wobatus

A Bull Market That Few Are Buying

OK, my 2 (thus far) negative recommenders, how is what i said wrong?

Bear Stearns was just an investment bank. Same with LEH. Same with Merrill. None of them were hypbrid commercial/investment banks, yet they were the poster boy "fails."

What did Morgan Stanley and Goldman do? become banks proper.

How were Merrill and BSC "saved"? Shotgunned into mergers with banks.

Not saying this helped said banks.

But all the i-banks are gone. None of them were post-Glass-Steagall hybrids, but none exist as investment banks any more.

And banks that had nothing to do with investment banking also tanked.

So repealing Glass Steagall didn't cause their downfall. The answer to these questions, what caused the collapse, isn't "Glass-Steagall was repealed." There were a lot of factors.

Further, there are investment bank/commercial bank hypbrids in other countries besides the U.S.

I agree that commercial banks or that side of business, with insured deposits and now explicit government backstops, needs effective regulating. I just don't know that saying you can't do both is the be all answer. Does that imply that our i-banks can just be cowboy risk mongers?

In any event, if you have pure investment banks and pure commercial banks both failing, and in fact representing the most glaring examples, it is hard to say repeal of Glass Steagall caused the problem.


On May 12 03:59 PM wobatus wrote:

> Also interesting is that JPM is a combination and yet perceived as
> fairly safe comparatively. LEH, BSC were just i-banks, ML was an
> i-bank forced to merge with a bank to survive. So combining the 2
> things didn't kill those 3. GS and MS were forced to convert to banks.
>
>
> The model got killed. No one would touch them without explicit government
> backing.
>
> Wamu and Indybank failed, and they were plain old banks, or s&ls.
>
>
> Mixing i-banks and commercial banks is not at all what caused the
> problem. C is a hybrid, but it was just remarkably poorly run. <br/>
>
> In short, I don't think repealing Glass-Steagall did it. Indeed,
> being explicitly regulated may have led to a sense of safety that
> wasn't there.
>
> But back to the i-banks, going public may have started it. The partners
> risked their own capital. Once you went public it was all OPM.<br/>
>

Why This Rally Is Unsustainable

Hey, now we are almost back to where it was when it ws unsustainable. Almost. Not quite.

There's always tomorrow....


On May 08 05:31 PM wobatus wrote:

> Even MORE unsustainable. :)
>
> Good call on TBT. Thought about it myself. Woulda coulda shoulda.
> bad call short financials. I am long some financials that I put on
> in the winter and plan to keep (GS, GFIG, GE), but did add some faz
> this week as a hedge. Gettin' killed, but added some more at $4.55.
>
>
> But that's kinda a lark.
>
> GOOOOOD luck with all the hocus pocus. Thems a lotta words.

A Bull Market That Few Are Buying

Also interesting is that JPM is a combination and yet perceived as fairly safe comparatively. LEH, BSC were just i-banks, ML was an i-bank forced to merge with a bank to survive. So combining the 2 things didn't kill those 3. GS and MS were forced to convert to banks.

The model got killed. No one would touch them without explicit government backing.

Wamu and Indybank failed, and they were plain old banks, or s&ls.

Mixing i-banks and commercial banks is not at all what caused the problem. C is a hybrid, but it was just remarkably poorly run.

In short, I don't think repealing Glass-Steagall did it. Indeed, being explicitly regulated may have led to a sense of safety that wasn't there.

But back to the i-banks, going public may have started it. The partners risked their own capital. Once you went public it was all OPM.



On May 12 01:10 PM Kinabalu wrote:

> Interesting comment considering that the Glass-Steagall repeal bill
> was signed by President Clinton.

Why This Rally Is Unsustainable

Even MORE unsustainable. :)

Good call on TBT. Thought about it myself. Woulda coulda shoulda. bad call short financials. I am long some financials that I put on in the winter and plan to keep (GS, GFIG, GE), but did add some faz this week as a hedge. Gettin' killed, but added some more at $4.55.

But that's kinda a lark.

GOOOOOD luck with all the hocus pocus. Thems a lotta words.


On May 06 04:56 PM wobatus wrote:

> Wow, -5 for staid stuff like this? Wow. You market timing geniuses
> are easily offeneed. How's the unsustainability goin'? Oh, I'm kidding.
> I'm SURE you'll have your day. Is it your jobs to make Cetim look
> good in the interim?
>
> All the best everyone.

