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Robert McDonald

 
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  • Ken Fisher's Favorite Stock Picks [View article]
    Your response is not accurate nor does it address the concerns I have presented in any relevant way. For one, 100% of the market is not controlled by fund managers and two, I never made any claim that Fisher investors did not know they could loose money. I would be foolish to do so. I never said such a thing.

    But did all of the investors involved realize they could loose 60% of their retirement funds if the worries about the financial industry and the real estate bubble turned out to be valid -- I don't think so. I present the following data below in this response and most likely will then cease and desist. The discussion is no longer appropriate or useful to the issues at hand.

    Here are some of the milestones involved in the 2008/2009 market meltdown:

    Sept. 2006 - The Financial Accounting Standards Board (FASB or the “Board”) issues FASB Statement No. 157, Fair Value Measurements (“Mark to Market”) -- effective for financial statements issued for fiscal years beginning after November 15, 2007

    Aug. 2006 J. Kyle Bass, a hedge fund manager from Dallas, Bass presentation to Wall St Execs York conferenceroom in to pitch his theory about a looming housing market meltdown to seniorexecutives of a Wall Street investment bank. (from Bloomberg)

    Feb 2007 – Joshua Rosner, a managing director in New York atinvestment-research firm Graham Fisher released a paper in February 2007 thatstates “overvalued and overrated collateralized debt obligations tied to subprimemortgages would soon cause a financial-market meltdown. That, in turn, would limit credit to home buyers..”

    Jan-07 Behr Sterns Mortgage Backed Securities (MBS)
    hedge funds halt redemptions

    Spring 07 Paul Springer warns Europe and US Regulators
    of a Financial Crisis

    7/1/2007 Behr Sterns MBS fund failures

    Nov 2, 2007 Meredith Whitney, financial-services analyst for CIBC World Markets, downgrades Citigroup resulting in 7% fall in the stock, a new 4 year low

    November 7, 2007 - CFO.com publishes on line article “FAS 157Could Cause Huge Write-offs” -- “Banks may be on the hook for untold billionsbecause the new rule makes it harder to avoid mark-to-market pricing ofsecurities.

    December 2007 - Average U.S. investment bank leverage peaks at approximately 28:1, an unprecedented high -- a clear warning sign that if anything went wrong this leverage would would result in a serious under capitalization problem -- just as indeed happened.

    1/11/2008 Bank of America purchase of Countrywide under distress conditions

    8/27/2008 Merrill Lynch MBS asset sale at 78%discount!! it should have been no secret that with the implementation of FASB 157 Mark to Mark accounting rules (see above milestone), this valuation writeoff would negatively influence the valuation of large amounts of MBS securities held by other banks. And in turn this would result in correspondingly large writedowns which indeed became the reality that we are all now very familiar with.

    9/16/2008 Lehman collapse

    9/17/2008 MONEY MARKETS LOCKUP

    9/17/2008 - Government takeover of AIG

    9/ 21/2008 Morgan Stanley and Goldman Sachs become banks

    9/26/2008 JPMorgan buys WaMu in the biggest bank failure in history, JPMorgan Chase will acquire massive branch network and troubled assets from Washington Mutual for $1.9 billion.

    10/6-11/2008 The DOW falls over 1,874 points, or 18%, the S&P
    500 falls more than 20%

    10/27/2008 Ken Fisher says “Another buy is Bank of America" in his Forbes column with this dateline.

