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  • If a CEO was running the show in the U.S., the option on the table would be to raise taxes and cut spending at the same time, Buttonwood writes. It's not only the rapid pace of government spending that has led to ballooning deficits, but tax receipts have fallen off since 2000. Will anyone in Congress dare suggest the idea?  [View news story]
    George Harrison wrote that song, as is well known.
    Jul 2, 2011. 04:30 PM | Likes Like |Link to Comment
  • Why Covered Call Writing Is No Free Lunch [View article]
    Good post. 4 of your stocks are on my list.
    Jul 2, 2011. 12:08 PM | Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    Cuban doctors don't make a lot of money, but then how much do doctors make in China or India? The purpose of a health care system is to provide health care not to enrich employees who have been given several years of free education by the society that raised them. The US profits by importing doctors from other countries without paying compensation for the cost of their education. How about if US medical graduates went overseas en masse and obtained citizenship in Australia defaulted on hundreds of thousands of dollars in student loans?
    Jul 2, 2011. 12:06 PM | Likes Like |Link to Comment
  • Why Pandora Isn't Direct Competition to Radio [View article]
    Sirius is more comparable to satellite TV, except that it provides many channels of radio instead of TV, because radio (without pictures) is suitable for listening while driving a car.

    Sirius is a radio service for cars, though you can listen to it in a house. The advantage it has for cars is that many areas of the US are served by nothing but radio crapware, religious broadcasting, and so on, and the range of individual radio stations on FM is about 35 miles from the point of broadcast. If you tune in to Sirius, you can listen to your favorite radio stations in your car anywhere.

    Anyone who has Internet at home has access to numerous radio channels practically all of which are free.

    One argument made about Sirius is that it provides music programing without commercials and that many people prefer to pay for radio without commercials.

    On the other hand, NPR radio claims about 34 million listeners to commercial free over-the-air (and Internet) radio, but in spite of intensive fund raising, only about 8% of listeners actually contribute money.

    I have not watched TV at home for years, but right now am staying in a hotel with a TV and have been watching various news and current affairs TV channels, which is easy to do as they are consecutively numbered. They are:

    1. Fox News
    2. CNN US feed
    3. CNN Latin America feed.
    4. BBC World News
    5. Al Jazeera
    6. Deutsche Welle English service (some incisive analysis from German public TV on the Greek situation, but presentation a bit dull.)

    As far as the quality of programing goes 3 is better than 2 and 1 (all of which have commercials) and 4 and 5 are superior ( in my opinion) in programing content and presentation to 1,2, and 3 and FREE OF COMMERCIALS and yet I am quite certain that viewership in the US on cable and satellite for 1 and 2 is much larger than viewership for 3,4, 5 and 6 combined.

    This presents a problem for Sirius, I think, which is what percentage of people are actually likely to pay for a superior service without commercials. There has to be a limit.

    The best bet for Sirius, in my opinion is to sell lifetime of the receiver subscriptions with the car so that the financing can all be rolled into one deal, just like those extended warranties they try to push onto you, and after this the driver does not really notice the payments.

    My other thought about Sirius is this. I listen to a lot of Internet radio, but in truth there are only two or three stations I listen to most of the time, because there are only so many hours in a day.

    A lot of people on these boards who have Sirius talk about how great it is, but my guess is that really it is just one or two radio stations that they are subscribing to. Subscribing to Sirius might depend on the availability of one particular radio station that the customer likes to listen to.

    Pandora? Just one of dozens of Internet radio channels and music sources, but with an extra gimmick, a computer algorithm that lets you type in "Jingle Bells" at Thanksgiving, and then hear Xmas songs until New Year's Day. (However I think there are other online music services that can do something like this.)

    Clearly the satellite radio market wasn't big enough to support two companies, so the question now is whether it will be really profitable for one. What it comes down to is getting more cars equipped with satellite radio and getting it paid for.

    Incidentally, I have not checked lately, but I believe satellite TV services also provide uninterrupted music channels, so could be competition for Sirius in the non vehicle market.
    Jul 2, 2011. 11:52 AM | Likes Like |Link to Comment
  • Why Covered Call Writing Is No Free Lunch [View article]
    I think the individual investor can be much more nimble than funds, which have to stay fully invested. The individual investor can sell calls when volatility is spiking and can use a variety of strategies such as selling ITM and OTM calls and puts simultaneously in different proportions.

    Naked call selling is not allowed for most investors, but you can often sell a call spread much more cheaply than selling covered calls.

    The individual investor may also resort to rolling calls forward or upward if the stock approaches the exercise price, which enables the call seller to hang on to the stock. In the end it is a question of balancing the return on the sold call, the appreciation of the stock, and the time decay of the whole deal to move in and out of the stock in timely fashion in order to get your target rate of return on capital.

    Of course in an IRA or retirement account, you don't have to worry about tax implications, for margin accounts different parameters have to be applied.
    Jul 2, 2011. 10:23 AM | Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    Have you been there?

    "The Cuban health care system is respected around the world, and is literally decades more advanced than any system found in Latin America. For this reason, the Cuban system serves as a model for Third World developing nations."

