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Jeffrey Robinson

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  • Gold's Dull Future [View article]
    Gold and oil have beaten out the Dow in nominal terms for 50 years.

    Gold is up 4,600% since 1962. Oil is up 3,100%. The Dow is only up 1,900%, and indeed, since the Dow is composed of oil stocks (or other stocks that theoretically would benefit from rising natural resource prices), some of the Dow's gains can be attributed to increasing commodity prices. Stock pay dividends but even that wouldn't make it a better investment.

    What is unique about oil and gold?

    1) Oil and gold are scarce and costly to extract
    2) Oil and gold are impossible to reproduce

    Agricultural commodities have not even kept pace with CPI, which is up 660% since 1962. For example, corn is only up 550% and wheat is only up a measly 288%. The global population is up 123%. Wheat has barely kept pace with population growth. The reason is simple: You can create more animals and plants. You cannot create more oil and gold.

    In that sense, if we assume continuous demand, gold and oil are the investments least likely to erode over time due to forces of supply and demand. Anything with a fixed supply and increasing demand due to population growth is naturally a good investment. As long as there is no gold standard, the fixed supply of gold and the ever-expanding money supply of global fiat money will keep gold's price rising. Not to mention, there is a demand for gold in jewelry and furnishings for the wealthy. It's not like there is no usefulness for gold.
    Mar 29 01:26 PM | 8 Likes Like |Link to Comment
  • 5 Reasons Why I Am Shorting The Market [View article]
    The market has not topped yet. There simply is no euphoria. Someone might have been able to squeeze a few percent off some local peaks, but a short trade against the index is too low of odds to even bother. I'd rather be positioned long and take profits and buy the dip.

    5 reasons to buy and hold and never look back:

    1. Equity call buying is at decade lows (about half of what it was at the 2007 peak)

    2. TLT:TIP ratio is above 1. People are plowing into long-dated treasuries and expect no inflation. Market performance in the last decade has been exceptionally strong under these conditions looking out one year or more.

    3. The Fed is still easing with no communication of a change. Employment is not improving in such a way to change their stance.

    4. China is bottoming, not topping. Therefore, consumer discretionary stocks and commodity stocks are bottoming here and will explode looking out a year or more.

    5. I can buy blue chip stocks on the Dow that yield twice that of a treasury. Why would I buy a treasury?
    Apr 16 04:18 PM | 7 Likes Like |Link to Comment
  • A Major Shift In The Market Just Happened. Did You Catch It? [View article]
    I'm seeing better than 20/20 now after having bad astigmatism and extremely poor vision. It was a great success! I have no regrets and would recommend it to anyone, with the caveat that you find a good doctor. My doctor was the official eye surgeon for the Sacramento Kings. I think it's worth it to pay a little extra for quality when dealing with something as important as your eyes.
    Mar 9 04:39 PM | 7 Likes Like |Link to Comment
  • Why Value Investors Are Going To Cash [View article]
    Couple thoughts:

    1) What if earnings increase next year, but prices don't advance as much as earnings? The P/E ratio will contract, stocks will advance, and you'll end up buying higher than today's prices.

    2) The Fed began raising interest rates in 2003/2004 and the markets advanced 50% AFTER the rates started going up. I don't see any reason to sell stocks based on rising interest rates, unless you want to be way early calling a top.
    Apr 4 04:43 PM | 6 Likes Like |Link to Comment
  • A Major Shift In The Market Just Happened. Did You Catch It? [View article]
    There are definitely simpler ways to construct this long term investment model based on the VIX. My suggestion was a starting place for discussion. Hopefully, the readers can adjust it to fit their own risk tolerance level or adapt it according to how they see the chart. Thanks for the feedback.
    Mar 9 04:36 PM | 5 Likes Like |Link to Comment
  • A Major Shift In The Market Just Happened. Did You Catch It? [View article]
    Excellent points. Thanks for the comment. I am not a sophisticated options trader, but your strategies make sense as a way of exploiting the fact that the VIX is unlikely to stay above 20 for very long going forward.

    Yeah, I don't agree with the likes of Marc Faber and Nouriel Roubini who claim the market is in for a shock later this year. If the markets were prepping for a big crash, volatility would already be elevated.
    Mar 9 04:51 PM | 4 Likes Like |Link to Comment
  • A Major Shift In The Market Just Happened. Did You Catch It? [View article]
    I've considered this, and in some sense, you are correct. Looking at the chart visually, it's clear the best time to buy in the long term was at the point of maximum fear. However, it also depends on what you are buying. During a market melt down, obviously some stocks may fare worse than others and some might not even be around after the crash is complete (i.e. Lehman Brothers). I'm speaking strictly in terms of black swans and risk when I approach it from the other side and suggest that you scale down exposure as the VIX rises. What if you bought if the VIX touched 50 and the S&P was at 1200, then after volatility subsided and the crash completed, the VIX was at 200 and never recovered? It's hard to predict how far the market will crash. If the markets go up perpetually forever, then this is a good approach, but there could be a time that isn't true and stocks never recover to new all time highs.
    Mar 9 04:46 PM | 3 Likes Like |Link to Comment
  • Why We Are Not OK And Not On A Sustainable Trajectory [View article]
    You think HFT should have any bearing on anyone's investment decisions? Really? Do you think HFT changes how much money Wal Mart makes or IBM?

    These are just arguments coming from people who don't "get" the market, who are probably positioned incorrectly for the rallies and find some red herring to blame for their mistakes.

    Sorry it keeps happening. Ignore HFT. It is MEANINGLESS.
    Jan 10 04:10 PM | 2 Likes Like |Link to Comment
  • Is Ackman Just As Wrong As He Was On J.C. Penney? Herbalife Q3 Results Suggest So [View article]
    The short squeeze already took place, and the stock merely went back to 2012 levels. Hedge funds took advantage of a player who made a mistake by revealing his hand, but are the making a fundamental play? Absolutely not. I guarantee they are looking to exit now that Ackman already got pressed. This was a TRADE, not an investment on their part.
    Oct 29 10:33 AM | 2 Likes Like |Link to Comment
  • Rough Seas For Diana Containerships [View article]
    Returns after dividend cuts tend to be pretty positive for stocks historically because investors overreact and over-sell on the news. Take, for instance, SuperValu, which cut its dividend last year. The stock is up 400% this year.

    We like DCIX here.
    Jul 29 01:26 PM | 2 Likes Like |Link to Comment
  • It's Almost May, So Go Away [View article]
    Buy the defensive stocks which have been leading for months? No way. If anything sells off, it will be the things that have run the farthest. Instead, people should be buying cyclicals (consumer discretionary, commodity-related) which will benefit from a weakening dollar once the Fed announces that QE will continue and probably will be expanded and purchase sizes increased at an upcoming meeting.
    Apr 27 11:52 AM | 2 Likes Like |Link to Comment
  • Here's What Happened The Last Time The Fed Owned All Outstanding Treasuries [View article]
    Another interesting angle is the political cycle. I've noticed markets tend to bottom and peak right around elections and bull markets run for entire terms of presidents. For example, there was a peak at Clinton's term ending, bottom at Bush's first term ending and second term ending. It's reasonable to conclude there won't be a significant peak until at least the end of Obama's term.
    Apr 4 05:30 PM | 2 Likes Like |Link to Comment
  • Flying High On Borrowed Wings [View article]
    I like what Schiff has to say for the most part and even donated to his campaign, but I think he's making a mistake here drawing a cause and effect relationship between the Fed's actions and the market.

    What if the Fed merely rides business cycles with programs that have no net effect on the markets or economy whatsoever? I'm not totally convinced the Fed is solely responsible for the markets rising. The dollar has been pretty stable since they began their programs in 2009, actually. So if it was just money printing and inflation, shouldn't the dollar be crashing? What if the Fed takes advantage of fear in the markets to create programs that give the illusion that they work as the markets recover? Or, what if they only create programs when there is a lot of fear in the markets, which are destined to move higher as long as there is a "wall of worry"? In other words, the Fed's program are themselves a "wall of worry" leading indicator. Just a thought.
    Apr 2 02:55 PM | 2 Likes Like |Link to Comment
  • Sell In April And Go Away? How To Capitalize [View article]
    The seasonal dips in the summers of 2010, 2011 and 2012 were tied to the ending of QE programs (or Operation Twist in 2012). The lack of certainty over whether there would be another QE left investors nervous and quick to pull the trigger on any bad news. That is not the case this year. QE is "infinite", or at least tied to economic metrics, so anyone waiting for a significant summer correction will be disappointed.
    Mar 24 05:51 PM | 2 Likes Like |Link to Comment
  • The Wisdom Of Not Reinvesting Dividends [View article]
    I've had the same debate. I think in the end there are many variables that go into the decision to reinvest. I think reinvesting in a stock you think is too cheap on dips is a good idea. So, if the stock has pulled back during the dividend payout period, you can reinvest if you still like the stock. If the stock has rallied hard and you think it (or the market) too expensive or stretched, turn off dividend reinvestment. If a stockholder has lost confidence in the stock and is only holding it for the dividend and socking it away so at least they won't lose everything on an investment, it's probably time to sell that stock and rotate into something better. And yes, there is at least one stock I own where that is true, but I'm refusing to sell. :-)
    Mar 20 06:22 PM | 2 Likes Like |Link to Comment