    I would submit that there was plenty of time for competent money managers to take defensive action; at least by the time period of 9/21/2008 to 10/6/2011 if they had not done so already. If they hadn't then I would also submit that they were not doing the job that they claimed they were doing nor were they doing what their clients were paying them to do. It is that simple.
    Sep 1 03:39 PM | 1 Like Like |Link to Comment
  • Ken Fisher's Favorite Stock Picks [View article]
    "Number one principle of investing is diversification. You can't put all your eggs in one basket." Some would rather not disclose or have you believe otherwise in violation of what should be their Fiduciary responsibility. This mode of operation is what can become lawsuit material. If you do put retirees in 50 to 100% in stocks you had better be a very good stock picker and know what you are doing. Full disclosure of the risk, especially under changing market conditions as in 2007/2008 is also in order. There was evidence cropping up in 2007 and early 2008 that 2008 overall market could be very risky for anyone significantly invested in stocks. Yes many money managers missed the opportunity to course correct but that is no excuse for not doing your own in depth due diligence. I submit there was lots of actionable information that would have suggested caution vs. declaring that the on-going bull market was still in process.
    Sep 1 01:57 PM | 1 Like Like |Link to Comment
  • Despite Monday's Rally, Things Aren't Adding Up For Bulls [View article]
    You did not read the numbers that I presented that are based on U.S, governement published numbers:

    www.nytimes.com/intera...

    WHY ARE SO MANY PEOPLE UNWILLING TO LOOK AT THE ACTUAL DEBT NUMBERS BEFORE THEY PONTIFICATE? DOES IT SUIT POLITICAL CONVENIENCE??

    THE NATIONAL DEBT GREW $6.1 DURING THE GEORGE W. BUSH ADMINISTRATION OR 42% OF THE CURRENT TOTAL!!!!. HELLO OUT THERE!!!

    THE NATIONAL DEBT HAS GROWN $2.4T UNDER THE OBAMA ADMINISTRATION LARGELY DUE TO PROBLEMS THAT WERE INHERITED FROM THE BUSH ADMINISTRATION:

    1. TWO ONGOING WARS WHICH ARE NOW BEING WOUND DOWN

    2. A MAJOR FINANCIAL CRISIS WHICH DID INDEED REQUIRE MASSIVE BAILOUTS OR THE OUTCOME WOULD HAVE BEEN WORSE THAN THE GREAT DEPRESSION. THE ONGIOING FALLOUT WE ARE EXPERIENCING IS MILD COMPARED TO WHAT COULD HAVE BEEN. EVEN THE BUSH PEOPLE SAW THAT AND STARTED PUSHING THE BAILOUT DOLLARS INCLUDING TARP, THE AIG TAKEOVER, AND THE PLACING OF FANNIE AND FREDDIE INTO CONSERVATORSHIP BY THE U.S. TREASUREY IN SEPTEMBER OF 2008. I THINK THAT MANY HAVE FORGOTTEN THAT ALL OF THIS HAPPENED ONE YEAR BEFORE OBAMA TOOK OFFICE IN SEPT OF 2009.

    3. AN UNFUNDED MEDICARE PRESCRIPTION DRUG PROGRAM

    4. A REPUBLICAN MY WAY OR THE HIGHWAY EDICT THAT THE BUSH TAX CUTS BE EXTENDED.

    Why are the conservatives, the Limbaughs, the Glenn Becks, the Tea Party so afraid of the real facts??
    Sep 1 11:35 AM | 1 Like Like |Link to Comment
  • Ken Fisher's Favorite Stock Picks [View article]
    I measure the skills and performance of any money manager by their results and not by what they say or by published articles with incomplete data. Not everyone lost this kind of client money in 2008, especially those of retirees -- I will leave it up to you to figure all the rest out.
    Sep 1 11:17 AM | 1 Like Like |Link to Comment
  • Why Tech Might Be the Best Place to Put Your Money Now [View article]
    The actual purchase price of a stock is irrelevant except for human psychology.

    The factors that are relevant are earnings and sales growth rates, debt (Apple has none), cash flow, cash and cash equivalents (Apple has approximately $80B which is more than the U.S. government had at the time of the debt ceiling debate), price to earnings ratio vs. appropriate comparables, price to earnings divided by growth rate vs. comparables (Apple's PEG is currently well below the normal 1.0 which is unheard of for a high growth stock like this, business diversification including international vs. domestic, the business competition and the growth of the business areas that the company is involved in.

    By all of these measures Apple is a very cheap stock. It is a gift to the average investor that only comes along once in a lifetime. It also passes the Peter Lynch smell test in that you see Apple products being held and talked about everywhere -- even your hairdresser of barber knows about them in significant detail.