    "Before the Revolution, most people could not afford proper medical care. In the rural areas there were few doctors and in the big cities, only the upper classes could afford health care."

    "All of this has now changed. Cuba has made excellent progress through its family doctor program. Small towns all have doctors the people can visit for free. Cuba now has one doctor per 200 citizens, compared to one per 400 in the US. The doctors live in the buildings their offices are in and keep track of the histories and needs of all their patients."

    "Cuba stands out statistically as well. Its infant mortality rate of 8/1,000 is second to none in Latin America, and is near that of the United States. The life expectancy of the average Cuban is also far longer than that of people in any other Latin American country."

    "Cuba has an excellent medical education program. It has 21 medical schools which graduate 4,000 doctors annually. All education is free. Before it lost Soviet aid, Cuba trained 20,000 students from Third World countries and required them to return to their own countries, where doctors are far more needed than in countries where they can command large salaries."

    "Doctors from Cuba are also sent to assist in poorer nations. Cuba has sent its doctors to many African nations and has established hospitals in other countries."

    I myself met Cuban medics working in Haiti in Port au Principe and Croix-des-Bouquets the week following the earthquake last year, so I can vouch for the last paragraph. Also see here:

    Why are developing nations not adopting the US model of health care if it is so good?

    Why can the US not produce enough of its own doctors in its own medical schools? Why does it import so many physicians from overseas, often educated and trained at the expense of taxpayers of other countries?

    Look, I do not dispute for a moment that the US has the best health care, especially surgery, in the world IF YOU CAN AFFORD IT. The debate is about the most effective way to finance and deliver effective health care to a whole population. Even if you don't care about the health of the US population, surely you want workers to be healthy so that corporations are profitable?

    I am sorry you could not get your surgery in Canada. You could come here to the Dominican Republic where I am writing this in an Internet cafe and get the treatment relatively cheaply if Canada will not provide it. Like many people who live in the US, I get all my dentistry here for 20% of the cost in the US.

    In the US, there are not death panels as such, but in many cases the availability of financing does determine whether people live or die. The lack of "death panels" and the existence of Medicare means that vast amounts of taxpayer money are spent on heroic efforts to keep elderly people who are dying alive a few more weeks or days by the administration of intravenous fluids, numerous expensive drugs, occupations of intensive care beds, and so on. Half of the Medicare budget is spent on people in the last 6 months of their lives, so cannot be considered very cost effective from the taxpayer point of view.
    Jul 2, 2011. 10:03 AM | 1 Like Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    Yes, but the real issue is what is the most effective way for the whole nation, espececially the working population, to have its health care financed. The fact that Britain spends only 1/2 as much of the GNP on health care as the US without the results being much worse is very telling, or that the quality of health care in Cuba is not much worse than the US and the standard of confidentiality is much better.

    (In the US you had Micky Mantle's surgeon or Gabrielle Giffords neurologist giving press conferences on the steps of the hospital, whereas the treatment Chavez received in Cuba is completely confidential.)

    I don't care how health care is financed, but how do we reduce it from 16% of the GNP to 8%. Can the insurance companies do this if they are allowed to compete? Why don't they pay the Congress to allow them free competition?
    Jul 1, 2011. 03:31 PM | Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    This is true. Primary physicians in the UK are paid bonuses if they can get a certain number of their patients to lose weight or quit smoking. This combines the profit motive with public health, a useful application of capitalism.

    Enjoy the egg mcmuffin. Incidentally MCD seems to provide another example of something that big business cannot do, which is make a decent hamburger.
    Jul 1, 2011. 09:29 AM | 1 Like Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    "Once insurance companies intervened in collusion with anti-competitive measures instituted by Congress, the providers were all now non-compete by law across states, which built up these unnatural moats, cobbling up unnecessary administrative bureaucracies which grew heavier and heavier over time. Those bureaucracies are expensive. And that doesn't even count what malpractice insurance has done. The insurance industry lobbyists have inflated prices along with the BAR forcing mandates on states to keep the competition a non-issue, IOW fiefdom monopolies."

    Don't be daft! Congress only enacts laws at the behest of the highest bidder and American politicians are like children fascinated with shiny objects. There is no way that consumers can raise enough money to outbid insurance companies for favorable legislation.

    The reasons commercial health care do not work are

    1. Most diseases are chronic conditions like diabetes that cost a lot to treat over a lifetime, especially in the last few years before death when many complications set in.

    2. Carrying the additional cost of beancounters to adjudicate claims makes the whole process non cost effective.

    3. Health care in the US is vastly complicated because of the need for Workers Comp for on the job injuries. In countries where everyone has health care from birth to grave it is not an issue. If you want a new roof on your house in the US, Workers Comp may add 25% to the price, unless you use Mexicans.

    4. Lack of universal health care in the US has the effect of grossly increasing the cost of motor insurance compared to other countries.

    5. Drugs are much, much more expensive in the US that other countries for quite spurious reasons such as the cost of development of new drugs. The real reason for the higher cost is that manufacturers have bribed Congress to fix the market and allow Medicare, Medicaid, the VA, the military, and so on to pay the rigged prices.

