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Interesting Times
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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
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Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! READING MATERIAL !! 102 comments
    Jun 30, 2013 4:15 PM

    THIS BLOG IS ONLY FOR SUGGESTED READING MATERIAL OR WEB SITES THAT POSTERS FEEL ARE IMPORTANT TO THEM. OTHERS MIGHT LEARN A NEW SITE TO USE !!!

    What started out as a small group discussing anything related to investing has grown extremely educational over the last few months.

    We have Authors, Financial Advisors, Seasoned investors, Experts in specific fields, and just the average Joe pitching in...

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I invested thinking they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I started a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. I am by far a gold or silver bug. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S (NYSEARCA:PSLV) are talked about as being safer then others (NYSEARCA:GLD) and (NYSEARCA:SLV).

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "? Are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other INVESTMENTS? Here is where most of us are uninformed and relish an education.

    Individual stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (NASDAQ:PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk politics and how it affects everyday life, fine with me!!

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure we'll be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol as it also allows a reader to click on it and get some data.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as. Tom, Eric, Hebba, Doug to name a few, in no particular order, will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well

    LURKERS , we are waiting for you to post here too!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (102)
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  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » I use Mike Maloney's http://www.goldsiver.com for some of my information on the metals!

     

    He has a 90 minute seminar for free to use. Lets see what others look at !!

     

    I will add additional sites as I see who uses what to give others a chance to post what they look at daily. For those picking individual stocks those web pages you use are vital to know as well.

     

    This is for every investment idea!!
    30 Jun 2013, 04:24 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Robert Kiyosaki's Rich Dad ,Poor Dad. I also bought the audio version and I strongly suggest people do that with this book.I would probably never had bought my shop (The building) if I had not read that book. I did that when Gold went to $1000.00 an Oz .The video you watched IT of the Fox news video with me was when I was in a storefront. I would probably be paying rent still. In this business NO overhead is the key to survival. If I need to hold Gold or Silver coins due to prices drops ,I don't have to sell at the end of the month.
    http://amzn.to/118l5fd

     

    For monthly info I read the Greysheets CDN Coin Dealer Newsletter
    30 Jun 2013, 04:44 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    For your consideration:

     

    http://bit.ly/118j6aU
    30 Jun 2013, 05:03 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    This is an explanation of how I "invest":

     

    http://seekingalpha.co...
    30 Jun 2013, 05:06 PM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3738) | Send Message
     
    I lost my access to Level 2 quotes recently. Anybody have a free or inexpensive site for this they like and trust?
    30 Jun 2013, 05:10 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @FREDDY

     

    Do you mind explain to people what a level 2 quote is? Plus you supply so much information and this chapter should be reserved for reading info maybe you can include some links for history here?

     

    Thanks!
    30 Jun 2013, 11:51 PM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3738) | Send Message
     
    Level 2 book is a table illustrating outstanding bid orders and ask orders with their respective volume: http://bit.ly/12AOWqL

     

    This tool reveals how low or high you may have to go to complete your desired buy or sell and may affect the number of shares you should build into your order to facilitate a fast single transaction. Here in Canada, the service is free via your broker if you trade at least twice a week.
    1 Jul 2013, 01:29 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @FREDDY

     

    Thanks for joining us and your explanation here.

     

    Still looking for that reading material for all of us to bookmark.
    I bet SOUTH will have a ton when he does respond..

     

    TACK might as well. Hoping he shares some of his sites as well.
    1 Jul 2013, 01:55 AM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3738) | Send Message
     
    Savvy investors would indisputably say if you only had time for one, it would be Barry Ritholtz's The Big Picture blog: http://bit.ly/qYrSua
    1 Jul 2013, 02:48 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1814) | Send Message
     
    I was using Google reader for quite awhile. As of Monday it will be no longer. I have been weening off it since the announcement. I like Google news because I can tailor subject and sources. It is a good starting point for general interests, mine. If I find something I can search on Google for more depth. In searching I find sites I like I bookmark them. One of a kind stories I might copy into Google drive or a USB drive.
    I like doing it this way it gives variety and I can have it across many devices. I use Chromebooks and tablets when on the road. I use a Apple Mini Mac at home and supplement it with Macbook Pro. I also like to use an Amazon Kindle for reading.
    Through out the years I have many things too many to list. I find the highly technical books a bit tedious and lean more to fundamental. Recently David Stockmans latest book stands out I highly recommend it. I got it on Amazon for 9.99 on the kindle edition.
    I generally follow my interests until I feel saturated. I do enjoy a good conspiracy theory got any good ones?
    30 Jun 2013, 11:36 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @BDU

     

    You are always attaching articles to your posts. Where do you get them from?

     

    Your turn for a conspiracy !!
    30 Jun 2013, 11:53 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1814) | Send Message
     
    I am out on patrol and find them. I like to post things current and relevant to discussion. Sometimes I post just to promote discussion to see what others think.
    Conspiracy?..... Are you referring to the Government/media/banking empire in the new corporate state of America?
    1 Jul 2013, 12:00 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @BDU

     

    Well when you patrol and find them post the links here please.

     

    THANKS!
    1 Jul 2013, 12:06 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1814) | Send Message
     
    I am not sure what to think of this one ... http://dailym.ai/1b0Zffr
    1 Jul 2013, 12:36 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @BDU

     

    uh, THAT isn't what I was expecting for reading material. Maybe it belongs in the regular chapter??

     

    Please don't get insulted.

     

    @KRUSTY
    Before you leave on that long vacation ( Africa) I hope you can list out some of the material that helps you. I believe you have done it before but I am trying to group everything in this one chapter to make the review much easier.

     

    @FEAR.
    What sources do you use? Sites>

     

    @ RIN
    You must have some links with an explanation as to what they are

     

    @DOUG
    Yours?

     

    @CURLS
    Develop any you like yet?

     

    @TACK
    Your favorite sites that help you compose a list ? CABANA GIRLS Calendar doesn't count!

     

    NOW i wish some newbies would post where they like to get their daily reading from as well...Besides here..

     

    Other regulars fire away ....
    1 Jul 2013, 02:06 AM Reply Like
  • Krustyman
    , contributor
    Comments (843) | Send Message
     
    Hi IT:

     

    Sure! Here it is:

     

    Contrarian Investment Strategies (Dreman)
    The History of Money (Weatherford)
    A History of Gold and Money (Vilar)
    Reminiscences of a Stock Operator (Lefèvre)
    Debunkery (Fisher)
    Markets Never Forget (Fisher)
    Stocks for the Long Run (Siegel)
    The Intelligent Investor (Graham)
    Trading for a Living (Elder)
    Common Stocks and Uncommon Profits (Fisher)
    The Warren Buffet Way (Hagstrom)
    The Essays of Warren Buffet (Cunningham)
    Buffettology (Buffet, Clark)
    The Small Book that Still Beats the Market (Greenblalt)

     

    Sites:

     

    http://bit.ly/YmsykZ

     

    http://bit.ly/t3XFTe

     

    http://bit.ly/19IQyFY

     

    http://www.census.gov

     

    http://www.bls.gov

     

    http://bit.ly/11Z9Q8A

     

    http://1.usa.gov/ZTDg16

     

    http://321gold.com

     

    http://www.aaii.com

     

    http://stockgumshoe.com

     

    Hope it helps. And enjoy your summer everyone! See you all in September.

