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Michael Nau

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  • Chart Of The Day, Reverse-Causality Edition [View article]
    Neil1236, you provide plausible mechanisms, but do not test them.

    If given a chance to toot my own discipline's horn (Sociology), I will: I think that Economics in general is a bit too oriented towards prediction/extrapolation from data, and not focused enough on causal modeling. These two things are different: one looks at past data and makes an intelligent guess about future (correlations are fine for this), while the other looks at past data in clever ways to move past correlation into making causal claims.

    A pooled time series analysis in which debt is first differenced and there are adequate controls for political conditions etc. would provide stronger evidence one way or another. R&R aren't stupid, they know how to do this. They decided not to.....
    Apr 19 08:27 AM | Likes Like |Link to Comment
  • What Is Pushing Down The Gold Price? [View article]
    When was the last time you paid for something in gold? Or had your paycheck denominated in ounces? Or saw companies report FCF in metric tons? Put yourself in a time machine, go back a few hundred years, and you'd be right about gold as money.
    Apr 19 08:05 AM | Likes Like |Link to Comment
  • Chart Of The Day: Despite Drop, 'Real' Gold Price Remains Historically High [View article]
    What goes up.....
    Apr 19 07:49 AM | 1 Like Like |Link to Comment
  • Apple's Dirty Little Secret [View article]
    I like buying lousy stocks where it looks like nothing will "get better". You can buy them cheaply and mediocre business performance will translate into superior returns.

    p/e ttm of 8.9, cash is almost 40% of market cap. Looks like a no-brainer to me.
    Apr 19 07:48 AM | 4 Likes Like |Link to Comment
  • Valuations Support 1% Or Less For U.S. Stocks Over Next 20 Years [View article]
    Great article, very impressive. I'm more optimistic about stocks than the author, so it is really good to hear a compelling bear case to keep me on my toes.

    In my opinion, an important part of returns going forward is what companies do with their record levels of cash. I hope they use it wisely.
    Apr 17 10:33 PM | Likes Like |Link to Comment
  • Apple: Time To Unleash A Massive Buyback Program [View article]
    I totally agree with the author. If they don't want to make an acquisition, keep $20B as working capital and return the rest to shareholders.
    Apr 17 08:49 PM | Likes Like |Link to Comment
  • Buy Stocks, Sell Everything Else [View article]
    chistletoe, it all depends on your time frame. I'm thinking in terms of years or decades.
    Apr 17 10:00 AM | Likes Like |Link to Comment
  • Buy Stocks, Sell Everything Else [View article]
    New Superhuman, I don't disagree, but there it is. I need to have enough to retire on in 30 years, and stocks seem like the only game in town.
    Apr 17 09:59 AM | Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce [View article]
    David, you're right about FDR, but I'm most interested in gold ever since it started floating against the dollar permanently. A price chart from 1920 to 1970 for gold isn't all that interesting.
    Apr 17 08:39 AM | Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce [View article]
    WMARKW, interesting question. I'm personally skeptical about any difference between physical and "paper" gold, but for the sake of argument, lets say there is a difference. I offer you the option of either GLD or gold bars, and will give you more GLD in terms of current market price than gold bars. What percent premium would you demand to accept GLD instead of physical?
    Apr 16 11:26 PM | Likes Like |Link to Comment
  • Beware The Sweet Siren Song Of XIV [View article]
    I think it is possible for XIV to go to zero, although I'm not worried about the compounding losses + fees angle. My biggest worry is that in the prospectus, if XIV falls 80% in a day, it will be automatically redeemed by the issuer. Unlike the long VIX products that will die a long painful death by turning $100 into $0.01 over the course of a decade, if XIV ever dies it will go out with a bang.

    This is a real problem, because during the 2010 flash crash and in 1987 the VIX spiked very suddenly, which would have put XIV holders in danger. Because of this ETN quirk, I'm sticking with SVXY despite the tracking error.
    Apr 16 11:11 PM | Likes Like |Link to Comment
  • Beware The Sweet Siren Song Of XIV [View article]
    I'm not so sure. I wouldn't expect XIV to track the VIX exactly, because that is not what it is tracking, so that 15% "expected" move doesn't bother me.

    The bigger picture is that the VIX is mean reverting in the medium to long term, so if you buy on a spike you'll eventually be rewarded. This is only true for short VIX positions, because everyone wants to be long VIX (leading to contango, etc.). If the secret gets out and everyone piles on the short VIX trade, this extra juice will go away. I'm not to worried that will happen because we have a violent shake-out every few years that keeps the shorts scared.
    Apr 16 11:05 PM | Likes Like |Link to Comment
  • You Can Bet On Gold Glittering Again [View article]
    Agreed, gold will come back 3 decades from now, just like 1980-2010. Maybe I'll buy some in 25 years.
    Apr 16 10:23 PM | 3 Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce [View article]
    As I write, sid gold's comment at the top has 26 "likes", way more than any other comment. We are nowhere near the longs capitulating yet, this thing is going to be uglier than it was for AAPL given all the emotion gold seems to stir up.

    sid, that's my "predication".
    Apr 16 10:20 PM | 2 Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce [View article]
    northhills24, um, sorry to let you down. What do you think is the best way to look at gold's valuation? I freely admit I don't know everything.
    Apr 16 06:54 PM | 3 Likes Like |Link to Comment