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  • Why Inflation Will Remain Muted For Next Several Years [View article]
    Let me try; first China
    What China is experiencing is a grand experiment trying to uplift their country in a short time frame. The unabashed lending to build has left the country over extended. Many banks have funded housing projects on a grand scale, with those houses unoccupied, the bad loans have piled up. The govt is trying to keep things alive by loosening the monetary policy. the underlying issue is the bad loans.

    Think of bad loans as excessive drinking. A person who drank too much will keep puking out on and off. If you don't force the person to puke out everything in one single shot, you lot a mess that goes on longer. The person cannot function. THe magnitude of puking is proportional to the binge.

    In US, the person was forced to puke out everything in short order and system of bad loans were cleaned up with ruthless efficiency. The bubble in China is much bigger. In US , the central bank was very aggressive in putting liquidity in the system. If not, we would have put the 29 depression to shame.

    Why is US market going higher? Earnings and valuations drive the market. Earnings and profitability have been on upswing. Earnings up because corp are leaner and meaner, productivity is higher, hiring is slower. profitability of US corp is at 100 yr high. As interest rates are low, folks are forced out of savings account to enter into the market. The market uses NPV of future cash flows, discount rate being record low, the NPV looks higher. Valuations are much below previous bubble, path of least resistance is upward.

    Market also awards higher P/E for low inflation. Hence the perfect conditions for market. Also markets climb a wall of worry and the wall is very steep now.
    Sep 20 10:33 AM | Likes Like |Link to Comment
  • Why Inflation Will Remain Muted For Next Several Years [View article]
    Thank you for your feedback
    Sep 20 10:17 AM | Likes Like |Link to Comment
  • The 'Sound Asset Allocation Strategy': The Missing Piece [View article]
    Dear Vice Investor

    Thank you for taking it a step further. I concur with your assessment. Great job.
    Sep 16 09:53 AM | Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Correct, we are not there yet. Perhaps I should have added my disclaimer in the end.
    Sep 15 02:29 PM | Likes Like |Link to Comment
  • Why, How And When To Buy Gold [View article]
    Probably what I should have said is, the emergency/panic would have caused the Gold to spike up vis-a-vis dollar. You can then sell small portion of gold get the $ and buy the goods.

    I understand why we moved away from Gold and Barter systems. They were cumbersome.

    I've to disagree with mobyss on the timing. You cannot predict when an emergency comes. When it hits, Gold will go through the roof. Gold may as well start declining for the next decade, but it is prudent to buy small quantities over that period.
    Sep 15 12:23 PM | Likes Like |Link to Comment
  • Why, How And When To Buy Gold [View article]
    Yes, Silver is also an excellent investment. The issue with silver the weight & volume. For a given unit of weight, you pack more heat into Gold. Storing voluminous metals is also an issue. If you are starting out and cannot afford Gold ,then Silver is an excellent choice.
    Sep 15 10:45 AM | 2 Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Please read my new article on Gold.
    http://seekingalpha.co...
    Sep 15 09:58 AM | Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    If you are thinking about Gold, then please read my new article
    http://seekingalpha.co...
    Sep 15 09:49 AM | Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Thanks everyone for all the kind words.
    Sep 15 04:29 AM | Likes Like |Link to Comment
  • Finally! An Asset Allocation Strategy That Works [View article]
    Japan was going through deflation (except for last few years). In deflation scenario, yield curve doesn't matter much.
    Sep 15 04:28 AM | Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    I wrote an article "dont fear the fed yet" and it was based on yield curve.
    Sep 14 10:23 PM | 3 Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Yes, I track 130+ indicators. I didn't want to write a very long article. Housing starts is a good one.
    Sep 14 01:24 PM | 2 Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Yes, we are proceeding smoothly (just learnt the meaning of your word tickety-boo from urban dict). The crash talk (other than minor corrections) are bogus.

    Didn't I put my summary in the disclaimer?
    Sep 14 10:39 AM | 2 Likes Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    There are two issues with ISM.
    1) There are too volatile
    2) they don't show a change in direction prior to the market top.

    I'm a sucker for data that shows reversals prior to market peak
    Sep 14 10:12 AM | 3 Likes Like |Link to Comment
  • Finally! An Asset Allocation Strategy That Works [View article]
    A lot of Ph.D economists have burnt their midnight oil to find correlations. The best correlations they found was between 10yr-3mo. I've found a dozen research publications on this. One was linked in article. You can google them and find it easily. The trick is to hide your emotions and act rationally at times of bubble and market top.

    Also 10yr is more broadly used. The amount of securities issued for 30yr is far less.
    Sep 14 09:46 AM | 3 Likes Like |Link to Comment
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