     

    Krustyman :-)
    1 Jul 2013, 07:37 AM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    Dang Krusty - you are way too smart for us here - you need to spend your time on SA Pro - :-)
    1 Jul 2013, 05:32 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @KRUSTY

     

    Have a safe trip.. Enjoy it !
    1 Jul 2013, 07:50 PM Reply Like
  • Krustyman
    , contributor
    Comments (843) | Send Message
     
    IT:

     

    Thanks! Leaving in 2 days!! :-)
    2 Jul 2013, 12:49 PM Reply Like
  • Krustyman
    , contributor
    Comments (843) | Send Message
     
    WMARKW:

     

    I am learning from all of you guys on a daily basis. :-)

     

    Krsutyman
    2 Jul 2013, 12:50 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    IT
    Recommended books

     

    Hot Commodities by Jim Rogers
    Buffettalogy
    World Right Side Up by Chris Mayer
    Breakout Nations by Ruchir Sharma
    1 Jul 2013, 07:38 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    For your consideration. Reading on dividend investing:

     

    http://seekingalpha.co...
    1 Jul 2013, 09:07 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » Guys

     

    GREAT, this is what I was looking for !!
    1 Jul 2013, 09:38 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    IT,
    I use Ameritrade , Fidelity for personal & accounts that I oversee.
    I try to keep it simple

     

    I also have built spreadsheets using "Google Docs" , track various accounts, watchlist, strategies , etc.. Gives me interactive , real time info during the day. its 's my attempt at a glorified Google finance.

     

    Sites that i use.. I do not take any one in particular as "gospel", try to weigh info and form an opinion from there

     

    Bespoke Investment http://bit.ly/ox9Vyo
    Drip Investment Resource ctr. http://bit.ly/wO6ngk
    Schaefer Research http://bit.ly/12Q1f4y
    Dark Liquidity 2013
    http://bit.ly/14IuCXB

     

    Also use, as mentioned before -- freestockcharts.com

     

    Occasionally will look at the usual financial sites
    CNBC.Com, Yahoo Finance, & Google Finance
    Today's headline from Bespoke group wil surprise those that believe the market is "euphoric"
    1 Jul 2013, 10:34 AM Reply Like
  • southgent1951
    , contributor
    Comments (2670) | Send Message
     
    I recommend the Calculated Risk blog for unbiased, accurate and brief summaries of economic data.

     

    http://bit.ly/KwO5iy

     

    I read that blog everyday. The author also provides links to the original data source for anyone desiring to read more. The author frequently uses historical charts which are invariably helpful to me since trends are easier to spot. For a number of reports, I will read the entire underlying report and will also examine tables containing data (e.g. GDP)

     

    As an investor, I just want the facts without filtration through some prism that distorts the facts.

     

    I am a top down investor which means my asset allocations key off my Big Picture views. I can only form those views with a wide variety of reliable information, taken from original source material, and then exercising the best judgment based on my knowledge and experience.

     

    Bias can be reflected through interpretation of the facts as well as by failing to even mention relevant information inconsistent with a pre-existing worldview.
    1 Jul 2013, 12:03 PM Reply Like
  • Tack
    , contributor
    Comments (12964) | Send Message
     
    Re-posted here from Chapter 20, per suggestion of blog author, IT:

     

    "Allow me to chime in and cause more trouble, no doubt.

     

    ZeroHedge is exactly the kind of radical-opinion, driven by selective facts, agenda-biased web site that misleads inordinate numbers of investors, if they fall under its thrall. It's aim, precisely, is to inflame negative emotions, and to the extent it achieves this end with readers, it cripples their objective assessment of factual information.

     

    And, to opine that I am not on any warpath directed at ZH, alone, I could say the same thing about other sites with rather one-sided views, like Huffington Post, etc., as well. Even CNBC has its factual information frequently smothered in lots of attention-grabbing punditry that, too often, leads investors astray and detracts from their ability to make independent judgments about what's actually represented by data. That's why I don't even turn it on; it's a distraction and detracts from time spent reading, researching and thinking independently.

     

    One of the best things about SA is that its Market Currents offers an excellent news feed on factual information that's mostly (not always) not slathered with hefty doses of editorial opinion. Of course, articles and commentary are abundantly available to serve that purpose, so readers must try to sift through sources to find those that make useful analyses of data, rather than merely shouting out opinions.

     

    The investors who perform the best are those that spend more time researching and thinking about actual data and its implications and less time getting swept up in emotional debates by sources that usually offer perpetually bullish or calamitous views of the universe."
    1 Jul 2013, 01:10 PM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    As I understand this is the Reading Chapter:

     

    Here are some things, beside SA, that I read regularly:

     

    Hussman weekly news letter: You can argue about his investment performance, but I like his data and his way of making things that are complicated seem straight forward.

     

    http://bit.ly/Ha1hxl

     

    I review items on Goldseek to see if there are things that pique my interest....I am particularly looking for data.

     

    http://goldseek.com

     

    I use Dividend.com to review upcoming dividends and relevant dates.

     

    http://www.dividend.com

     

    Of course other periodicals, but mostly as referenced in someone elses information.

     

    That's a few to start with.
    1 Jul 2013, 05:30 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @WMARK

     

    Yup, this is it !! As you see when this is completed everyone can go back and add new comments as NEW ideas and sites pop up!

     

    Confusing at first , but well all get the hang of it. Then we go back to the regular chapters!!
    1 Jul 2013, 05:46 PM Reply Like
  • Common Guy
    , contributor
    Comments (79) | Send Message
     
    I would like to add that the guy who created zerohedge ivan was fired from a wall street investment bank. He holds a grudge with them......

     

    It was this grudge that led him to create zerohedge. A person with hate can't be unbiased, therefore is recommended to take zerohedge with a grain of salt.
    2 Jul 2013, 01:33 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @COMMON

     

    That is info most I am sure did not know.. Thanks!
    2 Jul 2013, 01:57 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » I COPIED TACKS COMMENT FROM ANOTHER CHAPTER!!

     

    Here is a very useful site for due diligence on any security, especially all preferreds and exchange-traded debt issues:

     

    http://bit.ly/qWc98b.

