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  • Fear Leveraged ETFs, Not Futures [View article]
    Notice that the article was written 4 years ago.
    May 21, 2015. 08:28 PM | Likes Like |Link to Comment
  • The Taylor Rule: A Benchmark For Monetary Policy [View article]
    @NeedMoreCoffee

    "In addition, you are mistaken that the Fed "manages" the economy; "

    You're right; my mistake. The Fed does not have the power to manage the economy, even though it thinks it does. All it really has is the power to manage the price level. When it attempts to do more than that, it fails miserably -- to the detriment of all of us.
    May 5, 2015. 07:17 AM | Likes Like |Link to Comment
  • U.S. Q1 GDP: Poor, As Expected, With Silver Linings [View article]
    @gotothomas,

    thanks for your well-informed response. Chalk this up to the perils of the passive voice: "it was expected" rather than "we expected..."
    May 1, 2015. 11:10 AM | Likes Like |Link to Comment
  • U.S. Q1 GDP: Poor, As Expected, With Silver Linings [View article]
    "First of all, of course, it was expected."

    That's patently false. The consensus expectation was 1.0%. The actual number was only 0.2%. It was not expected at all.
    Apr 30, 2015. 10:55 PM | Likes Like |Link to Comment
  • The Taylor Rule: A Benchmark For Monetary Policy [View article]
    It boils down to two options:

    1) The Fed follows a rule
    2) The Fed plays God and wings it

    Fed chairmen inevitably prefer option 2. Who doesn't want to play God? What fun it is to have the world's markets hang on your choice of adjectives every month.

    John Taylor has wisely deduced that monetary policy yields more stability when it is based on a rule (even a flawed rule) rather than conjured capriciously by a Fed that has more confidence than knowledge.

    This Fed has consistently and repeatedly failed to accurately forecast the economy. A random sampling of Seeking Alpha authors have a better track record than the Fed. Why should the Fed be trusted to manage an economy that it fails to understand?
    Apr 29, 2015. 12:52 AM | 6 Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    Yup it's a great example. It underscores how pointless YOC is. Investors A and B can see whether or not they're doing badly just by looking at the share price. They don't need YOC to see that.

    And where it gets dangerous is that Investors A and B may reach different evaluations of whether or not the stock should be held based on the different YOC. I think even Robert agrees that would be wrong. But people on this site do this surprisingly often.

    Larry has made the most salient observation: if you care about your return, calculate return; if you care about dividend growth, look at dividend growth. Why use YOC to get an oblique and distorted measure of metrics that actual matter?
    Apr 28, 2015. 11:20 PM | 2 Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    Larry,

    I like your suggestions. I'm going to use YO42 from now own. Since 42 is the answer to everything, it's best to use that as the divisor. And it's no less relevant than the price I paid for the stock 20 years ago!
    Apr 28, 2015. 10:39 AM | 2 Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    @Hardog

    "Was that a product of years of Return of capital?"

    Yes. Although I have some others, like GILD, where the cost basis is $0.50 because of buying early and splits. I'm sure the "YOC" would be high, but there's no reason to ever calculate it. All I can see in Robert Allen Schwartz's article is an after-the-fact rationalization for a measure that he was already in love with.
    Apr 26, 2015. 10:17 AM | 2 Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    ">> The "trick" with YOC is to know what it is, what it means, and how to use it to your advantage. <<

    And that's what we're waiting for..."

    I already said how to use it to your advantage. ;-) It won't make you go blind....except to better uses of of your time and investment resources.

    Seriously, Allan's argument for it boils down to viewing dividend growth. But if you want to focus on dividend growth, you look at dividend growth itself, not some indirect measure of it. Moreover, YOC is backward-looking. Rational investors look forward (i.e. at dividend growth projections) not backward. But as I said, rational investors don't bother with YOC
    Apr 24, 2015. 07:26 PM | 2 Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    Did any serious, rational investor ever pay attention to "yield on cost?"

    My cost basis on EPD and KMI is 0. That means my distribution rate is infinite, right?

    "Yield on Cost" thinking is little more than financial onanism: giving oneself pleasure with no productive results.
    Apr 24, 2015. 10:23 AM | 10 Likes Like |Link to Comment
  • Does Reading Seeking Alpha Really Help Beat The Market? A 5-Year Meta-Analysis [View article]
    "but for simplicity's sake, I am going to view alpha simply as outperformance against a baseline index, such as the Dow Jones, Nasdaq, or S&P 500."

    Well that's cheating isn't it? In an upward trending market, high beta outperforms low beta. We all knew that before you wrote this.

    Why not re-run this using a real (i.e. risk-adjusted) measure of return like Sharpe or Sortino ratios? I suspect the results would be very different.
    Mar 10, 2015. 01:11 PM | 17 Likes Like |Link to Comment
  • Futures spike as Greece/EU reportedly come to terms [View news story]

    Get some Twizzler black licorice. Using it as a straw, suck up some Everclear (or vodka). That's roughly what Ouzo is.
    Feb 11, 2015. 06:20 PM | 1 Like Like |Link to Comment
  • Chinese Economy Continues In Recession [View article]
    @Simple

    If you sell something to China, it is the absolute number that matters, not the percentage number.

    For example, if you sell cars, car purchase only went up about 5% last year, whereas they went up about 20% in 2004. 20% of 2004 sales was only about 400K. 5% of 2014 sales was about 1 million(!)

    Notice the difference?
    Feb 11, 2015. 10:40 AM | 2 Likes Like |Link to Comment
  • Chinese Economy Continues In Recession [View article]
    In absolute terms, the Chinese economy will grow more this year than it ever has. 7% of the 2014 economy is more than 14% of the 2004 economy.
    Feb 10, 2015. 10:46 AM | 1 Like Like |Link to Comment
  • Greece's Tsipras rejects extension [View news story]
    Tsipras is making the bet that Europeans will fail to get together, act decisively, and do the right thing.

    150,000 dead Bosnians says that's a pretty good bet.
    Feb 8, 2015. 02:57 PM | 3 Likes Like |Link to Comment
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