    It would only take a 10:1 split to demonstrate this to the folks who do not understand the more meaningful metrics noted here.

    If you want to take a look at some stocks which are way out of line relative to these metrics, take a look at Amazon and Netflix.
    Aug 31 04:52 PM | Likes Like |Link to Comment
  • Baidu: Limited Upside, Unlimited Downside [View article]
    Analyzing stocks using this kind of complexity just doesn't make sense. Stock valuation in a company like Bidu is much a matter of the latest news and analyst speculations, related investor perceptions and the performance of the overall market. Some folks would call this kind of analysis majoring on minors.
    Aug 31 04:23 PM | 1 Like Like |Link to Comment
  • Why Apple Should Replace HP In The Dow 30 [View article]
    The DOW JONES INDUSTRIAL AVERAGE (DJIA) needs to add Apple to the index in order to retain any relevancy. Apple is one of the most successful companies in the world, let alone in America. It is a leader in the strong growth wireless mobility area as well as in the design, development and manufacture of cutting edge personal computing tools. It is an American success story and is taking significant profits away from foreign competition like Samsung, HTC and Nokia.It is time Apple's successes were acknowledged accordingly.

    As if the above factors are not enough, Apple is also the largest market cap company in the world. That ought to be a big hammer! If the DOW JONES principles involved cannot find a way to cook the books as they always have in order to get Apple listed as one of the 30 index companies, you have to wonder what the future of this increasingly irrelevant index is.
    Aug 31 04:15 PM | Likes Like |Link to Comment
  • Steve Jobs: Leader Of The U.S. Manufacturing Renaissance? [View article]
    Apple is doing lots of hiring here in Silicon Valley. The problem is that they want Engineers and Scientists and especially software programmers and experts in information technology. A lot of Americans have and are choosing to get MBA's or Law degrees or maybe Liberal Arts. Worse yet is that a lot of the ones who do not go to college or drop out choose to party or just have fun in high school and beyond and then they wonder why they no longer have employable job skills.

    When I first went to work for Intel in 1977, you could look around the meeting room table and see mostly native Americans. When I retired in 1998, you looked around the room and saw round numbers that 50% were Asians born in Asia, and many were now in high level management. There are opportunities out there so lets hope we can convince our young folks to get back to Engineering and Science like when we experienced the Sputnik threat. The Sputnik threat is small potatoes compared to the threat to American workers who cannot compete in America's own job market.
    Aug 31 03:19 PM | Likes Like |Link to Comment
  • The Last Word On Apple: Numbers Don't Lie [View article]
    This is a great Ap -- just added to my iPhone Thanks. I see a number of stocks are not covered like Applied Materials -- is there a reason or are they on their way.

    On another note, I also take issue with the Apple Safety rating. A forward P/E of 12 and a diversified business model (entertainment, games, cloud, mobile, computer, software and next year mulitmedia including a entertainment center HDTV with a better than TIVO like experience) make Apple a low risk value investment. The data published in your Ap reinforce that one also gets a growth component better than any diversified multinational anywhere neat its size.

    It is amazing that more analysts and investors don't get it yet. This is yet another example of the fact that old ways of seeing things do not die easily. The good news is that this provides more opportunity for the rest of us.

    Due disclosure: Very long on Apple
    Aug 31 01:03 PM | Likes Like |Link to Comment
  • Despite Monday's Rally, Things Aren't Adding Up For Bulls [View article]
    A balanced budget is effectively mandated by default if you are part of the EUROZONE. The fact that Greece ran huge deficits because it was protected by its "Eurozone" memberships while at the same time is not "free" to print more money or default on its financial commitments. The root causes of the problem are:

    1. One more time the financial industry has loaned money to a dubious creditor on the expectation that someone else would come to the rescue. The financial industry must be re-regulated such that it is not allowed to take unacceptable risk with the taxpayer on the hook.

    2. Greece has a corrupt government and a rich class that thinks it is OK not to pay taxes. It is standard practice in Greece to cheat on taxes to the extent possible and to the extent that many people pay no taxes at all.

