-tuned. They tell people what they want to hear, reaffirming existing biases. It is rhetoric that resonates in a common sense way. To refute it requires a paragraph by paragraph analysis, and no one has an incentive to take this on.

    With this in mind, you might look at a past article where I analyzed Pento's inaccurate use of data: http://bit.ly/s7rJOr

    If your job is hating the Fed and selling gold, you have a bull market. [BTW -- long GLD and GDX]

    And finally, I agree with Mobius that we need better regulation and transparency concerning derivatives.

    Jeff
    Nov 17 12:28 PM | 3 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    Tack -- I agree that it is a work in progress. There actually has been a surprising display of political will, don't you think? Look at the leadership changes.....

    Jeff
    Nov 17 12:13 PM | Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    davewmart -- I agree that a complete collapse is not priced in. Whenever an issue is in doubt, it can be a challenge to figure out what is "in the market."

    Regular readers know that I am long JPM, which I think is at least ten points lower than it would be w/o the Europe effect. And that is the leading bank.

    I have a number of articles suggesting reasons why this situation is not like 2008.

    Jeff
    Nov 17 12:11 PM | 2 Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    enigmaman -- Yes, that is the general idea, except that I think there will be many participants. Once there is more clarity, there will also be more investors.

    Jeff
    Nov 17 11:20 AM | Likes Like |Link to Comment
  • Predicting The Outcome In Europe And What It Means For U.S. Stocks [View article]
    davewmart -- I think that all of us who have been following this story for more than 18 months are familiar with the estimates of the size needed for the various programs. When I said the "overall" effect on US stocks, I meant just that --- not merely the twenty minutes from yesterday. The current low P/E multiple reflects European concerns and recession fears that are partly linked to Europe.

    If we had more clarity and confidence about Europe, stocks would be "worth" much more, so that is what is at stake. It is certainly somewhere in the trillions, as I think you will soon see.

    Thanks for giving me a chance to clarify this.

    Jeff
    Nov 17 11:18 AM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Will The Volatility Continue? [View article]
    Peter -- this seems a bit cavalier.

    Let us suppose that at the beginning of each year you could make a bet: Recession or no recession, using the official NBER determination.

    My guess is that you would not predict a recession unless you had compelling evidence. The odds are against you, since there is a recession only one time in six.

    With this in mind, let us review Hoisington versus the average street analyst. Draw a 2 by 2 matrix. The street guys are usually right, and the guys like Hunt are usually wrong.

    Jeff
    Nov 13 10:26 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Will The Volatility Continue? [View article]
    stock junky -- I try to avoid "real time" trading signals in my online commentary. Mostly this is because many people will use the information incorrectly.

    Registered investment advisors have special responsibilities, the first of which is determining suitability for any trading program. I screen people and recommend a blend of our five different programs. Most important is to avoid excessive risk.

    I do offer a (free) email update on our ETF rankings with a one-day delay. This should be very helpful for people who have a good plan.

    I also update our general posture online once each week. That is all I feel comfortable in doing, and I hope you understand.

    Good question and thanks,

    Jeff
    Nov 13 08:49 PM | 1 Like Like |Link to Comment
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