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  • Partying Like It Is 2007 [View article]
    Great points, banmate6. I'm up in Canada, but one of the points that we keep hearing (from travellers) is that much of the US infrastructure is in disrepair compared to here.

    Just how many of those jobless would be willing to work for a bit above minimum wage if they had their training, housing and food costs covered as they go around the country repairing roads, bridges, and other core infrastructure? I bet quite a few. Up in Canada we've got a rather large infrastructure improvement program, given how sparse our population is...

    There are numerous sectors that are underemployed in the US, but currently welfare programs are at the ugly midpoint to do nothing about it - too low to support someone as they try to fix their life (through education and locating work), but too high to encourage anyone to get off their ass through necessity. This is a rare occasion where compromise is worse than either "or" scenario. I feel that either the European way of doing it (We'll pay your education, housing, and food, so that you can become employable!) or the American way (You're not getting much, so fix your attitude and get off your ass.) would be better than what you've got. (You're getting some handouts, but only enough to raise the ire of people like Bret; not enough to actually change your life, or even pay transportation to job interviews. You'll have to rely on handouts from others, but since you are now a 'drain on the system', they're not going to want to help you out as much. You'd probably have had better luck if you received less handouts, and had others lending you a helping hand rather than looking down on you.)

    That said, I personally feel that the European way of doing it is better (Even after some abuse - I'm a lefty), but suspect that it wouldn't fly in the USA given how polarized American beliefs have become.

    Great posts, Michael Clark!

    Jul 2, 2015. 02:58 PM | 1 Like Like |Link to Comment
  • Partying Like It Is 2007 [View article]
    "The problem is that the politicians respond to this by increasing mandates, minimum wages, fees, regulations, taxes, etc., all of which provide less and less incentive for businesses to invest and create meaningful well-paying jobs. This results in the laggard growth rates we observe."

    I agree - bandaids for the real problem. But I also disagree. I think the debt overhang is the main thing impeding growth. People just don't spend as much when they're deep in the red. We're never going to get roaring growth back until asset prices fall back to levels that match up with income levels. (And if you haven't noticed, a lot of the job creation is part-time minimum-wage work.) That rebalancing won't happen with interest rates this low, and debt able to be indefinitely rolled over. The fed averted a crash, but this is the result.

    If rates go up significantly, repaying debt becomes a focus, but the price that people are willing to pay also drops significantly. No retirees seem to want to take a 50-75% hit on their asset values, so the central banking game shall continue.

    The big problem from my point of view (as a programmer, computer tech, self investor) is that technology will ultimately replace what most people can do. I firmly believe this. If you don't tax companies adequately, the system will collapse. We're in a period of rising personal taxes (through stealthy elimination of writeoffs) and declining corporate taxes (through both declining tax rates and loopholes), as we enter a period of reduced employment opportunities and increasing corporate margins. Bad combination, unless you're a shareholder.

    This video outlines some of it better than I can articulate:

    Although not the popular opinion, I feel that taxes are too low, and many more writeoffs have to be restored. Low taxes encourage saving/hoarding. If taxes are much higher, but with many more valid writeoffs, it encourages spending and improves the velocity of money, because if you don't spend on things (that you want and that you feel are deserving), then a bully called the government will take it from you and (maybe) decrease the deficit, but (probably) waste it. If you look at periods of roaring growth, they were higher tax periods with tons of writeoffs available.

    Jul 2, 2015. 02:26 PM | 1 Like Like |Link to Comment
  • Partying Like It Is 2007 [View article]
    clrodrick: That ship has already sailed. China has a debt bubble so great, it practically outsizes their economy. Without continual reinvestment into sub prime loans, they'd have no growth at all... keep in mind that many of their companies are debt heavy, have no way to pay back loans even in a booming economy, and depend on consumers that are debt heavy and have no way to pay back their loans even in a booming economy. Their strategy is to drop rates and roll over debt. Hmm...

    Do you know how much stuff is manufactured in China these days? The resulting implosion of their economy from mass defaults would probably grind all economic growth to a halt worldwide, and be good for a 90-95% correction in the markets, 1920's style.

    Or things can continue on in a stable manner. If we don't draw too much attention to China's predicament, we can just slowly rise for years... gives them time to sort things out. Hopefully they don't inflated that debt bubble any further.

    I honestly think we need to separate repayment rate from interest rate for all debt. If you had to repay at a rapid rate to get the best interest rates, that would be the motivation necessary to deflate at least some of the debt bubbles growing worldwide.

    Jul 2, 2015. 01:56 PM | Likes Like |Link to Comment
  • Partying Like It Is 2007 [View article]
    "So that would mean that the stock market will never crash when US short-term yields are fixed at zero permanently? I believe everyone would like that! So why wouldn't the Fed just stay at ZIRP forever?"

    The year everyone believes that is the year that the market soars only to be followed by a 25-40% correction.

    The market can go up approximately 2-4% per year indefinitely, given that the population of the world rises ~1.2%, and healthy economies can double that growth rate... plus technology will continue to incrementally enhance margins.

    SPY isn't up at all this year. We have oddly rational behaviour right now. Going sideways rather than scary up and down. It would be funny if it defied logic and did this for several more years. :P

    Jul 2, 2015. 01:43 PM | 2 Likes Like |Link to Comment
  • Mr. Market Is Not Thrilled With This Net Lease Merger, Neither Am I [View article]
    GPT has delivered growth. CSG shareholders might finally get back to breakeven if they can tolerate a lower dividend. Assuming a ride from $10/share, wouldn't you rather sell for $10 than $7?

