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  • The Fed's Fischer And Asset Bubbles [View article]

    Tack and I usually agree, and I admire and like him quite a bit, and pass on to young and new investors that his comments are always worth reading, because they can learn from them. In this case, we most likely don't disagree as much as it seems.

    Let us all suffice to say, because I certainly believe we agree on this fact: What the Fed did and legislation the Federal Government enacted over the years were the central factors in the Cash-Credit-Crunch Crash of 2008-`09.

    Thank you for your input and your comment, Nattering. Very good chart, though I hate the damned things.

    I remain, the ArtfulDodger
    Oct 9, 2015. 10:10 AM | Likes Like |Link to Comment
  • Cisco: Shares Have 25% Upside To $34 Fair Value [View article]
    Thank you for the response, L&F. I apologize for my comment and will continue to read your work.

    I don't see much discussion on this site regarding management, distribution, or long-term company planning. As noted, most everyone zeroes in on numbers and pays little attention to such things as intellectual capital and company psychology.

    On the quantifying side, they often ignore debt and company efficiency.

    That is what I was speaking of regarding qualifying.

    I like CSCO, as much as anything because JC is reenergized as if it were 20-years ago, and I love their plan, using his words, "to digitize the world nation by nation." Which he says will bring in hundreds of billions over the next several years.

    The best to you and your investing.

    I am, the ArtfulDodger
    Oct 8, 2015. 10:57 PM | Likes Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]

    If you note where the money supply was in `03 and watch where it went, it surely was a lot less after the rate increases.

    And too, it's clear from what my friends who were working in banking back then said: They just couldn't get money. The Fed had shut the supply off, as if they were trying to cause a bust out. Which is possible because Greenspan often spoke his view that there were too many banks. I'm not sure how many have faded away since `08, but they were falling like a TV tout's stock picks for a while.

    Sorry, but I have to stand by the conclusion I came to from my research years ago: The Fed by no means caused the Sub-Prime Debacle, but it surely brought it to a head, much like the girl and boy at a dance where the girl goads her date about another boy flirting with her. He then goes and pops the other boy. He brought the fight about, but the girl was the cause of it, just as our government was the major cause of the Sub-Prime Blowout, as it is most of our problems.

    Be well. AD
    Oct 8, 2015. 10:46 PM | Likes Like |Link to Comment
  • How Revisionism Saves Bernanke [View article]
    Fellow Investors:

    I have not or will I read Bernanke's book. These preening creeps make me sick when they go before Congress and everyone one bows to them. Or they go on a talk show and get fed a string of cotton balls.

    But I'd wager to say that he doesn't mention in his book or any interview that after the Lehman Bros. bust out in the Spring of `08, he and plenty of other statists were still claiming that the economy was on stable legs. Nothing at all wrong. John McCain famously said the economy was in excellent shape. Obama made a similar statement, along with many others.

    Upon taking over at the Fed, Bernanke immediately took part in Greenspan's rate-raising spree by adding the 17th-straight unprecedented rate increase, helping to suck hundreds of billions of dollars out of the economy.

    Thereafter, it took nearly everyone on the planet to get the man to cut rates a half-point in September of that year, after thousands of "loan brokers" had shut down, real estate agents were losing jobs daily due to no sells, markets were crashing, and banks were yelling that they couldn't even get overnight funds. Bond traders had the Ten Year under 2%. A clear cry for a rate reduction!

    In other words, Bernanke sat and did nothing but claim everything was fine, and refused to move until the ceiling had fallen in. If the man did indeed cure any problems, he certainly helped to bring them about by the above three actions: 1) continuing to suck money out of the economy; 2) cutting the money spigot off to lending institutions; 3) making absolutely not the first move in the face of obvious disaster.

    The man's actions clearly display a tool that Karl Marx left his statist followers: Create a problem, solve it (or pretend to), then declare yourself a hero. Hoi Polloi will love you for it. And so it is, and so it has been!

    For the truth: AD
    Oct 8, 2015. 03:21 PM | Likes Like |Link to Comment
  • Cisco: Shares Have 25% Upside To $34 Fair Value [View article]

    Good question. But I think L & F does not give his readers and comments the respect to respond, so this will be my last read of him and definitely the last comment re his articles.

    Oct 8, 2015. 02:36 PM | 1 Like Like |Link to Comment
  • Intel And Cisco Head-To-Head [View article]
    Fellow Investors:

    I don't generally respond to people like WestSea who doen't have a bio, so I'll put this in for the others in this line.

    It's my view that you must have an investment discipline to be a successful investor. You therefore create rules that you follow that you know (or believe) to be correct.

