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Rob Viglione

 
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  • Wall Street Breakfast: Must-Know News [View article]
    Is "hedge fund Paulson & Co" a joke for the Treasury?
    Dec 29, 2008. 09:35 AM | Likes Like |Link to Comment
  • SPX Historical Volatility Lowest Since September [View article]
    For the first time in months I have switched back to going long VIX via index calls to hedge equity positions. Since September/October I've had to sell puts to get similar exposure, since calls were too expensively priced.

    I recommend looking at VIX calls to buy down equity risk. Markets, and our entire financial system, are still highly unstable. I would not become complacent just because the rest of the market has.
    Dec 27, 2008. 11:30 AM | Likes Like |Link to Comment
  • Are Preferreds Staging a Comeback? [View article]
    There's pros and cons to holding preferred shares. High yields, cash flow preferences, and special tax treatment. Downside can be somewhat substantial, however, since preferred shares do not participate in dividend or price growth of the common stock. If markets rally, preferred shares should lag.

    Still, in this tough financial climate, preferred shares do have additional allure:

    www.thefreedomfactory..../
    Dec 27, 2008. 10:48 AM | Likes Like |Link to Comment
  • Profit Plays Offered by Obamanomics [View article]
    Obama will influence markets more than any previous president. His powers are enormous and he fully intends to use them. This will result in the continuation of this year's massive wealth redistribution program, which means to protect ourselves and potentially profit we should follow the money.

    The march towards universal health care will mean 45 million new customers for all sorts of products and services, with the least regulated ones profiting the most. It also means enormous boon for union-heavy industries that suffer from carrying expensive health care and pension liabilities that will soon be absorbed by taxpayers.

    Watch carbon efficient utilities who will benefit from carbon cap-and-trade, and alternative energy firms that will receive wind-fall cash flows from taxpayers. Finally, stay clear of defense and keep an eye on firms that cozy up to the federal government.

    Read "Obamanomics: How to Invest Over the Next Administration" (learnobamanomics.com/b...) for detailed recommendations.
    Dec 20, 2008. 06:46 PM | Likes Like |Link to Comment
  • VIX Sliding Fast [View article]
    This is the perfect hedging opportunity for long equity positions...buy long VIX. I've had to resort to selling VIX puts over the last few months to hedge long equity trades, since buying calls was too expensive. Now that VIX is down I'm switching back to buying calls.
    Dec 20, 2008. 04:48 PM | Likes Like |Link to Comment
  • Household Wealth Back to Normal? [View article]
    We're going to see net worth crash through that mean value very soon. Let's hope that it doesn't fall further than 1974 levels, but my guess is that it will.
    Dec 14, 2008. 02:56 AM | Likes Like |Link to Comment
  • Equity Risk Premiums: Will History Hold True? [View article]
    Interesting how equity risk premiums rarely seem to form a plateau. I would love to see this spike up followed by one down.
    Dec 7, 2008. 04:30 PM | Likes Like |Link to Comment
  • Why Are Investors Lunging After Low Yielding T-Bills? [View article]
    I've already started shorting 30 year treasuries.think this is the next bubble.
    Dec 7, 2008. 04:05 PM | Likes Like |Link to Comment
  • Defining Deflation [View article]
    Keep an eye on the monetary aggregates, particularly M2 (fed compiled) and M3 (no longer fed compiled). Unfortunately, the Fed stopped publishing M3 statistics, but a good source I've found is:

    www.shadowstats.com/

    You can see a sharp drop in M3, but it is still well above reasonable expectations of deflation...it's around 7% annual growth right now. Admittedly, I'm not sure how the last couple months have treated the aggregate, but there is still enough slack to keep from worrying just yet.

    At some point when asset prices cease crumbling, money velocity should pick up and then we'll be left with an excess money creation issue. I fully doubt central banks will be capable of absorbing excess liquidity.
    Dec 7, 2008. 03:56 PM | Likes Like |Link to Comment
  • Obama's 2.5 Million Job Stimulus: We Need a Scalpel, Not a Shotgun [View article]
    Two problems with Obama's economic "fix":
    1) The country can't afford it...debt-GDP was ~ 70% end of sep08. Tag on a bunch more ambitious relief programs and that figure jumps fast. When Hoover embarked on what was later termed FDR's New Deal, debt-GDP was 20%..lots of room for growth there.
    2) There's a good deal of evidence pointing to the New Deal prolonging the Depression. Job creation doesn't equal wealth creation, and there are consequences to widespread resource shifts from private to public sector.

