Marc Gerstein

Why You Shouldn't Hold Leveraged ETFs Long-Term

I believe the point of the prior comment is that your insight, so to speak, is not at all new. This has been a hotly and vigorously debated topic for quite some time, on major web sites including Seeking Alpha, among regulators, among investors, etc. Readers today expect that if someone states this conclusion, they ought to be offering some novel insight. Here, on the other hand, you didn't even address the minimum basics.

Wow: Judges Now Nixing Lenders’ Foreclosure Claims Entirely in Court

Actually, anyone interested in this situation should read the complete Gretchen Morgenson article. The summary provided here is completely unsatisfactory.

The extent of PHH's inability to establish its legal status as a creditor was quite substantial, so much so, that a ruling in its favor could easily open the door to courtroom larceny; foreclosures initiated by fake mortgagees.

I have no idea from the facts described in the Morgenson article if PHH is legit or a fake. Apparently, the judge who studied the full evidentiary record, was not persuaded.

It is possible that PHH is for real. If so, and if they are going to sustain an unjust loss, it looks like it would be their own fault for not properly following standard age-old procedures for documenting their legal rights. Sorry PHH, but being in a hurry to cash in on a securitization boom is no excuse for failure to follow clear procedures that are well understood even by first-year law students.

And sorry Edward Harrison and Grechen Morgenson, this is not an aspect of a debtors revolt.It's just a matter of the legal system doing what it's supposed to be doing, applying the law. This is not just a technicality folks. This is very serious.

Actually, in a sick way, I sort of hope PHH wins on appeal. There are a lot of really really nice homes in my area. If I can foreclose on them without having to prove I own the mortgage, wow... the heck with investment research. I'll make a heck of a lot more money through court-sanctioned larceny. Who knows, maybe this can be so big, a bunch of us seeking Alpha writers and readers can get together to form a company to do it, and even raise money in an IPO! Perhaps Trump Tower can be our first phony foreclosure.

I like this . . . com on PHH . . . win that appeal!!!!!!!!

Nokia Enters the Already Crowded Netbook Market: Pros and Cons

"Nokia has a price tag of approximately $300 for its net-book."

Wrong!

Nokia has a price tag of approximately $600 for its net-book, which is way overpriced.

Who in their right mind would take the $300 version which requires a $60-a-month plan with AT&T? Most people are already paying somebody somewhere for internet access and wouldn't even consider giving AT&T $60 a month.

This sort of nonsense is an example of what happens when corporations pay more attention to their own "biz dev" (business development) group rather than to their customers.

And by the way, who wants Windows 7, another Microsoft operating system of the future. One of the benefits of netbooks is that you can get them with XP, which we know works even on normal amounts of memory.

Microsoft's Debacle – and Google's Challenge

Why should the author, me or anyone else go out hunting for such third-party applications? I use Blackberry. It's every bit as easy to use as the author indicates. What's his or my motive to look for a solution for a non-existent problem?


On Oct 15 11:48 AM bricki wrote:

> The problems with this article is that the author has missed the
> point of Android. It is an open platform and the result is that there
> are 3rd party applications that support a variety of tasks.
>
> Take a look at MyLink for Android for example.

Will Cheaper Laptops Snuff Out Netbooks?

Netbooks aren't necessarily about being cheap. They're about being small. I have a 10.1" Lenovo with a 160 GB hard drive and 2 GB of memory and a long-life battery for which I paid $400. Using my external CD drive to load software, it can do everything, and I mean EVERYTHING my full-feature laptop can do and just as quickly. And it's highly portable. I even did a few hours of work in a coach airline seat even though the person in front of me reclined all the way back.

I've heard the new generation of big laptops described as "desktop replacements" and they are; that's my main work computer. Going further, the new generation of netbooks (the ones that can do everything, not just surf the net) are "laptop replacements" taking over the portability function forfeited by the desktop replacements.

Leveraged and Inverse ETF Providers Now Face Lawsuits: When Will It End?

Anybody want to guess whether plaintiffs' lawyers are being paid on a contingency basis? I suspect not. :-)

Beware of GAAP Again

TTM is irrelevant either way.

If you think bank losses are over with, then the irrelevance of TTM is clear.

If you think there's more trouble ahead, you should be thinking about where that trouble might be coming from (the same place as before, or someplace different) and how large the next potential trouble are might be (something that may not be discoverable anywhere int eh financial statements but probably requires a journey into the depths of the footnotes and all the tables included there).

Whatever your point of view, a go-no go decision on a bank stock will succeed or fail based on what happens in the future. To naively assume that the details of 2008 will repeat is not the way to get there. The analysis has to be done fresh.


