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Kirk Lindstrom  

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  • TIPS Say The Deflation 'Threat' Has Passed [View article]
    Great article. Thanks.
    Feb 27, 2015. 10:47 AM | Likes Like |Link to Comment
  • SPY 1.8% Below Record High While ECRI's WLI Growth Rate Rises To 6-Week High [View article]
    alorenz, not everyone believes we escaped a recession. From CNBC this AM http://bit.ly/16YMbJH

    The highlights;

    >>>
    “There is no acceleration in underlying economic activity.”

    “There’s this wrong concept that I keep on hearing about in the financial press about the acceleration in economic growth… It isn’t happening!”

    “We had a horrible retail sales number, we had a horrible durable goods number, we’re likely to have a very disappointing retail sales number coming forward, this month we have a strong payroll number we say everything’s great – it’s not great….it’s been the same thing for the last five years, there’s no improvement in the economy!”

    “After a string of dismal data on durable goods, retail spending, and inventories, we get a good jobs number and everyone saying the economy’s good – it’s not good!”
    <<<
    You could argue that the recovery is only benefiting those of us who were rich enough AND smart enough to step in front of the Fed's money printing and government spending programs to buy assets (stocks and real estate) that would benefit. I keep taking profits as the market moves higher so my pile of cash in the investment accounts is at record levels even as my stock and REIT holdings are ALSO at record levels.

    Talk to small business owners and they don't see a huge pickup, even here in the Silicon Valley where many are doing great. Housing costs here are SOARING and eating up most of the gains for those who rent and higher premiums for health care eat up most other gains from lower gas prices and small raises.
    Feb 12, 2015. 02:35 PM | Likes Like |Link to Comment
  • SPY 1.8% Below Record High While ECRI's WLI Growth Rate Rises To 6-Week High [View article]
    Good question DavidLMO. I use ECRI's data as part of a much larger body of data. Much of what I use is reported on by others on Seeking Alpha already by people who have closer access to the data, or those who actually create the data such as the II Sentiment Survey.

    I believe many of ECRI "critics" are little different than those on the East Coast who hate the Patriots for their long history of success while the teams they root for failed to reach the Super Bowl at all. That is most economists have such awful records that they enjoy seeing ECRI be wrong on something. Sort of like making a big deal out of a football with a little less pressure.

    I feel ECRI's only major "mistake" was to underestimate the lengths the Fed would go to prevent a recession. I believe the FED probably uses ECRI's data or saw the same indicators ECRI uses and concluded it would take EXTRAORDINARY MEASURES to prevent a recession, hence the massive QE with interest rates below fair market rates.

    Go read my last article from Nov. 10, 2014 "SPY Sets Another Record High While ECRI's WLI Growth Fell To A 2.3-Year Low" http://bit.ly/16XINPp
    then compare GDP, WLI, GDP & WLI Growth rates and the value of the S&P500 to where we are today.

    WLI and its growth rate were well off highs at 2.3year lows while SPY & S&P500 were at record highs. Q3 GDP was at 3.5% (later revised to 5.0%) and ECRI said sustained growth above 3% would be hard to maintain.

    Today we have 2.6% for Q4 GDP... significantly lower than the 5.0% revised Q3-2014 GDP and the S&P500 is essentially flat at up 20 pts since November.

    It seems quite useful to not have used the 5.0% Q3 GDP as an "all clear" signal for strong growth to follow. Using the falling WLI was a good "caution, drive carefully" signal as I took profits when markets or stocks I own were at record highs and I have used the several periods of weakness to buy back shares. From this trading and good stock selection (Alpha) I've managed to get roughly market returns with only 2/3rds of my portfolio in the market the past few years.

    If you check Jim Cramer's record at http://tinyurl.com/Jim... you'll see he only managed to squeak out a gain of 1.1% in 2014... He's a guy who makes a lot of noise with access to tons of data and economists who've asked questions of the President and the Fed chair yet he only managed to do an 8.4% compound annual return for the past five years, well below my mad money "Explore" or "Aggressive Core" portfolios. I've read hedge funds have had a tough time too getting returns I show at the link... It seems most were either too bullish or too bearish rather than "cautious." Maybe they should use more of ECRI's data or follow my methods?

    I hope that answer was helpful.
    Feb 12, 2015. 09:16 AM | Likes Like |Link to Comment
  • IBM: Undervalued But Underachieving [View article]
    The time to buy IBM is when they hire Gallagher to break watermelons at Comdex (now CES.)
    http://bit.ly/1zGFuZp
    The link goes to a story about the issues Gallagher had with IBM messing with his act, etc.... pretty funny that they tried to change their image and old ways kept coming in.

