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Robert Weinstein

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  • Why Not a Transaction Tax? [View article]
    Mr. Frankel you may not this as it appears your not active in the markets by your article but the markets have changed since 1989. I am sorry to be so rough on you but your the one that decided to write about the mechanics of the markets. If you didn't know you would be called out for your lack of knowledge than you should have. You provide an example based on "When Financial Markets Work Too Well: A Cautious Case for a Securities Transactions Tax” (1989). Add another Nobel Prize Winner, Joe Stiglitz." but its clearly outdated and no longer applies to today's markets. You could just as easily have as much relevance in talking about typewritters or rotory dial phones.

    I am sorry but you clearly have no idea of the workings of the markets or how they function. Knowing how the markets worked before the 90s compared to today would have prevented you from writing such a foolish article.

    Since we are at this point lets go back to the days when I was rather new in the investment world and starting to invest in stocks.

    Back in the pre internet trading days the markets where much smaller and to buy or sell a stock you had to basically go through a specialist (NYSE) or a market maker (NASDAQ) and pay a huge spread called the bid / ask spread that was often twelve and a half cents per share or more. Back then you just didn't have the kind of trading that you do now or the volume that we have. a 100 million share day was a very big trading day for Wall St. Now you have single stocks that can do 100 million shares in a day.
    Todays major markets have a lot more liquidity and the cost of transactions have gone from $50 per typical mom and pop trade to about $5 or less per trade. Furthermore the average trader / investor can actual trade directly with other traders / investors and side step the costs of dealing with the a market maker.

    Back in pre 2000 you didn't have small investors and traders from around the world trading the US markets like we do now because the cost of doing so was too great and the internet was just getting started. But what if you just had the large cost (your transaction tax) you would still destroy all the business that American brokers, Stock exchanges, and market professionals now have because those transactions would simply go away as the costs of doing business would be too high.

    You would have the engine to efficenct capital allocation take a dose dive because of the 'tax the other guy not me" theory with total disregard to unintended consequences that would cripple the liquidity and raise the cost of investing for everyone.

    The evil speculators that you want to get rid of spend money for computers, Rent, market data, broker fees, and the ten gazillion other things it takes to trade the markets. If we had it your way all the business that they provide would evaporate in thin air.

    Perhaps in the future you could spend more time trying to figure out ways to raise the tide so all boats will go higher instead of promoting new ways the government can increase its tax burden on productive members of society. raising tax revenue will not help the government either. I think history shows that the more they get the more they spend and they don't spend it efficiently.
    Jan 14 10:27 PM | Likes Like |Link to Comment
  • 60 Minutes on Oil: Did Anyone Verify Anything? [View article]
    good job bringing this out in the open.

    Simple econ 101 with a free market will show that supply and demand control prices in the long term. Anyone who fights that simple truth does so at their own peril.

    small changes in the supply/demand can cause huge prices changes that tend to go further north and further sound in the short term than ideal.

    Northwest Air bought contracts that equal in the neighborhood of $100 oil. I guess you can count them in the list of evil speculators but I for one would rather trust an open and equal access market to what some in Congress would do to our free market.
    Jan 14 03:05 PM | Likes Like |Link to Comment
  • Europe's Lack of Economic Understanding [View article]
    Good article, meanwhile on the other side of the pond the US is spending money on its credit card with the real belief that the party will never end.

    Like a trader trying to average out a losing trade the US keeps pumping in money that it needs to borrow to get in the first place instead of allowing the free market to balance things out.
    Jan 14 01:24 PM | 1 Like Like |Link to Comment
  • Best Performing Stock of the Year? A Pasta Company! [View article]
    Perhaps a little "too good" stock is currently overbought and setting up for a short. I would prefer to sell naked calls to capture the time element of the trade as well but options are not available on this issue.

    I am NOT saying its not a good company but rather the run up in pricing is overdone.
    Jan 14 10:50 AM | Likes Like |Link to Comment
  • GM Shorts Pay 50% Annual Rate [View article]
    Important article on better using your investing capital. Often selling puts makes a lot more sense than buying stock. Its less risky and you can even make money if the stock ends up at the same or near same price when the options expire.
    Jan 14 10:22 AM | 1 Like Like |Link to Comment
  • Deficit on Track to Surpass $1 Trillion [View article]
    While a trillion dollars sounds like a lot (and it is) its not the biggest problem. The bigger problem is that this is not a one time deficit and its just one year in a pattern by the mathematically challenged people in DC that believe a "tough choice" is to hold spending on a program to the level of inflation.

