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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.
My book:
A Modern Approach to Graham and Dodd Investing
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  • The Turbo-Charged Lives of Young Millennials
    A young celebrity, who's barely out of her teens, has a very busy and active social life, including a series of whirlwind romances (that have sometimes left her hurt and confused). One might say, that's the life of a celebrity, and in a different (older) generation, that might have been the case. But based on my acquaintance with one of her parents, these are not shallow crushes but rather genuine, if (so far) unsuccessful attempts to find love. And, indeed, something else may be at work with today's young people.

    They have grown up with iPods and "instant messaging" and "texting" (including "sexting," which is to say that a major portion of their lives have happened at warp speed. The problem is, these are constructs based on the latest technology. That's fine as long as we are talking about purely mechanical processes. The problem is that many aspects of human affairs, including relationships, operate on slower, biological processes. These are things that can't be rushed because they proceed at their own timetable. (As Warren Buffett pointed out, it takes nine months to make a human baby; one can't do so by making nine women pregnant for a month each.)
    Today's teenagers live in an edgy world. Besides the usual issues of hormones and emotions, that have plagued teens from time immemorial, they have to deal with life (and world) issues "instantly" through handheld devices and social media, rather than at the slower pace afforded by "snail mail," (and more recently, the landline telephone). All this makes it easier to get confused, and to make the wrong choices. Navigating through the array of possibilities now offered at a rapid fire pace by society would be daunting for most adults; how much more so, for young people.
    Dec 13 12:25 PM | Link | Comment!
  • Revisiting the Ugly American
    "I've been to any number of foreign countries, and I've always managed to get in with any group I wanted to," an older (American) acquaintance of mine boasted. He proved it once again by getting in with members of such a group in New York City, and scoring with a "foreign" woman.

    He is, however, a relic of an America that may soon disappear. That is, an America that was liked abroad, often in spite of itself and its citizens, and whose currency was trusted worldwide. Today's international image of America is rather different; a producer of goods and services that have often done harm in the recent past, and that importers can reasonably reject. A population which, despite some outstanding exceptions, sees its "average" citizens falling behind in education and attainment compared to those of most developed, and even many, third world countries. In short, a country one need not pay much attention to.
    Yet this country continues to lecture others about their economic policies while failing conspicuously to put its own house in order. But such a state might not continue for long. And a country whose leaders don't command the respect of their counterparts might soon find that its citizens no longer command a warm welcome abroad.
    Dec 11 3:52 PM | Link | 7 Comments
  • The Counterfeiting of America
    Quantitative Easing is the latest step in the counterfeiting of the American currency and society. Ben Bernanke admitted as much with his appearance on Sixty Minutes. The idea of taking troubled paper, and backing it with American dollars at face value basically counterfeits both that paper, and the backing dollars themselves.

    It proceeded earlier, with the securitization of the housing boom. Banks created packages of  loans that HAD previously been reasonably safe, except that the underwriting was so sloppy that many of the loans in question were "dead on arrival." They then applied historical default rates to the new pool of bad loans, and secured them to the old level, a practice Warren Buffett would have likened to taking the fatality rate of Cool-Aid without taking into account the variety served at Jonestown.

    Mnay on Wall Street feel that the way out of our problems is getting other countries to take our counterfeit assets. That can happen--once in the lifetime of any given country. But when others catch on, "once bitten, twice shy." Or "fool me once, shame on you. Fool me twice, shame on me." After that, we will have created major problems for our children, because no one will trust American "paper" for a long, long time to come.
    Dec 07 3:18 PM | Link | Comment!
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