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Jeff Miller

 
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  • Weighing The Week Ahead: What Lies Beyond The Cliff? [View article]
    Mr. Chad,

    You are obviously a complete newbie to what I write. My investment perspective changes weekly, and is on record.

    Since I look at facts and data, I am not emotional and I don't tremble.

    Since you lack any information for your comment, people can and should ignore what you say.

    I really try to be nice to people making comments for the first time....even when they are anonymous like you... but there is a limit.
    Dec 30 10:45 PM | 7 Likes Like |Link to Comment
  • Weighing The Week Ahead: The Lull Before The Storm? [View article]
    nafar -- The economic growth is building employment, but not fast enough. 110,000 a month in net job gain is just treading water. 165,000 would make some progress. We need something closer to 300,000 for a robust recovery.

    It is also true that corporations have been very profitable despite the modest growth. Stocks are priced based on profits, so for investors, the slow growth has provided some gains. For society, it is not very good.

    As aggregate demand improves -- and it gradually will -- companies will hire more people. I think we are in a longer than normal recovery cycle.

    Your question is one that everyone should be thinking about.

    Jeff
    Aug 19 09:44 AM | 7 Likes Like |Link to Comment
  • Odds Of Recession With Romney? Who Knows! [View article]
    Hi gang -- I set out to write an article about statistical inference, but I wanted to have some fun with the topic. We are all bombarded with bogus conclusions like this, especially during an election campaign. That is why I picked something that I thought would be easily recognized as outlandish. I even included the following:

    "Lessons in Inference

    I trust that readers will understand my tongue-in-cheek approach to this subject. It is silly to conclude, based on this evidence, that electing Romney will lead to a recession."

    So feel free to analyze the lack of logic in the conclusion about Romney, but use it to appreciate the need for clear thinking about such scientific claims:)

    Thanks -- and especially to those readers who are helping to explain.

    Jeff
    Aug 14 09:50 AM | 7 Likes Like |Link to Comment
  • Confused About Stocks? You Are Not Alone [View article]
    Canuck -- Welcome to Seeking Alpha!
    Considering your points --

    1) Please note that I am quoting Dick Green as well as endorsing his viewpoint. I have written several other articles on these themes which you have probably not seen. And yes, there were high profits before 2008 in the financial industry, and then big writedowns. My approach suggests that looking backward is not a useful method. My past articles on Shiller show that you will probably never find a chance to invest if you follow that method. If you want to advance this, why not put some numbers on the losses in the prior years and then tell us at what Shiller P/E point you would recommend that your clients buy stocks. Please note that even the bottom in 2009 barely qualified on the Shiller method!

    2) Feel free to treat stocks as a 50-year bond if you want. The big pension funds do asset allocation on a much shorter time frame. None of us has any idea what will happen in five years, much less a 50-year cash flow. This is an unrealistic and unhelpful analytical method, which will assure that your clients never buy any stocks. Meanwhile, people actually trading stocks look at likely developments over the next year or two. As a fellow investment professional, you must know that daily stock pricing reflects this. Is there any stock that qualifies under your method?
    3) This artificial nature is most exasperating. You cannot reject data because you do not like it. Governments do not accept poor economic times without a fight -- regardless of party. Government stimulus is a natural part of counter-cyclical policy. It will wind down as the normal organic growth is restored. You seem to think that the natural state of an economy, in the absence of government, is a recession. That is just wrong.

    I don't find the secular/cyclical lingo to be very helpful to investors, but I do believe that we are in the early innings of a slow recovery. Let us try this another way:

    Under what circumstances would you recommend stock ownership? Any names that you like? Do we have to wait until the Fed stops the low rates? What would change your mind?

    Again -- welcome to SA. Thanks for joining in. I wish the best to you and your clients, and I hope you find a way to include some stocks in your portfolios!

