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Kirk Lindstrom  

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  • SPY Near Record High While ECRI's WLI Rises To 30-Week High [View article]
    Q1 GDP may turn negative at the next revision due to the just reported March trade deficit.

    http://read.bi/1cidVwf

    >>>It turns out the US economy may have contracted in the first quarter.

    Last week, we learned that gross domestic product grew by just 0.2% in the first quarter, far below the 1% economists had expected.

    Then on Tuesday, the Commerce Department reported that the trade deficit in March exploded to a six-year high, $51.4 billion.

    ... The slowdown and strike over a labor dispute limited the flow of goods through some of America's biggest ports. And that could have put more downward pressure on growth in the first quarter, according to economists.

    In a note after the release, BNP Paribas economist Laura Rosner wrote: "We calculate that today's report, if taken at face value without considering any offset from inventories, implies a 0.6pp downward revision to first-quarter growth, leaving our tracking estimate at -0.4% q/q saar (BEA's initial estimate was +0.2% q/q saar)."

    To explain why imports surged and exports were soft, Rosner suggests that the goods on inbound ships were unloaded before they were restocked with goods meant for exports. <<<
    May 5, 2015. 12:24 PM | Likes Like |Link to Comment
  • SPY Near Record High While ECRI's WLI Rises To 30-Week High [View article]
    Sanibel, that is the way I see it also. To ignore their WLI completely would be throwing out the baby with the bathwater.
    May 4, 2015. 06:51 PM | Likes Like |Link to Comment
  • How To Play Expected Inflation From The TIPS Spread [View article]
    SPY Values
    Closed Feb 11, 2011 at $133.11
    Opened Feb 14, 2011 at $133.03
    http://yhoo.it/1F1PSOu
    Today (5/4/15) SPY is 211.42
    May 4, 2015. 12:09 PM | Likes Like |Link to Comment
  • 2% Inflation Is Alive And Well [View article]
    I agree that we're running 2%, easily, with the way they measure inflation.

    People are using their savings from lower gasoline to buy bigger smartphones with bigger data plans. I also noticed my satellite TV bill has doubled in the last 10 years mostly because of the high prices for sports that used to be free over local TV. Also networks I don't care about like Fox News raised rates and Dish eventually caved and raised the cost of all plans about $5. None of these high priced items existed when they first started calculating inflation so I'm not sure how they account for it.

    The average home in SF just went over $1M. We're somewhere between $2M and $3M for an older home on 1/4 acre in Los Altos, CA where in 2000 it was only $1M. Try and tell anyone hired by Google, Tesla, Faceplant, Apple etc. that want to buy a home here that inflation is only 2% and they'll die laughing.

    Property taxes here are locked in at just over 1.1% of purchase value plus 2% a year max inflation. They keep adding fees so my taxes have about 20% adders... anyway, figure out how much you have to earn to buy the average $1M home in SF, pay the property taxes, get told to let your lawn die while they add surcharges to water to pay salaries and pensions... tons of inflation in CA.

    So, if the Fed is hoping for prosperity to spread out of Silicon Valley, beware of MASSIVE inflation to come. For example, see " Los Altos Home Prices Grew 13% in 2014 & up 282% since 1998" at http://bit.ly/1GYkK2v
    Apr 18, 2015. 12:57 PM | 2 Likes Like |Link to Comment
  • U.S. Debt At 104% Of GDP Hits Another Record. Stocks, Gold Should Do Well On Slow Rate Hikes [View article]
    dear james, you wrote:

    "I look for Gold to reach $1500 per oz by Dec 2015"

    There are some remaining gold bulls that agree with you. RONALD L. ROSEN in his April 15, 2015 letter at http://bit.ly/1DLJIzB
    says the decline in gold was "a running flat correction" in a longer term bull market.

    "Gold and silver have completed a magnificently bullish running flat correction. For gold the failure of the C wave to decline below the beginning of the A wave is absolutely, monumentally bullish."
    Apr 16, 2015. 11:02 AM | Likes Like |Link to Comment
  • Altera Investors Should Be Cautious With Intel's Offer Reportedly Off The Table [View article]
    What is lacking from all the excellent discussion so far is an analysis of profits Intel could make by selling the Altera chips. I believe Altera has huge margins for chips made by chip fabs. Eliminate some redundant staff such as HR and the savings grow even more.
    Apr 15, 2015. 12:46 PM | Likes Like |Link to Comment
  • U.S. Debt At 104% Of GDP Hits Another Record. Stocks, Gold Should Do Well On Slow Rate Hikes [View article]
    Dear mkemac,
    How do you arrive at 300%? That works for buying a home but I think we would be a disaster, especially since the real debt is more like $210T when you account for off the books debt such as Social Security and Medicare.
    Apr 14, 2015. 07:52 PM | 1 Like Like |Link to Comment
  • U.S. Debt At 104% Of GDP Hits Another Record. Stocks, Gold Should Do Well On Slow Rate Hikes [View article]
    Dear bbro, while that would be another interesting statistic, the Fed and most economists I follow track "Total Public Debt as Percent of Gross Domestic Product", especially those who like to say how great President Clinton was and how awful the next two were/are.

    See The Fed's chart at http://bit.ly/1yywu2F
    Apr 14, 2015. 07:49 PM | Likes Like |Link to Comment
  • 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
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