    I saw the act at Comdex where IBM employees abandoned their conservative clothes at COMDEX to dress more like those of us in business casual from HP. A product I helped design was in the Thinkpad that was part of the IBM/Ballagher show so it was fun to watch.

    I doubled down on IBM in 1993 and have taken many, many times my original investment out and hold it now as a nice dividend payer.

    From my IBM charts : http://bit.ly/1zGFQz5
    it looks like there are a ton of buyers sitting on the round number of $150...
    Jan 24, 2015. 12:34 PM | Likes Like |Link to Comment
  • The Only 2 Charts You Need To Understand The S&P 500 [View article]
    Lets say you own a successful dental office with your brother-in-law. It has a steady stream of customers paying big dollars for new crowns made that day using expensive capital equipment. After you make the loan payments on the capital equipment to make crowns you have cash flow to pay nice dividends (salaries) to yourself and your brother-in-law. Clearly it would make sense to get a loan from the bank to buy out your brother-in-law's share as long as the payments to the bank are less than the salary you'd pay your brother-in-law from the business.

    That is a no brainer. I don't see it as any different than Intel buying back shares that pay a dividend higher than the cost to service the loan. The big difference is they buy it from thousands of shareholders rather than a brother-in-law and they buy capital equipment to make chips rather than new teeth.
    Dec 7, 2014. 12:32 PM | 2 Likes Like |Link to Comment
  • SPY Sets Another Record High While ECRI's WLI Growth Fell To A 2.3-Year Low [View article]
    I WISH the central banks listened to me! LOL

    "you got the Central banks"

    Seriously, I wonder how much of the slowdown is savers saving MORE now that we worry we need 2 to 5 times more money on the fixed income side of our portfolios to guarantee the same SAFE income stream we could get 10 years ago with CDs and US Treasuries?

    I've done EXCEPTIONALLY well these past years but it feels like it is nowhere enough as $1M in FDIC accounts used to give $40K to $60K, depending on how you laddered it while now you are lucky to get $15K.... Best CD Rate Survey http://bit.ly/1sxumVj
    Nov 11, 2014. 12:50 PM | 1 Like Like |Link to Comment
  • U.S. Debt At 102% Of GDP Hits Another Record... Is It Time To Buy Gold? [View article]
    Not sure what happened to my reply. I'm sorry but I don't watch videos, you can end up spending too much time on stuff that doesn't matter or watching some guy try to explain why the moon is made of green cheese just so some site can record longer visit times to charge advertisers more.

    Maybe you can give us a summary in a few words to save time?

    The obvious "correct" term is "increasing the money supply" but "printing money" is much more descriptive to the casual reader without a background in economics. What matters is the act of QE dilutes the value of money held by savers as it is a hidden tax on savers.
    Nov 2, 2014. 09:29 AM | Likes Like |Link to Comment
  • U.S. Debt At 102% Of GDP Hits Another Record... Is It Time To Buy Gold? [View article]
    I'm sorry but I don't have the time to watch videos friends recommend. Maybe you can give a condensed summary?

    My belief is if the point videos were trying to make were good enough, then you could convince me your way of looking at things was correct without asking me to tear apart another's argument.
    Nov 2, 2014. 09:22 AM | Likes Like |Link to Comment
  • Concerns Over Google's Earnings Results Are Way Overblown [View article]
    No mention of SBC? I've covered this in my newsletter but in short Google is similar to a popular nightclub that doesn't show the profits you expect. The profits go out the back door as cash tips for free drinks to the bar tenders who steal free pours from the nightclub owners. THE EARNINGS ARE GOING TO INSIDERS!

    SBC, Stock Based Compensation as percentage of net income was 45.9%

    For Q2 Y/Y comparison via Google's earnings release:

    SBC increased by $404M
    Net income fell by $160M

    Do you see a connection there?

    I bought Google for my newsletter portfolio and my own portfolio at $155 and $261 so I have HUGE gains... but now I'm considering selling as I nearly barf every time I read how much of shareholder income goes out the back door as SBC. Cisco did a lot of this in 1999 and look what happened to that "best of breed" company...
    Oct 22, 2014. 11:08 AM | 1 Like Like |Link to Comment
  • ECRI Says U.S. Inflation Pressure Elevated As Gold Falls Below $1,200 Per Oz. [View article]
    Inflation for a basket of goods will be different for people. The government number for CPI is an attempt to average it out, but it misses badly for many.

