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Stephen Aniston  

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  • Supply-Side Versus Keynesian Economics [View article]
    @sailthesound - the 1980's recession was actually 2 consecutive recessions according to the NBER within a year of each other:
    January 1980 - July 1980 (6 months)
    July 1981-November 1982 (18 months)

    So within a 3 year period - 1980 to 1982, the country was in recession for 24 months. Far longer period than any 3 year period since 1990 and that includes the 2008 recession.
    Aug 22, 2014. 02:06 PM | 1 Like Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    CoinsK - well I can justify credit for investments because it generates income and gets paid back. Now I can't justify credit for consumption. I do believe in savings, it's just that the process of saving delays things a lot. Back in the day, you work all your life to save, then start a business. Now you get a loan, start a business, in 5 years return the loan and you're way ahead faster. There is nothing wrong with credit per se. What is wrong is how it gets used. Giving credit for worthy activities is very different than what is going on right now which is the monetization of unworthy activities so that somebody doesn't go bankrupt.
    Aug 22, 2014. 12:50 PM | 3 Likes Like |Link to Comment
  • Rethinking Buffett's 'Favorite' Valuation Metric [View article]
    Well, stocks trading at P/E above what demographic P/E suggests they should trade it is what I consider a bubble. FED's demographic P/E model for 2014 suggests a P/E of around 12. We are trading at 19x. This suggests an about 50-60% overvaluation. I call that a "bubble". See 2 years ago the market traded at P/E of 14 which was inline with the FED model. You didn't see me calling the market a "bubble" then. A bubble is a state of valuation that is not permanent and I don't think this P/E will stick around for a long time.

    The FED will never say it in public but all their research points to an internal opinion that stocks are seriously overpriced. Yellen making hints at biotech stocks is the easiest way she can make a suggestion without people panicking. The other thing you need to monitor in her speeches is the concept of "financial stability". She seems to be talking about that a lot lately and this is also a code word for "balance sheet assets are too expensive".

    I am not sure why do you think I am implying that people are foolish? Expensive things become more expensive all the time. Is there anything wrong to point out that stocks are trading at expensive levels?
    Aug 22, 2014. 12:10 PM | 1 Like Like |Link to Comment
  • Nobel Prize Winner Shiller Is Damaging His Reputation With CAPE Ratio Talk [View article]
    May be you should read this New York Times article by Mr. Shiller from 2005:

    Couple of extracts (article addresses the so called "housing bubble" which nobody believed existed in 2005):

    "These, in short, are his second 15 minutes of gloom. He predicts that prices could fall 40 percent in inflation-adjusted terms over the next generation and that the end of the bubble will probably cause a recession at some point."

    "Shiller is predicting the mountain goes into the sea," Robert I. Toll, the chief executive of Toll Brothers, a home builder, said in a recent interview, without having been asked about the economist. "He's selling himself."
    Aug 22, 2014. 11:32 AM | 12 Likes Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    Yup, money supply needs to match productivity growth to keep prices stable. Otherwise you have continuous deflation and with deflation you don't have credit. Without credit, you're stuck in the dark ages. If private enterprise is to get a big project done, it needs credit. You can't build the Empire State Building from savings.
    Aug 22, 2014. 09:50 AM | 3 Likes Like |Link to Comment
  • Is The Shiller P/E Broken? [View article]
    Great link. Thank you!
    Aug 22, 2014. 09:33 AM | Likes Like |Link to Comment
  • Is The Shiller P/E Broken? [View article]
    Where can you get international CAPE info?
    Aug 22, 2014. 05:04 AM | Likes Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    I am sure my doctor can't wait to get blood pressure alerts from all his 200 or however many clients. Since the doctors already work around the clock, I am curious how they will handle this new flood of information. Heck, it took them 10 years to just start typing my information into a computer.

    Now has anybody asked the question. What if my health data is used against me? Make me pay more in car insurance, health insurance? There is a huge privacy issue with health data that people who are fascinated by technology completely ignore. Health data is probably just as important as financial data - you can find plenty of super smart security experts working at banks providing "Bank level security". Yet, when was the last time you heard of a security expert working in a hospital? The Chinese just stole 5 million patient records. If that data is available, how long it is going to be before companies do a "health check" along with your "credit check". You really want your bosses at work to know you have mental health problems or high blood pressure problems? If that stuff leaks out, forget about getting promoted to an executive position.