     

    For closed-end funds:

     

    http://bit.ly/o4ngfR

     

    For yield issues of all types:

     

    http://bit.ly/I81bHK

     

    For every conceivable type of chart:

     

    http://www.ycharts.com
    1 Jul 2013, 07:46 PM Reply Like
  • User 7415181
    , contributor
    Comments (604) | Send Message
     
    I was about to post the first three sites when I saw you put up this article. Without trying to act like creepy stalker dude, Tack's commentary over the years is worth reading through.

     

    For those focused on yield, I think the five articles in this series are a good read:

     

    http://seekingalpha.co...
    2 Jul 2013, 08:33 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    I read and watch the Ebay crowd quite often.It helps to keep up with coin scams and other variables as well.
    http://bit.ly/14JFsN7
    1 Jul 2013, 09:20 PM Reply Like
  • extremebanker
    , contributor
    Comments (1710) | Send Message
     
    Websites and Investment papers.

     

    http://bit.ly/169pIbk

     

    http://bit.ly/1212MUr

     

    http://bit.ly/1cqDaFd;s=RSf|desc&t=6&am...

     

    http://bit.ly/o4ngfR

     

    http://bit.ly/qWc98b

     

    http://bit.ly/AddhLm

     

    I would also highly recommend the book "The Ivy Portfolio".
    2 Jul 2013, 12:23 PM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    One book that I would highly recommend is: Confessions of an Economic Hitman - John Perkins

     

    For those interested, this online book is an interesting read and covers many "ethical" issues about the power that issuers have to "produce" money. It's free and downloadable:

     

    The Ethics of Money Production - Hulsmann

     

    http://bit.ly/wk65Fr
    2 Jul 2013, 12:46 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @FOLKS

     

    Keep printing these idea's for reading material. It will be priceless !
    2 Jul 2013, 12:53 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Another book I read and suggest is 'The Big Short' by Michael Lewis. He's a terrific author and this book is a total insight to the way the Housing Bubble developed and also how a few were able to spot the way to hedge against it. A very good read if you can handle all the quotes from a man who suffered from Aspergers syndrome (And Turret's apparently).
    6 Jul 2013, 07:45 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    http://bit.ly/XuOwnV 'The BIG SHORT'
    7 Jul 2013, 03:30 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » TACK'S COMMENT !!

     

    Which of these would you rather have?

     

    Regional Banks:
    0.5% funding cost
    4.75% loans
    0.5-1.0% defaults

     

    BDC's:
    2-4% funding cost
    12% loans
    large capital-gain income on client sales and IPO's
    3-5% defaults*

     

    * that default rate seems way out of line, as Barron's says the rate is less than 1% "Well, a surprising nugget in the Barron's piece claims that the loan-loss rate for BDCs is a refreshingly low 0.7% a year." http://bit.ly/11nVMGi

     

    For me, anyway -- even if the defaults were 3-5% -- the choice is easy.
    5 Jul 2013, 05:26 PM Reply Like
  • southgent1951
    , contributor
    Comments (2670) | Send Message
     
    IT: The Barron's article alluded to by TACK was published last April and was written by Jack Hough.

     

    http://bit.ly/14T7BBq

     

    Hough is discussing primarily some arguments made by Wells Fargo, one of the brokerage firms at the center of the BDC universe.

     

    One metric mentioned by WFC is the dividend coverage from "stable cash flow".

     

    I would be in the camp that "stable cash flow" does not really mean what I would call stable when you are dealing with a bunch of junk credits. What can go wrong frequently will go wrong is one of my many mottos as an investor with over 4 decades under my belt.

     

    In any event, ARCC, which I own, has a ratio of stable cash to the dividend payout of 75%. The highest in that respect is New Mountain, which I also own, at 97%.
    5 Jul 2013, 08:28 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @SOUTH

     

    Thanks for the explanation...
    5 Jul 2013, 08:45 PM Reply Like
  • Tack
    , contributor
    Comments (12964) | Send Message
     
    south:

     

    Apparently, the "junk" credits pay off rather well, overall: http://seekingalpha.co...
    5 Jul 2013, 11:09 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Not sure if anyone mentioned this but Chuck Carnevale (SA author) , has presented a recent series about value investing..

     

    IMHO, he presents some of the best info here on SA,,

     

    A link to his latest on the industrial sector..
    http://seekingalpha.co...

     

    There is plenty of value here as he points out , and most of these are out of favor -- a perfect time to consider purchase..
    6 Jul 2013, 08:25 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    IT

     

    Another book I recommend is the Lords of Finance by Liaquat Ahamed, about CBs of US, England, France, and Germany during WWI and WWII
    7 Jul 2013, 02:55 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1502) | Send Message
     
    Okay IT, here is a link to Bob Wells latest article. He's become my guru, as the way he invests will work well for everyone's retirement fund.

     

    http://seekingalpha.co...

     

    All of Bob's articles are very informative for newbie investors - and I still consider myself a newbie.

     

    The discussions after the articles are great too.
    8 Jul 2013, 12:10 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Reposted here from Chapter 23 discussion on covered calls so I don't have to type it all out a 3rd time:

     

    As an example the 9 stocks I put calls on this month I have received $139 in dividends. But, I have also received $235 in premiums from the covered calls. For a total income this month of $374. If my calls get exercised by the 20th I will make an additional $600 profit on the stocks. Though only 4 of the 9 are in the money right now. Not a bad return for one month's work.

     

    IT, Rich,
    A call is an option to buy a stock at a given price. If you are buying a call option you pay a premium to purchase that stock at a certain price by a set date. The price is called the Strike Price, the date is called the expiration date or just expiration. If you already own 100 shares of a stock then you can sell a call for that block of stock. 1 options contract is always 100 shares. When you sell 1 contract of 100 shares of a stock that you own it is called a covered call, because your only risk in the contract is having to sell your 100 shares at the strike price. For SELLING a call you receive the premium. If you buy the call you pay the premium. If the price of the stock rises to the strike price the buyer can buy the 100 shares at any time. This is called exercising the option when the buyer wants the 100 shares. Just to give you an idea, I have only had one contract for GE exercised this year. Once the contract hits the expiration date it is gone. Either way you keep the premium and can do anything you want with it. Covered call options are the only options you can do without a margin account. In other words it is the only option you can do without having to borrow or put up money to execute. So, you do not have to worry about margin calls forcing you to make a trade. You already own the shares, that is all that can be forced into a trade at the strike price you agreed on..

     

    For an example. As you know I bought 100 shares of Archer Daniels Midland (ADM) with brokers fees my cost was $3417 or 34.17 a share.
    I went to Yahoo Finance and brought the options section for (ADM)
    http://yhoo.it/16lap9w
    On that day, the $35 strike price ($35 a share would give me a $83 profit for holding the stock for 20 days) for a 20JULY option had a premium of .40 (40 cents per share). .40 times 100 shares = $40.

