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  • Cisco: Despite Difficult Year, I Smell Value [View article]
    Thanks for taking the time to read my article. I agree that a dividend policy would be appropriate. Maybe I am being too simplistic looking at hard cash on the balance sheet, strong eps growth, a track record of 120 acquisitions (most successful) and a dominant market share in key segments? I always liked those measures, but you all raise valid points and I will take them on board.
    Jun 22, 2009. 03:28 PM | Likes Like |Link to Comment
  • The Seven Habits of Highly Suspicious Hedge Funds [View article]
    Oustanding summary. I would add that the Madoff's are still few and far between. Most investment managers do their best morally for clients. I think the issue is less about the complexity of hedge funds and the inability of the man-on-the-street to understand what he is investing in, but the gap between the risk the investment manager thinks he is taking (based on data-mining and past risk-adjusted returns) and the actual risk embedded into the fund which is uncertain, as the future and its impact on asset prices is unknown. If you pay a 30 year old investment manager a small fortune a year, inevitably he starts to think he is smarter than he actually is. It's just human nature. Maybe you need to have worked through three recessions before you should be allowed to be the final decision maker on a investment fund? Taking into consideration the ongoing boom and bust monetary policy, we shouldn't have long to wait to see three.
    Jun 22, 2009. 10:44 AM | 4 Likes Like |Link to Comment
  • The Geeks Shall Not Inherit the Earth [View article]
    Great to see you posting your excellent articles on here Tim. We met many years ago and I have followed your work since.

    I agree with the points you raise and remain convinced that boom and bust is nearly always a function of money-supply outpacing real economic growth or the mis-allocation of debt to prop-up consumption or feed asset-price bubbles. I wrote a piece on it here but can't capture the clarity of your work.
    Jun 22, 2009. 08:22 AM | 3 Likes Like |Link to Comment
  • Dallas Fed on Curbing Irresponsible Lending [View article]
    Agreed.

    Making sure a prudent debt to equity ratio is in place for lending just sounds like common sense to me. The equity should be at risk. Only fair. Credit should be cheap, but only given in volume to proven borrowers and consumers/investors with good collateral.

    Also, borrowing to consume or to acquire assets already in the economy is a zero sum game and one that leads to inflation or asset price bubbles. Debt should only issued for projects that have the potential to create new real economic growth. It sounds illogical until you really investigate the theory. Watch this space.

    Another great article by the way.
    Jun 21, 2009. 01:20 PM | 5 Likes Like |Link to Comment
  • TIPS Yields Signal New Inflation Concern [View article]
    The Recusant - quite right, and may I also add the small issue of the voting system. If the current set of failed, box-ticking bureaucrats and their chosen quasi-governmental economists continue failing at their current near-terminal rate, the popularity of extremist opposition parties and extremist policies will increase. Politics and economics have only twice been more aligned then they are now. Those times were the two world wars.
    Jun 20, 2009. 03:31 AM | 1 Like Like |Link to Comment
  • Chart of the Day - Inflation Adjusted Dow [View article]
    Thank you very much. Just what I am looking for and it fills in the fairly wide gaps in my recent inflation adjusted returns on equities, article.
    Jun 19, 2009. 07:10 PM | 6 Likes Like |Link to Comment
  • British Airways Focuses on Survival [View article]
    OldLimey, very true. Thanks for continuing to read my articles.
    Jun 19, 2009. 06:55 PM | Likes Like |Link to Comment
  • Commodities Today: The Correction Has Arrived [View article]
    Larry, oil is a buy near $60 in my opinion. I am not even sure if we will get that low. Great article by the way.
    Jun 19, 2009. 04:27 PM | 3 Likes Like |Link to Comment
  • TIPS Yields Signal New Inflation Concern [View article]
    Dian - wise words. The Recusant - really interesting point of view and I tend to agree with you. Of course there are serious social problems as well as economic issues that need to be resolved.
    Jun 19, 2009. 04:13 PM | 1 Like Like |Link to Comment
  • More Signs Recession Is Running Out of Steam [View article]
    The US is not the whole global economy. At least half the US writers on SA talk about the US economy as if it is the only economy. China, India, Brazil, Australia... I can go on. There are 150 others.
    Jun 19, 2009. 03:59 PM | Likes Like |Link to Comment
  • Credit Suisse and ETFs: Going for Broke? [View article]
    You have a keen eye and produce a volume of quality analysis that is quite frankly staggering. 5m plus hits on your blog. Amazing. When I grow up, I want to be Tyler Durden.
    Jun 19, 2009. 03:21 PM | 6 Likes Like |Link to Comment
  • British Airways Focuses on Survival [View article]
    captainccs, I think that is a very fair call. Personally I avoid the sector all together.
    Jun 19, 2009. 09:52 AM | Likes Like |Link to Comment
  • Further Evidence That Inflation Isn't Imminent [View article]
    Government sourced inflation data is often close to worthless. For example the basket of goods they use here, in the UK, includes items that the average family can't afford in a recession. The real basket of goods for lower-middle and working class families is much more exposed to food and energy costs than the official government basket suggests. It doesn't matter if iPods, DVD's, vacations and new cars are falling in price when food, oil, electricity, etc is rising (as it has for most of the past 2-3 years). Families can't afford the former luxuries and have to buy the latter necessities. Add into the equation stalled personal earnings growth and in this recession you have a much higher real inflation rate for most people than you will at more prosperous stages of the economic cycle. Unfortunately the central bank and governmental bureaucrats won't see it from their 2nd home in the Hamptons (or Tuscany for Euro-zone box-tickers).

    I'll give you another pretty weird example of how out of touch the bureaucrats are in UK. The government is giving a £2,000 grant to buyers of new cars if the buyer part-exchanges their old, less fuel efficient car. Well you still need to put down say £13,000 to secure the average family car. So the middle class and wealthy who have £13,000 or more sloshing around their bank account get a nice discount to buy a car. If you don't have £13,000 spare to buy a new car, (and I humbly suggest consumers like that need government help more), you get nothing. It's redistribution of tax-payers money from the poor to those rich enough to buy new cars. Madness.
    Jun 18, 2009. 04:41 PM | Likes Like |Link to Comment
  • More Signs Recession Is Running Out of Steam [View article]
    I am delighted to see I am not alone in posting "green shoots" articles. I have been voicing hope on SA for some weeks and am consistently getting the thumbs down for it. Admittedly I have not been to the US in recent months, but I have spent a considerable proportion of my time recently in Asia, the Middle East and the UK and I am seeing growing confidence, a willingness to do business and economic activity picking up rather sharpy from the Q1 trough. Whilst I appreciate there are still some tough hurdles to overcome, I have seen zero evidence that a global economic armageddon is nigh.
    Jun 18, 2009. 04:10 PM | 1 Like Like |Link to Comment
  • Do Markets Really Need to Price In Government Failure? [View article]
    US government failure can be avoided with 5-10 years of moderate inflation, which will erode the real economic value of its nominal debt. I believe an unspoken objective of the enormous monetary stimulus is not just to boost economic growth but also to generate that higher inflation. I admit inflation has its gross disadvantages but those issues represent the lesser of evils if your balance sheet shows 10 trillion dollars of nominal debt. A weaker dollar is also an aim of US authorities but like inflation it can not voice its desire openly for it. All is not lost yet for US inc, but it will be a close call.
    Jun 18, 2009. 06:19 AM | 4 Likes Like |Link to Comment
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538 Comments
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