Seeking Alpha

Michael Nau

View as an RSS Feed
View Michael Nau's Comments BY TICKER:
Latest  |  Highest rated
  • I Will Never Make Another (Investment) Mistake [View article]
    Good article. I'm curious about your Canadian market exposure. Are you exposed only to Canada's share of global equity markets, which is pretty small, or do you still have a "home bias"? Personally, I'm not sure if moderate levels of home bias are all that bad, particularly if you're interested in funding your retirement using your local currency. Thoughts?

    By the way, as an American, I have very minimal exposure to Canada, only through VXUS and VSS, perhaps 2% of my portfolio. Does that sound reasonable?
    Oct 9 11:51 AM | Likes Like |Link to Comment
  • The Un-Terrifying Treasury Bill Market [View article]
    I hope you're right. We're still 8 days away from a default and most people seem to think that a default won't happen. If this price momentum continues for several more days, there will be material changes in the price of T bills.

    I expect that if it really hits the fan, there will be a tipping point and a price decline will turn into a rout. I buy that T bills are basically the safest asset, but if volatility kicks up liquidity could could decline and cause even greater swings. That could fuel a self-reinforcing cycle. Or not, but if enough people are worried about it, it could become a self-fulfilling prophecy.

    If I were a Martian, I'd be fascinated by this whole debacle from an academic perspective, but there's too many unknown factors and I'm too involved in the economy to not be worried.
    Oct 9 11:10 AM | 1 Like Like |Link to Comment
  • Solving The Debt Crisis Will Require Real Politik [View article]
    How about this: a compromise that throws a non-obamacare bone to the GOP like Keystone along with legislation to eliminate the debt ceiling so that this brinkmanship stops in the future. That way, the GOP can have a victory but the Dems can say that they definitively solved the default risk problem.
    Oct 9 10:01 AM | 3 Likes Like |Link to Comment
  • Volatility players looking good of late [View news story]
    QTR, why short VXX rather than buy SVXY?

    Its the same trade, but the losses don't snowball in the same way when you're wrong in the short run. Think of it this way: if the underlying VIX futures index goes up 100%+ in the next week, then you're down 100%+ on your VXX short. That could be a big deal depending on position size. SVXY won't go to zero, provided that there are not 100%+ moves in the same day.
    Oct 8 06:08 PM | 1 Like Like |Link to Comment
  • The Sum Of All Money Market Fears [View article]
    Seems like we should wean ourselves of short-term financing, its what exacerbated the financial crisis in the first place. The idea that GE, KO and the banks are always one step away from insolvency is not reassuring.....
    Oct 8 01:08 PM | 4 Likes Like |Link to Comment
  • The Market Gains Since The Lehman Collapse May Fall Victim To Politics; In This Case CYA Means Cover Your Assets [View article]
    JasonC8847, what if the Dems took the same tack when W was in office? The left wing of the Democratic party wants single-payer health care and are disappointed by Obamacare. Should this minority of 20% cause the government to shutdown and default if they don't get their way?

    This sort of take-no-prisoners, polarized approach more closely resembles French political history than American political history. After all, we've only had one constitution but the French are on their fifth republic.
    Oct 8 12:00 AM | 4 Likes Like |Link to Comment
  • Capitalizing On Cannabis: Many Prices Aren't Right Despite The 'Green Light' [View article]
    Alan, I appreciate your candor regarding your concerns about this space, but it still seems like you are still a bit too optimistic. I just don't see why these tiny companies need to go public right now- are they capital intensive? Why always list for pennies and opt for minimal disclosure? Something seems fishy.

    I'm bullish on the pot industry myself, but I suspect that the real winners are not available to retail investors, but rather are small-to-medium sized operations that can fund internally. After all, most small-scale family farming operations can be pretty profitable but are not publicly traded. If I wanted to make a fortune in this, I'd start my own operation and try to keep a low profile given the ambiguous legal status.
    Oct 7 11:53 PM | Likes Like |Link to Comment
  • Bulls' Margin Of Error Razor Thin [View article]
    What is your source of information about the "swelling deficits"? It is my understanding that the deficit has shrunk considerably, perhaps to 5% of GDP, which is sustainable in the medium term and close to sustainable in the long term. Thats why the Dems feel like they have a stronger hand than in 2011, among other reasons.
    Oct 7 11:40 PM | 1 Like Like |Link to Comment
  • The Sky Is Not Falling, But It Is Teetering On Its Edge: Protect Your Portfolio [View article]
    Fair enough, it seems like we agree on a lot of the basics. It is nice to have a calm, reasoned discussion in this era of hyperbole.