     

    So I sold a call contact on (ADM) with a strike price of $35 for an expiration of 20JUL13. In the options table you will see ADM130720C00035000. This means the stock is ADM, the year is 2013, the month is 07 the day is 20, the "C" is for a call option and all the rest with the 35 is the strike price of $35.

     

    Currently, today ADM closed at $35.36. So the buyer could exercise their option at any time and my 100 shares of ADM would be sold to them for $3500 and the option is closed. If whatever reason the buyer doesn't exercise the option by 21JULY the option expires, I keep the 100 shares and start all over for the next covered call.

     

    So, just for examples sake the option on ADM is exercised tomorrow. I would have $3500 plus the $40 premium for selling the option for $3540 minus the $3417 I paid for a $123 profit in 20 days. Actually minus the $9.17 broker fees I would only have $113 profit for 20 days. I'll let you do the math, but, the point is that there are options ranging from one week to 5 years. I only do options for one month or less time periods. That means I can generate this income 12 times a years. If I make sure I hold the 100 shares during the 4 times a years that X Dividend and Date of record rolls around I also get the dividend payments for those 100 shares for the year. So if I subtract the 4 times a year I don't want to have an option on my shares I can still do 8 monthly options a year for the extra income.

     

    Hope that helps???

     

    @NOT

     

    So in your example what is your reasoning for not picking lets say $36 bucks as the strike price? 8 Jul, 11:09 PMReply! Report AbuseLike0

     

    NotrubComments (237)
    Because the $36 strike price on that day was only .12 or $12. Minus my brokerage fees it would make $2.29.

     

    I have been doing this long enough that I know I can usually just buy the stock back or even better buy one of the other stocks on my watchlist and start the process all over. I am not attached to my stocks. I like having a guaranteed sell price no matter what. My main priority is to generate monthly income, not hold on to a particular stock. Using the covered call option on my stocks I get paid every month vice just 4 times a year when dividends come around.

     

    If you look at the January 2015 option table
    http://yhoo.it/185bCZg
    I could have sold ADM for $40 strike for a $2.26 premium. Experience has shown me I can make more than $226 in two years. If I do weekly contracts that is 52 premiums a year, or monthly 12 times a year. So just doing monthly contracts $226 divided by 24 months = $9.46. So as long as I am making more than $9.46 a contract I am doing better in the long term doing shorter contracts. Also, with the shorter contracts there is less of a chance that your contract will be exercised. So I don't have to make any decision other than what is the next contract I am going to sell.

     

    You have to go into the tables and look up the contracts each time. They vary. A weekly contract may not always be available if there is no opening interest in it. Sometimes the contacts will not be available at each one dollar increment. Sometimes it may be $2 or $5. It all depends on the interest in that particular stock.

     

    richonsilver:
    Now there's something i haven't a clue about and won't touch until I do. "Calls" - I don't even know what that is but it sure sounds like Notrub is doing well with them. You mention an income of $374 this month... how much money is tied up in the market in order for you to generate that $374? Is making money this way high risk? I do not expect a fiull blown lesson on this... perhaps a link where i can learn about it but I am curious to hear what kind of funds must be toed up in and what risk level there is to generate the $374 with and additional $600 profit still possible. I would venture to guess there is significant money generating these possibilities but have no clue how much risk is involved at the same time.

     

    ROS,
    Currently this month I have 9 stocks that I have covered calls on. My cost for the 900 shares was $15,833. I do not put covered calls on every block of stock I own. Some are up for dividends, some I can not get a profitable strike price for in the one month or shorter time frame. Some I can't put a covered call on because I have not built up a 100 share block yet, like (FCX) I currently own 28 shares which I build on every time I get additional cash.

     

    As long as you only do covered calls on stocks in which you can make a profitable trade on at the strike price you select the only risk is that the option will be exercised and you sell your 100 shares of that particular stock. Once you sell a call on your 100 shares the premium is yours to do what you want with no matter what happens with the option.

     

    Some people think they are leaving money on the table. Take the example I gave of my 100 shares of (ADM). My strike price is $35. At this moment the price is at $35.36. So if it exercised today I get 3500 for the stock and $40 for the premium for 3540 before commissions. The buyer could turn around and sell the stock for $3536 minus their premium, $3500 for the 100 shares and commissions. Say the stock rose to $36 by Friday and was exercised. I would still only get the $3540, but the buyer would get $3600 for selling the 100 shares minus the above.

     

    I have had cases where the stock price goes up over $2 over the strike price and is never exercised. A lot of traders use options for a lot of different purposes. Like using a straddle (buying or selling a put and call at the same time to lock in a profit at a certain price range. This strategy is used a lot during earnings season when a stock is coming out with their earnings on a certain day and the trader wants to lock in a profit on just that days trading) or using options to hedge against losses. Once you get into those types of options you have to have a margin account. Which means your potential losses and gains are amplified because you are using leverage (borrowed money). I do not use borrowed money for any of my transactions so I have limited myself to just doing covered calls and taking what the market will give me each month.

     

    Hope that helps???
    9 Jul 2013, 01:19 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Perfect example of why portfolios need to be reviewed , at times employ sector rotation, and selectively trim overvalued stretched positions.

     

    Excellent article from one of the best - Chuck Carnevale..

     

    http://seekingalpha.co...
    9 Jul 2013, 09:26 PM Reply Like
  • dnorm1234
    , contributor
    Comments (868) | Send Message
     
    Mark Thoma's "Economists View" blog is a pretty good aggregator for economic news and insight from academic circles (and elsewhere). He's a prolific blogger.

     

    http://bit.ly/12Xa52U
    9 Jul 2013, 09:43 PM Reply Like
  • tampat
    , contributor
    Comments (996) | Send Message
     
    "Ahead of the Herd provides original content in the form of articles and interviews, we screen dozens of contributors articles every day for publication and we search the web for news regarding the various resource sectors.

     

    We do all this so you don't have to.

     

    No one is better when it comes to keeping YOU informed, and current, on what is happening in the world of resources."

     

    Richard (Rick) Mills
    Host, aheadoftheherd.com

     

    http://bit.ly/12rJ4jB
    10 Jul 2013, 04:12 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » Ok, anyone have a favorite magazine for newbies?
    10 Jul 2013, 05:24 PM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    Speaking of magazines.....have you noticed that most all magazines these days have shrunk to a pitifully small ghost of what they used to be. Guns and Ammo almost nothing for $7 or $8 bucks.

     

    What does it say when Vogue can be 250 pages and The Economist can be 40 pages?
    10 Jul 2013, 06:50 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » Does anyone even remember Mutual Fund Magazine years ago? Honestly I really thought that one was one of the best !
    10 Jul 2013, 11:46 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Interesting & informative article from Bob Wells, SA Author with a good track record , explains why he's not a fan of Div. ETF's which some have asked about ..