Why This Rally Is Unsustainable

Wow, -5 for staid stuff like this? Wow. You market timing geniuses are easily offeneed. How's the unsustainability goin'? Oh, I'm kidding. I'm SURE you'll have your day. Is it your jobs to make Cetim look good in the interim?

All the best everyone.


On May 04 10:09 AM wobatus wrote:

> Highly leveraged heavily shorted garbage almost always leads a rally.
> Note how staid old PG, KO and MCD have just sat there or worse during
> this. Not that they may be spared in a sell-off, but pointing this
> stuff out is pointing out the obvious and doesn't make the market
> as a whole overbought (except on a near term basis, since 9 week
> winning streaks ain't exactly par for the course). I don not expecta
> sel-off eblow the march lows absent some exogenous event.
>
> What i get the sense of was November ws the real financial panic.
> The chances of utter meltdown have abated. But then the real economy
> effects of the Sept-Nov. meltdown became manifest, leading to a retest
> and break of the fall bottom in March. Now the ecomomy seems like
> it won't collapse either, and even absent stellar growth, it was
> oversold. We are just getting back to the "normal" recession prices
> from the uh-oh, maybe deprerssion prices.
>
> And now you have all the voices of "unsustainable" plunge protection,
> goldman is gaming the market voices. Voices of those who want to
> buy in, but at cheaper prices.
>
> Which is why the rally gets into overbought territory.
>
> And then we'll pull back, the "told ya so" disaster voices will come
> back in...lather rinse repeat.
>
> 'Twas ever thus.
>
> Personally, i am not doing much but holding onto stocks bought at
> what i felt were decent prices, collecting dividends, or watching
> the businesses grow even in this climate.

Plunge Protection Team Attacks BofA: This Ends Now

Yeah. Once you look, it is hard not be in pain. Understood.

Carpe diem, gather ye rosebuds...


On May 01 03:14 PM PainfullyAware wrote:

> I do wish that I was less aware; it would be less painful.
>
> However, Safety Is A Function Of Awareness.
>
> Those who refuse to discuss the proximity of Lions become "Big Kitty
> Snacks".
>
> I am not Cynical - I am Concerned.
>
> Apathy Has Brought Us To Our Current Situation. There is nothing
> like being uncomfortable to pique interest in public affairs. We
> Are Definitely Going To Get "Change".

Top 5 Quotes from Berkshire's Annual Meeting

My bad. Of course, berkshire went public years before buffett got involved. He ws running his fund before he bought berkshire.

This may be wrong, but he ws buying berkshire shares before he took control, and I saw somewhere that when he took over it was trading at about $15. This is 1965 I think, but I am not going for absolute accuracy here.

The return to today from $15 would be 6276. MSFT would have to go up about 25x over the next 20 some odd years to match. And of course, it is now paying a dividend. BRK doesn't.

Thankfully, no one is putting a gun to your head and saying you can't own both, or you can't ignore both.

Has msft added more to the world? well, some techies would say emphatically no.


On May 05 10:26 AM wobatus wrote:

> Well, I hate to be picayune, but msft actually returned 251x since
> the close of its first trading day, 3/13/1986, berkshire "only" 29x.
> You did say more than twice, so technically correct. Quite a bit
> more.
>
> Of course, as I stated above, since 1979, berkshire has returned
> 290x. Boy, if you went back to ITS ipo...nevermind.
>
> No one is claiming Berkshire is a philanthropy. Mr. Buffett is philanthropic
> with his money that he gains thereby. You can quibble with his choices
> for bestowing his largesse, or his politics.
>
> The point raised was whether he "makes" anything. Well, the maker
> of bobble-head dolls makes something, and i imagine the net utiles
> of pleasure in the world may increase thereby. Buffett et al allocate
> capital and in general has done it well, and he has done it well
> apart from inflation or some grand supercycle. You may not like paying
> for his geico car insurance, drinking his brown sugar water or reading
> a sanborn map to get from here to there, but there ya go...he would
> be poor if the products he invested in were not bought by people
> who have made their own decisions about whether they are worth their
> dollars, inflated or otherwise.
>
> There are likely benefits to his capital allocation aside from just
> shunting money from one billionaire to another, although Andy Kessler
> might agree with you.
>
>

Top 5 Quotes from Berkshire's Annual Meeting

Well, I hate to be picayune, but msft actually returned 251x since the close of its first trading day, 3/13/1986, berkshire "only" 29x. You did say more than twice, so technically correct. Quite a bit more.

