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Praveen Chawla

 
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  • Nobel Prize Winner Shiller Is Damaging His Reputation With CAPE Ratio Talk [View article]
    Stephen, Thanks for the link. My respect for Prof. Shiller went up a notch.
    Aug 22 11:59 AM | 3 Likes Like |Link to Comment
  • Nobel Prize Winner Shiller Is Damaging His Reputation With CAPE Ratio Talk [View article]
    The CAPE ratio is not a market timing indicator. It just says that the market is overvalued based on 10 year earning history of the average of the S&P 500 companies. Prof. Shiller always point out that CAPE can remain high or low for years at end.
    Here is a great article on CAPE from Doug Short.
    http://bit.ly/JNT7Io
    Aug 22 11:39 AM | 5 Likes Like |Link to Comment
  • A New Rayonier, But The Same Old Problem [View article]
    Stephen, Thank you for insight on RYN. I have been eyeing WY but the price always seem to run away before I get around to acting. I will be a buyer below 30.

    Regarding RYN - I think the more intriguing part of the business may be the spin-off. I have invested in it and had written an article on it as well. Let me know what you think.
    http://seekingalpha.co...
    Aug 22 10:27 AM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    Enough people seem to be getting it right that margin debt dips before market tops. I don't have mathematical proof of this phenomena but the pattern seems to hold.

    Its your choice to follow the indicators or not. One thing I have learnt in Investing and Trading that it is more of an art than a science. Many scientists fail in investing because they are always trying to engage the left brain (logical, judgemental, sceptical) to solve investing problems while ignoring the right brain (perceiving, trusting, sensing, pattern recognition). The best investors engage both sides of the brain. Thanks for your comment and engagement.
    Aug 22 09:58 AM | 1 Like Like |Link to Comment
  • Is Starbucks Over Caffeinated At These Levels? [View article]
    LOL. Marvin, thats a great comment.
    Aug 21 09:37 PM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    Thank you for your commentary. I think taking on margin debt is entirely voluntary (no one is forcing you to take on debt, its driven by greed). Deleveraging might be voluntary or forced due to margin calls. If the deleveraging happens before the market peak, I would say it is mostly voluntary.

    There are independent 2 scales on the right hand side of the graph - one for margin debt and the other for S&P 500. Both give % increase from the start of the respective period shown in the particular graph. The time period selected is arbitrary and selected to show the S&P peaks of the cyclical bulls which were followed by at least a 20% correction.
    Aug 21 09:42 AM | Likes Like |Link to Comment
  • Is Starbucks Over Caffeinated At These Levels? [View article]
    Agree with the thesis that SBUX is over valued. I think selling covered call on the stock might be the way to go to milk some dividends as I don't want to sell my position just yet.
    Aug 21 07:59 AM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    There are bound to be some smart people (or lucky) in every cycle who perceive market tops in advance and deleverage before the masses. Look at the great traders like Livermore, Soros, Drukenmiller etc. I find it interesting that tops form gradually (rather than suddenly) over several months so there should be plenty of warning if you are perceptive and savvy.
    Aug 21 04:50 AM | 1 Like Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    LC, Not to my knowledge. The July margin data should be released soon - so data is at least a month behind the market. I really did not see much correlation between S&P 500 prices and margin debt. The latter is much more volatile but I notice the pattern of margin debt peaking in advance of cyclical market peaks and that intrigued me and led me to think of the hypothesis of smart money reducing debt in response to irrational exuberance. I suspect the real trick is to distinguish the false positives from the real thing. I plan to work on this problem and will report back.
    Aug 21 04:40 AM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    Good idea! Next time I will praise the Fed to get the red meat guys really riled up (helps with page views :-).
    Aug 21 04:31 AM | 1 Like Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    I am not looking at margin debt per se - I am looking at margin debt peaking and declining.
    Aug 20 06:41 PM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    I don't think it will make much of a difference as GNP rises very slowly as compared to margin debt. In my hypothesis I was looking for signs that smartmoney is reducing debt in advance of the market peaking. The dumb money then rushes in and buys the echo peak which comes after and gets trapped.
    Aug 20 06:40 PM | 1 Like Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    I will do that when I get some time. The main issue is getting the data to line up as margin data is released by NYSE by month (and is about a 1 - 2 months late). I will certainly report back if I can get around to it. Good idea. Thanks.
    Aug 20 06:36 PM | Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    Hi Guys, I agree. Can't be sure this is a secular bull. I am assuming it is cyclical and will be ending soon and positioning myself defensively (i.e., minimizing leverage).
    Aug 20 03:15 PM | 2 Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    No. Just margin debt in investor's accounts. Leveraged etf's, derivatives etc. create even more leverage which is not captured by this metric. So real situation is likely worse than depicted.
    Aug 20 09:50 AM | Likes Like |Link to Comment
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