    If you follow those rules, you have to know that you have acted correctly in the largest percentage of the time. So you cannot make a mistake, and you don't give a hoot in the wind what the stock you sold did after you sell it.

    People who look back are always If-I, Could-I, Would-I, Should-I types of people who can never make a decision and stick to it, because they're always second-guessing themselves. They're usually blamers, who won't take responsibility for hoping from hither to yonder with their investments.

    For young and new investors I urge you to create an investing discipline that is based on sound rules. Stick to them. Don't look back. Pay attention to where you are at the time; not where you were. If you believe your rule needs amending, do so. But then stick to it.

    Be patient. I've been working on my rules for 40-years, and as investing conditions change, as the world changes, I certainly alter them some. But, as a rule, they are the same today as they were in the 1970s when I started creating them.

    There's no other way to be a good investor.

    I remain, the ArtfulDodger
    Oct 8, 2015. 02:23 PM | 3 Likes Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]

    I have to disagree with you that the people who initially started forcing private lenders to lend to certain groups were "well-intentioned." They did so without the slightest care to the institutions they mandated to lend money; they did so for the express purpose of taking funds from one group to transfer them to another. And that they did for political purposes to garner votes from their constituents.

    It is a sneaky way of taxing (read: stealing from) the productive to give to the non-productive. It's pure Marxism in a slyly hidden form.

    In my moral book, stealing is stealing no matter how slyly you do it, and it's wrong to take from anyone by force no matter what you do with the money or goods stolen.

    Until our government stops doing that, we're going to have one crisis after the other until we finally have a blowout a 100-times as big as the `08-`09 bust out.

    Thank you for the comments.

    Oct 8, 2015. 02:07 PM | 1 Like Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]

    You misread what I wrote. I wrote that the 17-straight, unprecedented rate increases "brought about" the Cash-Credit-Crunch Crash. I did not say the Fed was was the cause of people getting loans who could not and many of whom had no intention of paying those loans back.

    The Fed sucking hundreds of billions of dollars (I estimate $500b) out of the economy certainly caused the whole shebang to come to a halt; but by no means did the Fed cause the sub-prime loans to come into being.

    The private sector saw the opportunity created by the Federal Government and acted on it, by creating thousands of "mortgage brokers" to find people loans. In mine and your state alone I know several people who were running various ones and they were fudging in every way they could to get non-qualified people loans. I'm sure we can extrapolate that one into a universal.

    Community Organizing Groups were telling their constituents to get loans and not concern themselves about paying them. A housing development 5-miles from my summer home in Carolina ended up with over a 100 people who moved in and never made the first payment. They left just as fore-closers came to bolt the doors and take over.

    Nevertheless, I contend and will argue strongly that Greenspan could have eased us into the blowout rather than sucking so much money out of the economy so quickly. When the money dried up, the "mortgage brokers" shut down. Banks were having a difficult time getting overnight funds at the height of the mess.

    Now, you're going to tell me that the Fed wasn't at the root of that?

    I lay blame on the whole thing in these degrees: Fed 10%. Private Sector 15%. The Federal Government 75%.

    Thank you for your comment, and, as always, I wish you and your investments well.

    Oct 8, 2015. 02:00 PM | Likes Like |Link to Comment
  • Biotech Returns Outstanding Even Given Recent Weakness [View article]

    We've discussed predicting market direction on other threads, something which I'm against trying to do. But not necessarily sectors or specific stocks. It's rare and I'm never specific or short term, but I will go with a slightly longer term prediction a small degree of the time. Such as what follows:

    We had what my contrarian friend calls a perfect contrarian point (or, indicator) yesterday when Jim Cramer was yelling all over the place that the "biotechs had come down so far that they were dangerous" at this point and had "another shelf down" to go.

    Never fails! He says. When Cramer's double bullish on a stock or a sector and after a sell off of that stock or sector, and he finally succumbs, that is a perfect contrarian point over 84% of the time, according to that same contrarian investor friend of mine who keeps up with Cramer's "capitulations."

    Be well, GJ. AD
    Oct 7, 2015. 04:35 PM | Likes Like |Link to Comment
  • Cisco: Shares Have 25% Upside To $34 Fair Value [View article]

    What about the company's products and services?

    JC is high on "digitizing the world nation by nation," none of which I believe those earnings are in the price of the stock.

    Good piece overall, but all quantifying. A little qualifying is called for at times, especially here.

    Long CSCO at 14 and standing.

    Oct 7, 2015. 01:13 PM | 1 Like Like |Link to Comment
  • Biotech Returns Outstanding Even Given Recent Weakness [View article]
    Wow Woust! You should be able to make more money than Buffet & Icahn have together by shorting the biotech indices on the futures market.

