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Mark Bern, CFA

 
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  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Inventories had been building for several quarters at a rate faster than sales. I don't think there will be as much additional inventory build up as you may expect. If consumers are going to spend as expected in the 2nd quarter retailers would not be lowering guidance. But I hope you are right. I'd rather have a better outcome. Thanks for sharing your view.
    Jun 2 03:11 PM | 2 Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    pmiller - Thanks for sharing your perspective. Higher health insurance hurts, but so do things like low interest rates for those of us who have saved and want to invest more in high quality bonds. We have less to spend than we would in a normalized interest rate environment. Also, housing is looking weaker to me and with prices having risen many first time buyers are being priced out of the market, especially with stronger underwriting requirements to qualify for mortgages. There's a lot more but I'll save some.
    Jun 2 03:08 PM | Likes Like |Link to Comment
  • Don't Expect The U.S. Economy To Grow As Expected [View article]
    Gary - I get regular updates and news releases from ACT Research which covers the trucking industry. So far, everything looks strong. But a good portion of the demand in new rigs is to haul oil out of shale areas that don't have adequate pipelines to get product to the hubs. Pipelines are being built, so that will change in time. It is hard to get a grip on how strong the rest of the economy is via transport news. Rail is up for much the same reason as trucking. Again, that could change when pipelines are in place.

    Fleets had gotten well over historical average age and needed replacing. Much of that happened as a result of postponements during 2008-2011. The purchases of new tractors and trailers looks like some catching up to me and I expect that it will slow. Fleet upgrades happen during the good times.

    As far as the transports goes, rail is doing extremely well with modest increases to tonnage (outside of oil) because the big companies are able to raise rates consistently more over the last several years than in the past. That goes right to the top and bottom lines. Rail will continue to do well until we get into another recession, imho.
    Jun 2 03:04 PM | 2 Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Shaduc - Thanks for a breath of reality.
    May 30 08:45 PM | Likes Like |Link to Comment
  • China Creates A Buying Opportunity For Nu Skin [View article]
    yuan song - I will wait for a verdict before I change my positions. But thanks for sharing your thoughts.
    May 30 08:41 PM | Likes Like |Link to Comment
  • The Time To Hedge Is Now! Candidate Summary [View article]
    Dash - I really don't use screening tools. I am sure that there are some that would help to identify high-beta stocks, but I look at individual charts on individual stocks. I would tell you to look at industry ETFs to find the best industries but most of those securities have been created since the last recession. So, I just draw on my many years of experience. I know that does not help and I am sure that I miss some great candidates because I generally stick with the largest 1,500 or so stocks and mostly U.S. companies. In other words I try to stick to what I know best.

    For picking the targets I try to identify technical support levels, primarily those that are consistent since 2003. Support is often found at levels where multiple highs were made during those periods when the stock was trading up off the cycle lows. Support is also identified as levels where stocks have gone down to and then bounced. The strongest support is where both of those formations meet. I try to keep my target price slightly above the strongest support I find in the charts.

    I looked at hundreds of charts to find the candidates I came up with, but by moving down a little in capitalization or by checking industries I did not mention you may find some more possibilities.

    I hope that helps. Thanks for asking.
    May 30 08:39 PM | Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Sorry, but I thought from your earlier comments that you were implying that peasants were moving to the cities and buying homes with cash.

    I do understand that most residences are bought with cash. But the owners are not living in them, right? Who is? Are they rented and providing income to the owners or are they just sitting empty, deteriorating?

    In response to: "How many average Chinese workers could afford to buy a $250,000 to $450,000 apartment on an annual salary of $10,000?"

    You stated: "--- A lot. Wages, taxes, actual income and savings work very different between the West and China."

    That is the difference I would like to understand. Could you elaborate as to how a lot of average Chinese workers can afford to buy homes that are priced at 25 to 40 times their annual salary? Saying that it happens a lot does not explain how. This is puzzling to me and I'd like to understand it.

    Thanks.
    May 29 09:02 PM | Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Brent - Thanks for sharing your sentiment. I appreciate the kind words.
    May 29 01:53 PM | Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Manufacturing, mining, exports and domestic sales all create wealth; no doubt. But the statement was a quote and from a certain point of view it makes sense. The state (government, either central or local) owns an interest in many businesses in China. The state owns interests in major banks. But it seems as though employment and urbanization are more important goals of the state than profit. Thus, much of the revenue of the state has come from "import duties, land sales, etc." The state also owns the land and the investors are merely leasing it for development, if I understand the situation correctly. The leases are generally for 70 years from what I have read.