Of course, as I stated above, since 1979, berkshire has returned 290x. Boy, if you went back to ITS ipo...nevermind.

No one is claiming Berkshire is a philanthropy. Mr. Buffett is philanthropic with his money that he gains thereby. You can quibble with his choices for bestowing his largesse, or his politics.

The point raised was whether he "makes" anything. Well, the maker of bobble-head dolls makes something, and i imagine the net utiles of pleasure in the world may increase thereby. Buffett et al allocate capital and in general has done it well, and he has done it well apart from inflation or some grand supercycle. You may not like paying for his geico car insurance, drinking his brown sugar water or reading a sanborn map to get from here to there, but there ya go...he would be poor if the products he invested in were not bought by people who have made their own decisions about whether they are worth their dollars, inflated or otherwise.

There are likely benefits to his capital allocation aside from just shunting money from one billionaire to another, although Andy Kessler might agree with you.




On May 05 04:31 AM Yoon Kim wrote:

> If you had invested in MSFT in the 1980s you'd be up more than twice
> that of Berkshire.
>
> Also, there is nothing philanthropic about transfer of wealth from
> one billionaire to another billionare monopolist.

Top 5 Quotes from Berkshire's Annual Meeting

Ha ha. Bravo, yellowhoard. Now, I am off to dance the little Walter Huston jig from Treasure Of The Sierra Madres.

All the best.


On May 04 03:23 PM yellowhoard wrote:

> Tell Kernen that he needs to dress more flamboyantly. That small
> town Ohio look is so last year.
>
> I'm thinking Brady Bunch orange jump suit with a lime green cowboy
> hat.
>
> We right wing knuckle draggers need to raise the bar, style wise,
> for the maoist zombies running about these days.
>
> IMHO

Top 5 Quotes from Berkshire's Annual Meeting

All depends on your time frame and when you buy. If you bought during prior bears, like 1975, 1982, 1990, you do ok. And dollar cost averaging. I am sure DGI can speak for himself, but I don't believe he said stocks don't ever go down, even dividend growers.

Best of luck, Salvador.


On May 04 12:32 PM Salvador wrote:

> A lot of my dividend paying stocks have taken a monumental tumble,
> and the dividend pay outs don't even begin to make up for the total
> loss.
>
> Pepsi and Union Pacific are two stocks that I own that come to immediate
> mind.
>
> Mr Dividend, can you please inform us on what dividend paying stocks
> you have purchased that haven't tumbled. I'm so very curious.

Top 5 Quotes from Berkshire's Annual Meeting

Whoever negative rec'd me, fair enough, but that is the actual performance of berkshire versus gold since 1980. I understand, the date was cherry-picked. Same as in the post to which I replied.

Perhaps gold will do better than BRK over the next 5-10-15 or 20 years. I am sure yellow hoard thinks so.

Disclosure: No position in either. Ever. Although I don't think having some gold or other precious metal as an inflation hedge is necessarily a bad idea.

On May 04 10:41 AM wobatus wrote:

> Hey, it's fun with cherry picking dates time.
>
> Let's try January 1980. Berkshire is up from 300s to 93,000 even
> after a big dip, up about 290x. Does that beat inflation?
>
> Gold has gone from $850 at its all-time high back then, to, hey,
> $904. Does that beat inflation?
>
> So, if you had invested $85,000 in gold back in 1980, you'd have
> $90,400 today (forgive my math skills). You'd have been better off
> in treasuries (not that I'd be buying treasuries these days per se-well,
> maybe for a brief pull back in the stock market return of some fear
> trade). If you had invested $85,000 in berkshire back then you'd
> have $24,722,515.00. Give or take.
>
> Past isn't necessarily prologue, do your own dd, future results may
> vary, this is not an offer to sell, nor a solicitaion of an offer
> to buy, the offer is only made by prospectus...
>
> Love the avatar by the way. So does Joe Kernen.
>
> And best of luck, ole yeller horde.

Top 5 Quotes from Berkshire's Annual Meeting

Hey, it's fun with cherry picking dates time.

Let's try January 1980. Berkshire is up from 300s to 93,000 even after a big dip, up about 290x. Does that beat inflation?

Gold has gone from $850 at its all-time high back then, to, hey, $904. Does that beat inflation?

So, if you had invested $85,000 in gold back in 1980, you'd have $90,400 today (forgive my math skills). You'd have been better off in treasuries (not that I'd be buying treasuries these days per se-well, maybe for a brief pull back in the stock market return of some fear trade). If you had invested $85,000 in berkshire back then you'd have $24,722,515.00. Give or take.