    Our bigger problem is the crazy notion by so many that we can borrow more and more money forever and that we will never have to pay the piper. This credit card bill that we are running up WILL someday have to be paid and when it does happen it may destroy our country in ways that even bombs are unable to.
    What is going to happen when regardless of the shape of the economy DC is forced to cut back on spending?
    What happens when Japan and or China are faced with economic problems and they not only say they are unable or unwilling to loan more money but they actually want to start to get some of their money back?
    This could become uglier beyond anyone's estimate in very short order.
    Jan 14 12:53 AM | Likes Like |Link to Comment
  • Las Vegas Sands: Providing a Good Customer Experience [View article]
    I have not noticed a change in air from MPS to Vegas over the past three or four years except maybe a little bit higher. The room rates are at the lowest levels I have seen since right after 9/11. Table stakes are somewhat lower. I have seen $10 craps and blaickjack at the Venetian which shows that they have small stakes available which also shows that they gaming is softer than perhaps two years ago. The crowd was thinner but still busy. It appeared to me that the staff level was neither too large or too small. I never had the impression that the Venetian was short staff compared to my other visits and the standard for Vegas. My most important question that I wanted to answer for myself was "does this appear to be ready to go under?" That question for me is a "no" and so I am a seller of put options and a buyer of stock. One read of my blog and its pretty clear that I am a hardcore shorter of stocks. Well over 90% of my trades are shorts so if I thought that LVS was about to fail I would be the first to short the stock. At this time I am comfortable with my 'bets' that LVS will not go under and stay under $5 per share. We already know Las Vegas is very good at separating customers from their money. I also believe that with the quality of management in Las Vegas that they will figure out what it takes to get the customer in the door. Detroit should take lessons on how to execute and build brand value.


    On Jan 13 06:38 PM emperorsten wrote:

    > What did all of this cost? Plane tixs, room, dinner? What were the
    > stakes at the tables? Higher, Same or lower then usual? What was
    > the crowd. American, Asian, Euro? Did places have enough people to
    > service the crowd?
    Jan 14 12:24 AM | Likes Like |Link to Comment
  • Securities Transaction Tax: Wrong Idea at the Wrong Time [View article]
    Your right on the money.

    Only people who want to prove they no nothing about the markets would suggest such a thing.

    The fool probably based his math on current trading volume which would significantly dry up.
    Jan 13 10:07 AM | Likes Like |Link to Comment
  • Education Sector Still Looks Dangerous [View article]
    Very astute observations on APOL. The weekly chart for me shows that APOL is close to a pivot point where I will make a short entry.
    Jan 13 08:42 AM | Likes Like |Link to Comment
  • Rick's Has Great 2008, but Fails to Provide Guidance [View article]
    Very good article.

    I just made two trips to Vegas in as many months to look at RICK, LVS, and BYD and it does appear that the Vegas club is going to be a financial drain for some time to come.

    I keep wondering if Eric is a better club owner than CEO. Some of the actions just do not pass the smell test for this investor. For example I can not think of a reason why a company with a market cap of less than $60 million borrows money so that they can buy an airplane? The Vegas club is not as easy to criticize but its in a poor location relative to others so it should be easy to spot that it will be the first to have lower revenue in a down turn.

    RICK is a stock that I have owned and want to own again but without a change in the attitude of management or financial results I will have to wait it out.
    Jan 12 01:59 AM | Likes Like |Link to Comment
  • Auto Industry: Can We Get a 'Twofer'? [View article]
    The whole idea of spending (forget loaning this is money gone baby gone) on companies that have not been able to execute a plan that offers cars/trucks that people want to buy at prices people are willing to spend FOR YEARS is simply obscene. As I wrote in my blog these jobs are gone with the way management has run the companies and having the federal government step in will not only cost the taxpayers a lot of money (already has in terms of congressional resources) but will delay the ability of the auto makers to get back on solid ground and start producing a product that people want to buy.

    Its too bad congress thinks they know better than the capital markets as they are bringing America to its knees a lot quicker than need be.
    Dec 10 11:51 PM | Likes Like |Link to Comment
  • Bet on Buying Boyd [View article]
    Interesting post. I do think the author is wrong in thinking that BYD is a buy. The problem as I see it is the author has not spent as much time on the property or in Las Vegas.

    BYDs main property in Vegas and the second most important property are both off strip. This means that when Vegas catches a cold BYD gets pneumonia.

    I wrote a post in my blog about how I walked a tour through the property about four times a day to see how they where fairing. It was not pretty. To fill rooms they are offering them at $25 weeknights and $50 Weekends.

    As if that was not enough, City Center and other properties will be coming online in less than a year.

    Also, applying TA to the stock its pretty clear what direction the weekly chart is in. Also this stock is under the 200 MA which also shows that money is moving out of this stock not into it.

    I do feel that BYD could be a great buy at some point and maybe as early as 2009 but does not present a good risk to reward opportunity in my opinion for this trader.
    (I wrote the same in another college post about the same stock. I think its good that the students are learning about stocks IMHO. I have no opinion if it should be posted on SA or not)
    Dec 8 05:54 PM | Likes Like |Link to Comment
  • Positive Growth Outlook for Boyd Gaming Corporation [View article]
    Interesting post. I do think the author is wrong in thinking that BYD is a buy. The problem as I see it is the author has not spent as much time on the property or in Las Vegas.

    BYDs main property in Vegas and the second most important property are both off strip. This means that when Vegas catches a cold BYD gets pneumonia.

    I wrote a post in my blog about how I walked a tour through the property about four times a day to see how they where fairing. It was not pretty. To fill rooms they are offering them at $25 weeknights and $50 Weekends.

    As if that was not enough, City Center and other properties will be coming online in less than a year.

    Also, applying TA to the stock its pretty clear what direction the weekly chart is in. Also this stock is under the 200 MA which also shows that money is moving out of this stock not into it.

    I do feel that BYD could be a great buy at some point and maybe as early as 2009 but does not present a good risk to reward opportunity in my opinion for this trader.
    Dec 8 05:48 PM | Likes Like |Link to Comment
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