     

    http://seekingalpha.co...
    12 Jul 2013, 03:19 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @Folks

     

    I am glad that most of you have a understanding of what this chapter is all about. It will be a reference point now and in the future. Hell, we mad be at chapter 100 one day and refer back to this specific chapter for a newbie.

     

    I hatred in another blog a poster saying "we discussed this before so go find it"

     

    Like I am going to go back and read 99 chapters ? Come on. That is my reasoning for thinking about adding this ONE chapter for ALL to bookmark and ADD articles , books, even posts to.

     

    Thanks !
    12 Jul 2013, 04:54 PM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    I am starting to do an investigation of "Stock Ownership in America". I want to understand who owns what, by income, age, etc. I want to understand who is making market decisions and whether pundits are blowing smoke up my skirt (???) when they make comments in the press or media. I start off with the assumption that ownership is much more highly concentrated than it might appear in older and wealthier population. It might follow the income ratios, where the 1%'ers own much more of the market than we would think.

     

    I also want to understand what the hedge funds own/control and how much of the ownership is held in mutual funds.

     

    I'll let you know - maybe PM you IT with a document including graphs, that you can post on one of your chapters - if you find it "INTERESTING".
    12 Jul 2013, 05:37 PM Reply Like
  • tampat
    , contributor
    Comments (996) | Send Message
     
    I would be interested in the results.
    12 Jul 2013, 06:33 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » @WMARKW

     

    One thing I leaned years ago is EVERYTHING is interesting to someone. Have no problem either you posting it or me..

     

    Thanks. looking forward to it and honored that you would post your work here !!
    12 Jul 2013, 06:27 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Here is an interesting article about locking in your gasoline price

     

    I haven't researched it thoroughly , but it caught my eye ,especially the "my Gallons" link he provides

     

    I have a couple of friends that drive around all day with their jobs and their yearly gas consumption is huge. Maybe useful...?

     

    http://seekingalpha.co...
    13 Jul 2013, 09:23 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Market valuation today vs. 2007

     

    Warning contains - Very bullish commentary on equities--
    May not be suitable for all audiences :)

     

    But IMHO states factual data to consider.

     

    http://seekingalpha.co...
    13 Jul 2013, 10:11 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    Outstanding author here on SA who has assembled a div growth portfolio that now stands with a PE ratio less than the current S & P 500.

     

    http://seekingalpha.co...
    15 Jul 2013, 06:06 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    For your consideration, Ultimate buy and hold strategy:

     

    http://on.mktw.net/1dJ...

     

    You might also want to look at the links at the end of the article.
    19 Jul 2013, 06:37 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    There was some talk recently on the consumer staples sector.. An analysis from one of the best Chuck Carnevale.

     

    http://seekingalpha.co...
    19 Jul 2013, 12:51 PM Reply Like
  • Learner16
    , contributor
    Comments (106) | Send Message
     
    I recommend reading a book by Mebane Faber:

     

    The Ivy Portfolio

     

    http://amzn.to/14nnN19

     

    Very good, simple investing strategies based on moving averages and tactical asset allocation that worked in the past with the data to prove it.
    19 Jul 2013, 02:26 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1502) | Send Message
     
    IT, this is a very interesting article written by an author who should be followed

     

    http://seekingalpha.co...

     

    The graph showing WTI oil/gold compared to the DOW is very informative. Notice that when WTI/gold (using yesterday's numbers, that ratio would be 108/1293 = 0.08) is under the DOW, the market is rising.....but when WTI/gold goes above the DOW, the market is not doing so hot. Notice especially the period on the graph from 2007 to 2008. So going forward, I'm using this graph to signal how the market should do, going forward. As long as the WTI/gold ratio is below the DOW we should experience a bull market.

     

    I am expecting this bull market to run for awhile. If the price of oil goes to 150 and gold goes to 1000, then the ratio is 150/1000 =0.15. That would mean the market will go down, you can see on the graph WTI/gold would be above the DOW. As long as the WTI/gold stays well below 0.1 and the DOW is 10,000 or higher, this bull keeps on running.
    20 Jul 2013, 07:56 AM Reply Like
  • Dr. Ken Kapur
    , contributor
    Comments (137) | Send Message
     
    I strongly feel that the market is on the verge of going down.
    See my blog
    http://bit.ly/18MzbTQ
    Also my book
    31 Jul 2013, 08:31 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    At IT's request I offer this read for all those who are "market driven folk" but have issues with the private sector as regards healthcare.

     

    Kenneth Arrow (Nobel Prize winner and VERY respected economist) wrote "Uncertainty and the welfare economics of medical care" way back in 1963 and frankly, it's IMHO one the best argumenst for those who believe you dont have to be a Marxist to accept the need for socialised healthcare. Yes, you can be pro-market and pro single payer without evidencing cognitive dissonance! :-)

     

    There are real and perfectly logical problems with attempting to translate market forces to healthcare.

     

    A link:http: //http://bit.ly/1jSfuQx
    12 Dec 2013, 09:11 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    http://bit.ly/1bZG7kI

     

    Americans were too smart at one time to allow Socialized medicine.But they are now subjects of the state.
    12 Dec 2013, 03:23 PM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Coins: What socialised medicine? You mean when they adopted socialised healthcare for Medicaid and Veterans? That programme that Reagan said would lead to disaster and communism? The one that is more efficient than the private sector even though by law they cannot haggle on pharma prices? The one that is loved by almost everyone for half a century?

     

    You already HAVE socialised medicine and it works very well even though big pharma tried to cut the legs off it with that ridiculous law about not being able to negotiate prices like every private buyer can.

     

    Read the Arrow study, it is from around that same time 50 years ago when Americans were "too smart".
    12 Dec 2013, 04:41 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    @ Fabsy
    In regards to SOCIALIZED (Correct English Spelling)
    Vladimir Lenin " "Socialized medicine is the keystone to the arch of the socialized state."
    13 Dec 2013, 07:23 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3761) | Send Message
     
    @ Fabsy

     

    Many of your points are excellent, but I want to add on these two:

     

    The socialized medicine we have doesn't work very well. It's bankrupting us. It has limits on basic preventative care, and other cost efficient care because "politics" won out on this or that issue. Many, many doctors won't participate. So you're stuck paying outside insurance, or without an appropriate specialist, take your pick.

     

    Also, as I've said, private buyers can't negotiate prices. If you go to the doctor without an insurance plan you will pay retail. So if the doctor charges medicare $250 and gets paid $75 by medicare, the private buyer will pay $250. They can cry, plead, beg, but most of the time they pay $250 or it goes to collections.
    13 Dec 2013, 10:45 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Land: Many thanks for your kind words.The answer to Medicare being abandoned by overpaid doctors is not to abandon Medicare but perhaps to remove limits on numbers of doctors and expand single payer? I like doctors but they operate as a guild and exploit the worst mix of the public/private nature of US healthcare and are thus far better paid than they "should be" in either a fully functioning free market or a nationalised system.