    I guess I'm less worried about a spike in interest rates or inflation. In my opinion, we still have more deleveraging in the household sector, which will dampen inflationary pressures and keep interest rates low. I think that while QE may be keeping rates "artificially" low, the "natural" rate of interest is not all that much higher given the weak economy, high unemployment and low levels of investment.

    I'm also of the school of thought that both sides of the aisle are posturing (the treasury secretary is a political appointee after all), but I think that the GOP will eventually cave. I don't see the Dems budging much on Obamacare and I think businesses will put increasing pressure on the GOP and peel off the moderates from the conservatives. Maybe we can get some face-saving measures like the keystone pipeline and other items on the GOP wish list. That way Obama can say he held tough on healthcare but the other side can still claim a victory of sorts. I may be too optimistic here, but after all, I'm an American, I'm supposed to be optimistic :)
    Oct 7 11:48 AM | 5 Likes Like |Link to Comment
  • The Sky Is Not Falling, But It Is Teetering On Its Edge: Protect Your Portfolio [View article]
    I think the figure above is a bit misleading because it measures a stock (debt amount) compared to a flow (tax revenue). With the sequester, the deficit for the next decade has dramatically shrunk and debt-to-gdp will be about level during that period. There's longer-term issues, but no emergency, the real risk right now is a politically-motivated technical default.

    Also, the government is not like a household. It can print money (I can't), and it does not need to accumulate savings over the life course. If the government was like a household, it should always run on a surplus. Instead, surpluses are either spent on new programs, tax cuts or some combination thereof. The government does not need to save. If anything, the government is more like XOM, which will do just fine into the future and never need to pay off its debts. In fact, it can steadily grow debts with revenues ad infinitum, so the real thing to watch is debt-to-gdp and servicing costs.
    Oct 7 11:22 AM | 7 Likes Like |Link to Comment
  • Why Hasn't The Budget Deficit Decline Hurt Corporate Profits More? [View article]
    So Somalia is the world's most efficient economy, with Afghanistan a close second? And Sweden is near the bottom? Doesn't sound quite right to me......
    Oct 7 08:06 AM | 5 Likes Like |Link to Comment
  • Obama And Lew Say This Is Serious - Are They Just Grandstanding Or Is This Time Different? [View article]
    Good point, capitalism and democracy don't necessarily mix well. You can't have pure capitalism and pure democracy at the same time.
    Oct 6 12:17 PM | 7 Likes Like |Link to Comment
  • Treasury: Catastrophe awaits if debt ceiling not raised [View news story]
    Blowing up the government is not a good way to achieve reform. That is what elections and the legislative process is all about.
    Oct 3 12:11 PM | 4 Likes Like |Link to Comment
  • The Zombie Apocalypse Has Arrived [View article]
    This is a little too much. Ever since the 1960s, intellectuals have tried to point to pop culture fads as confirmation of their favorite social or political theory. Zizek is one of the worst. The problem is that their methodology is pseudo-scientific. Does Pokemon tell us something profound about the social circumstances of millenials? Or Miley Cyrus? Or tight-fitting jeans? Or organic food? Which pop culture phenomenon should intellectuals even focus on?

    I'm skeptical. Lets stick to actual social indicators, such as income, unemployment, crime rates, demography, etc. and leave the culture crit stuff to the english majors.
    Oct 1 03:09 PM | 18 Likes Like |Link to Comment
  • Apple Should Not Give In To Icahn [View article]
    I'm an AAPL shareholder with a 3-5 year time horizon, and I'd be glad to see a larger buyback. Right now, the market cap is $440B with $140B+ in cash and $17B in debt. The current buyback can be mostly funded by current operating income without dipping much into the cash. So the real question is whether AAPL needs $120B+ in net cash going forward.

    I don't think so. Big ticket acquisitions tend to destroy more value than buybacks. I think the long-term prospects for investors depend more upon current optimal capital allocation than companywide growth. After all, I don't own the whole company, I own shares. Those shares can still go up in value if growth is stagnant provided management grows my share of the pie.
    Oct 1 02:50 PM | 6 Likes Like |Link to Comment
COMMENTS STATS
971 Comments
1,915 Likes