Vladimir Senkov

67 Comments

    • ON: Sat Oct 11th 00:20 AM
      Commented on:
      Where We Go from Here: Best and Worst Cases
      It's amazing how long can "don't just stand there do something" approach can go and how much damage it can cause.
      Quick question for everybody, if Hank and Ben hadn't "acted to prevent the financial meltdown" would the meltdown still happen?
      And where would we be today if Greenspan didn't use all his financial engineering tricks?
      When manipulating the system one has to understand that the manipulation itself doesn't fix the system. Either you pay you bills now or you pay them later, with interest. The rest of the tricks is just there to confuse you and justify the high pay of those financial alchemists who pretend that they know something you don't. Some of them believe it too, but the good ones know the reality, they just aren't saying it outloud.
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    • ON: Tue Sep 30th 20:47 PM
      Commented on:
      TWM: An ETF Arbitrage Opportunity
      Oh man, oh man, where do I begin . . . Ok, let's try to be constructive here.
      If I recall correctly, these type of funds are trying to mirror DAILY returns. So even if it tracks perfectly you will experience different results over longer term. And why would you expect it to track perfectly to begin with?
      Yeah, spreads (even if they actually exist once you calculate everything correctly) may narrow eventually, but who knows when? Have you heard of LTCM?
      How many years did it take for those spreads to narrow? Can you sit it out? What is your WACC? Will it be worth it? Of course not.
      View article »
    • ON: Thu Sep 25th 20:56 PM
      Commented on:
      Why It's Time for Muni Bonds
      Dear Graham,
      Let me get this straight. You actually point out that there are USD negatives to think about and from that you conclude that you need to be buying USD denominated munis? As alternative to treasuries???
      Let me give you an analogy.
      Suppose I had some cash. Some $100 bills. I heard that USD might go down so i started looking for alternatives and bought . . . treasuries!
      Does that make sense? HELL NO!
      There is a reason treasuries are trading higher than munis at the moment. And you need to understand this reason before investing into them and/or suggesting it to other people.
      I'm not saying munis are good or bad a purchase right now, that would depends on your objective.
      Your article has been one of those "you can't be serious" moments for me tonight :)
      View article »
    • ON: Thu Sep 25th 20:31 PM
      Commented on:
      Why I Bought AIG Last Week
      Brian, all stocks have always been essentially call options on company future profits if company is to be evaluated as a going concern. Alternatively, if you look at company's liquidation value, you might need to look at asset to debt ratio, etc. In most cases debt holders have no incentive to force a liquidation if there is any residual value after the debt is paid back, so in most cases common stock is worthless in liquidation scenario, so in most cases stock really should be valued as a call options on future profits.
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    • ON: Wed Sep 24th 23:58 PM
      Commented on:
      You Can't Handle The Truth
      Smarty_Pants, what good is your cash if nobody takes it?
      For the REALLY paranoid:
      You'll have to get the cash first (for this you'll have to call ahead, wait a few days and then they'll treat you like a criminal that you are, you think it's your money you are taking? NO, it's Paulson's money, apparently :)
      but then you'll have to spend this money before it becomes worthless. buy gold before they forbid you from holding it.
      It will be nearly impossible for most to do this right. You'll leave paper trail and may be later found guilty of trying to escape your responsibility as a citizen to surrender any and all savings you might have to help GS.
      View article »
    • ON: Wed Sep 24th 22:18 PM
      Commented on:
      You Can't Handle The Truth
      I'm no Paulson but i think you can figure out what might happen from the history books. Lost of "average guys" could end up losing jobs for a very, very long time for no fault of their own.
      That's what I assume Paulson wants us to think.
      If this is actually true nobody knows. It's one of those things where observing the experiment changes the outcome. Have you heard that economists have predicted 13 out of last 3 recessions? It's kind of like that.
      View article »
    • ON: Wed Sep 24th 20:15 PM
      Commented on:
      Why I Bought AIG Last Week
      I often hear people talking about "cheap" stocks and they often mention the "book value". Do you understand exactly what the book value means? Do you know that folks are happy to get 22 cents on the dollar for some of the assets that they could actually sell? Do you know how much they would be able to get for the ones they could not sell? 0? Suppose they could sell all at 22 cents on the dollar. Think about this as the "best case scenario". Your 5.80 at the end of the last qtr quickly becomes under 1.28.
