Thomas J. Gordon

Dispelling the Deflation Myth

Living4Dividends: These guys argue that money supply or what they call "hot money" funnels itself into certain asset areas. I respect these guys but I'm not sure I understand or agree totally with what they are saying:

www2.nationalreview.co...

Dispelling the Deflation Myth

I'm not sure if this article is trying to make a distinction between asset inflation/deflation and general cpi inflation/deflation. You read things like "greenspan increased the money supply and that money caused oil to skyrocket". I don't believe excess money supply chanels itself into specific areas. To me, inflation is a general phenomenon. You have certain amount of money chasing a certain amount of goods and that indicates a price level. Asset bubbles may happen in commodities, real estate, or stocks. In my mind that is a very different phenomenon than general cpi inflation/deflation.

Lessons from the Volatility Shock of 2008

Just looking quickly at the portfolio that was suggested in 2007 I would guess that it did not avoid severe losses in the big 2008 downturn. I can think of only a few things a long investor could have been in that would have avoided enormous losses for august 2008 on: shorts or puts on almost anything, treasury bills, japanese yen, and selling calls like you mentioned. I like statistics. I understand statistics. Did it help you here take less losses from august 2008 on?

Calculating Country Risk Observed by Betas

this is an interesting article and the author clearly has training in formal financial theory. I question her "country correlations" though. I find all world markets for the last year or more to be highly correlated (I would guess .9 or greater). If I believed this chart, I would invest in czech republic and I wouldn't get creamed when the u.s. markets go down. But for the last year all I see is everything moving together and no where to hide. I'm not offering any computed data to prove this, but this is what I observe.