    Jeff
    Apr 18 11:49 PM | 7 Likes Like |Link to Comment
  • How To Play The Market? Depends If You're A Trader Or Investor [View article]
    Michael -- Traders are not the bad guys. As David notes in another comment, I wear that hat every day -- most of the time in fact. Acting as a trader, my positions are re-evaluated constantly and something is changing every day. That is long-term compared to many. As a trader I should not care about the current P/E or the recession odds. I need to understand how my fellow traders are thinking. It is fast and loose. Many of the best I have known do not want to know any news. They sense and trade the flow.

    And I agree with you that investors need to be cognizant of major fundamental considerations, and adjust asset allocations, although my criteria differ from yours.

    I realize that my article was geared more to the individual investor, and that is for a reason. The smartest and best investors read financial news and watch financial TV. Most of what they hear is advice about trading.

    Thanks for joining in, and I hope this helps to clarify.

    Jeff
    Apr 12 09:51 AM | 7 Likes Like |Link to Comment
  • European Impact On U.S. Equities Is Overstated [View article]
    kwm3 -- If you are going to move from law to investments as you suggest in your profile, you need to do the same level of professional work and fact-finding.

    Two examples: Concerning the JPM derivative exposure, using notional values is typical of those seeking to scare rather than to inform. JPM has $13.9 B of net exposure and estimates a $3 B loss in a complete disaster. They do not offset European exposure with different counter parties, so that is not a risk. http://buswk.co/tbJQbw

    Second, Europe is not our "closest trading partner." Our biggest trading partners are Canada, China, Mexico and Japan. Germany and the UK are a distant 5th and 6th and no other European country is in the top 10. http://1.usa.gov/vg9W1C

    Best of luck in developing your investment theses and ideas. It is not easy:)

    Jeff
    Dec 16 12:00 PM | 7 Likes Like |Link to Comment
  • Dow 20K: Here's Why It Could Happen [View article]
    Eduard -- Before offering lessons in logic, please read the introduction to the "what if's" more carefully.

    I specifically stated that I cannot make an entire argument in one article. I also stated that it was worth thinking about these ideas.

    It was not a syllogism. I really appreciate constructive discussion, but it requires fairness on your part.

    Jeff
    Jun 24 10:40 AM | 7 Likes Like |Link to Comment
  • ECRI Growth Plunges [View article]
    Ricard - I am having trouble understanding your point. The ECRI collects data and provides a contemporaneous interpretation.

    Two weeks ago there was a low probability of a double dip.

    Now the indicators are a little worse, so he says that the rate of growth is slowing.

    What would you suggest? The man looks at the data and reports. The indicator is still positive, but showing a slowing growth rate. It is a long way from signaling negative growth.

    It is a problem of the "second derivative" which I am sure that you understand.

    Just a thought----
    May 28 11:32 PM | 7 Likes Like |Link to Comment
  • The Sound Of Silence [View article]
    cfetrader -- There are many ways to make money through investing and trading. You have a method which you have tested to your own satisfaction.

    I wish you well -- but not necessarily on the current trade.

    Jeff
    May 23 09:58 AM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Time To 'Sell In May'? [View article]
    billcharlesdixon -- Many issues are not part of the weekly review/preview. As I have written before, I understand the significance of the Ukraine situation for world politics, defining roles, setting precedents, and many other angles. The question I ask is each week has two parts:

    1) Does this story have a significant potential market impact?
    2) Did anything change this week --- something really new?

    From the market perspective there was initial fear of direct US/Russian military conflict, and I explained that it was not going to happen. I discussed the many diplomatic steps that we would see with months of negotiation, etc.

    Tom notes that the market is not reacting much, and he is correct. If you want to worry from a stock perspective, you need to have some rationale. There is a long list of worries that make good TV....

    And I emphasize again -- none of this is to disparage the significance for the people involved.

    I am watching this closely for any market implications.

    Thanks for the question -- maybe I should have explained a little in the post.