    So, what do individuals own? I believe that the premise of the quote I used was that individual investors hold the majority of their wealth in real estate. Some very wealthy individuals own large companies and their wealth is stored in those businesses. But that constitutes a small minority of Chinese households. Wealth is always aggregated in the hands of a minority of a population. And China is no different in that respect. If it were we would never read about the terrible working conditions of the cheap labor force. That problem seems to have receded, but it points to there being a lot of average Chinese citizens working for relatively low wages in factories. The wages have risen along with the standard of living but still the average is still low compared to developed countries.

    I do realize that some Chinese sold land for significant profits and moved to the cities and used the money to buy either more land or housing. But I cannot buy into the idea that the majority of Chinese workers moving from the poor rural areas are coming to the cities with a six-figure nest egg looking for a $10,000 a year job with poor working conditions.

    Telling us that it all works differently in China is convenient as long as you don't explain how it actually does work so that we can all be enlightened and make sense of your arguments. Calling us all stupid is easy as long as you don't have to explain yourself. Saying you know better without explaining it does not help. I think I speak for a lot of other readers who would like to learn. Please explain the differences or point us to sources of information that support your comments.
    May 29 12:23 PM | Likes Like |Link to Comment
  • Is The China Real Estate Bubble Real? [View article]
    Touche! You may be right about our man. Your argument certainly makes sense when compared to the other two instances. I won't argue with his being a swindler. Swindlers are not always stupid. If you include Buffett in that group I think we would agree that he is smart rather than stupid because he knows how to manipulate the system (and the general public) to his advantage for profit. That does not make it either honorable of stupid, merely legal.

    My point is that I believe that the correction coming in China will be more significant than more recent ones, it will short-lived in China, and China will recover. But the impact on the rest of the global economy could be more severe. All will recover in the end but I believe it is time for caution in equities, especially in companies dependent upon trade with China.
    May 28 07:24 PM | Likes Like |Link to Comment
  • China Creates A Buying Opportunity For Nu Skin [View article]
    Mackerel42 - Thanks for sharing your observations. Very well put. My feeling is that even though many Americans have developed anti-MLM prejudices, the Chinese are still very open to the concept, as a billion or so more in other emerging economies may be. I am neither from Utah nor in MLM either. But I see huge potential long-term.
    May 28 05:43 PM | 1 Like Like |Link to Comment
  • Is The China Real Estate Bubble Real? [View article]
    depueman - My apologies. However the guy took profits. Incredible profits. I wouldn't call that stupid. He has an opinion about the market and is playing by his instincts. If he is wrong he makes less. But that is being cautious, not stupid, imho. I will indeed be watching 2nd half sales in housing and next year's sales as well. In my article just published I am not predicting anything imminent or even a crippling blow to China. I give it three years for an adjustment to take place. I could be wrong, but that is my opinion and I'll stand by that. So, let's see if the housing markets keeps going straight up for another three years.
    May 28 12:26 PM | Likes Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Frog - Thanks for sharing your perspective.

    First, I do not hate China. I believe that the long-term economic future of China is very bright.

    Second, I do not think nor say that China stocks are over valued. My focus is on the real estate market.

    Finally, I am not calling for a crash but a correction; big difference. China has, and will continue to have hiccups along the way. I just think that this one could be a little bigger than in the past. But I have no doubt that the central government is better positioned to minimize the impact locally. My concern is primarily how such an event will adversely affect the still-fragile global economy.
    May 28 09:59 AM | 1 Like Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    Jeremy - I intend to keep watching what happens in China and will update the article if anything of consequence begins to happen. Thanks for the comment.
    May 28 07:36 AM | Likes Like |Link to Comment
  • Is The China Real Estate Bubble Real? [View article]
    haigulike - Thanks for the response. You have more faith in the central government than I do. Only time will tell. I'd rather be wrong and have things continue upward. I'd like to sell my house in a couple of years and it would be nice if the price didn't get hammered again.

    Thanks for adding to the discussion.

    BTW, you're probably going to hate my next article. LOL. I suspect we will be continuing the conversation about China. It's good to consider the views of others and weigh diverse opinions.
    May 28 12:57 AM | 1 Like Like |Link to Comment
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