    3. Greece has a failed economic system that puts large amounts of money in the pockets of bureaucrats without useful output, sets unrealistic benefits including vacation and retirement commitments for public employees, and most critically is not supportive of successful business operation. This problem is severly aggravated by the fact that the existing government bureaucracy makes it very difficult if not impossible to start up new businesses. The combined effect is a prescription for economic disaster just as it has happened and is doomed to repeat itself unless major change is made.

    A so called balanced budget amendment is off the mark. The systemmic problems of the Eurozone structure that led to these problems have to be fixed.

    Governments need the financial flexibility to respond to national disasters and emergencies including war. I do not think it appropriate for the richest nation on earth to tell the victims of the Hurricane Irene disaster that "sorry the government has no money to help due to a balanced budget requirement." This would also add to the economic toll due to the long time to re-establish successful business operation and jobs to the area which in turn would result in significant tax loses.

    Let's restore the America we all knew when we were growing up, at least for the over 40 crowd, and tell the Tea Party that they simply do not understand the bigger picture. Yes it is harder and more complicated but restoration of America's success requires a powerful federal government that is also well managed. It is the latter that is the biggest challenge. I for one think Obama understand that and is trying to do what is right.

    George W. Bush was one of the most irresponsible presidents we have ever had starting two wars and Medicare prescription drugs without funding while giving the nation an undeserved tax cut. Any business that operated in this mode would soon be bankrupt. The national debt grew $6.1T under his administration. In other words 43% of the $14.3T national debt was created under George W Bush's administration. Let's get objective about what has really happened!!
    Aug 31 11:25 AM | 1 Like Like |Link to Comment
  • Ken Fisher's Favorite Stock Picks [View article]
    Here is an example of a successful lawsuit against Ken Fisher:

    www.bloomberg.com/news...
    Aug 31 10:26 AM | Likes Like |Link to Comment
  • Ken Fisher's Favorite Stock Picks [View article]
    OK, then you are saying that it was OK that Ken Fisher lost money for his clients, a good fraction of them being retirees, most of whom have still not been made whole 3 years later. If you want to take a couple of examples he rode Nokia (his largest holding at the time), GE and many banks into the ground, purchases that at this late time are still under water. In 2007/2008 he convinced himself that banks were not doing anything that was a jeopardy to the economy and worse yet, that a possible real estate bust was not a jeopardy to the banks or the economy, at least in any significant way. To add insult to injury, he refused to buy Apple, one of the best performing relatively low risk stocks of the last 10 years. Why did he do so poorly. He operates in a my way or the highway style which is always dangerous at best and allows his personal biases to get in the way of successful investing.

    I have to ask myself the question of why are you defending him? There are many lawsuits in process over what he did.
    Aug 31 10:11 AM | 1 Like Like |Link to Comment
  • Apple: Sitting At The Precipice Of A Massive Move Higher [View article]
    Hi Andy,

    Thank you for posting some specific examples. I will take a look pending enough information being given here to understand if the technical analysis prediction was indeed successful in predicting the actual outcome or if it could have not been anticipated in more straight forward ways.

    Having specifics on Apple is very useful to me since I follow Apple everyday and read much of the commentary on SA as well as Barron and Fortune Tech Blogs, WSJ, Marketwatch, NYT, Bloomberg, etc.

    Bob
    Aug 30 03:34 PM | Likes Like |Link to Comment
  • Why You Should Avoid Apple [View article]
    Aha, I see this guy has a Blog listed on his profile -- looks like this person is trolling for customers. I have to assume Seeking Alpha received some advertising fees for allowing this article -- otherwise how could it have gotten through their screening process which is supposed to include checks for in-depth research?
    Aug 28 04:46 PM | 6 Likes Like |Link to Comment
  • Why You Should Avoid Apple [View article]
    This article has no merit and if the author had done an ounce of reputable research he would know that. How can Seeking Alpha allow this kind of useless stuff from an anonymous author on their website while rejecting other worthwhile inputs? Is there some kind of payoff involved or is it charity to an improvished student seeking notoriety?
    Aug 28 04:40 PM | 12 Likes Like |Link to Comment
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