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Mark Bern, CFA  

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  • QUICK CHAT #54 -Start Friday 5/21/10 [View instapost]
    Joseph - I keep saying that I will buy TBT, but this time I have waited patiently for a real bottom (or top in the Treasuries market). Right now we are nearing the prices attained by TBT back in March 2009 and it would be very enticing were it not for the way an inverse, leveraged ETF works. TBT had gained value during the dollar melt down but is now losing value at an increasing rate as the dollar strengthens. The problem is that the ETF resets every day after moving according to the percentage (doubled) of it's underlying asset. I've gotten strung out on these before, so I'm very leery of getting in early and holding on because they just seem to wring out too much of my principal while the actual underlying moves very little. But I am getting close getting in soon. I'm just waiting for a big day of panic selling accompanied by another big rush to "safety." I am hoping to be a little safer that way. Good luck!
    May 24, 2010. 02:04 PM | 4 Likes Like |Link to Comment
  • Investors Should Plan for Increasing Volatility [View article]
    Buzzer - That is a good analogy and your point is well taken. I think we probably are not far off in our expectations. I just don't think we will be going up too much more in the near term because there is just too much global uncertainty overhanging the market right now. I have a basic optimism where US equities are concerned, but it is more of a long-term view at this point. The short-term has turned me very cautious.
    May 24, 2010. 01:53 PM | 1 Like Like |Link to Comment
  • Part I - We all know the Gulf blowout is a disaster. But just how big a disaster could it be? [View instapost]
    You got it! And it doesn't matter much which side of the argument they hop onto, they win either way.
    May 24, 2010. 01:49 PM | 4 Likes Like |Link to Comment
  • Why GOOOH? Restore the Republic and Save our Wealth. [View instapost]
    Where on earth did that come from? GOOOH employs big banks? What do they do; put their contributions into an account at a big bank? Is that so terrible?

    You know what is terrible? It is terrible that some people vote for candidates who accept huge contributions from big banks and then do their bidding after they are elected. GOOOH candidates are required to limit contributions accepted from any one entity to a maximum of $600. I don't know anyone who can be bought for $600, do you? Of course, according to public records Obama accepted around $70,000 from one big bank and more from other big banks. Dodd did the same, only accept higher contributions from big banks that did Obama. That sort of bribery doesn't give me warm fuzzy feelings. I don't like it when my elected officials are bought and paid for by anybody, banks or otherwise. I think we need reform in the laws to restrict contributions along the lines of the GOOOH requirements to level the playing field so that not only the rich and powerful can get elected, but real Americans who care about their country more than they care about money and power.
    May 24, 2010. 01:48 PM | 5 Likes Like |Link to Comment
  • Home Sales Rise, Inventory Surges [View article]
    That may be true from a "national average" perspective, but down in the trenches in many communities the reality is much different. The banks can say they are funding a high percentage of properties that meet their underwriting criteria, but all they have to do is make the criteria so stringent that almost no loans qualify and, voila! there are no problems. Statistics can tell any story one wants, you just have to set the rules and parameters to provide the output necessary.
    May 24, 2010. 01:37 PM | 1 Like Like |Link to Comment
  • Home Sales Rise, Inventory Surges [View article]
    In the areas where we do most of our business, underwriters/banks have squeezed the requirements for appraisals to the extent that there are absolutely no comparables. For instance, they now require that all comparable homes used for an appraisal must be within a half mile of the subject property and that no sales older than three months may be used. They also want more comps which don't exist, making it impossible to get an appraised value.
    May 24, 2010. 01:34 PM | 1 Like Like |Link to Comment
  • Home Sales Rise, Inventory Surges [View article]
    Teresa - I'll have to look into it. Thanks for the heads up. If the new regulations become too onerous we may look into turning the company into a non-profit. At least that way we can still pay ourselves and, hopefully, side-step many of the regulations that could kill us. I know that there are even more regulations for non-profits to work through, but since I have served on non-profit boards and have had an interim stint as an executive director for one, I think I can pilot the ship through the labyrinth.
    May 24, 2010. 01:30 PM | 1 Like Like |Link to Comment
  • QUICK CHAT #54 -Start Friday 5/21/10 [View instapost]
    The Spanish bank situation is huge! They are maintaining that home values have dropped a mere 10% while the market prices are saying that home values have dropped by at least 30%. One of the problems is that the Spanish government's official reporting supports the 10% drop in values. According to the Economist magazine, using the government's home value index, Spain's housing market is overvalued by 55%. Even using the more reasonable market pricing, home values in Spain are still about 29% overvalued. If the Economist is even close, Spain has a very difficult economic patch lying in front of they.
    May 24, 2010. 01:25 PM | 5 Likes Like |Link to Comment
  • Part I - We all know the Gulf blowout is a disaster. But just how big a disaster could it be? [View instapost]
    User - I like your big stick tactic, but I suspect that our elected officials will side with the legal battles tactic. After all, we elect mostly lawyers to Congress, President, etc. It now makes a lot more sense to see so many incumbents retiring or deciding not to run for another term. Some of them will end up in the courts either fighting BP or defending them. They're just following the money.
    May 24, 2010. 12:36 PM | 4 Likes Like |Link to Comment
  • Investors Should Plan for Increasing Volatility [View article]
    Buzzer - I am sorry if I implied what you stated in your comment. I meant nothing of the sort. I don't think the market has spiked or that it is overbought. I didn't mention oil prices at all. If you reread my comment you'll find I didn't say any of that.

