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Reel Ken  

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  • Are You Beating The Market, Or Is The Market Beating You? [View article]
    Hi respectful777,

    Thank you for taking the time to read the article and your comment. Much appreciated.
    Aug 3, 2015. 03:09 PM | Likes Like |Link to Comment
  • Hedging SPY With Options - Part 3 [View article]
    Hi Marc,

    Thanks for taking the time to read and comment.

    The strategy doesn't work WELL, in a rapidly rising market (+15% or more). It will underperform in that type of market, but outperform in a slowly rising market, a flat market or a down market.

    So, as with any strategy, you must accept that there will be times that the market moves in your favor and times it moves against you. That is unavoidable.

    However, if you analyze the historic markets, you will see that the number of slowly rising, flat and down markets greatly outnumber rapidly rising markets by a considerable amount. The strategy doesn't "bat 1.000 ..... but it does "bat .600+" and that's considerably better than most.

    Also, the strategy is designed to allow one to stay 100% invested over all markets...that overcomes a major shortcoming for most investors as they sell and buy at in-opportune times.

    For instance, the market was up nearly 30% in 2013 ... and my portfolio returned only about 18%. So, it "underperformed" ... or did it?....... Since my returns are "portfolio returns" they are right in line with a more traditional 60/40 stock/bond portfolio. So, even in a "bad year" for the strategy, it held its own.

    I track actual performance, and for the last five years (a notably bull period) ..... my overall portfolio returns have been 13.12% vs. the S&P at 15.44%.

    But, when one considers that it is "overall portfolio" return ... it actually outperforms any portfolio that has 15% or more in cash AND stayed 100% invested at all times during the five years.

    So I can attest that it does work, but it requires discipline and understanding.
    Aug 1, 2015. 08:33 AM | Likes Like |Link to Comment
  • Lumber Liquidators: What I Expect From The Q2 Report [View article]
    Hi gasman,

    I'm not totally on the same page with you .... I'll my best try to explain:

    Even though cigarettes do cause cancer and have a warning label, everyone that smokes cigarettes doesn't get cancer ...

    On the other side, everyone that has a blood alcohol level below the legal limit are not un-impaired.

    Just as "causes cancer" doesn't mean everyone will get cancer, "Safe" limits don't mean completely SAFE.

    So, when a product is banned from sale it means a whole lot more than it just isn't safe ... consider that cigarettes aren't banned in California.

    So, even if a produt manages to meet "safe" limits, doesn't mean it is "safe". It just means that in the endless battle between money and conscience ... a compromise is met.

    It is up to each individual to judge whether the money or the conscience means more to them. There will always be plenty of people on both sides.

    Just my point of view.
    Jul 29, 2015. 10:34 PM | 1 Like Like |Link to Comment
  • Lumber Liquidators: What I Expect From The Q2 Report [View article]
    Hi gasman,

    Great idea.... I suppose there are tons of potential consumers out there that just can't wait to buy product that was mislabeled and contains a known or probable carcinogen that has been laying around in storage for a few years.

    I'm trying to imagine the ad campaign....

    Probably looks like this...

    "Flooring on sale ... cancer risks reduced, some warping, discoloration or other damage possible ...."

    Run T.V ads with couple driving to a Casino while smoking and drinking beer with voice over ...." Drive and gamble sensibly"

    Seems like a winner to me.
    Jul 29, 2015. 05:22 PM | 6 Likes Like |Link to Comment
  • U.S. stocks follow China, global markets lower [View news story]
    Chinese stock market is oxymoronic. WYSIWYG.

    Is there no irony and inefficiency in a Communist Regulatory Body overseeing/managing/re... a Capitalistic Market?

    Let's see how this would work ...."From each according to his long position to each according to their short position".

    By George, I've got it !
    Jul 27, 2015. 08:02 PM | 4 Likes Like |Link to Comment
  • What Is The Intrinsic Value Of Gold? [View article]
    Hi DeepValueLover,

    It can be argued that the intrinsic value of something, such as gold, is the value of its utility use. The "speculative" component of price would be the extrinsic value.

    Now, the interesting thing about Gold ... it has an obvious utility value ...jewelry, electronics, etc.. But Gold also has a less obvious utility value ... its value as a monetary component.

    I'll try to give an example ... a dollar bill has a "utility value", probably micro-cents, in the paper, itself. It also has a utility value in the form of a monetary component. For instance, a five dollar bill has more monetary intrinsic value than a one dollar bill, even though the paper utility value is the same.

    Gold shares these two components of intrinsic value.

    Now, taking it a step further, the dollar can have a speculative component ....versus other currencies, reserve currency, numismatic, liar's poker hand... etc....these would constitute the extrinsic value of the dollar bill.

    Gold also shares speculative value.

    So, one can say that Gold has obvious and less obvious utility values and a speculative value ... we can then be "fancy" and call it intrinsic and extrinsic.

    I'm slightly opposed to looking at it this way...as choice of words should be made to simplify and clarify meaning, not confuse meaning ... by trying to break gold and money into extrinsic or extrinsic, it is my opinion we do nothing but confuse an already difficult subject.
    Jul 27, 2015. 06:09 PM | Likes Like |Link to Comment
  • What Is The Intrinsic Value Of Gold? [View article]
    Hi sleek,

    First: You say......."......The intrinsic value of an investment is the sum of its future cash flows, discounted to the present......."

    As far as your definition .... "e pluribus unum".

