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  • Forget About SWANs, Fish And Chowder: Chase Yield In Retirement [View article]
    "When you chase yield, you chase risk."

    Yes, that is undoubtedly true, at least I don't doubt it. The question for me then is am I properly compensated for the risk I take when I don't chase yield? Often the answer is no, I will not experience the required catch up either in total return or cumulative dividends. Nevertheless my cautious nature recommends a blended approach which relies on conflicting, even mutually antagonistic models, on the safe assumption that the models are toys composed of beliefs convenient to hold. In investment, like life, most wallets are found under lampposts. No wonder people are tempted to believe that's where they are lost. :-)
    Jul 6 11:43 AM | 9 Likes Like |Link to Comment
  • The Next Phase Of Easing Will Be 'Qualitative' - Purchasing Common Stock [View article]
    "The developed world's savers are being decimated to fund the profligacy of borrowers."

    Pretty soon there won't be any rich people left.

    Our critical analysis then is that the greedy rich banksters are being bled dry by poor profligate borrowers. If only we could raise rates now now now instead of when the economy picks up the greedy rich banksters could make more money at the expense of the poor, which would be a very good thing! No more decimation of lenders! Send the poor back to the poorhouse where they belong!
    Jul 4 09:31 AM | 1 Like Like |Link to Comment
  • Could China And Russia Be Trying To Kill The Petrodollar Standard? [View article]
    I didn't. I read history (see Walter Russell Mead's "God and Gold"), which says the world holds the money of the world leader in trade. Hate and envy are optional. :-)
    Jul 1 09:17 AM | Likes Like |Link to Comment
  • Could China And Russia Be Trying To Kill The Petrodollar Standard? [View article]
    A reserve currency is a circumstance, not a plan. A country that's a huge market for foreign goods will pay for them with its currency, which will be accepted. That's what it means to buy and sell. The desire to sell in dollars is the desire to hold dollars or dollar instruments.

    There are several reserve currencies. The dominant one belongs to the principle maritime power of the day. If China is our successor it won't plot its way to a reserve currency, it will buy the worlds goods and the world will save in Chinese currency. What else would you expect?
    Jul 1 08:30 AM | 2 Likes Like |Link to Comment
  • John Hussman: The Delusion Of Perpetual Motion [View article]
    " Ask yourself how you would feel losing money during a time when the S&P has tripled."

    The right time to lose money is when the market is down. Then you have unrealized losses. If you're losing money on the way up, you're listening to advice from someone who gets paid either way. Why you do that? :-)

    Jun 30 10:25 AM | Likes Like |Link to Comment
  • John Hussman: The Delusion Of Perpetual Motion [View article]
    I wouldn't buy an overpriced stock, at least not knowingly. As for the market, it can go where it wants. I fail to see how a high present valuation reduces my returns now or later or ever. My returns are on the price I paid when I bought. I did buy recently, and I expect I'll buy more if I can find something reasonably priced. But buying will slow if I can't find much at the right price. There are stocks I'd like to own that look expensive, so I won't buy them. I sometimes wonder if I'm making a mistake. Some high priced stocks will turn out to be bargains later, but which ones?
    Jun 30 09:59 AM | 1 Like Like |Link to Comment
  • Revisions For Q1 Show Biggest Drop In U.S. GDP In 5 Years [View article]
    It looks like too much taxation with spending flat. The pattern should continue with further tax hikes on the way for years to come, up three quarters and down one I should think. We've seen 2013 and 2014 already so it shouldn't be a surprise the next time.
    Jun 29 02:32 PM | Likes Like |Link to Comment
  • Are You Prepared For Correction 2014? [View article]
    "According to John Hussman, at current valuations, investors could realistically expect to experience negative nominal total returns over the next 5-7 years."

    It could turn out that way. I may have experienced more gains, realized and unrealized, in the last five years than I will in the next ten, if you add all my portfolio bits together like that. Going sideways for years is a consequence of relatively high valuations now. I'll still be able to realize gains selectively as required. In a sideways market many stocks will go up while others stall or go down.

    It looks like I've been here before (sings....:-) ). Then I didn't know enough to hedge, now I know too much. :-) :-)

    When you own ~85 stocks all kinds of fun and groovy paths are open to you, especially the all important Do Nothing path, as well as Take Profits and Harvest Tax Losses.

    Do Nothing 75%

    Take Profits 15%

    Harvest Losses 10%

    Repent, the End is Nigh 0%
    Jun 26 02:01 PM | 1 Like Like |Link to Comment
  • Addicted To Central Bank Painkillers? [View article]
    The author is critical of the POV I'm attacking, though the headline, with the "not for attribution" question mark, muddies the issue. If I could change anything at SA, and I wouldn't change much, I'd advise authors to present their views affirmatively with conclusions following premises that are argued for, not assumed.