    Gosh, I wish I knew such things! Sheesh, I don't even know which way the markets are going for the next few months --- much less this month.

    Oct 7, 2015. 01:08 PM | Likes Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]

    Of course, we have to agree the Beast we know as the Fed is not going to change — at least in our lifetimes. So our conversation is merely for fun. Or, if we have big egos, we could say it's academic. I'm going for fun. How about you?

    As long as someone wants to lend money to someone else, and freely so without government coercion, then I believe each one should be able to fulfill their wishes. Because I believe in freedom first and foremost.

    But I'm strongly opposed to the government mandating that lending institutions lend certain groups money, as they started doing in the late 1970s with the Community Reinvestment laws. Which, of course, eventually led to the creation of the sub-prime loan, after the Clintons sued hundreds of lending institutions for "discriminatory lending practices" in the `90s.

    I think the steady rates of 1-3% would keep the economy more stable than the current Fed's manic moves. Remember that Greenspan admitted that he panicked after flying over the aftermath of 9-11 and began slinging money around the nation. Then panicked again in `04 thinking he had overdone pumping the pump and raised rates 17-straight unprecedented times. Thus, bringing about the Cash-Credit-Crunch Crash of `08-`09.

    I can't imagine how computerizing the system and setting rates between 1 & 3 could bring about anything any worse than that blowout. Can you?

    Besides, lenders could charge what they wanted to, if demand became that heavy. The wholesale rate, however, would remain between 1 & 3.

    Thank you for your comment. The best to you and your investing.

    Enjoy the fun: AD
    Oct 7, 2015. 01:01 PM | Likes Like |Link to Comment
  • Biotech Returns Outstanding Even Given Recent Weakness [View article]
    Good piece, GJ. Thanks.

    Long GILD at 95.

    Oct 7, 2015. 02:02 AM | Likes Like |Link to Comment
  • Why I'm Reiterating Income Investors Buy Consolidated Edison Instead Of Southern Company [View article]
    Fellow Investors:

    ED is selling at over 17 x earnings. That's far too popular in my opinion to buy a utility. They ought to be bought around 12 x earnings.

    The entire utility trade looks rough to me nowadays. I do agree with this author that SO is not in good shape. I don't think he mentioned the massive debt it has accumulated in the last 7-years trying to meet government rules, regulations, and mandates. More of that to come before this Administration is finished.

    One slip and there goes the dividend, and along with it the price.

    It's my view there are better and less risky places to put funds.

    The best: AD
    Oct 7, 2015. 01:58 AM | Likes Like |Link to Comment
  • Dow Theory, The Economy And A New Bear Market [View article]

    You wrote: "If John Smith is right only 4% of the time, and I am right `only' 5% of the time, I am still a 25% percent improvement over Mr. Smith. That is one giant step for mankind."

    Comment: GJ, can you not see that you are still wrong 95% of the time? Yes, indeed, you bested Mr. Smith by 25%, but you're both broke from losing 95 & 96% of the time, respectively.

    The intangibles are far, far too many, and this includes the psychology of market thinking, which is rarely — if ever — mentioned on this site (or others of the type). Add into this millions of news inputs every hour, and predicting market direction is far more difficult today than 30-years ago. And no one could consistently do it then!

    I believe in prioritizing and putting my energy in areas where the odds are on my side that I might excel, and if I do, I have good chance of winning big. Really good football players aren't going to put a lot of time into practicing basketball to make a living. They're going to put all their time into what they're good at, so they might be able to make a living at it.

    It bores the hell out of me to lose, so I blank out things in which I know the odds are against me. I don't play lotteries. I wouldn't walk in a casino and play any game against the house if they gave me the Mao Zedong Suite plus meals for a month. I wouldn't think about trading stocks because there is no leverage, and thus no advantage to it.

    I wouldn't dare even dream of predicting market direction, though we do know that, over time, markets tend to rise. But we also know that no one has ever consistently predicted market direction over shorter periods. It must therefore be a fruitless endeavor, one in which you're going to be wrong far more than right.

    Everything I do I try to take the best of by at least 20%, and I've found if I do that, over time the money backs up in my accounts.

    No telling what the odds are of predicting market direction, but you can bet they are way, way, way against being able to do it consistently.

    Again, GJ, you obviously have a kryptonite head (and I do not mean that negatively), and so you're going to continue to bang away at predicting market direction. I wish you well on that course, but I wish even more that you put your brain to things you're truly capable of doing and might even succeed at doing. You will be far more successful, and life will be much easier for you. In fact, you may even help mankind, by some means.

    I am, the ArtfulDodger
    Oct 6, 2015. 06:11 PM | 1 Like Like |Link to Comment