    Second: You say .........."...Also, unlike other commodities, it is not consumed....." Wrong, of course gold is consumed, what are you thinking?
    Jul 27, 2015. 05:49 PM | Likes Like |Link to Comment
  • What Is The Intrinsic Value Of Gold? [View article]
    HI Doug,

    Easy .... zero
    Jul 27, 2015. 05:31 PM | Likes Like |Link to Comment
  • What Is The Intrinsic Value Of Gold? [View article]
    Hi sheepdip,

    Coins are easily counterfeited, mis-graded and overpriced. It is almost impossible to get a fair deal buying or selling them.

    They are for experts in the field and those willing to pay for expertise.

    Anyone that relies on the dealer for an appraisal and fair price deserves whatever they get.
    Jul 27, 2015. 07:35 AM | 5 Likes Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    Hi accidentalcapitalist,

    I have a reality filter on my search engine, so it filters out Fox News Facebook.
    Jul 22, 2015. 07:47 PM | 2 Likes Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    Hi Doug,

    You're the one that said Gold was insurance ... not me. I said, quite clearly, options are insurance...gold is not.

    Next ..."...Gold will maintain it's purchasing power over time. Same with silver...." Just so we're on the same page... that's an OPINION, not a fact. Furthermore, it is not an Universal opinion.

    Next... I never said the dollar is risk free .. or that anything else is risk free. Insurance isn't risk free. Everything has some degree of risk.

    There just isn't enough space to discuss with you why central banks hold gold. It is complex and involves factors way beyond what you are trying to imply. Gold reserves can be used to manipulate currencies just as currencies can be used to manipulate gold.

    I suggest the answer to your inquiries (such as Nixon and 1971) should really be addressed to Rand Paul and others that have no concept of 21st century economics and economies and capitalize on ignorance and fear-mongering.

    Last, you state ...".....When I say "eventually," it is proven throughout history this will occur...."

    This is such nonsense, I can't believe I'm reading it. History does not prove that anything will occur. If that was so, we'd still be living in caves waiting for someone to invent the wheel.

    History has proven, if anything, that nothing stays the same, everything evolves and that predicting the future is a fool's game.
    Jul 22, 2015. 05:18 PM | 1 Like Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    Hi accidentalcapitalist,

    Your posts and the author's are very instructive in detailing how gold, et al, has become a "run away train" in the "it's insurance" game.

    The logic is so seriously flawed, that I'll either write an SA article or post a blog so it can be adequately and accurately explained. Maybe then, investors such as you and the author can avoid making analogies that serve no purpose other than to cloud the issues.

    Look for it, it will be here soon.
    Jul 22, 2015. 03:38 PM | 2 Likes Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    Hi Accidental Capitalist,

    I think if you would have taken the trouble to read my profile, you would have noticed that I spent over 40 years in Financial Industry and specialized in Risk Management. I've taught top Financial professionals complex risk management and have been published in Nationally Prominent financial journals.

    I also have over 100b articles on SA, many of which deal with risk management.

    I think that qualifies me as having enough knowledge of what constitutes insurance to take the position I take regarding what is/is not insurance and whether or not gold is an investment or insurance.

    The author, Doug, on the other hand sells gold to those willing to buy it.

    So, I think you should really try to reach a sustainable position regarding which of us is more likely to distort whether or not gold provides insurance qualities to a portfolio.

    The answer to that question will answer your entire post.
    Jul 22, 2015. 03:36 PM | 2 Likes Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    Hi Doug,

    The odds of currency going to zero are miniscule compared to the odds of the stock market declining. So the chances of gold actualizing as you suggest versus options actualizing as I suggest are so remote to be statistically insignificant.

    Do you really think someone with a stash of Gold will somehow survive in a world without currency? This is just scare tactics to support unsupportable positions.

    I think you need to brush up on economics 101 and try to construct a world without currency and just gold for exchange and see how far that gets you ... for most people it will get them enough bullets to shoot all the people coming after their gold...of course that is also part of the "currency=zero" scare tactic, as well.

    Did you ever consider that a world with currency=zero, how are people employed? How does anything function. Please explain!

    Furthermore, your "eventually all currencies go to zero" is correct...but then again, eventually the universe goes to zero and we all die. The only "eventuality" with any real chance of being realized within the foreseeable future is "we all die".

    Lastly, of course I watch oil vs. gold...I'm the one that pointed it out and the similarities. Gold will have it's ups and downs, as will any investment ... but insurance .. sorry...you need to understand what insurance is.

    You are confusing "insurance" with something that reduces risk. For instance, one can say that brushing one's teeth is "insurance", making the same logical flaw you make. It is not "insurance" it is a method of reducing risk.

    What's your definition of insurance and how does gold fit in?
    Jul 22, 2015. 02:20 PM | 2 Likes Like |Link to Comment
  • April Call To Wait And Buy Gold Below $1,000 Still In Effect [View article]
    I have two problems with your article...

    First......Gold is NOT insurance for a portfolio. It is an investment, in and of itself. Unless one allocates substantial portions to Gold, it does nothing, in a real sense.

    OPTIONS are insurance for a portfolio...gold is, at best, a derivative of insurance. Options can protect a portfolio the way insurance does, Gold, MAYBE, smooths out a decline.

    Second, Gold is likely to experience the same type of price action we now see in oil. Miners are desperately trying to maintain revenues and market share. With decreasing prices comes increasing supply. It is a spiral. At some point it will stop, but if the price falls below $1000, it means nothing.

    The article looks at "New Gold" through "Old Gold" glasses.
    Jul 22, 2015. 05:46 AM | 1 Like Like |Link to Comment
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