Mattias Ericsson

Mattias Ericsson
Contributor since: 2012
There is two CPI, CPI and core CPI, core CPI excluding items as interest payments as its affected by policy. To imply that spending on food items are a causal effect on price increase is impossible as that would require knowledge of the deviation from cumulative preference to cumulative spending.
PPI is a good measure on what PPI measure, production cost. CPI is a good measure of what CPI measure, consumer cost. For example increasing ad valorem taxation 5 % across the board would not affect PPI at all, but would increase cost of living for consumers all the same. PPI and CPI each measure what they should, not what they shouldt.
CPI is a whighted index, meaning that even as prices on newspapers as in the example put forward indeed have increased above inflation. The relative wheight of such spending in a household budget has decreased making the inflationary impact of that price increase alot less than the actual price increase. For example if I was to use the cost of longdistance calles made on landlines there has been massive deflation since the 90s. Wheighted indexes is something a basic econometrics class will give knowledge about, a moneymanager not knowing this would make me think twice about investing there.
I will go long in Nokia before the Q4 results are presented. As I am fully invested currently I will need to sell of another position I hold and as of yet has not decided which.
What I count as scrap value is what you get after paying off all debt as well as legal costs to liquidate. Ie. if Nokia goes into liquidation today there would still be a fairly ok return to shareholders that bought at todays price. This is by todays book value, if the EBITA go north in a a few years the case might be diffrent.
Thanks for pointing out the billion dollar gaff, naturally it should say millions. Macroeconomics's rarely count in millions and the math wizards go into micro, I blame it on being a work related damage.
Good article. Just a correction, it was JM Keynes who said "markets can stay dislocated longer than you can stay solvent.". He was also as Warren Buffet one of the few that made money in the stock market in the 1930s.