On Oct 15 11:57 AM ryanclarke wrote:

> If you think the bank losses are over with ... then you are right.
> Don't latch on to TTM. But I doubt the banks are done righting off
> consumer loans ... and such will be obvious sometime in 2010.

Beware of GAAP Again

That's the flaw in GAAP.

What you are talking about is disclosure. That's critical and I always said that. I'm talking about something different; developing a basis for future forecasting. If you don;t like management, you'll assume less favorable progress off that base than would be the case if you liked management. But wither way, unless you have a set of numbers that gives you a proper base for forecasting, then you can not be doing analysis.

People make money from doing analysis. Nobody in the investment community makes money from casting blame for what happened in the past. I can't even begin to count the number of investors who missed out on opportunities for gains that were right in front of them back in 2002-03 simply because they were angry. What was the point in that? Who did they punish?


On Oct 15 11:20 AM logicalthought wrote:

> >>One example (of an unusual expense) would be losses on the disposal
> of a business.... So let's stop bashing analysts and corporate executives
> and start advocating for change where it's needed, with Generally
> Accepted Accounting Principles.<<
>
> Don't you think that if management pisses away shareholders' capital
> on poor investments it should be reflected in the earnings as indicative
> of the poor quality of management? Okay, do you want to give them
> a free pass for one bad investment every 10 years? Fine. But what
> about if it happens with even semi-regularity? Do you seriously think
> that if the GAAP definition of an "extraordinary loss" were broadened,
> this wouldn't open a crack through which options-incentivized corporate
> execs wouldn't drive a tractor trailer?

Three Reasons to Invest in Hansen Natural

I’m a bit troubled by the disclosure at the bottom of an otherwise fine article: that HANS is the only stock you own. Two points:

I understand your desire to unlearn what they teach in your MBA program (I checked your SA bio) and a lot of the mathematical MPT concepts do, indeed, falter in the real world. But the “diversification” piece of MPT is not the problem. That part of the theory is fine; in fact, it’s downright vital. I agree that HANS is a pretty good company with a reasonably valued stock. But never, never, never, never underestimate the way the world can toss nasty curveballs at any company or stock, no matter how great. Heck, even a one quarter earnings shortfall wherein HANS does spectacularly well, but a teeny bit less spectacular than some analysts had hoped can precipitate a wicked stock plunge. So much the worse if there’s an actual business hiccup which tends to happen pretty-much all the time. I note you’re a Buffett fan. Please do not believe all the nonsense you see written about his so-called love of “focus” portfolios. In truth, he is a big-time diversifier. The list of Buffett holdings you see bandied about are actually only a small portion of the total BRK portfolio. So please, add some diversification to your portfolio. HANS isn’t the only great opportunity out there.

I suppose I should have welcomed you to SA earlier in this comment. Anyway, I do so now. Your reasoning re: HANS is sound and well presented and I expect you’ll write more in the future. But from a reader’s point of view, I will have to tell you that I’ve long ago learned to be suspicious of writers speaking bullishly on the only stock they own. Even if there is nothing shady actually occurring, it still casts a shadow on the overall credibility of what you say. Even the most honorable of investors-authors can find themselves getting too wrapped up in one thing to the point where their objectivity falters. It’s easier to see the full spectrum of issues that surround a topic when you don’t have a full-out 100% stake in how others feel about it. So besides being financially prudent, diversification is also intellectually sound.

Sirius XM: A More than Viable Stock

This is a perfect example of what's wrong with the opinions here on SIRI? What makes you think I don;t like to buy low and sell high? Is it because I had the chutzpah to question the qualkity of analysis in an agenda-driven overly emotional article? Actually, FYI, I have on several occasions n the past made some vey nice, and hugely profitable trades in SIRI, some based upon my own fundamental analysis (the sort I suggested Steve offer) and one a pure technical-analysis trade. It's been a while so I'm not up to date on the situation, and frankly, wish this author had helped me do that, as his headline teased. But much of what I'm seeing here are delusional rants.


On Aug 31 10:59 AM between the hedges wrote:

> As for you Gernstein, the optimistic posters on this blog like to
> buy low and sell high. Do you like to buy high and sell low? Cramer,
> Barrons, and Motley Idiot are eating some Sirius crow and keeping
> their followers out of a 1200% + winner. Follow them if you would
> like.

Sirius XM: A More than Viable Stock

I find this article disappointing.

The author has a very definite and fixed pro-SIRI agenda. It would seem that his platform, Satwaves.com, will cease to exist if SIRI vanishes. That, by itself, is not a condemnation. Agendas are commonplace on Wall Street, like everyplace else, but they do put readers on guard and cause those of us who are more neutral to look harder for facts. This article was not completely devoid of facts, but they were overwhelmed by his anti-Barron’s, anti-Motley Fool, and anti-Cramer rants. The latter even leaves me to wonder if the facts presented here were in context, or just random tidbits pulled to make a counter argument.