Past isn't necessarily prologue, do your own dd, future results may vary, this is not an offer to sell, nor a solicitaion of an offer to buy, the offer is only made by prospectus...

Love the avatar by the way. So does Joe Kernen.

And best of luck, ole yeller horde.


On May 03 08:29 PM yellowhoard wrote:

> Buffet, like most people his age, don't want to admit that they prospered
> from this massive ponzi scheme that is collapsing around us.
>
> Sure, buy and hold works great when money is cheap and credit is
> expanding. But, had you bought one share of Berkshire ten years ago
> you would be about even today. That is only because the dollar has
> fallen so much that inflation has "kept you even".
>
> Had you invested the same $90,000 in 1999 in gold, today you would
> have over $300,000.
>

Why This Rally Is Unsustainable

Highly leveraged heavily shorted garbage almost always leads a rally. Note how staid old PG, KO and MCD have just sat there or worse during this. Not that they may be spared in a sell-off, but pointing this stuff out is pointing out the obvious and doesn't make the market as a whole overbought (except on a near term basis, since 9 week winning streaks ain't exactly par for the course). I don not expecta sel-off eblow the march lows absent some exogenous event.

What i get the sense of was November ws the real financial panic. The chances of utter meltdown have abated. But then the real economy effects of the Sept-Nov. meltdown became manifest, leading to a retest and break of the fall bottom in March. Now the ecomomy seems like it won't collapse either, and even absent stellar growth, it was oversold. We are just getting back to the "normal" recession prices from the uh-oh, maybe deprerssion prices.

And now you have all the voices of "unsustainable" plunge protection, goldman is gaming the market voices. Voices of those who want to buy in, but at cheaper prices.

Which is why the rally gets into overbought territory.

And then we'll pull back, the "told ya so" disaster voices will come back in...lather rinse repeat.

'Twas ever thus.

Personally, i am not doing much but holding onto stocks bought at what i felt were decent prices, collecting dividends, or watching the businesses grow even in this climate.

Plunge Protection Team Attacks BofA: This Ends Now

Sorry, meant to say, of course, that fruits of growth was not universally available to all. Probably obvious from the context. And please excuse my mis-spellings and perhaps not being focused on topic.

Were economic swings in the past caused by government intervention? Lack of trust in government? Which came first, the lack of trust or the panics? How did the gold standard effect that? Or fiat currency, free banking, whatever? Was a large belly, watch fob and mutton-chops really the byword of succesful masculine fashion?

Was the greater growth stretch because of certain policies? Which factors were most important? Did man reach a tipping point in certain areas of industry, etc., in certain locales? Did you ever read Guns Germs and Steel? Does the law of large numbers make large growth rates unsustainable over time?

Can any Met pitch wortha damn beyond Johan Santana?

On May 01 10:46 AM wobatus wrote:

> I want to get back to this but tone it down. Prior to the New Deal,
> or the market crash, whenever, or prior to the Fed, whenever we are
> discussing, say 19th century to 1907 panic, we had great growth,
> but huge cycles. Caused or not caused by government intervention,
> or a certain type of intervention (I know someone has put forth the
> point ALL cycles are caused by the government intervening), whatever.
>
>
> Certainly, during a lot of that time, one has a hard time denying
> the fruits of overall expansion were universally open to all (I am
> not saying they weren't universally shared, we take that as a given).
> I mean, we had slavery racticed pretty much everywhere, and not stamped
> out mostly in the U.S. until the second half of the 19th century.
>
>
> Even tehreafter, many lived in virtual peonage, and not just the
> serfs of russia, but many people here as well. Women couldn't vote.
> The franchise was denied to many others.
>
> Many advanced by dint of smarts, hard work, some luck. many did not,
> and were to a large extent locked in place.
>
> Now, these are separate arguments, political rights versus economic
> freedom. I don't think the distinction was quite as broad to a laborer
> in 1900, a coalminer in West Virginia, a railsplitter, yada yada.
>
>
> Right or wrong (and not meaning to get back to gold, really), you
> had bryan's supporters feeling oppressed by the eastern money men,
> and the gold standard, as keeping them down.
>
> You had finacial panics. You had overall expansion over time, but
> huge, and hugely painful downturns, and for some it may have seemed
> almost impossible to come up out of the dregs. Like that black tenant
> farmer in Hard Times I mentioned. Of course, to move away from that
> legacy, it was damn hard for some white tenant farmers as well.<br/>
>
> And even if it is ALL caused by government intervention, certainly,
> there are different kinds of government intervention. What caused
> the tulip bubble and panic. or the panics after the civil war, or
> 1907, or now, may be caused by different things the government does.
>
>
> So. We vote them out. We look to change things. This author advocates
> commissions, inquiries or prosecutions of Paulsen, Bernanke, Goldman's
> trading, etc. maybe that is time and money well spent. Personally,
> I like Bernanke and think he is well-meaning. I could be very wrong.
> I may be naive, but probably less so than some of you may think.
>
>
> Get everything out and open and under the clear blue sky and we can
> all discuss and debate and decide where we go from here and how to
> get out of this mess. Because it probably isn't easy. Well, maybe
> some of you do have the solutions. I am open to listening. :)
>
> Take care all. I enjoy this kind of discussion, acknowledging that
> sometimes be a little flip.
>
> Best of luck in markets and life.
>
>

