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Kevin McElroy

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  • The Oil Situation Could Be Worse Than We Thought [View article]
    You can sum it up with one class. "No Free Lunch 101."

    That's something my parents taught me before I went to elementary school. Until someone invents a robot made out of hope that gets its energy from the sun, everything you get in life comes from the sweat of someone's brow. If they're "giving" it to you for free, they either want something in return or they stole it in the first place.

    If you're a good person, the idea of taking something forcefully from someone else should leave a bad taste in your mouth.

    These are the kinds of rules most decent people learned before they could talk. The political class seems to be completely deficient of the most basic sense of right and wrong. You can see this deficiency, plain as day, in almost every single policy they enact.
    Apr 23 10:12 AM | 20 Likes Like |Link to Comment
  • Silver - Prepare for the Flood [View article]
    I'm not inclined to point out someone's age as a reason why they might be right or wrong. I have unending respect for Richard Russell, but it's not because he's in his 80s. And when he's wrong, it's not because he's too old. When he's right, it's not because of decades of experiences.

    If Glen is wrong, it's not because he's in his 20s or 30s. I happen to think he's probably right that silver will slide a bit further over the short term, but I'm not a day-trader so I really don't care. I think he's probably wrong about a variety of other things, but lets not drag age into the equation.

    That's ageism. And it's not okay.
    May 7 08:39 AM | 15 Likes Like |Link to Comment
  • 9 Stocks to Protect Yourself From Dollar Devaluation [View article]
    I'm not a republican, but nice try. I purposely left my political viewpoints out of this letter, because it has nothing to do with my analysis.

    I can paint republicans and democrats alike with the spend-thrift brush if that would make you happy.
    Nov 4 03:09 PM | 13 Likes Like |Link to Comment
  • Will Silver Now Take the Lead? [View article]
    Thanks for the commentary Jeff, although it doesn't appear that you're disagreeing with me. My decision to look at this ratio going back to the late 1800s wasn't entirely arbitrary. That's when the US government demonetized silver (in 1873, I believe) so it was not pegged to gold in any official way, and allowed to float freely as just another commodity.

    I think that you're right: the long, long term trend is for the gold silver ratio to drop closer to 15-1, or maybe 10-1, but I'm looking at what's likely to happen to this ratio for the next few months and maybe years. Unfortunately, my readers don't have a 4000 year time-line in which to make their investments, otherwise I'm right there with you.
    Sep 17 08:33 AM | 13 Likes Like |Link to Comment
  • Will Silver Now Take the Lead? [View article]
    I'll ignore your ignorance of the usefulness of money to address your other comments...

    I've seen this gun-gold argument every time I talk about why individuals should own gold and silver - and of course a man with a gun can take anything he wants from someone without a gun.

    But the argument completely falls apart if both of these straw men own guns. It's not an either/or conclusion. I can own precious metals AND guns. I DO own precious metals and guns.

    It seems like the argument might be that I could/should have bought more guns instead of gold or silver, so that I would have an incremental advantage in this bizarre hypothetical mad max arms race. Will the man with the most guns take the gold and silver from anyone else? Why would he if the stuff is worthless? How will he hold all of the guns and simultaneously rob the gold-holders? So many questions...
    Sep 17 08:26 AM | 13 Likes Like |Link to Comment
  • The Oil Situation Could Be Worse Than We Thought [View article]
    Yeah, I realized the error right after this posted. It should read: "Oil is a significant cost input for nearly every business, good, commodity and product."

    Thanks for the heads up.
    Apr 22 10:52 AM | 12 Likes Like |Link to Comment
  • Now's the Time to Own Exxon [View article]
    Camper, the article you posted is over three years old. Here's a newer article: www.nytimes.com/gwire/...

    Since that time, Exxon has become the BIGGEST natural gas company in North America with its acquisition of XTO.

    With BP sucking wind, Exxon now has an even greater competitive advantage in traditional fossil-fuels, and with its war-chest (over $13 billion) comes the ability to buy whatever next-gen energy technologies/sources the company can't build in-house.
    Jul 28 11:12 PM | 10 Likes Like |Link to Comment
  • Absurdly Overvalued: If Facebook's Worth $50B Then Apple's Worth $1.4T [View article]
    That lawsuit wasn't about IP or technology at all. It was about who came up with the now trademarked idea of facebook. In other words, the suit had NOTHING to do with the actual lines of code and the algorithms that make up facebook's software. Or about the computers they use. Or even how they use them. It was about who was a part of the team that came up with the idea of facebook.

    You can't trademark WHAT facebook does. It's social networking. It's basically email 4.0 or 10.0 or whatever. There wasn't even anything new or original about what they did when they first started. They were basically just a new and much improved version of myspace, which was a new and improved version of friendster, which was a new and improved version of AOL groups, which was a new and improved version of geocities, etc. etc. etc.

    If you think facebook is the absolute LAST etc. in the long list of etc.'s - AND you believe that it will be able to monetize it's list in an increasingly profitable way, then MAYBE you pay 50 times cash flow.

    That's a whole lot of wishful hopeful thinking.
    Jan 9 07:55 PM | 9 Likes Like |Link to Comment
  • Bad Housing Advice of the Day, Philly Edition [View article]
    The whole premise of the article is flawed. You buy a house to live in. You buy gold for capital preservation.

    Buying a house for capital preservation is as silly as buying gold to live in.

    Ms. Arvedlund seems to tacitly come to same realization in her article, and yet she still puts forth the silly dichotomy as a real dilemma.