    Consider home ownership. If you own a home where I live (Los Altos in the SF Bay Area, California) and have a mortgage, your annual property tax gains are capped at 2% a year and we got a massive cut on interest rates to service the loan thus inflation has been very low since 2000. OTOH, if you were a renter these past 14 years, then your inflation is massive as rents and the price to buy a home such as mine have soared, roughly doubling, during the past 14+ years.
    Oct 9, 2014. 09:45 AM | Likes Like |Link to Comment
  • ECRI Says U.S. Inflation Pressure Elevated As Gold Falls Below $1,200 Per Oz. [View article]
    ECRI's mistake was underestimating the effect of artificially low interest rates and $85B a month QE at its peak on allowing the government to keep spending to boost GDP. I believe their indicators correctly predicted the weakness seen for the business cycle while correctly predicting inflation pressure would be low despite the actions of the Fed.
    Oct 9, 2014. 09:37 AM | Likes Like |Link to Comment
  • The Dow Economic Sentiment Index Supports A Higher Market [View article]
    The U.S. Bureau of Economic Analysis (BEA) has issued the following news release today:

    Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.6 percent in the second quarter of 2014, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.


    The full text of the release on BEA's Web site can be found at http://1.usa.gov/vgZr0y
    Sep 26, 2014. 09:57 AM | Likes Like |Link to Comment
  • U.S. Debt At 102% Of GDP Hits Another Record... Is It Time To Buy Gold? [View article]
    Dear 6228371,

    Who was your comment directed towards?

    Unless we throw out most of the Democrats and Republicans in US government and replace them with Libertarians, I don't see any chance of lowering the total debt, much less paying it down by running surpluses. Given the opportunity to buy votes from taxpayers and favors from big corporations after they leave office, I think we'll see new spending and/or tax cuts if we generate a regular budget surplus.

    As for your 10-year time frame, I think we'll be lucky if inflation runs faster than debt growth so the total debt as a percentage GDP falls but the total debt probably won't shrink.

    What do you expect to see?
    Sep 23, 2014. 10:49 AM | 1 Like Like |Link to Comment
  • U.S. Debt At 102% Of GDP Hits Another Record... Is It Time To Buy Gold? [View article]
    1.7% Full & Core CONSUMER PRICE INDEX – AUGUST 2014

    "The Consumer Price Index for All Urban Consumers (CPI-U) decreased
    0.2 percent in August on a seasonally adjusted basis, the U.S. Bureau
    of Labor Statistics reported today. Over the last 12 months, the all
    items index increased 1.7 percent before seasonal adjustment.

    The seasonally adjusted decline in the all items index was the first
    since April 2013. The indexes for food and shelter rose, but the
    increases were more than offset by declines in energy indexes,
    especially gasoline. The energy index fell 2.6 percent, with the
    gasoline index declining 4.1 percent and the indexes for natural gas
    and fuel oil also decreasing. "

    All Items CPI less food and energy, Core CPI, was also 1.7%

    "The all items index increased 1.7 percent over the last 12 months, a
    decline from the 2.0 percent figure for the 12 months ending July, and
    the smallest 12-month change since March. The index for all items less
    food and energy also rose 1.7 percent over the last 12 months. The food
    index has risen 2.7 percent over the span, while the energy index has
    increased 0.4 percent."
    Sep 17, 2014. 02:56 PM | Likes Like |Link to Comment
  • U.S. Debt At 102% Of GDP Hits Another Record... Is It Time To Buy Gold? [View article]
    I LOVE IT!

    So many forget that taxes are taking money from the productive to give to "other things" the takers deem more worthy of the money.

    It is fine as Bill Gates needed the threat of jail for me to not copy his $600 MS Office package in the early 1990s and resell it at flea markets... so clearly Gates needs to pay taxes to support the protection that made his wealth possible.

    I also have no problem paying taxes on gains above inflation for what I made on MSFT stock from buying back in 1993 when I figured Gates had a money printing machine. I'd be happy to see cap gains taxes eliminated in favor or taxing the gains that exceed the rate of inflation.

    But when we are punitive with taxes and force all the great jobs from HP, Apple, Intel, AMAT and now Tesla out of Taxifornia to no tax states and countries, you would think the parasites would learn that a SUCCESSFUL PARASITE DOES NOT KILL ITS HOST!
    Sep 5, 2014. 02:05 PM | Likes Like |Link to Comment
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