    Heath tech penetration is a much bigger issue than one company, Apple, making the right device for it.

    To me personally, I can take one look at a person and see if they are in good shape or not. I don't really care about their percentage of fat. Some of the most health obsessive people I've met in my life about counting calories, nutrition and exercise happen to be the fattest and unhealthiest looking. It's them and the people on TV. The rest of the population doesn't care as much as the media or Tim Cook wants them to.
    Aug 22, 2014. 04:49 AM | 3 Likes Like |Link to Comment
  • Rethinking Buffett's 'Favorite' Valuation Metric [View article]
    Sure let's try to find every excuse to justify the bubble. That is why it is a bubble. Because everybody is manufacturing reasons to buy expensive.
    Aug 22, 2014. 04:41 AM | 4 Likes Like |Link to Comment
  • Don't Buy This Dip: The Fed Is Not Your Friend [View article]
    Well, I just installed solar panels on my house via Solar City. Pretty seamless experience. My neighbor saw it and he is looking into it. His mom too. I live in CT and solar panels are starting to spread like wild fire around here. Solar has no penetration in the US yet, but the panels are now cheap enough where you can get substantial savings on electricity. In addition, cloud computing is enabling telecommuting to a level unseen before. I think more and more people will start working from home which cuts on commuting costs. Half my block is working from home presently.

    For electric utilities and coal, oil and gas companies, this is a secular development that is very problematic over the long term. This could be a good tactical opportunity but over the long term I see lower demand and price pressures in the hydrocarbon space. This is a sector that has overbuilt a lot of infrastructure with junk financing. Rising rates and lower demand could seriously compress earnings in this space over the next few years. I see nat gas getting more expensive once we start to export it, but otherwise, I think the long-term outlook is grim for the other fuels.
    Aug 21, 2014. 07:02 PM | Likes Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    I am not sure the health movement claims as many followers as the iPhone movement. 70% of Americans are considered overweight which means that they are not really obsessive about their health.
    Aug 21, 2014. 05:01 PM | 2 Likes Like |Link to Comment
  • The Bubble's Name Must Be Godot: We Keep Waiting And Waiting [View article]
    People forget company earnings went from $85 in 2007 to $7 in 2009 in 24 months. During a period of 0 percent interest rates for a big part of it. Once the economy starts to go down, ZIRP or no ZIRP earnings are going to suffer.
    Aug 21, 2014. 04:49 PM | Likes Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    Umm, there was a need for an iPhone. Combining emailing, phone and a music player into one was logical and needed. There was a need for Apple TV, iPad. People couldn't quite put it together, but Jobs did. There was definitely a need that was filled. There is a reason that they have postponed it for 2 years now. They need to find what will make it a compelling product and my guess is they are stumped at this point. From what I've seen already, I don't see a feature set that is a must buy for a majority of the population the way the iPhone or the iPad is. All I am saying, don't expect the iWatch to sell in the numbers that the iPhone has - that's not going to happen.
    Aug 21, 2014. 04:31 PM | 3 Likes Like |Link to Comment
  • Don't Buy This Dip: The Fed Is Not Your Friend [View article]
    This market only has dip buyers. Once it gets up, nobody wants to buy anymore. It's gonna make a marginal high and down we go again. If the bull is truly raging, we would've been through 2000 already.

    "Buy American companies while they are on sale, especially domestic energy companies." LOL - when I see a 10% discount, I'll buy, but right now - no discount :)
    Aug 21, 2014. 04:19 PM | 1 Like Like |Link to Comment
  • Apple's iWatch Profit Potential [View article]
    Only 3.3 million fitness tracking devices and about 3 million smartwatches. were sold in 2013.

    Grand total about 6 million.

    Which sounds about right. Let's say 10% of the US population decides to use them, it is about 30 million devices total. Apples takes 50% share - that is 15 million. I don't know. Whatever money they make out of it, it's gonna be a rounding error on the Apple income statement.
    Aug 21, 2014. 02:52 PM | Likes Like |Link to Comment