      Another thing you have to remember is that book value, as irrelevant as it is at the moment matters only if you are trying to look at the liquidation value of the company. Why are you looking at AIG from liquidation point of view if you already know that the gov. essentially told you that AIG isn't subject to a liquidation?
      So forget about book value and look at AIG as a going concern.
      What do the earnings look like now and how are they going to look like in the future? What would be left after the massive debt is serviced? My guess is nothing. Why? Because there is no reason for anything to be left. Financing they are getting at the moment is not an attempt to develop a stable source of income. It is what's necessary to keep it afloat, because some believe "it has to stay afloat". Those who gave it money already have stable stream of income, it's called taxes.
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    • ON: Sat Sep 20th 20:14 PM
      Commented on:
      Performance for Harvard, Yale Endowments in 2008
      When you make a statement that one could replicate this performance using some ETFs, I'm assuming you've back-tested this. Could you please show us some more details on how you did it?
      View article »
    • ON: Fri Sep 19th 23:17 PM
      Commented on:
      The Artificial Inflation of Stock Prices, Due to the Short Selling Ban
      It's simple. The name of the game just changed from "short to 0" to "pump and dump", that's all.
      View article »
    • ON: Wed Aug 20th 13:06 PM
      Commented on:
      Options Trader: Wednesday Outlook
      I was always wondering who makes US economy contract and Chinese economy expand. Now you finally explained this. It's JPM and GS. Wow! and i mean, WOW!
      You know why i love markets? In many disciplines you can argue your entire life and never know if you were right or wrong about your hypothesis. Thankfully, market is sort of a universal "prove me wrong" machine. So i'm having a tough time understanding why one would want to continuously call Shenanigans. If one is convinced that his point of view is ultimately correct, why would one tell anybody? One would just keep it quiet and make more bets.
      Let's take a look at your FRE bet. Why are you pulling out of it if you're right? If you're wrong, would you tell us how you came to understand that?
      The reality is, you argue about macro stuff for the sake of the argument, it has little to do with your trading, i mean gambling. It's just smoke and mirrors. You went ahead and gambled on FRE options because your arguments empowered you to think that you have some sort of an edge against the market, that you are superior to it, that you understand something others dont. Then you either have to pull out without a good explanation (why look back anyways, sunk cost, it just became too risky) or you have to call Shenanigans or perhaps you got lucky and won. Either way this empowers you for the next round of arguments.
      Is arguing improving your trades? I doubt it.
      Is it entertaining? Initially. It quickly gets old, unfortunately. I think you may need more cartoons!
      View article »
    • ON: Sat Aug 9th 12:39 PM
      Commented on:
      12 Great Investment Strategies
      Is this a direct quote from Rob Arnot:
      "Since probabilistically the largest cap stocks will underperform all other stocks". If so, his is probably another chapter I'd skip, along with George Gilder's :)
      View article »
    • ON: Wed Jul 30th 16:58 PM
      Commented on:
      Cornerstone’s Unauthorized Liquidation
      How much is your broker charging you to short this thing, if you don't mind me asking?
      View article »
    • ON: Fri Jul 11th 23:52 PM
      Commented on:
      Even the Legends Are Losing in Today's Markets
      ehart500, well said. but, folks like Soros have been trying to do the kind of studying of economic environment for a long time and i'm sure Bill Miller also believes that he does the same thing. It's in the rear view mirror that his genius gets reduced, in your words, to "applying rules of thumb" :)
      Every study is a logical chain that can be reduced to following a few rules of thumb, usually a lot less than the those doing the studying would let you believe. Think mortgage paper buyers . . . their rule of thumb was "real estate always goes up". They gave birth to an entire industry of people who's rule of thumb was "those guys are idiots". Guess we know who had a better rule but again, only in rear view mirror. I'm sure you can dig around and find people who explained why this paper wasn't worth 99% of the face value 5 years ago. Some of them made their bets and lost. Then there were people who made those same bets 4 years ago and lost again. Then 3 years ago. Only the ones lucky enough to made and stick to these bets in the last couple of years came out ahead. For the market isn't a judge telling you who is right and who is wrong but a voting public that can be as stupid and wrong as anyone else and indeed often is for very long periods of time.
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    • ON: Fri Jul 11th 22:28 PM
      Commented on:
      Even the Legends Are Losing in Today's Markets
      4 out of 124?
      View article »
    • ON: Fri Jul 11th 22:21 PM
      Commented on:
      Even the Legends Are Losing in Today's Markets
      ANTS, either this is only obvious in the rear view mirror or you are a genius. You pick :)
      View article »
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