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Mark Bern, CFA  

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  • QuickChat #278, February 5, 2015 [View instapost]
    Maya - I think that, long term, you will be fine. I like DOW and its rising div.
    Feb 15, 2015. 07:41 PM | 2 Likes Like |Link to Comment
  • I'm Not Trying To Scare You, I'm Trying To Help You [View article]
    thomaswhite - But this time its different! The central banks have it all figured out! Nothing to worry about. Relax and just ride along to nirvana; get rich without worrying about risk. The Fed has your back. We must trust our leaders since they know more than we do and would never do anything that might pull the economy off track. This is the bull market that never ends. This time the economists have it all figured out.

    Feb 15, 2015. 02:54 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    WT - I own mostly US multinationals and consider it imperative to hedge against currency fluctuations because of my portfolio's indirect exposure to the Euro. While I think the Euro could strengthen against the US$ between now and the actual beginning of ECB QE, I like EUO and UUP for the next six months or longer.

    Look at what has happened to the Yen since Abe and the JCB decided a weaker Yen was imperative. The Yen was trading at $0.01285 at the end of 2012. Today it is trading at $0.00844 down 33% over the last 2 years.

    Projections put the Euro at $0.80 or so in the next couple of years. It was at about $1.39 at the beginning of 2014 and now stands closer to $1.14. Going down to $0.80 would mean a 42% drop in 3 years. That may be necessary to remain competitive with the Japanese.

    After all that, where would this leave China with its peg to the US$. I can't help but believe that further slowing is in its future due to competition. And S. Korea will need to do something soon if it wants to remain competitive. When does it all break into an all out currency war? Or does it? Next, of course, is the impact on US exports and industrials.

    This may not end well. But who knows? The CBs have it all under control for now.
    Feb 15, 2015. 02:43 PM | 4 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    And it does depend, as I believe you mentioned earlier TB, that the cash stored overseas may continue to lose value with a rising dollar. With all the easing by CBs around the world, the US$ looks like a good bet to strengthen in coming years. That would cause a sustained drag on corp earnings; something that US corps will indeed be considering.

    This is actually another good discussion that helps us all in formulating our expectations for the future! The QC community rocks!
    Feb 15, 2015. 02:33 PM | 2 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Couldn't agree more, TB. Fighting somewhere else is always preferable, but then again, too many of the sheeple who know nothing of war besides what they see on the well-screened media will never favor armed force until the feel the pain more directly. I think it is inevitable that ISIS (or some other jihadist group) will attack us here at home again someday. If the attack is isolated, society will come together for only a short time and then forget about the danger once again. If the attack(s) is widespread geographically then, and only then, will the majority of Americans unite against terrorism.

    Of course, I don't want it to happen. I just think it remain inevitable because our nation will not take terrorism seriously enough until it becomes a reality here at home. Thus, terrorists will continue to wage war around the globe and we will never do enough. That will encourage and embolden the enemy until, finally, they strike the US homeland in such a way that coalesces the masses. Then the real war will begin.

    It may not happen in our lifetime, but I do not see any other outcome, sad to say. The enemy does not think so much in terms of this year or the next five; it has its eye on the prize without the limit of time and plans are made for the next 50 years instead of the next budget cycle. There is always a plan B, C, D, E, etc. when taking the long term view. That is our enemy. And we, as a society, just can't seem to get our heads around that concept. We win, you lose is not how it works. We can win the next 10 or 20 times and they won't give up as long as they keep their eye on the eventual prize and the prize is attainable for their great grand children.
    Feb 15, 2015. 02:28 PM | 2 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    TB - One industry that should see increased investment in the US is chemicals. Abundant and cheap feedstock (nat gas and oil) here in the US should provide attractive cost savings potential, imo.
    Feb 15, 2015. 02:14 PM | 3 Likes Like |Link to Comment
  • I'm Not Trying To Scare You, I'm Trying To Help You [View article]
    Totally agree that the risk/reward ratio, by most "normal" measures, does not favor the investor. But the continuance of QE and ZIRP (or cheap money) by central banks around the world may be able to inflate equities for awhile longer. How much longer is the big question.
    Feb 15, 2015. 12:42 PM | 2 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    I was near Lai Khe in the Michelin Rubber Plantation. We worked with scout dogs infrequently. We usually moved late at night and once a dog tripped a flare booby trap. Platoon leader regard for the dogs at night dropped then. Our platoon actually shared a small base with mercenaries that had been abandoned by the French.

    We should probably move any further reminiscing to pm to save others from having to read our dribble.
    Feb 14, 2015. 06:45 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Joseph - Ture. And befuddled is right. When taking fire from a village my unit was ordered to stand down and not engage. We were pinned down by multiple snipers from a "friendly village." We were definitely befuddled.
    Feb 13, 2015. 01:20 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Maya - Thanks for the response. As I ponder the situation I think that LT is probably right; far less than $2 Trillion will be brought home. I read that corps were willing to bring cash back at the earlier proposed rate of 6.5% but adding 2% on top of that may negatively affect how much will be repatriated. It will probably be a fraction of what could have been because of lawmaker greed. They will end up with less than planned, be able to spend less on infrastructure and then blame the evil corps for not doing their share to support the effort. If $500 billion comes home the tax will amount to $42.5 billion. My guess is that only $30 billion actually makes it into infrastructure projects. But that would be a good temporary boost to that sector that could last for a couple of years. OTOH, playing devil's advocate again, Congress (in its infinite wisdom) could spend the entire $42 billion (or whatever it turns out to be) on infrastructure but, at the same time, repurpose funds that would have been otherwise earmarked for infrastructure to other types of expenditures. The end result is a lot of positive headlines and little of no extra funding for infrastructure.
    Feb 13, 2015. 01:18 PM | 3 Likes Like |Link to Comment
  • Swine Flu, MERS, Ebola And Medical News Concentrator January 1, 2015 To ?? [View instapost]
    The plague is back with a disturbing twist:

    Not a big problem yet as long as it remains contained.
    Feb 13, 2015. 12:57 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    I have mixed feelings about whether we need the quotes or not. Getting them means we are back fighting the war on the ground. But the list of quotes proffered is a good one. Thanks, DG.

    I must say, though, that the Army has its elite units, too. But, those units are more scarce and the non-infantry units are not well trained. I was in a recon unit in Vietnam (1st Inf Div) and heard that the North had a bounty on our heads. We wore black scarves with our unit insignia embroidered on them. Apparently, some guys before my time raised some havoc. Our platoon retained the highest kill rate for infantry companies within the battalion while I was there but it didn't seem like we did that much damage. I guess the line companies just did less.
    Feb 13, 2015. 12:48 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    Maya - You are right, of course, as I am just too negative about our political leaders right now (both sides of the aisle). Stock buy-backs will help lift stocks for sure and div increases will also help. This move could provide another year or more to the US equity bull.

    But, let me take another contrary stance for you to debunk. (I like the back and forth of ideas and interpretations)

    If the US corps suck all that cash back into the US and use it mostly for stock buy backs and div increases there are, to me, two potential negative outcomes; one short-term and the other intermediate.
    1) Removal of the cash from foreign financial institutions could have a negative impact on the respective balance sheets of same. Could that undermine what the ECB is trying to do with its QE? Or are the two moves linked in an attempt to counter the impact?
    2) Will US corps reduce capital investment in places like Europe even more contributing to further erosion of growth in the EZ? US corps will probably leave the cash needed for capex in those regions where the opportunities still remain but in places like Europe where growth potential is close to zip (and where a lot of cash is likely hoarded from profits piled up in past and due to corp tax deals by some of those countries) there may really be no reason to leave much cash.

    My point is that the move has two sides to the story: Very good for equities in the US but what about the potential for driving Europe into recession? How does that play out on the multinationals' rev and earnings?

    I know I sound pessimistic all around, but I do wonder what the other side of the coin will uncover.
    Feb 13, 2015. 12:38 PM | 4 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    VW -Lyndhurst. I actually live just of I64 on the side of a mountain. If you are on I64 heading toward Charlottesville (East) just after you pass exit 96 look to your right. At night you will see a few lights dotting the side of the mountain. One of those is my house.
    Feb 13, 2015. 12:23 PM | 3 Likes Like |Link to Comment
  • QuickChat #278, February 5, 2015 [View instapost]
    DG - I can't help thinking that they may want to test our resolve. With the weakness that has been demonstrated over and over again by the current administration they may believe that we will pull out all boots on the ground completely if we take heavy casualties of our own. The big question I have is will we send in reinforcements to protect our own soldiers if necessary or will we pull another Bengazi and limit the losses. I suspect ISIS is wondering the same thing.
    Feb 12, 2015. 07:26 PM | 4 Likes Like |Link to Comment