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Tom Au, CFA

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  • Gold: A Bad Investment and Getting Worse, Part II [View article]
    "I like gold. It’s pretty, and it makes my wife happy. But that is about the extent of its value."

    You treat gold as if it had a fixed value, and therefore its value should decline as society progresses, and wealth becomes greater.

    But that's not the function of gold. It is a RELATIVE store of value, compared to what ELSE is going on in the world.

    I don't hope for gold to go back to 5% of the global market cap, as in 1968, because it presaged the inflation of the 1970s. Unfortunately, that could happen, given the inflationary pressures being built up by global economic policies.

    And Chinese and Indian investors (of any given income level) are more prone to buy gold than comparably affluent Americans, given their countries' more troubled histories. As a larger percentage of the world's wealth in transferred to China and India, so will demand for gold.
    Feb 9 04:13 PM | 46 Likes Like |Link to Comment
  • Is a Crash Impending? [View article]
    China first. Then the U.S. "Forewarned is forearmed."
    Aug 31 11:56 AM | 43 Likes Like |Link to Comment
  • Here It Comes: Consider Yourself Warned [View article]
    A woman who knows both of us told me, "Warren Buffett didn't foresee the 2008 crash. But you did" (in "A Modern Approach to Graham and Dodd Investing," Wiley, 2004).

    I was warned by a contemporary of Ben Graham's (born 1896) to expect another "1929." Decades ago, this person told me, "I may not live to see it, but you will."

    I'm not smarter than Warren Buffett. But believe my mentor to be smarter than Ben Graham.

    I may be wrong, but am not in doubt.
    Jan 7 05:39 PM | 31 Likes Like |Link to Comment
  • Here It Comes: Consider Yourself Warned [View article]
    "We have never seen a crash and rebound in US stock market history like what we have just experienced, except once. That "once" was 1929/1930."

    Meaning that 2010 will be "1931".

    All because of the 80-year "long wave" cycle.
    Jan 7 05:32 PM | 29 Likes Like |Link to Comment
  • Roubini: The Recovery as a House of Cards [View article]
    I'm not a "permabear" although I'm often mistaken for one.

    But the nature and magnitude of our programs are such that we'll probably spend five years (or so) in "purgatory."

    Before we come back stronger than ever, as we did after the 1930s.

    But the "long term" is just that; may take a long time.
    Feb 12 11:33 AM | 28 Likes Like |Link to Comment
  • Sure It’s Legal … But Is It Right? [View article]
    The banks didn't "make" a lot of money. The bankers "booked" a lot of (false) profits, and then paid themselves huge salaries based on book profits. If they had to pay themselves on what they really earned, they'd be starving.
    Sep 2 03:35 PM | 27 Likes Like |Link to Comment
  • Meredith Whitney: Housing Double Dip Is Certain [View article]
    Housing is THE ISSUE in banking just now. Understand one and you understand the other.
    Jun 22 02:39 PM | 25 Likes Like |Link to Comment
  • Housing and the End of Upward Mobility in the U.S. [View article]
    The end of upward mobility came around the the year 2000 when Congressmen/women could be bought and sold by lobbyists in the marketplace.
    Apr 16 12:47 PM | 23 Likes Like |Link to Comment
  • Is America's Middle Class Going the Way of China? [View article]
    At the very top, it's more than just education. It's connections and clout.

    It may be no accident that one of the rising stars of the Democratic Party, James Rubin, is the son of Robert.
    Apr 15 08:55 AM | 23 Likes Like |Link to Comment
  • Here Comes the 'Double-Dip Recession' [View article]
    "They need a crisis to advance their new stimulus bill. "

    And their health bill. And their new taxes. And...
    Jan 12 03:44 PM | 22 Likes Like |Link to Comment
  • California: The Haves and Have-Nots [View article]
    Put the legislators on IOUs, and the crisis will be solved in a jiffy. It's like the "bathroom" negotiation. The deal will be done if no one is allowed to go to the bathroom until it is.
    Jul 2 09:12 AM | 22 Likes Like |Link to Comment
  • The U.S.: Land of the Free and Home of a Nearly Failed Treasury Auction of Its Own [View article]
    Few (rational) buyers want U.S. paper at current interest rates, so the government basically has to "make a market" in its own paper.
    Feb 12 04:12 PM | 21 Likes Like |Link to Comment
  • Watching Dividends Rise: Putting Together a Focused Dividend-Growth Portfolio [View article]
    Jumping in and out of ABT may be a way to make money. But it isn't "investing." It's trading.

    Investing is finding a "good" stock and holding it for a long time. Warren Buffett is more famous than just about any trader.
    Feb 2 12:26 PM | 20 Likes Like |Link to Comment
  • 7 Attractive Dividend Aristocrats Proving the Wisdom of the Masters [View article]
    Beating the market isn't the true metric. In the late 1990s, a twentysomething internet guru named Ryan Jacobs beat the market handily with then-hot internet stocks--until he didn't.

    The point is that a well conceived dividend or dividend growth strategy will produce a satisfactory return, with a relatively high degree of safety, regardless of what the market does, because of all those cash yields.
    Oct 29 07:46 PM | 20 Likes Like |Link to Comment
  • President Obama is a "defender of free markets," Paul Volcker tells Fox Business, "not a wild-eyed leftist radical." It's not surprising that "people are a little cautious about investing," he says, given the depth of the recession, but Obama is right to point out excess in the financial world - "and it happens to be accurate."  [View news story]
    If Obama is a "defender of free markets" and "not a wild-eyed leftist," he's not exactly convincing in these roles.
    Sep 22 06:35 PM | 20 Likes Like |Link to Comment
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