irondoor91

109 Comments

    • Time To Go Long, For A Short Time? [view article]
      "it’s hard to imagine stocks staying below this level over the next year to three years".

      I don't know. Who would have imagined 10 years ago that an investor would have been fortunate to be a break-even on his Vanguard 500 Index fund in the next 10?

      Can anybody ever think the unthinkable?       Oct 06 07:46 PM
    • Opportunity in Emerging Markets Amidst This Panic [view article]
      Frear is a natural reaction, and it has a positive intention; to protect yourself from danger. It originated thousands of years ago when man saw others of his species running in panic. He didn't stand around waiting to see if it really was a saber-tooth tiger. He just ran with the herd that had alerted him to potential danger as he had been trained to do.

      On the other hand, when man is hunting for game he applies patience, cunning, stealth and a small group with killing tools. He knows better than to charge in the direction of his prey. As he becomes better equipped to kill, many gain complacency and the highly skilled begin to supply others with meat as they become dependent on his hand-outs.

      But those who became complacent and dependent lacked survival skills. They were out of shape and couldn't escape.

      Sound familiar? It should, because we are seeing it play out today in our citizens who are sitting on their portfolios and 401-k's like deer in the headlights. "It'll come back" is the refrain. Don't panic. Diversify. etc.

      By the time this decline accelerates down past the 8500 level, true panic and the herding instinct will set in. But it will be too late for many. They left too much of the decision making up to others and had let any skill in it that they should have acquired before investing wither away. All they have left now is either indecision or panic.       Oct 06 10:46 AM
    • The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
      The longer one continues with fundamental analysis and value-based investing in these names, the more money will be lost. The question is, how are these companies going to perform in a deflationary environment, and how do they scale back to respond to it. Oct 03 09:00 AM
    • Fooling Around a Financial Black Hole [view article]
      Look at history. Government bailouts in a Bull market; the market continues to advance. Government bailouts in a Bear market; the market continues to decline.

      The market is much, much bigger and stronger than any government or combinations of of worldwide government. The government might as well issue regualtions that prevent selling on a down-tick.       Sep 28 09:55 AM
    • The Calm Before the Storm? [view article]
      Dear Givemeabailout: Paulson had to sell his Goldman stock when he became Treasury Secretary. It was a great trade, since he got out at a much higher price and he did not have to pay capital gain taxes. If he then put it into Treasuries, he's further ahead. Sep 27 11:44 AM
    • Employees in Financial Sector Are Overpaid [view article]
      I heard somewhere that there were millions of people sitting around doing nothing but living off the government, food stamps, rent-free in air conditioned apartments, color TV, microwaves, free medical care, etc. They do not pay any taxes on their cash incomes. But they are not satisfied or grateful to their fellow citizens. They are parasites and will be until they kill the host. They always want more, more, more. Sep 27 11:16 AM
    • The Commodities Hedge Fund Flap [view article]
      Answer to User 232593: Forget the word "hedge fund". The concept of a mutual fund that invests in the common stock of multiple companies has been around for decades. There are thousands of them. Check out the returns of stock mutual funds for the past 10 years. After taxes, they have earned generally less than the inflation rate. 80% of them can't even beat an S&P index fund, but they still get to charge more than 1% on total assets. They hold trillion of dollars worth of stocks and they dwarf hedge funds. Same for bond funds. Same for money market funds (which actuall serve a useful purpose these days as a convenient way to buy t-bills).

      Take the concept of the mutual fund a step further. Allow the fund manager to purchase, sell and short any publicly traded stock, bond, ETF and to also buy mutual funds as well, if he wants. Wrap the concept in a limited partnership that is privately owned, where the manager has most of his personal net worth invested alongside his partners. The investors must be "sophisticated&qu... and have a minimum net worth. They can receive daily reports on partnership holdings, gains and losses, performance and any other information that they want to demand.

      For this flexibility, they are willing to pay the manager a few basis points more to cover his higher overhead compared to a mutual fund, since the partnership will by design hold much smaller level of assets than a mutual fund. In addition, the partners are willing to share a percentage of the profits earned with the manager.

      What's the problem with this arrangement? It seems much more personal and under the control of investors than that of a mutual fund run by a faceless manager that an investor will never see or speak to.

      But why would anyone want to, given their miserable investment track record.

      I will ask you the same question. What good are mutual funds that charge high fees but can't beat the market? Those fund mangers will continue to earn very high salaries, benefit and perks even though their funds have lost billions of dollars in the past year (and will continue to lose as long as we are in a bear market).       Sep 26 05:45 PM
    • Profiting from the $700 Billion Bailout [view article]
      Re: logicalthought. You are correct and that was what I observed when reading through the piece. I haven't thought through all the ramifications of the bailout yet (who can know the future?), but at some point the government is going to own a lot of homes. Until the average price of those homes (now around $215,000) declines to 3x the median family income ($50,000) there is not going to be stabilization. That would be with stabilized employment, which isn't happening. In addition, we know that the free flow of mortgage money is shut down now and if banks are going to avoid this disaster in the future, they have to demand more downpayment, higher FICO scores, higher income to debt ratios, etc from borrowers. It seems to me that all those good people are probably already in homes. Why would they want another one? Do you really believe that there are millions of folks just sitting around in apartments with $40,000 in the bank, no credit card or auto debt and good secure jobs who are patiently waiting for home prices to come down? I don't know of any, but maybe somewhere in Iowa. Not in California, Nevada, and Florida where the problems are. People are leaving those states for financial survival. Sep 25 11:04 AM
    • Tracking 9 ETF Portfolios [view article]
      Wonder why none of these guys would consider any of the inverse funds, be they stock, bond, currency, commodity, etc.? When you are in a Bear market, you should be either short, hedged, or out. I assume most would agree that we are in a Bear market. Could it be over? Yes. Could it get better? Yes. Could it get worse? Yes. Could it get much much worse? Of Course. Sep 25 10:36 AM
    • Active vs. Passive Investing - Some Thoughts [view article]
      Roger,

      I am in the business as both a RIA and manager of a small hedge fund. I have been reading your posts for a while and generally agree with your approach for investors and especially those approaching retirement. It is very hard to make money in the markets, and it is very easy to lose it and lose it quickly. Using a moving average technique to allocate assets into or out of the equity or bond markets is as good as any "rocket scientist" method devised on prop trading desks. Using individual stocks, ETF's or active mutual funds to implement is a matter of preference and the comfort level of the investor and advisor.