    It's an interesting thought experiment, but the way she writes the article makes it sound like she thinks it's a legitimate idea.

    I have read some interesting housing data from Bud Conrad that suggests housing has much further to fall: static.safehaven.com/a...
    Feb 2 09:23 AM | 8 Likes Like |Link to Comment
  • How Bond Market Vigilantes Work [View article]
    Federal Revenues are rising 10%? Really? Can someone - anyone - point us towards any backup for this bold claim that seems to run counter to the facts as we know them?

    This stat seems like a slyly placed joke, but it's the fulcrum for the entire piece. Without it, everything that the author says is 24k bullshit.
    Dec 16 10:23 AM | 8 Likes Like |Link to Comment
  • Why Buying Gold Is a Doomsday Trade [View article]
    Well, the Fed didn't start raising rates in 1980. 30 year treasury yields rose almost every quarter from the mid 7% in 1977 to over 15% in late 1981. Gold rose fastest when rates were above 9%.

    Only when rates climbed faster than real inflation did gold tank.

    Treasuries are nowhere near that level today. If we were at even 5% yields for Treasuries, you might have a point. Maybe. But we're so far from Volcker's days that your comment is about as laughable as CBP's articles.

    I don't know who is lining the Calafia Beach Pundit's pockets to write this nonsense, but they're paying him too much. It's clear from these desperately weak articles that his heart isn't in it.
    Apr 8 03:08 PM | 7 Likes Like |Link to Comment
  • Positioning for a Food Riots Economy [View article]
    I'm more interested in how you've come to such a conclusion then to make a meaningless bet.

    In fact, I've already bet with you.

    Like most westerners, I already have a significant portion of my net worth on your side of the bet. Much more than $1,000-50,000. In fact, the challenge right now is to deleverage that position. But making a bet with you would be unhelpful. I won't want dollars if we continue to experience a currency crisis over the next two years.

    The entire idea of western hegemony is being bet on the notion that we can continue down the path we're on - and you want to double down? The fact that you and I own and rely on a car that runs on gasoline, that you and I eat ANY food that's shipped halfway around the world, the fact that almost all of our assets are denominated in and tied to dollars - for these reasons and many, many more- we're both already up to our eyeballs in hock on your side of the bet.

    I fully hope that I'm wrong. If I am wrong, then I'll be fine. We all will. I can eat my stored food and consume or sell other goods. But if I'm right, then any winnings I'd receive from you would be worthless. Any capital I'd lock up in an escrow account is capital unavailable to use today to deleverage - which regardless of how unnecessary you think it is to do so, I'm prepared for either event. It sounds like you aren't.
    Jan 17 11:40 AM | 7 Likes Like |Link to Comment
  • Farmland That Pays a Dividend [View article]
    I think you need to look up the definition of the word shill before you start throwing around accusations. Here's a good place to get started: en.wikipedia.org/wiki/...

    I'm EXTREMELY up front with the service that I provide. I write a free newsletter. It's free - you won't ever pay a dime for it. No catch.

    I work for a company that sells newsletters. If you buy a subscription, we give you at least 30 days to decide if it's right for you and your portfolio. Usually, we give you 60, and sometimes we give you six months. We tell you ALL of this information up front - not in the small print either.

    If you don't like the research, or decide it's not right for you, we give you ALL of your money back. If you decide after the trial period, we refund you on a pro-rated basis.

    Honestly, this business arrangement is more fair and more transparent than any mutual fund, 401(k), ETF, or pension in existence. Go ahead, ask your mutual manager for your 2.5% in expense fees back. You won't get it. Actually, you probably won't even be able to get a straight answer about what they're charging you. But I tell you exactly how much you pay, and I give you the toll free number to call that lets you cancel.

    So...I'm not a shill. I'm the opposite of a shill.

    My job as a free newsletter editor is to find compelling investment ideas that might be of use to my readers. We can agree or disagree on the compelling nature of the investment, or whether it's a good buy or not. But I'm not shilling for anyone.
    Sep 20 04:31 PM | 7 Likes Like |Link to Comment
  • An Unpopular Commodity Stock Paying a 6.4% Dividend [View article]
    Everyone - I've had SA post a correction and modification to this article. Thanks for keeping me on my toes. I did make the mistake of confusing PM's operations with MO's - and it gives me little solace to see I'm not the first editor to make this mistake. I've found no less than two other independent sources parroting the same error.

    That's no excuse - so please accept my apology. I clearly didn't take the time to double-check and back-up my initial research, as I usually do. I think you'll find that the balance of my articles are less error-riddled.

    If I was feeling especially argumentative, I might be able to make the case that there's a global marketplace for cigarettes, so that Philip Morris' Asian sales would impact Altria's domestic sales, but that may or may not be the case. It may 'Merit' further research...
    Sep 20 04:16 PM | 7 Likes Like |Link to Comment
  • Absurdly Overvalued: If Facebook's Worth $50B Then Apple's Worth $1.4T [View article]
    I don't understand why Facebook is called a technology company. Nothing they do is proprietary. They don't have any special machinery or intellectual property. Their business model is based on advertising revenue - something that's highly discretionary. No one needs to advertise on facebook - there's no special sauce there. You can reach more people more effectively on google (y'know, when people are ACTUALLY searching for a way to spend money).

    Someone needs to give me ONE compelling reason why facebook won't get myspaced.

    They basically have a trademark and a large user base. So did AOL (although AOL at least had sales for a while too). So did myspace. So did newspapers.
    Jan 9 12:22 PM | 6 Likes Like |Link to Comment
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185 Comments
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