     

    And when I speak of private buyers negotiating I am not speaking of retail customers. HMOs and the like do not pay the same price from big pharma that you or I would.
    13 Dec 2013, 10:50 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3761) | Send Message
     
    @ Fabsy

     

    Since I wanted this discussion to move over to the chapters & not clutter up here, I'm going to post my reply in the conspiracy chapter.

     

    Hopefully... you'll see it there.
    13 Dec 2013, 11:08 AM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    "overpaid doctors" - says who?
    13 Dec 2013, 01:20 PM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    WMARKW: says the absolutely HUGE increase in healthcare costs in the US that are DOUBLE the GDP percentage of most developed nations which have superior outcomes and provision. Look outside the US box and you see that doctors (as part of the healthcare sector in general) are vastly overpaid relative to results on a national scale. If you think pay should correlate to performance (or be the product of a generally functional market system) then the US healthcare sector as a whole is massively overcompensated and the "market" is totally skewed. If you can come up with a better metric to support the idea that the US consumer gets "good value" from the healthcare sector bring it on. The objective data is pretty clear on the subject and it certainly supports my proposition. Now kindly show why you think doctors as a whole in the US are not overpaid and by what measure. Or do you not have any objective basis for your opinion?
    13 Dec 2013, 01:43 PM Reply Like
  • WMARKW
    , contributor
    Comments (10275) | Send Message
     
    See Chapter 41.
    13 Dec 2013, 01:49 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Animal Farm is what you have advocated. I was born in a free country instead.Some folks that I met in Europe when I was there for a couple of years get it ,most don't "Nuff said"
    12 Dec 2013, 04:48 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    http://bit.ly/1crEPKq

     

    I should have put this link with the Animal Farm comment. Sorry about that IT,thanks for reminding me what this thread is about. I apologize .
    13 Dec 2013, 07:10 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Coins; most people come to a site like this to listen to fact based arguments with logical reasoning. Platitudes are for the wilfully ignorant.

     

    You consistently respond to detailed questions with comments like this. Why do you even bother?
    12 Dec 2013, 06:49 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Because you are being a windbag? Someone asks what time it is and you want to build an entire clock.And you say so many things that are not so, Anymore questions?

     

    " The problem is not that people are taxed too little; the problem is that government spends too much."
    ……………..Ronald Reagan
    12 Dec 2013, 07:35 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4703) | Send Message
     
    the reduction on the deficit as reported -- Most of the credit (about 60%) goes to spending restraint: this year federal spending will be about $3.43 trillion, which is the same as was spent in the 12 months ended June 2009. That will mark four and a half years of zero increase in federal spending. As a % of GDP, federal spending this year will be 20.4% of GDP, down from its 2009 high of 24.4%.

     

    Amazing how the facts can be spun to make an incorrect point..
    Same nonsense different day ..
    12 Dec 2013, 07:41 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Here's something that should be read objectively,especially by those like Steve who believe that somehow our spending is in control.
    "The Congressional Budget Office (CBO) provided a fresh reminder of Washington’s out-of-control spending. CBO updated its budget outlook with the following deficit and debt estimates:

     

    This year’s budget deficit = $642 billion
    FY2023 budget deficit = $895 billion
    Total deficits over the next decade = $6.34 trillion
    Gross federal debt in 2023 = $25.2 trillion
    What Drives the Debt?
    According to CBO’s outlook, revenue is projected to grow each and every year. In 2023, CBO predicts the federal government will collect nearly $5 trillion in tax revenue. The problem is out-of-control spending. By 2023, the federal government will spend at an annual rate of nearly $6 trillion. Washington is expected to spend close to $47 trillion over the next decade. Health-care-entitlement spending consumes nearly one-third of total government spending over the next decade.

     

    The Consequences of Inaction
    In testimony delivered earlier this year to the House Budget Committee, CBO Director Doug Elmendorf said the following:

     

    “Federal debt held by the public is projected to remain historically high relative to the size of the economy for the next decade. . . . Such high and rising debt would have serious negative consequences: When interest rates rose to more normal levels, federal spending on interest payments would increase substantially. Moreover, because federal borrowing reduces national saving, the capital stock would be smaller and total wages would be lower than they would be if the debt was reduced. In addition, lawmakers would have less flexibility than they might ordinarily to use tax and spending policies to respond to unexpected challenges. Finally, such a large debt would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates."

     

    CBO’s update can be read in full here. http://1.usa.gov/Jm9XUW
    13 Dec 2013, 07:16 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Coins: And you deal in platitudes that are ridiculous. You quote REAGAN talking about govt spending????!!!! Do you have any idea at ALL what happened to govt spending and deficits under Reagan? Are you kidding me!!!????
    13 Dec 2013, 07:18 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Fear: Its actually FAR WORSE than you state. If you factor in all govt spending (including states) and adjust for inflation and the automatic failsafes such as unemployment benefit that kick in during recessions then govt spending is actually COLLAPSING. In fact, this is the worst drop in total govt spending in the US since about the time of Korean war demobilisation.

     

    Try telling this to Coins though. He simply wont believe it becaus it conflicts with his meme indoctrination.Oh, and the deficit is falling like a brick.

     

    A link from the antichrist according to Coins: http://bit.ly/18Isdkh
    13 Dec 2013, 07:23 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    That is not my link Fabsy. Please show where I posted that link anywhere..This was my link on overspending.
    CBO’s update can be read in full here. http://1.usa.gov/Jm9XUW
    Please don't misrepresent others,it makes you look small and European.
    13 Dec 2013, 07:25 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Coins: Here is what the Von Mises institute thinks about your Hero Reagan who actually spent much more than Carter and taxed more too even as he borrowed more. http://bit.ly/NZn37V

     

    So if even your holy grail Austrians know the truth why on EARTH would you quote REAGAN to suggest lower taxs and less gvt spending???!!!! You only reveal your complete ignorance of history and economics and your willingness to not only deal in platitudes but BELIEVE THE WORST OF THEM.
    13 Dec 2013, 07:30 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Here's the deal with Paul Krugman : He is wrong ! Why in the world would you follow a Keynesian dingbat like him?
    . As Milton Friedman pointed out, the real burden of government is spending, regardless of whether that spending is financed through debt or taxes. Too much debt is clearly bad, but substituting taxes for the debt does not make the problem substantially better.

     

    Which brings us to the question of European “austerity.” Krugman continues to insist that European countries’ austerity has been devastating, and that spending cuts must therefore be resisted. The “case for keeping [the U.K] on the path of harsh austerity isn’t just empirically implausible, it appears to be a complete conceptual muddle,” he wrote this week, and “austerity policies have greatly deepened economic slumps almost everywhere they have been tried.”

