JKC1967

Making Money With Fannie and Freddie: Bank of Ozarks' Conference Call

Great article - Bill Gross in his outlook for 2009 said the best strategy is to "shake hands with the Government, buy what they are guaranteeing, and try to get there first" (I'm paraphrasing here). Sounds like these guys at Ozark did excactly that, I wish my fund manager had thought of it, believe me.

The Banker's Dilemma

This is one of the best articles I have read on SA for quite some time, it really summarizes the macroeconomic situation well. What I like is the emphasis on the Velocity of money in analyzing deflation. As I understand it, John is saying that it does not matter how much money is created by the FED, if it just sits in the "warehouses" due to fear/deleveraging, deflation persists. It makes me think about how some ofthis is psychological in a sense, and that fear can be a self-reinforcing cycle that is difficult to break. Great work John!

Financials: How - And When - We Reached the Bottom

Is it possible to see merit in both Tom's case and DSB's? I think so. There is no diubt by traditional metrics banks are extremely undervalued, but it is impossible to leave out the general macroeconomic environment. If the Gov't end-up taking over/guaranteeing FNM and FRE, if housing continues to drop for for the next couple years, if the general process of deleveraging and defaults extends more broadly into other types of debt like auto and credit card loans, if the FED has to raise interest rates due to inflation....doesn't mean all of these things will happen, but any analysis of banking securities that does not take these risks into account seems flawed. Would love to hear Tom respond to DSB at some point....

How Low Can This Market Go? The 40 Percent Solution

Dent is Harry Dent. His theories essentially revolve around demographics, tying stock market performance to demographics, and he does predict a major crash and depression as the Baby Boomers start to retire in large masses (around 2010). HOWEVER, he has also written books called "The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010." Below is a summary from Amazon of his predictions of how this decade would end. As you can see, ole Harry was probably a wee bit off the mark! Just goes to show the importance of being diversified across asset classes, instead of listening to every two-bit "expert" out there!


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The Dow hitting 40,000 by the end of the decade

The Nasdaq advancing at least ten times from its October 2001 lows to around 13,500, and potentially as high as 20,000 by 2009

Another strong advance in stocks in 2005, with a significant correction into around September/October 2006

The Great Boom resurging into its final and strongest stage in 2007, and even more fully in 2008, lasting until late 2009 to early 2010