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Eric Peterson

Eric Peterson
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  • What Is In The Silver? [View article]
    Very interesting article and I like your approach, analyzing the correlations. But I think one year is much too short. I think the analysis should at least contain the 2008 crisis, so a 5-year correlation would be much more interesting.

    Phrases that you are testing, such as "safe haven" and "inflation protection" certainly are not used by investors with a 1-year trading horizon. Thus the need for a longer time period for the study.
    Feb 8 07:55 AM | 3 Likes Like |Link to Comment
  • What January Performance Portends For The Stock Market In 2012 [View article]
    It seems this whole article could have been a LOT shorter: "The January Barometer has no predictive power of statistical significance". That's about all the useful information there is in the article, so why is the article so long? I guess it was just for entertainment, so can't knock it too much.

    By the way, how is that 1000 target for the SP 500 working out for you? It's going to take a drop of over 300 points now to reach that by April 27. Even if it does happen, it wasn't a good strategy to sit out during the massive rally of the past 6 weeks. Why not get out now at 1320 instead of below 1200 in December? You missed this rally completely.
    Feb 2 06:29 AM | Likes Like |Link to Comment
  • 2012 Europe Outlook: How The Fiasco Will Unfold, Part 2 [View article]
    The title of your December 21 article said that 100% cash is the only way to play this market. If you are a predicting a 20% decline in the SP 500 by the end of April, why not sell out-of-the-money calls on the SP 500 to get some income, instead of sitting 100% in cash?

    For example, right now I'm short a number of June SP 500 1400 calls, because I don't think the SP 500 will get to 1400 by June. If it stays below 1400, I collect all the premium as a type of income on my cash. I make this income whether the market goes down a lot, down a little, stays the same, or goes up 8% more by June. Only if it goes up more than 8% by June will I lose money. IMO this is a better strategy than sitting in cash, if your opinion is the market is not going to skyrocket.
    Jan 17 08:20 PM | Likes Like |Link to Comment
  • 2012 Europe Outlook: How The Fiasco Will Unfold, Part 1 [View article]
    Very interesting article with lots of good ideas and good presentation of the current situation. Without getting into any specifics, however, I don't think some of the predictions about the future can be proven just by a logical train of reasoning. It's also possible to present a very logical argument that would lead to different conclusions about the future of Europe. I think the real situation is much more complicated than A implies B will happen, B implies C will happen, so my conclusion is C will happen. You might have left out factors D and E, or overestimated the impact of factors A and B.

    One example is your claim that austerity won't work for any of the countries involved. Some very smart and experienced people with no political ambitions or biases think it can work. I personally have no opinion either way, I'm just saying that smart people with logical arguments can come to opposite conclusions about the future.
    Jan 17 07:53 PM | 1 Like Like |Link to Comment
  • Today In Commodities: Giddy Up [View article]
    "The 50 day average on GLD is in a downward slope and it it looks like it is destined to fall below the 200 day--and you know what that will mean."

    Actually I don't know what that means. :) Can you point to an objective study that looked at all the times in the past 20 years or so that the 50-day dropped below the 200-day, and where gold was one month later? Or two months later? I'd like to see the actual numbers. (Gold not GLD, GLD hasn't been around 20 years).
    Jan 4 08:26 PM | Likes Like |Link to Comment
  • Be Aware Of Santa Claus Rally, New Year/Year End Indicators [View article]
    All of these indicators are a form of "cheating", because they include the up period into the prediction. For example, "ïf January is up, the whole year will be up" is kind of like saying if a football team is up 14-0, it is likely to win the game. Which doesn't say a lot. The only true test of January's predictive power is how the market does in the remaining 11 months, not how it does for the whole year. Same for the first 5 days of January predicting January. It should be used only to predict the remaining days, not the whole month. You can't buy the market at the beginning of January after seeing how it did the first 5 days!

    Would be nice to see if these old cliches really have predictive power in the proper way, not using part of the period to predict the whole period, but to only predict the future.
    Dec 25 11:17 AM | 2 Likes Like |Link to Comment
  • 5 ETF Portfolio With Near Zero SPY Correlation [View article]
    Pecious metals and bonds have done very well over the last two years, so I think any portfolio that has 80% of its assets in metals and bonds would outperform the SP 500 during that time period. Even if the funds were picked randomly with no special selection criteria like you used. A true test of the portfolio must include time periods when bonds and precious metals did badly.
    Dec 21 07:12 AM | Likes Like |Link to Comment
  • 10% Sale On Closed-End Dividend Funds [View article]
    Closed-end funds with large dividends are very misleading. A large part of the "dividend" is often just a capital gains distribution, which you have to pay tax on, and which lowers the NAV and the market price of the fund by the amount of the distribution. This is especially true for many of the country funds. So the net effect is you make nothing from the distribution, but have to pay taxes even if you are holding your shares for the long term.
    Dec 14 08:48 AM | Likes Like |Link to Comment
  • A Short Covering Rally? [View article]
    I think the only thing your first chart is showing is that high-beta stocks decline a lot and rise a lot. We already knew that...

    How about showing the average beta of those deciles?. I bet it shows a clear trend higher for the stocks that gained the most on Monday (and declined the most the previous month).
    Nov 30 10:15 AM | Likes Like |Link to Comment
  • Today In Commodities: Is My Money Safe In Commodities? [View article]
    Matthew:

    "money at an FCM in segregated account…that my friends is safe. "

    Horrible timing on that one! I'm an MFGLobal cutomer and haven't had access to my segregated money for over a week, and have no idea when or IF I will ever get access to it, or how much of it is lost.

    Segregated money is safe ONLY if the firm follows all the rules, which does not seem to be the norm these days!
    Nov 7 11:54 AM | Likes Like |Link to Comment
  • Why Now Is the Time for Corn [View article]
    That trend line looks rather arbitrary. If you started with the July 2007 low, the trend line would actually be sloping down slightly instead of up, and we would currently be nowhere near it. Trend lines can usually be chosen to fit a story (not that your story is wrong, I'm merely talking about trendlines in general and their usefulness).
    Mar 18 04:07 PM | 1 Like Like |Link to Comment
  • Who Says Gold Doesn't Earn Interest? [View article]
    Article is wrong. You don't get interest from the short-nearby long-forward spread. You make money only if interest rates go up (or the expectation goes up). If interest rates stay constant, you make nothing from that spread. There is no interest on gold contracts or spreads.
    Jan 5 09:05 AM | Likes Like |Link to Comment
  • Indonesia: A Must-Own Emerging Market [View article]
    I've been investing in IF (Indonesia Fund, a closed end fund) for serveral years. It had a huge drop last year, but has been doing well this year, although not up to the levels it was at last year. It has the advantage that it's trading at about a 10% discount to net asset value. It has the disadvantage that trading volume is fairly light.
    May 19 10:29 AM | 2 Likes Like |Link to Comment
  • Not All Eastern European Economies Are the Same [View article]
    And I might add: if you are a contrarian investor, then the countries with the worst sentiment might be the best investments.
    May 13 07:46 PM | 1 Like Like |Link to Comment
  • Not All Eastern European Economies Are the Same [View article]
    I'm not sure that sentiment is a very good indicator of how an economy is actually doing. I'm an American living in Slovakia, and Slovaks are notoriously pessimistic about their country for some reason.
    May 13 07:45 PM | 1 Like Like |Link to Comment
COMMENTS STATS
264 Comments
93 Likes