    You can see Obama's actual broadcast and more commentary here:

    www.thefreedomfactory..../
    Dec 7, 2008. 03:36 PM | Likes Like |Link to Comment
  • ETFs in 2008 - What Lessons Can We Learn? [View article]
    Exploiting correlation variances between indices, sectors, and other ETF combinations was a profitable business for me up until this year. I'd become complacent with what I thought was the power of diversification, spreading bets across nearly every possible asset class.

    The financial meltdown tore all that up, changing the rules of the game. De-leveraging the entire system has devastated nearly all asset classes, trashing the idea of decoupling and the dogma of diversification.

    In retrospect, I should have adhered to healthy hedging practices, which I claimed to consider but never fully implemented...they seemed too costly at the time. Boy was I wrong!

    All we can do is salvage what we can and look to the future. Here's a good article written by a colleague of mine that analyzes sector performance, comparing to earnings expectations in an attempt to discern a way to exploit potential variances:

    www.thefreedomfactory..../
    Dec 5, 2008. 02:36 AM | Likes Like |Link to Comment
  • The Fed's Potentially Very Bad Policy [View article]
    I'm hearing lots of calls for GOVERNMENT to DO SOMETHING. Well, we must ALL look to how we can take personal actions to ensure long run prosperity. What we are experiencing is broad, systemic rot that must be overcome by all economic participants, not just government.

    We should be questioning what "back on track" really means. Obviously, the previous financial order was untenable, so bailing out market participants who made bad decisions discourages systemic cleansing and restructuring, which is what is desperately needed.

    If government must play a role it's best courses of action should be geared towards:

    1) Conduct some DEEP soul searching...identify, and understand the BAD aspects of public policy that contributed towards this disaster, then take decisive actions to eliminate these policies, rather than creating new ones,
    2) Smooth the natural process of de-leveraging...don't try to stop it, but focus on softening the pain that must occur,
    3) Ensure all "smoothing" is equal and not targeted to some at the expense of others...government should not be creating economic winners and losers. A political-based economy is not an acceptable long run solution!
    Dec 5, 2008. 01:57 AM | Likes Like |Link to Comment
  • Looks Like We'll See Dow at 10K - Soon? [View article]
    If the contrarian mantra holds any validity it might make sense to think long on the market. Just look at the overwhelmingly negative perceptions on this article, for starters. Then turn on the news, listen to the radio, or stand by the cooler at work and eavesdrop on some of the conversations...those you'd never expect to think about the markets are all professing their despair and fears for the worst.

    It's in environments like this that we need to start thinking about incrementally buying long. There's a ton of bad news, but much of it is already priced into markets...there may yet be more to add to the list that surprises further towards the downside, but there are some great assets on fire sale right now.

    On this point, I suppose I would look to fundamental values on an individual level. One asset class to consider...corporate debt. Great hedge on deflation and yields are extremely attractive. If you don't know enough about picking individual bonds, consider BlackRock Corporate High Yield Fund (COY) with a forward dividend yield of 21%.
    Dec 5, 2008. 01:38 AM | Likes Like |Link to Comment
  • Peak Oil's Bell Is Ringing [View article]
    Betting on peak oil is a risky venture. I've lost a good deal of money betting long on oil futures, thinking markets were nuts to discount the commodity so drastically following its $147 per barrel high. Trying to time this phenomenon can be disastrous.

    Politicians trying to socially engineer society can prove even more disastrous. Allowing markets to work will be the best approach going forward in optimally allocating energy resources to those uses which are of greatest value to society at large. Beware politicians claiming to be able to do this more efficiently!
    Nov 16, 2008. 03:33 PM | Likes Like |Link to Comment
  • 100% Yields on Ecuador Bonds: A Sign of the Times [View article]
    And yet populism continues to drive power to defunct ideologically-driven policymakers. You'd think humanity has sufficient data at this stage to pass judgment on collectivist politics.
    Nov 16, 2008. 01:50 PM | Likes Like |Link to Comment
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