     

    But there have actually been few spending cuts in Europe, so it makes little sense to blame them for poor performance. A new study by Constantin Gurdgiev of Trinity College in Dublin compared government spending as a percentage of GDP in 2012 with the average level of pre-recession spending (2003–2007). Only three EU countries had actually seen a reduction: Germany, Malta, and Sweden. Not surprisingly, two of those three, Germany and Sweden, are among those countries that have best weathered the economic crisis. Those countries that have suffered most, Greece, Italy, Spain, and Portugal, have all seen spending increases.

     

    And what about Great Britain, which has been Krugman’s No. 1 exhibit for the dangers of austerity? Compared with pre-recession levels, British government spending is up by 2.5 percent of GDP, a 29 percent increase in nominal spending.

     

    Krugman belittles those who cite countries such as the Baltic nations or Switzerland, whose governments really have cut spending and seen robust economic recoveries. But how does he account for Iceland, considering he himself once called it “a post-crisis miracle?”

     

    Iceland actually slashed spending from 57.6 percent of GDP in 2008 to 46.5 percent in 2012, a nearly 20 percent reduction. Yet, while Iceland was one of the countries hardest hit by the international banking crisis of 2008 and the recession that followed, the economy started growing rapidly again in 2010.

     

    What most of Europe has seen in abundance is tax increases — exactly the sort of thing Krugman has advocated in the United States. In fact, overall, European countries have raised taxes by $9 for every $1 in spending cuts.

     

    One might conclude that it was these tax hikes, rather than nonexistent spending cuts, that are responsible for Europe’s economic slowdown. Something to keep in mind the next time Paul Krugman — or President Obama, for that matter — calls for yet another tax hike on the rich.

     

    None of this makes Krugman either a knave or a fool. But it does make him wrong.

     

    http://bit.ly/1ea5EJP
    13 Dec 2013, 07:37 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Hey Fabsy .Your total ignorance of American economics has been illustrated once again ! CONGRESS does the spending in America. Go get a clue .

     

    Here's more about your "IDOl" Krugman
    European economies have sputtered. Krugman blames this on sharp spending cuts, which would be the opposite of the Keynesian stimulus spending that he favors. If only European governments had listened to him, Krugman suggests, instead of to all those knaves and fools, and spent more, their economies would be humming along by now.

     

    Professor Krugman should pause briefly from congratulating himself totake a look at a few unfortunate facts.

     

    Let’s deal with the Reinhart and Rogoff kerfuffle first.

     

    For all the attention it has received, the Amherst researchers did not actually disprove Reinhart and Rogoff’s conclusion. Reinhart and Rogoff found that economies grew slower during periods of high debt (defined as government debt greater than 90 percent of GDP) than they did during times of lower debt.

     

    The researchers from UMass, on the other hand, found that — wait for this — economies grew slower during periods of higher debt than they do during times of lower debt.

     

    The UMass researchers did find a smaller difference in growth rates (one percentage point versus 1.3 points for the preferred median rates in Reinhart and Rogoff), but that hardly suggests that we are in dire need of more debt.

     

    Besides, Reinhart and Rogoff’s model always provided a sort of faux precision to the debt argument. While the UMass researchers agreed that higher debt is correlated with lower growth, they found no evidence of Reinhart and Rogoff’s assertion that growth drops off dramatically above 90 percent of GDP. Did anyone really believe that debt equal to 89 percent of GDP was fine, while 91 percent of GDP sent the economy into a free fall? The point is that governments cannot amass an unlimited amount of liabilities without economic consequences.

     

    Numerous studies besides Reinhart and Rogoff’s have shown this.

     

    Read more: http://bit.ly/1crGXBL
    13 Dec 2013, 07:42 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Oh boy Coins. Once again you attempt to score victories by claiming I said somethin I didnt and then stamping over what I didnt say..... That might be fun for you but it makes you look very silly in front of an audience.

     

    So, if you are to be believed, all that spending and taxing under Reagan was nothing at ALL to do with his policies but forced, simply FORCED on him by a hostile congress. Is this your firm belief? I just want you to go on record first before I respond.

     

    Now on RR the main gripe with it was NOT that they saw a relationship between debt and growth, no. Only the ignorant half aware observers of the debate believed that. The main issues are 1) they did not establish CAUSALITY (that debt caused slower growth or slower growth caused higher debt). DO YOU UNDERSTAND THIS VERY BASIC CONCEPT AND WHY IT RENDERS YOUR ANALYSIS UTTERLY WRONG? 2) RR allowed a meme to spread virally that there was some kind of "magic 90% debt/GDP treshold that Paul Ryan and others used to beat everyone up about spending. That magic threshold was WRONG, incorrect, totally bullsh-t. Has anyone on the Right retracted anything? Nope.

     

    Now, will you PLEASE attempt to either widen your perspective, drop your blind ideology or just read more diverse sources.

     

    I read Krugman, I also read from the Von Mises Institute and many many disparate sources. I then compare, contrast and try to form a synthesis of my own without preconceived ideology getting in the way. You should try it.
    13 Dec 2013, 09:41 AM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3738) | Send Message
     
    Debt Wall modeling says under a relatively low interest rate regime Congress can continue its massive borrowing for twelve more years 'til empirical observation suggests the Treasuries auctions go into crisis mode and the bond vigilantes take control of the agenda. One of several factors for the tipping point will be 7% yields on the 10-yr bond.

     

    Debt Wall chart: http://bit.ly/vIM1wQ
    14 Dec 2013, 02:19 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » Guys

     

    May I remind everyone this link it just for reading material. All other comments belong in the chapters.

     

    Thanks!
    12 Dec 2013, 07:38 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Fabsy,are you still going to go with the false premise that Jesus was a Marxist? And since you brought that up I have O respect for your POV since you can't admit how wrong you were? Got any other "platitudes"?
    12 Dec 2013, 07:39 PM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Well Coins, even though I repeat that I did NOT say Jesus was a Marxist (and I am getting very tired of dumbing down so you can understand what everyone else on this forum understood (which was that I was criticising a false comparison of Mandela and Obama to Marxism) the fact is a LOT of people (other than Limbaugh and Palin) see a HELL OF A LOT of Marxism in Jesus's teaching even if they would never ever call it that.

     

    Perhaps Limbaugh and Palin know more about Jesus than, say, the Pope? http://bit.ly/1fpMD3l

     

    There are a nice long list of quotes from Jesus there that you would probably shoot a politician for saying today. Go at it matey, explain them all away for me as not in fact the call for wealth re-distribution they most certainly are....
    13 Dec 2013, 07:37 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » I hope everyone understands that this is a READING CHAPTER...I really don't want to start deleting derogatory comments.