    The more a premise departs from the default the stronger the evidence must be to secure it. If I say I saw a bird fly I don't need to add anything. If I say I saw a hippopotamus fly I'd better bring photos, radar images, testimony from witnesses, physicists, aerodynamics engineers and so on. :-)

    A point on instability, it's there all the time, and we need it. A stable world is dead.
    Jun 26 09:10 AM | Likes Like |Link to Comment
  • Addicted To Central Bank Painkillers? [View article]
    The conclusion is at odds with their admission.

    "The authors, while accepting the idea that low real interest rates might be the outcome of low growth and secular stagnation, argue that central banks cannot simply be seen as passive agents adapting their policies to the macroeconomic environment; they are responsible for low interest rates."

    While birds fly, they can't be merely green? When arguments are presented in such a disjointed way, one can only wonder if a coherent version is possible. What would the author mean if he could plainly state it?

    How does a passive agent adapt a policy? Isn't that an active agent? Isn't an active agent what you need to adapt anything?

    Can the Fed be seen as passive if it's active? Does this go anywhere?

    The Fed adjusts rates (in an "active" kind of way) and is responsible for the consequences of the floor it sets, and the market participants then set rates above that. The least manipulative Fed rate is zero. As one who favors manipulation, I naturally question the wisdom of a zero rate. If a rationale for a higher rate presented itself I'd be inclined to favor it, but it would have to net out positive, and it won't until the economy picks up.
    Jun 26 08:16 AM | Likes Like |Link to Comment
  • Retirement Strategy: What I Will Do When The Market Corrects [View article]
    You don't need to run away from a correction, and it's expensive to react to an endless series of false positives just to get the supposed benefit of reacting to a true positive.
    Jun 25 01:45 PM | 2 Likes Like |Link to Comment
  • Are We Crying Wolf Again? The Bear Is At Peter's Door This Time, So Raise Cash And Prepare To Protect [View article]
    The tax hog kills the Bull. My gut says Yellen knows and Obama, who believes in "pay for" and running out of money, doesn't.
    Jun 25 10:36 AM | 2 Likes Like |Link to Comment
  • GDP contracted 2.9% [View news story]
    "It never ended for many people on Main Street."

    Neither did the GD end for many people. They ended first. Still, the GD ended.

    I think it's important not to change the subject from whether we're in a recession to whether some people never got out of the last one. The answer to one is no and the other is yes, and that's not contradictory.

    There's a reason why recessions are defined as two consecutive quarters of negative growth. It removes false positives like Q1 (if it is a false positive), and if we get a negative Q2 number then by golly even bbro and I will agree we're in a recession. That's not as unlikely as some optimists think, given low spending at all government levels and the wave of tax increases at the beginning of the year.

    This BEA chart is informative. Read across line 1 from 2010 to now, then go down to line 23 and compare the numbers with line 1.
    Jun 25 09:27 AM | 1 Like Like |Link to Comment
  • Are We Crying Wolf Again? The Bear Is At Peter's Door This Time, So Raise Cash And Prepare To Protect [View article]
    I'm not in the market, or out. I own stocks, occasionally buy some or sell some, but only for my purposes. The market can go to hell for all I care. I don't buy or sell "it", or care what it "thinks".
    Jun 25 08:50 AM | 4 Likes Like |Link to Comment
  • Are We Crying Wolf Again? The Bear Is At Peter's Door This Time, So Raise Cash And Prepare To Protect [View article]
    "My crystal ball is telling me that we will have another stock market crash within the next ten years, possibly within the next five years."

    We won't have a crash for decades. Even in the 19th century crashes were spaced widely. Since we added stabilizers we've had one crash, in 2008, and that didn't happen until thirty years after we began removing the safety features. If we add similar features back and keep them current, a pretty normal thing to do, we won't see another crash until everyone reading this is dead.

    About the 2002 "crash"........four years of gains were wiped out. The guy who wrote the Wikipedia article about the 2002 drop made a good point:

    "The downturn may be viewed as a reversion to average stock market performance in a longer-term context. From 1987 to 1995, the Dow rose each year by about 10%, but from 1995 to 2000, the Dow rose 15% a year. While the bear market began in 2000, by July and August 2002, the index had only dropped to the same level it would have achieved if the 10% annual growth rate followed during 1987-1995 had continued up to 2002."

    The lesson we all should learn is that a crash is possible even during a bear market if stabilizers are removed and government decides to stop supporting the private sector (due to a looming thin air shortage, or put differently "we've run out of tax cuts!").
    Jun 25 08:34 AM | 3 Likes Like |Link to Comment