Steve, the question of SIRI’s future is a fascinating and challenging one. Since you seem to follow the company closely, might I request a follow-up article strictly on SIRI; just an analysis of the company and nothing at all on the emotions and agendas surrounding it.
What’s what now with SIRI’s subscriber counts, new signups, churn, pricing, etc. How does the cost picture look, not just capital costs but day-to-day operating and marketing costs?

I haven’t looked closely at SIRI in a few years (pre-XM merger) , and am curious as to where it now stands. If you want to help people understand a bullish case for SIRI, then please present one – sans the bear-bashing rants.

Some Thoughts on Leveraged ETFs

The companies are not touting them as long-term. They are making true claims, so there's nothing to rebut.

The ones who are advocating them as long-term are the critics like the author here, and those who can't or won't read the documentation on what these things are all about.

On Aug 10 11:48 AM Leftfield wrote:

> I don't see a rebuttal of the main point here: That leveraged ETF's
> are being touted as perfectly for and track well, long-term. Yet,
> the user is supposed to figure out on their own that the claims are
> false.

Some Thoughts on Leveraged ETFs

This article is breathtaking in its bias and distortions. Read the prospectus folks and let the words speak for themselves. What we have here is a classic example of what Don quotes me as saying: that Pro Shares is being convicted of failure to deliver on promises they never made.

After staring at the article for a while trying to figure out what would cause anyone to write such things, I notice the author's background: Options!

Here we go yet again . . . another option guy tearing into a competitor. Now I get it.

Again folks, just read the prospectus. Use Don's screen-shots, they're accurate. Just bear in mind his commentary is being offered by a competitor, not an unbiased commentator. If you want more of my views, do a Seeking Alpha search on my name. I covered lots of ground with lots of objective data; no need to reproduce it all in a comment. Like the words of the prospectus, real-world data speaks for itself too.

And as for my point-of-view, I have no business stake in whether these things fly or die. I approach them as just another investor, one who used to use options but switched to the leveraged ETFs because I find them easier to use. That's my opinion. And my other articles amplify the reasons.

Warren Buffett Portfolio: Going Beyond the Folksy Stereotypes to Find All-Star Stocks

I saw Winkler's article and I don;t buy his premise. I can just as easily argue that everybody was bailed out by the taxpayers, you, me, everyone because who knows what the heck would have happened to the financial system had the bailouts not occurred. Maybe you agree. Maybe you don't. That's a political debate, not an assessment of Warren Buffett.

And speaking of Warren Buffett, as good as he's been over how many years, 2008 was a nightmare for him and his shareholders (one of who is me), so I don;t see that he got a free ride. If he has the wherewithal to dive into disaster and probably come out smelling like a rose later on, that would be the due to the accumulation of all the success he had going in, and assuming that's how it turns out, more power to him. In every walk of life, long-term winners can get away with things most people can't. Suppose Bill Bellicheck didn't win all those super bowls in New England. with a personality like his, do you think he'd ever be able to hold a job? Of course not! Winning has many reward, for Bellicheck, for Buffett, for everyone. That's life.


On Aug 06 11:38 AM swaps wrote:

> Good article, but you should also check out Rolfe Winkler's Seeking
> Alpha article today on Buffet.
> Warren Buffet too would have evaporated into oblivion last Septmeber
> if the disappearing American middle class had not bailed him out
> along with the rest of the banking system with massive fiat money
> creation to offset the derivatives black hole.
> i know, the middle class did not really bail out Buffet - but their
> remaining imaginary equity was the only asset the elites had left
> to forcibly borrow against , with interest charges to accrue.
> Winkler details accurately the Buffet hypocrisy.

Ben Graham Portfolio: Snazzy Returns from a Vintage Strategy

Actually, my plan is to do this as an ongoing series with a collection of All-Star screens (Graham is one of seven I have now). So we will have plenty of opportunities to revisit the performance testing after we have experience in real time.


On Jul 31 04:26 PM Tom Armistead wrote:

> I am long OLN and I think strategies based on Graham's thinking are
> a good idea anytime but especially in an environment that is somewhat
> similar to the 30's when many of his ideas were developed and tested
> under difficult conditions.
>
> Marc I am a fan and I got the idea for some of the stocks I own off
> various lists you have published here on Seeking Alpha.
>
> But the "backtesting" here strikes kind of a sour note, better to
> have been pushing such a strategy for the past 6 months than looking
> backward and saying look at the results that could have been achieved.