     

    Put them in chapter 41 :)

     

    Thanks!!
    12 Dec 2013, 07:49 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    From Rob McEwen :
    "Parts of the world are still buying gold. Russia is still buying gold and they publish their gold reserves monthly. China is still buying gold. There’s a lot of gold going through Hong Kong and through Mainland China.

     

    Countries with large dollar reserves are using some of those reserves to buy gold and you have to say, “Well, why are they buying gold?” Large Central Banks aren’t selling their gold. The U.S. hasn’t been selling their gold for quite a while.

     

    If it was a worthless [relic] and it was going down, then you’d think they would just get rid of it. [But] I don’t think there’s much more on the downside in gold. Maybe five percent. You look at the broad market right now. The stock market is quite high at the moment and on a relative basis, gold is very cheap. So I think some investors will be looking at relative value situations, and saying, “Maybe I should have some gold in my portfolio now?” It’s off quite a bit from its highs, and I still believe our monetary base is being debased and one needs to protect their capital."
    http://bit.ly/1crEEi0
    13 Dec 2013, 07:07 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3761) | Send Message
     
    Folks, Fabsy, CoinK...

     

    can you please take this discussion over to chapter 41 or the conspiracy/discussion chapter?

     

    This reading chapter is only for references, not discussion. It's disturbing my sense of order. ... I like being able to come to this chapter to pick up references. A long,, long discussion in the middle is going to make that much harder.

     

    ...Also IT's going to find himself having to delete some of this if it stays here, and then it won't make sense...
    13 Dec 2013, 07:57 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3761) | Send Message
     
    Oops, I meant a smile or lol after my comment.
    13 Dec 2013, 08:20 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Here's some of my favorite reading material. I am a huge fan of the writings of Thomas Sowell. Here's a good sample .

     

    Two unrelated news stories on the same day show the contrast between government decisions and private decisions.

     

    Under the headline “Foreclosed Homes Sell at Big Discounts,” USA Today reported that banks were selling the homes they foreclosed on, at discounts of 38 percent in Tennessee to 41 percent in Illinois and Ohio.

     

    Banks in general try to get rid of the homes they acquire by foreclosure, by selling them quickly for whatever they can get. Why? Because banks are forced by economic realities to realize that they are not real estate companies.

     

    No matter how much expertise bank officials may have in financial transactions, that is very different from knowing the best ways to maintain and market empty houses.

     

    Meanwhile, there was a story on the Fox News Channel about schools that are using their time to indoctrinate kindergartners and fourth graders with politically correct attitudes about sex.

     

    Anyone familiar with the low standards and mushy notions in the schools and departments of education that turn out our public school teachers might think that these teachers would have all they can do to make American children competent in reading, writing and math.

     

    Anyone familiar with how our children stack up with children from other countries in basic education would be painfully aware that American children lag behind children in countries that spend far less per pupil than we do.

     

    In other words, teachers and schools that are failing to provide the basics of education are branching out into all sorts of other areas, where they have even less competence.

     

    Why are teachers so bold when banks are so cautious? The banks pay a price for being wrong. Teachers don’t.

     

    If banks try to act like they are real estate companies and hold on to a huge inventory of foreclosed homes, they are likely to lose money big time, as those homes deteriorate and cannot compete with homes marketed by real estate companies with far more experience and expertise in this field.

     

    But if teachers fail to educate children, they don’t lose one dime, no matter how much those children and the country lose by their failure. If the schools waste precious time indoctrinating children, instead of educating them, that’s the children’s problem and the country’s problem, but not the teachers’ problem.

     

    Sex indoctrination is just one of innumerable “exciting” and “innovative” self-indulgences of the schools. There is no bottom line test of what these boondoggles cost the children or the country.

     

    Incidentally, conservatives who think that schools should be teaching “abstinence” miss the point completely. The schools have no expertise to be teaching sex at all. We should be happy if they ever develop the competence to teach math and English, so that our children can hold their own in international tests given to children in other countries.

     

    Schools are just one government institution that take on tasks for which they have no expertise or even competence.

     

    Congress is the most egregious example. In the course of any given year, Congress votes on taxes, medical care, military spending, foreign aid, agriculture, labor, international trade, airlines, housing, insurance, courts, natural resources, and much more.

     

    There are professionals who have spent their entire adult lives specializing in just one of these fields. They idea that Congress can be competent in all these areas simultaneously is staggering. Yet, far from pulling back — as banks or other private enterprises must, if they don’t want to be ruined financially by operating beyond the range of their competence — Congress is constantly expanding further into more fields.

     

    Having spent years ruining the housing markets with their interference, leading to a housing meltdown that has taken the whole economy down with it, politicians have now moved on into micro-managing automobile companies and medical care.

     

    They are not going to stop unless they get stopped. And that is not going to happen until the voters recognize the fact that political rhetoric is no substitute for competence."

     

    Thomas Sowell is a senior fellow at the Hoover Institution at Stanford University. His Web site is http://www.tsowell.com.

     

    From the writings titled 'Seductive Beliefs' http://bit.ly/1fpTVUK
    13 Dec 2013, 08:18 AM Reply Like
  • Fabsy
    , contributor
    Comments (361) | Send Message
     
    Here you go Coins et al: A nice summary of why we probably shouldnt have a gold standard from Brad de Long. Its short and sweet and might prime you for conversation :-)http://bit.ly/1kG4Qda
    13 Dec 2013, 09:47 AM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    I don't want a Gold standard "fabsy:. Where, in your alleged mind,did you get that ?
    13 Dec 2013, 01:55 PM Reply Like
  • CoinsK
    , contributor
    Comments (2923) | Send Message
     
    Anyone ever read articles by Reuters? Not a right wing source exactly.

     

    http://reut.rs/1bBDPCa
    13 Dec 2013, 02:00 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » Ok, ok, ok....I am sorry but I had to delete a few comments . I love the intensity and opinions on anything. Both sides of the fence are great.

     

    However I really would appreciate it if you guys can PLEASE move your discussion to the conspiracy chapter or chapter 41?

     

    LOMAH is correct as I am trying to keep some things in order. I ORIGINALLY set up this blog portion for references. Now if some wants to dispute the references then bring that over somewhere else.

     

    I have held back my opinion of some references people have left. It isn't my place to interject my thoughts. That would be up to the reader of such reference. Just like in a library..

     

    So please continue with the debate but just bring it at least to chapter 41 ?

     

    THANKS FOLKS..BTW I also will delete anyone who just drops a derogatory comment without any backup. That is wasted space. I am more lenient with those who participate on a daily basis. However if a newbie drops in and just blasts someone that comment is history !
    13 Dec 2013, 02:16 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10361) | Send Message
     
    Author’s reply » reply » Last night I was thinking of some of the mutual funds that I have owned ..Looking for value investing one specific one stood out.. Tweedy, Browne !! Here is a link for those that might have interest..

     

    http://www.tweedy.com
    31 Jan, 04:28 PM Reply Like
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