    6. We have a totally corrupt Supreme Court that allows large corporations to bribe government ad lib. After the next American Revolution this will be seen as equivalent to the Dred Scott ruling that persons of African descent were not human and could never be US citizens. The Supreme Court is a case of the foxes guarding the chickens.
    Jul 1, 2011. 09:19 AM | 4 Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    What you say is quite right, Phil, except that The Guardian is not a right wing Murdoch paper, but is mildly leftish and run by a non profit making trust.
    Jul 1, 2011. 09:00 AM | Likes Like |Link to Comment
  • 2 Rarely Mentioned Reasons to Include Microsoft in Your Portfolio [View article]
    Stocks go up and down. You can sell January $22.50 puts now and either you will get the stock put to you for a basis of about $21.80 or else you will get about 7% annualized return on your money while you wait for the puts to expire. Sell the puts as a spread by buying a lower price put and you can increase your percentage return to about 10% annualized. If the stock really takes off, cash in your puts earlier for a quick profit.

    [See: Cat, skin, ways to, more than one]
    Jun 30, 2011. 05:54 PM | 1 Like Like |Link to Comment
  • 2 Rarely Mentioned Reasons to Include Microsoft in Your Portfolio [View article]
    "Moreover, there are countless people trying to create filler web pages, utilize SEO techniques and drive search traffic to their crappy sites in an effort to make money."

    I don't know what SEO stands for, but this probably explains why so many Google searches end on Web pages that just seem to be pointless garbage that just exist for no apparent reason, even though no one would ever choose them as a destination.
    Jun 30, 2011. 05:40 PM | Likes Like |Link to Comment
  • Monday Madness - Greece Is a Drop in the Bucket Compared With Us [View article]
    Phil Davis for President!

    I've lived under a proper socialist government, and I have lived under an ultra conservative capitalist government, and to be honest I can see that both have their pluses and minuses, but the ultimate aim of both socialism and capitalism should be to make the world a better place for the average person to live in.

    Surely we can all now admit that socialist road building has been a great success, and that capitalism is an abysmal failure at providing cost effective health care, but that we would never have Henry Ford or the microchip and all that flows from it without some kind of free market capitalism.

    Can't we throw away the two useless political parties in the US and start afresh with some sort of proportional representation so that we get a wider variety of reality-based opinions in Congress?
    Jun 30, 2011. 05:22 PM | 1 Like Like |Link to Comment
  • Stock Picking: Why It Is So Difficult to Be Successful [View article]
    I do have a copy of William O'neill's book "How to make money in stocks", which is generally very well reviewed on Amazon, but I was a bit disappointed with the book which has a few gems, but a lot of padding and and lot of promotion of IBD. His main thesis is that the best ploy is to trade on upward momentum.

    Although I have several investment books, I can't say that any of them are indispensible. "Generate Thousands in Cash On Your Stocks Before Buying and Selling Them" by Samir Elias, in spite of the ridiculous title, is a fairly sound book, and "The Options Playbook" by Brian Overby is a useful primer.

    My own tendency is to try to combine the strengths of Soros and Buffet, which means first picking industries likely to flourish in the current and future geopolitical global situation, and then selecting the companies that seem to be best positioned to prosper, especially if they have "moats" or unique assets that cannot be reproduced. Obviously you want a management that has a good strategic plan, the ability to execute, and an interest in rewarding the shareholder.

    Then you want to buy the stock cheaply.

    I would like to invest in the same companies as Buffet, but to buy them before he does--but of course this is impossible unless you are a hedge fund manager, as many of them are psychic!!!!! Or so it would appear, or maybe they just think like Buffet. With enough resources you could probably program all of Buffets past investment decisions and use computerized artificial intelligence to predict what he will do next, or at least produce a list of likely actions, but as a retail investor, that is a bit beyond my capacity.
    Jun 25, 2011. 11:16 PM | 2 Likes Like |Link to Comment
  • Stock Picking: Why It Is So Difficult to Be Successful [View article]
    None of this surprises me. That's why my view, at the present time is that the amateur investor is best to buy into companies that look like they have a good long term future and be prepared to hold them for a few years, and to buy into them very gingerly indeed over a period of time. It would not be a bad idea to buy into a stock position over a period of a year or more, so as to be able to take into account seasonal fluctuations, political happenings, the general state of the market, earnings announcements, ex-dividend dates , and the current standing of the VIX before adding shares or selling puts.

    None of these things will guarantee profit and success, but at least they will help to level the playing field.

    Of course if you are just starting out adding $5000 per year to an IRA, it is very difficult to be patient and tempting to swing for the fences with the latest stock mentioned in an article, which is nearly ALWAYS a grievous error...

    My interest as a Rookie IRA Investor is geared more to the situation where the investor has a rollover from a company or government pension plan that includes many years of contributions and thus a sufficient sum in play to use longer term strategies.
    Jun 25, 2011. 10:06 AM | 1 Like Like |Link to Comment