Plunge Protection Team Attacks BofA: This Ends Now

I want to get back to this but tone it down. Prior to the New Deal, or the market crash, whenever, or prior to the Fed, whenever we are discussing, say 19th century to 1907 panic, we had great growth, but huge cycles. Caused or not caused by government intervention, or a certain type of intervention (I know someone has put forth the point ALL cycles are caused by the government intervening), whatever.

Certainly, during a lot of that time, one has a hard time denying the fruits of overall expansion were universally open to all (I am not saying they weren't universally shared, we take that as a given). I mean, we had slavery racticed pretty much everywhere, and not stamped out mostly in the U.S. until the second half of the 19th century.

Even tehreafter, many lived in virtual peonage, and not just the serfs of russia, but many people here as well. Women couldn't vote. The franchise was denied to many others.

Many advanced by dint of smarts, hard work, some luck. many did not, and were to a large extent locked in place.

Now, these are separate arguments, political rights versus economic freedom. I don't think the distinction was quite as broad to a laborer in 1900, a coalminer in West Virginia, a railsplitter, yada yada.

Right or wrong (and not meaning to get back to gold, really), you had bryan's supporters feeling oppressed by the eastern money men, and the gold standard, as keeping them down.

You had finacial panics. You had overall expansion over time, but huge, and hugely painful downturns, and for some it may have seemed almost impossible to come up out of the dregs. Like that black tenant farmer in Hard Times I mentioned. Of course, to move away from that legacy, it was damn hard for some white tenant farmers as well.

And even if it is ALL caused by government intervention, certainly, there are different kinds of government intervention. What caused the tulip bubble and panic. or the panics after the civil war, or 1907, or now, may be caused by different things the government does.

So. We vote them out. We look to change things. This author advocates commissions, inquiries or prosecutions of Paulsen, Bernanke, Goldman's trading, etc. maybe that is time and money well spent. Personally, I like Bernanke and think he is well-meaning. I could be very wrong. I may be naive, but probably less so than some of you may think.

Get everything out and open and under the clear blue sky and we can all discuss and debate and decide where we go from here and how to get out of this mess. Because it probably isn't easy. Well, maybe some of you do have the solutions. I am open to listening. :)

Take care all. I enjoy this kind of discussion, acknowledging that sometimes be a little flip.

Best of luck in markets and life.




On Apr 30 12:35 PM wobatus wrote:

> The period was also one where certain folks were perpetually disadvantaged.
> That's why you had a lot of wobblies etc. supporting bryan and free
> silver (don't crucify me on a cross of gold, etc.).
>
> If you read Hard Times by Studs Terkel, there's a passage where a
> black tenant farmer talks about the Depression. He says something
> along the lines of, we just called it hard times. That's the way
> things always were. Just that it started hitting the well off white
> folks, and they called it a Great Depression.
>
> Thos panics use to mean depravation, degradation and poverty. The
> wild swings may have led to an overall rise in wealth, but unfortunately,
> not a lot of trickle down for some.
>
> There is no denying that the money supply did shrink by 25%, and
> that the fed was liquidationist to a great extent. This was not just
> caused by fear of government confiscation. Too much of it came before.
>
>
> If one leaves things perfectly laissez faire, and just ride the boom
> and bust and don't bring the lowest rung into the system and along
> for the ride, believeing they have a stake and a benefit, then you'll
> have breakdown and you can end up like russia did. They'll come and
> take it, right or wrong.
>
> Anyway, i get far afield here.
>
> On Apr 30 10:42 AM Carlos Lam wrote: