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Kevin McElroy

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  • Silver Opportunity Begins Anew [View article]
    Well, that's a bit over-dramatic. The end of a currency's hegemony is not the end of the world. It's not likely to even cause the end of a country. Do I expect blood in the streets? Sure. But we already have blood in the streets.
    Feb 3 02:30 AM | Likes Like |Link to Comment
  • Silver Opportunity Begins Anew [View article]
    Fair point. Bonds have been a great place to be for years. Even Bill Gross got out of bonds too early!

    But we know the bond train can't last forever. When interest rates take the smallest steps back to revert to mean, it will be a massacre in bonds. Until you're wrong, you'll be right though.

    I managed to buy some of that $45 silver - but I bought most of my silver under $20 - so my cost basis is still attractive. In silver, as with bonds, or any asset class, it doesn't make sense to try to time the bull market.
    Feb 3 02:28 AM | 1 Like Like |Link to Comment
  • Government-Backed Investment Nearly Twice As Profitable As Gold [View article]
    30 year bonds were up nearly 20% in 2011. Gold was up 10%.
    Jan 9 10:05 AM | Likes Like |Link to Comment
  • Government-Backed Investment Nearly Twice As Profitable As Gold [View article]
    In what way?
    Jan 4 03:38 PM | Likes Like |Link to Comment
  • Government-Backed Investment Nearly Twice As Profitable As Gold [View article]
    Great comment. I agree with you that the Fed appears to have arrested the attention of the market, but they haven't solved anything. Eventually their schemes will destroy the credibility of the dollar. I'd argue we're currently in the midst of that credibility destruction.
    Jan 4 09:40 AM | 2 Likes Like |Link to Comment
  • How To Safely Sell Your Gold [View article]
    You can head over to Wyattresearch.com and go to the careers section. Please be aware that you'll be expected to write new, original content every day the market is open. And when you make an inevitable mistake after writing hundreds of articles, and you rightfully own up to the mistake, be prepared to take grief from monday morning quarterbacks.
    Jan 3 09:47 AM | Likes Like |Link to Comment
  • Bears Continue To Look Strong Despite Lack Of Concrete Catalyst [View article]
    Nice work calling this rally.
    Nov 30 12:32 PM | Likes Like |Link to Comment
  • Clearing Up Big Misconceptions About Shorting: My Idea For Italian Bonds [View article]
    I'm not ashamed at all - which I might point out is name-calling. As is calling me pathetic. Pedantry is a fair judgment from my vantage point. You can refute it if you want. Or not.
    Nov 23 12:53 PM | Likes Like |Link to Comment
  • Clearing Up Big Misconceptions About Shorting: My Idea For Italian Bonds [View article]
    You're being exceedingly pedantic. Market prices rise and fall. You should profit as you wish. There's no judgment necessary, because vindictive thoughts and wishful thinking should be absent from your investment thesis.

    I buy or sell because I think an asset is fairly priced or overpriced. If I'm right, I make money. If not, I don't. Buyers aren't cheerleaders. Short sellers aren't devils. It's a useless way to look at the market, because the very act of entering the market is not a phenomena self-reinforcing enough to make it a part of any investment strategy.

    A butterfly flaps its wings and all that, yes, but it's irrelevant to the discussion. Italy is broke, selling their bonds didn't make them broke. Buying them won't make Italy solvent.
    Nov 22 04:34 PM | Likes Like |Link to Comment
  • Clearing Up Big Misconceptions About Shorting: My Idea For Italian Bonds [View article]
    You misunderstand my point. The single act of one buyer or seller (in this case: me) buying or selling does not guarantee that prices will rise or fall. Otherwise, no one would ever lose money buying stocks. Right? Do you understand my point? If you don't, please tell me which stocks you're buying now because frankly I'll take the other side of the transaction every time.

    Moreover, there's plenty of research suggesting the opposite: short sellers provide liquidity when it's needed most. And when shorts get hit with a margin call, their buying to cover is EXTREMELY bullish, usually setting off a wave of big gains for the underlying.

    I recommend reading this now widely publicized paper by Lou and Karpoff: http://bit.ly/upNUH6

    It's probably a grad level paper, so maybe go through a 400 level Econ course before tackling it.
    Nov 22 09:33 AM | Likes Like |Link to Comment
  • How To Profit From Italy's Fall [View article]
    Yes, Ireland's yields have come back to earth somewhat, but only after breaching 12%. If that happens with Italian bonds, the price will get crushed.

    If you shorted Ireland at 7%, you'd still be in the black.

    Thanks for commenting.
    Nov 15 04:24 PM | Likes Like |Link to Comment
  • Treasuries: I Hate This Investment But It's Working [View article]
    I don't know if this article is a good argument for diversification - especially when most people don't even have a good bead on what diversification really means or how to diversify effectively.

    Your average mutual fund manager will tell you that diversification means owning a blue chip fund, a growth fund and an income fund. They'll tell you to own bonds if you're old, and high beta stocks if you're young - with almost no intelligent regard to whether it's a good time to buy bonds or stocks.

    I do like asset class diversification, most fashionably of late seen in the Ivy League portfolio. But that type of diversification typically means avoiding the entire stock market for months if not years at a time...
    Nov 11 11:44 AM | Likes Like |Link to Comment
  • Treasuries: I Hate This Investment But It's Working [View article]
    Well, when I say stocks, I generally mean the S&P 500 or the Dow. Sorry I didn't make that more clear.

    I refer to these stock indexes because that's what most regular investors own through mutual funds. And most investors' portfolios have exceedingly high correlation to the movements in these broad market indexes.

    I like MCD as well.
    Nov 11 11:39 AM | Likes Like |Link to Comment
  • The Dollar Will Fail - No 'Ifs' About It [View article]
    Yes, I'm familiar with Warren Buffett's arguments against owning gold. And I don't know what kind of ax he's grinding, but it's a ridiculous argument. Of course you'd rather own 5 or 6 Exxons than a swimming pool filled with metal. But there's a world of difference between why you'd want to own gold and why you'd want to own Exxon, just as there's a world of difference between why you'd want to own cash, treasuries, fine art, real estate or corporate bonds vs. owning shares of Exxon. Don't confuse and compare cash (and the reasons for holding it) for an equity (and the reasons for holding it).

    I mean, what would you do with a swimming pool full of cash? What would you do with a swimming pool filled with Mona Lisas?

    So, first you need to understand that owning physical gold is not an investment. It's a form of cash-savings. Buffett I'm sure advocates for cash-savings. He holds cash. You wouldn't make a ridiculous analogy about holding dollars in a savings account. So really, your argument against gold comes down to your belief that the dollar in a savings account will outperform gold. You've been wrong for 12 years. Why are you correct now?
    Nov 9 10:42 AM | Likes Like |Link to Comment
  • The Dollar Will Fail - No 'Ifs' About It [View article]
    Thanks for asking this question so respectfully, and disagreeing so graciously.

    My ultimate thesis for the dollar is, as you say, for it to become worthless. That thesis may take several decades or more to truly play out. But in my eyes, a currency doesn't have to become worth zero in order to be a failure. For the U.S. it would be a major failure for the dollar to lose its reserve currency status. That might be enough to make it highly undesirable to hold the dollar.

    Moreover, I guess I see the dollar failing currently. It's failed as a store of value for any significant period of time. It's failed Americans who save in dollars, and own assets tied closely to the dollar. The whole idea of a politicized fiat currency is failing as we speak. More people wake up to this idea every day.

    Paper currencies fail. They all do. They all will. I guess I see the dollar failing sooner than everyone else. That's a difference of perspective, and the very fact that everyone seems to think I'm crazy is evidence enough to me that there are still plenty of folks who have yet to buy a single ounce of physical gold. That's bullish for gold from my perspective...
    Nov 8 03:56 PM | Likes Like |Link to Comment
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