    Jeff
    Apr 27 11:15 AM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: A Volatility Cocktail [View article]
    steve_t - If you follow the regular reports in WTWA, you will soon see that there is often a divergence between underlying fundamentals and the market move for a particular week. It works both ways. I'm not sure why you thought it was predictable BEFORE this week :)

    Your trading conclusion is in line with Felix's, as I noted.

    Jeff
    Apr 13 09:22 AM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Does The Weakness In Housing Threaten The Economy And Stocks? [View article]
    Thanks for the encouraging comments. When I get behind on the schedule I always wonder whether to follow through. I am glad that readers found this useful.

    Jeff
    Feb 25 09:49 PM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Correction Over? [View article]
    vraykin -- I decide on a case-by-case basis. Since there are many candidates in the universe I follow, I do not mind losing a specific stock when it is called away. I have collected the premium as well as the stock move. The combination is usually about 4% in five or six weeks. I can afford to be patient and look for a new opportunity.

    If the stock is wildly undervalued and I expect a big move, I do not make it a part of this program. I just buy the stock in my "long" portfolio.

    With changing events and earnings my price targets for stocks change as well. I evaluate each new position based upon this information. It is possible to re-enter a stock at a higher price, but only if the fundamentals have improved.

    As you note, the process does have a way of taking you out of some stocks that have made surprisingly large moves. You may find that these drop back into your buy range.

    The only thing I would say about the ADP example is that your combined stock gain and premium was about 2%. I usually try to sell a call that is a bit farther out of the money. I am very fussy about entry points on new positions.

    There are many ways to make the strategy work, and you can have some fun doing it. The major point is to avoid buying over-valued stocks. I hope this is helpful.

    Jeff
    Feb 16 01:14 PM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Will Yellen Signal A Policy Change? [View article]
    CautiousInvestor, a regular participant in our discussions who offers many interesting points, is having trouble posting comments. With his permission, I am posting a message he sent to me:

    CautiousInvestor February 9 at 8:53am
    Last week's installment of WTWA was particularly good as it included your typically insightful comments along with a number of helpful links. I miss our exchanges but I have not been able to comment presumably because of technical issues with SA's platform.

    While the economy could easily grow at around 2.5% to 3.0% during the current year, there may be more downside than most realize. In the interest of brevity, I'll only deal with one issue dealing with employment and consumer spending which accounts for about 70% of the economy.

    And that issue is that average employment gains of 180,000 per months is not materially increasing total employment which expanded from 143.2 million in December, 2012 to 144.6 million in December, 2013 because layoffs, while decelerating, are continuing to average around 115,000 per month. This suggests net employment is only increasing 65,000 per month which works out to around a 1% gain in employment over the course of a year.

    And with earnings and the hourly work week virtually stagnant, its hard to see how real personal consumption expenditures can continue growing at the most recent rate of 3.3% given that the BEA reports that real PDI increased at an annualized rate of .8% in the fourth quarter, down from 3.0% in the third quarter. Further, in its most recent GDP release, the BEA reveals that the yoy quarterly increase in PDI was actually minus .1% while .7% for the year, the latter being the lowest annual rate of increase since 1998 with the exception of 2009.

    It's interesting that the calculated expansion in employment of 1% is very close to .7% increase in PDI with the difference likely attributable to new hires making less than tenured employees. My hunch is that much of the recent increase in consumption has been supported by increases in motor vehicle financing accompanied by reduced savings with the rate of savings in the fourth quarter falling to 4.3% from 4.9% in the third quarter.

    But with real incomes virtually stagnant and failing a surge in employment gains, further growth in consumer spending would appear unsustainable unless supported by household releveraging.
    Feb 9 11:18 AM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Economic Recovery Stalling Out? [View article]
    Thanks to all those with some kind words!

    It helps me keep working on Saturday night when I would really prefer something else:)

    Jeff
    Feb 2 09:15 PM | 6 Likes Like |Link to Comment
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