    Jul 2, 2015. 12:41 PM | 1 Like Like |Link to Comment
  • Apple set to pay $450M after losing e-book appeal; Apple Music goes live [View news story]
    I think we need to crack down on these patent & innovation thieving companies. It's not right that they abuse the laws in such a manner. Taking Apple's technology and using it in devices two years prior is such flagrant abuse and manipulation of the timeline, we should not stand for it. Just how many such manipulations have occurred to delay Apple's inevitable rise to a trillion dollar market cap? The time police are asleep at the wheel - or worse yet, perhaps already erased by the changes that have occured to date!

    It's clear to me that we have to boycott companies releasing innovative new technologies until after Apple first develops then. Only then can the timeline's consistency be maintained!

    Jul 1, 2015. 01:52 PM | 2 Likes Like |Link to Comment
  • Orchid Island Capital Plummets, One Analyst Predicted It [View article]
    What a ride on the UVXY!

    Probably was, since Greece is causing spreads to compress rapidly. None shall be spared... except inverse leveraged ETFs, clearly. (UVXY is actually a volatility instrument. Responds to people paying more for put protection... kinda. There's a ton more inputs than that.)

    Jun 30, 2015. 12:17 AM | Likes Like |Link to Comment
  • REITs That Pay Monthly [View article]
    Some of the Canadian REITs are on firesale right now - although they could become even more on sale in the future depending on the fed and global events.

    I'm talking about 8-12% yields (today) on companies that have payout ratios in the ~90-100% range. (Similar to STAG)

    I just picked up some WSR and IRT. More and more people are opting for apartments, and WSR does seem to be doing a good job turning around malls...

    Here's a Canadian one that guided $0.94 in FFO after a just-completed merger - time will tell:

    Their merger potentially introduced currency exchange headwinds, similar to the ones that WPC faces.

    Jun 27, 2015. 03:25 AM | 1 Like Like |Link to Comment
  • Time To Panic For Pacific Drilling? [View article]
    It all depends on the price of oil. I'm long PACD, ORIG, and a few others. I have no illusion over these investments being lucrative if oil stays flat or declines further.

    Jun 26, 2015. 02:25 PM | 1 Like Like |Link to Comment
  • Apple Bitcode, Processor Independence And Future Proofing The Apple Watch [View article]
    Realchacal: That's normally how it works. Processors have an architecture and instruction set, which will be different from one to another. Individual companies generally try to maintain backwards compatibility, so processors end up being part of a family. The three main ones are Intel/AMD (i386/i686/amd64), ARM (Smartphones/Tablets), and MIPS. (Usually routers.) There's also Atmel with their extremely low power AVR series, intended for embedded devices and sensors. (Arduino, etc.) They all have different nuances to compiling software for them. It's further complicated by strapping different operating systems on top. (And in the case of Atmel, there may not be an OS.)

    A few programming languages (like Java) attempted to get around this complexity and hassle. Java was born decades ago, and has the most successful/ubiquitous bytecode implementation. Numerous other languages now sit on top of it. It compiles as it runs (Just In Time to be executed - JIT compilation), which limits performance and increases memory overhead, although often the decreased time writing code and debugging leads to better optimized and less bug-filled software. Java is pretty common on servers too, where it usually compiles fully before executing, instead of during execution. Since it scales so well, large companies like Facebook use it to handle billions of users. Theoretically a language compiled for a given processor could do better, but often programmers cannot wrap their heads around the optimizations required. Better to let smart engineers do it once, then have the compiler figure it out.

    Microsoft has their own JIT style, with their C# language. They've enabled it across all of their platforms... XBox, PC, etc.

    Sounds like Apple is getting behind the same idea. It certainly does make sense.

    Jun 25, 2015. 02:37 PM | 11 Likes Like |Link to Comment
  • Unveiling A Pivotal Plan For This Predictable Outlier [View article]
    Interesting stuff, Brad. Considering how well investors took the negative book values of banks, I wonder how well they will handle their private funds diving from $10 to $7 due to regulatory reporting changes?

    I imagine that many will get quite afraid of real estate, bringing prices down further and cap rates up. Thoughts?

    Jun 25, 2015. 01:32 PM | Likes Like |Link to Comment
  • Unveiling A Pivotal Plan For This Predictable Outlier [View article]
    Keep in mind that with roughly a third of revenue coming from overseas, the rapidly weakening Euro and other currencies impact part of their earnings... That's why FFO is lumpy in the fast graph.

    I doubt they will ever move to P/FFO parity with O. Companies with currency headwinds always seem to trade at a discount. That does mean the DRIP is likely to be more effective over time... 6% compounds faster than 4.5%.

    Jun 25, 2015. 01:13 PM | Likes Like |Link to Comment
  • I'm Recommending A Riskier REIT [View article]
    I thought perhaps that he meant enterprise value - but even that is under a billion.

    Their parent, RAS, is over 3b? Market cap 0.5b?

    Jun 25, 2015. 03:02 AM | Likes Like |Link to Comment
  • I'm Recommending A Riskier REIT [View article]
    The way the payout ratio is going, a dividend cut may not happen any time soon?

    Jun 25, 2015. 02:44 AM | Likes Like |Link to Comment
  • I'm Recommending A Riskier REIT [View article]

    Wasn't the first one prorated slightly due to IPO date?

    Jun 25, 2015. 02:42 AM | Likes Like |Link to Comment