      You offer good, sound perspective. The best thing to do for yourself and your clients is to stick to your knitting and what got you to where you are today. It is very easy to get flushed out with these 300+ point moves on a daily basis.

      So diversify and consider using one of more of the new short or double short EFT's to hedge if you or your client is uncomfortable with volatility or direction.       Sep 22 11:27 AM
    • Wall Street, R.I.P. Now What? [view article]
      Go back to early 1920's. Similar situation, except no Fed. They were playing with their own money, but the leverage was actually lower. Do you think they were dismissing the liklihood of depression? Probably didn't even come up in discussion as everyone was trying to get rich.

      I find your dismissal of depression foolish, just as you would have dismissed the likelihood of the complete destruction of 100% of the major investment banks one year ago. We must think the unthinkable and prepare for it. We must (though it is impossible) attempt to get threee moves ahead and hedge everything where possible. But there is no perfect hedge, since there is always counter-party risk.

      It is a new world order and the vast majority of the public is sleep-walking throught it today. Daddy Bush and Paulson have told them not to worry, go about their business as ususal, the economy is strong, strong, strong! Oh, and like after 9/11, please don't even think about saving or paying down debt. Go out and spend, spend, spend. Pay your taxes. It's the patriotic thing to do!

      Did you also notice the commentary on weekend television about whether your 401-k was "safe". The explaination was that 401-k accounts were insured up to $100,000! How stupid can you get. Show me a 401-k statement that contains CD's.       Sep 22 11:11 AM
    • Are Short Sellers to Blame for the Financial Crisis? [view article]
      Let's assume you own shares of GS. You see the stock going down. You have a few choices: You can sell and hold the cash. You can buy some other stock, helping the price go up. You can purchase a put option to protect your capital.

      If someone shorts GS, he is may profit from it. He covers, buy buying and helping the price go up. He takes his profit and either holds it in cash, shorts another stock or maybe even buys GS long if he now thinks the price is realistic. I don't see where the "loss" is except to GS shareholders who have been asleep at the wheel since last fall and have done nothing to protect their investment. After all, it is a free maket for sellers, isn't it?       Sep 20 03:49 PM
    • Longer Term Reversal Trigger [view article]
      Bailouts in Bull market = Bull trend resuming. Bailouts in Bear Markets = Bear trend resuming. Agree with your analysis of Possible short-term pop for a few days or weeks. If you're a Bear, you've got to cover above 2473 on Nasdaq or 1973 on NDX. If this is a continuation of the uptrend from July 15th, then it should reach at least above the August 11 high of 1313.15 on the S&P. If Monday and Tuesday turn out to be larger declines in the face of the breadth and volume on Friday, a selling panic could ensue. Remember that there are a lot of stocks not on the banned shorts list and people will seek protection. Market makers can also short any stock now to hedge their put options exposure. Sep 20 03:19 PM
    • Being Contrarian and Thinking of Buying [view article]
      How do you know the "fundamentals&quo... haven't changed? And just what are the fundamentals, anyway? If the fundamentals haven't changed, what is the rationale for the stocks being down 10-50%

      In the aggregate, people aren't stupid. They know what they see, hear and feel. What they are seeing, hearing and feeling is fear about themselves and their security (not necessarily their portfolios). They know something just isn't right out there. And they want no part of it after years of irrationality.

      As they act on their feelings, the fundamentals you speak of will then change.       Sep 18 09:37 AM
    • When Can We Start Breathing Again? [view article]
      What's to stop the US Government from simply adopting all bad debts, keeping the credit bubble inflated? Well, the US Government's IOU's have a price, an interest rate and a safety rating. If mortgages have a price, an interest rate and a safety rating, so do Treasuries. If investors fear the government's ability to pay interest and principal, they will move out of Treasuries the same way they moved out of mortgages. The American financial system is too soaked with bad debt for a full-out governemnt bailout to work, and ultimately the market won't let politicians get away with assuming all the bad debts. It is going to continue to take some time for the market to figure out what to do about it, but as always, there is no such thing as a free lunch. The only question is who pays for it.

      The Fed and the Treasury have placed a call option on the future production and earnings capacity of the American public. Most of that public had nothing to do with the current financial crisis. They were merely going about their everyday business, paying down their mortgages, educating their children, saving for retirement and paying their taxes. Now the government is drawing on their future in amounts the size of which the people have no concept. Do you think their so-called "leaders" in Congress are going to tell them they truth? No, since Congressmen themselves don't know the answer. They believe in the Printing Press, since it has always worked. Do you think politicians will tell the people that they have to pay much higher taxes in order to bail out the system problems that they had not part in creating? No, because that politician would lose his job. The only way Washington sees its way out of the problem is to print dollars and inflate it away. But, that won't work this time, because it is DEFLATION, NOT INFLATION, that is coming.

      Does anyone honestly believe that the Government will ever be able to repay its debts and service all of its off-budget guarantees and unfunded mandates?

      There is a point coming when the People will say Enough is Enough!       Sep 15 11:27 AM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»