root_thing

The Anatomy of a Bear Market

You can always argue that the stock market will make a new high at some time in the future. But will that be in six months? A year? Five years? A decade? If the stock market is stagnant, you can probably find alternative investments that provide a better return. That's a reason to sell. And if you think the market is going down, why would you willingly take that ride down even if you know it will eventually come up again? Doesn't it make more sense to re-enter at a point closer to the bottom? Yes, it's hard to pick the bottom, but if you're any good at investing, you should have a sense of whether the bottom is very far away or getting close. If you don't have that kind of instinct, then buy index funds and stop wasting your time.

ProShares UltraShort China ETF: Caveat Emptor!

Wow, thanks! I own several of these funds, and I too noticed that they didn't move as expected. They should advertise these securities as short-term trading vehicles. Hold them for 2-4 days during a run-up, sell, then wait for the drop and buy them back.

U.S. Mortgaging Its Future for Sovereign Fund Investments

In the 19th Century, Europeans bankrolled the Louisiana purchase, the building of US railroads, the steel industry, the oil industry -- even cattle ranches. By the end of WW II, they had very few U.S. holdings. There was the stock market crash, stock sales to finance Europe's own war effort, and confiscation by the US government (mostly German holdings). These days, look at how Russia recently screwed Shell Oil or how Venezuela nationalizes industries whenever they feel like it. To me, it's the foreign investors who are at risk.

Bill Ackman Video Speaking on MBIA, Ambac and Bond Reinsurers

Excellent! It really gives you a feel for how the credit markets are a big Ponzi scheme, and how banks, bond insurers, and rating agencies, are all participants in a web of lies.

Gold Is Just a Brick ('Active Value Investing' Book Excerpt)

Um, who buys an investment with an expected holding period of 200 years? Will Microsoft be here in 170 years? Does that mean all the people who bought it in the early 1980's were stupid? Closing in on 100 years, GM is on death's door. However, if you bought it in the 1920's and held on through the 1970's, you cleaned up. Will Apple, RIMM or Google be here in 200 years? Does anyone care?