    All I did say was that the volatility of those periods is similar to what we are experiencing now. That is what scares me. You make a very good point in that we are not starting from a new high in the markets. That is very true. But, my point is simple. I haven't noticed this much volatility (ever to my recollection) in the middle of a sustained bull market. The question I may ask is: What makes this market different? I admit I don't have the answer, but am very curious.

    If "everything" is getting better as some would have us believe, then I would ask about the pending economic impacts of the gulf oil spill, the European sovereign debt crisis (which many believe is still not contained), and the regional drought occurring in China. I don't know the answers to these problems, either, but they need to be quantified before the market is likely to ignore them completely.
    May 24, 2010. 12:32 PM | 2 Likes Like |Link to Comment
  • Home Sales Rise, Inventory Surges [View article]
    Well, this is all anticipated information which merely confirms expectations. We won't really know the health of the housing market until July or August.

    We sell houses using a lease/purchase option in areas where the appraisers won't provide a good appraisal because of all the distressed sales. We're able to capture a higher selling price and move more inventory. The end of the tax credit has actually resulted in a significant rise in activity and sales for us. People who wanted to buy but couldn't get qualified or couldn't get a reasonable appraisal are now changing their strategy. To them, our offers look pretty good. Thank Heaven! The tax credit nearly killed our business model.

    Of course, we'd really prefer to sell them outright with outside financing or for cash, but then we would have to take much reduced prices. We decided late in 2008 the evolve our business model and do what made more sense. With the tax credit gone, we're starting to roll again. When the lending environment improves, we'll probably adapt again.
    May 24, 2010. 12:21 PM | 2 Likes Like |Link to Comment
  • Part I - We all know the Gulf blowout is a disaster. But just how big a disaster could it be? [View instapost]
    The only group who will benefit from this disaster is the lawyers. Even if BP gets fined $Billions in the end, the lawyers will end up with a significant share through fees. They are all encouraged to keep the litigation going for as long as possible because that just causes even more billable hours. There are legal firms who plan to make a life-long living from the legal battles that will ensue. And do they care about the clean up? Well, of course, they'll clean up! But the oil will just sit there killing the natural habitats while they do.
    May 23, 2010. 07:52 PM | 4 Likes Like |Link to Comment
  • Part I - We all know the Gulf blowout is a disaster. But just how big a disaster could it be? [View instapost]
    The latest story:

    news.yahoo.com/s/ap/20...

    A couple of disturb ing excerpts from the article:

    "In Barataria Bay, orange oil had made its way a good six inches onto the shore, coating grasses and the nests of brown pelicans in mangrove trees. Just six months ago, the birds had been removed from the federal endangered species list."

    Just six month off the endangered species list and they'll be going back on very shortly. This time the endanderment may spell their extinction. What price will BP pay for that?

    " It became obvious the company had been underestimating the leak Thursday, when it started siphoning the oil at a 210,000-gallon-a-day rate while more crude spilled into the water."

    Finally, it becomes obvious!
    May 23, 2010. 07:43 PM | 4 Likes Like |Link to Comment
  • Investors Should Plan for Increasing Volatility [View article]
    I've stated this many times in other comments on SA, but I'll say it one more time. The increased volatility feels very much like it did in 1987, 2000, and 2008 just prior to the market crashes we expereinced shortly after. I don't recall this sort of volatility preceding and major bull market beginning unless there was a day of capitulation experienced just prior. The difference is that in the sustained bull markets we don't experience so many huge down days; while in the volatile markets preceding a crash we see a bias to the down side. I'm not predicting anything. This could very well be the one time that "is" different. I'm just saying that this feels very similar to past periods that were punctuated by a very nasty bear market crash. Be cautious out there.
    May 23, 2010. 07:18 PM | 4 Likes Like |Link to Comment
  • Part I - We all know the Gulf blowout is a disaster. But just how big a disaster could it be? [View instapost]
    lower98th - You make a very good point! I think we should support an amendment to the Constitution that requires all members of Congress and the President to lead the initial charge in any war they declare.
    May 23, 2010. 08:35 AM | 6 Likes Like |Link to Comment
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