The Whole Picture's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/186995/comments http://seekingalpha.com/article/140316-autozone-buying-opportunity?source=feed#comment-524654 524654 Sat, 30 May 2009 20:42:53 -0400 http://seekingalpha.com/article/112307-the-great-american-ponzi-scheme-part-ii?source=feed#comment-338554 338554 The construction industry is different. It is an extremely fractured industry. It has a surprisingly low barrier to entry. I have often seen a construction company fail, only to have its key employees immediately start a new company. Construction jobs are not going oversees. Companies from other countries cannot ship houses or office buildings to the United States. The jobs stay here, but only if there is a reason to build. If we let industries such as the automakers move to other countries, we will have less reason to build and won't need those builders.]]> Fri, 26 Dec 2008 08:28:00 -0500 The construction industry is different. It is an extremely fractured industry. It has a surprisingly low barrier to entry. I have often seen a construction company fail, only to have its key employees immediately start a new company. Construction jobs are not going oversees. Companies from other countries cannot ship houses or office buildings to the United States. The jobs stay here, but only if there is a reason to build. If we let industries such as the automakers move to other countries, we will have less reason to build and won't need those builders.]]> http://seekingalpha.com/article/109526-testing-the-s-p-500-vs-oex-put-call-strategy?source=feed#comment-322939 322939 Sun, 07 Dec 2008 10:46:43 -0500 http://seekingalpha.com/article/108375-lock-in-low-gas-prices?source=feed#comment-317093 317093
Once we add future taxes and carbon trading to the mix, gas prices at the pump will likely go up much more than the actual price of gas or oil. I assume that investing in UGA will not help offset these extra expenses. Meanwhile, these extra expenses will likely reduce demand, thereby reducing the underlying prices of gas and oil. In this scenario, hedging with UGA could result in an investment loss while still paying more at the pump.]]> Sat, 29 Nov 2008 09:12:14 -0500
Once we add future taxes and carbon trading to the mix, gas prices at the pump will likely go up much more than the actual price of gas or oil. I assume that investing in UGA will not help offset these extra expenses. Meanwhile, these extra expenses will likely reduce demand, thereby reducing the underlying prices of gas and oil. In this scenario, hedging with UGA could result in an investment loss while still paying more at the pump.]]> http://seekingalpha.com/article/93402-how-much-longer-can-money-managers-hang-in-behind-energy?source=feed#comment-243162 243162 Mon, 01 Sep 2008 11:16:25 -0400 http://seekingalpha.com/article/87380-wall-street-breakfast-must-know-news?source=feed#comment-216347 216347
Except for the relatively few items being traded on multiple markets, stocks don't really "move" after extended trading hours. It is simply a case of supply and demand. Let's say a stock ends the day at $10 per share. After trading stops, let's assume some very bad news is published about the company. The next morning, when trading begins, no one in their right mind would enter a bid for $10. The best bid might be for $5, so that the first trade of the day was $5. The stock did not move overnight from $10 to $5. You did not lose out on a chance to trade on the way down after the news was released. There were simply no buyers as the price dropped from $10 to $5.

After saying that, there are some private markets (i.e., those used by larger institutions) that may be in after-market trading, but I am not sure that is the case. Regardless, the same rules apply -- the price does not move around in a linear fashion -- it jumps around based on available buyers and sellers.

A good example of where this can hurt you is with a stop loss price. Let's say you own a stock trading at $10. You want to protect yourself from any major losses, so you put in a stop loss order for $8. However, some bad news is released such that all buyers reduce their bids to $5 or less. Unless your broker was kind enough to "guarantee" your stop loss order (highly unlikely), your stop loss would be forced to sell at $5 because there are no available buyers at $8. The price jumped from $10 to $5 instantly.

This is one of the reasons businesses make announcements after trading stops. It allows all shareholders and potential investors equal access to information, so that the share price can adjust appropriately and the market open at a fair price given the new information.]]> Mon, 28 Jul 2008 09:20:24 -0400
Except for the relatively few items being traded on multiple markets, stocks don't really "move" after extended trading hours. It is simply a case of supply and demand. Let's say a stock ends the day at $10 per share. After trading stops, let's assume some very bad news is published about the company. The next morning, when trading begins, no one in their right mind would enter a bid for $10. The best bid might be for $5, so that the first trade of the day was $5. The stock did not move overnight from $10 to $5. You did not lose out on a chance to trade on the way down after the news was released. There were simply no buyers as the price dropped from $10 to $5.

After saying that, there are some private markets (i.e., those used by larger institutions) that may be in after-market trading, but I am not sure that is the case. Regardless, the same rules apply -- the price does not move around in a linear fashion -- it jumps around based on available buyers and sellers.

A good example of where this can hurt you is with a stop loss price. Let's say you own a stock trading at $10. You want to protect yourself from any major losses, so you put in a stop loss order for $8. However, some bad news is released such that all buyers reduce their bids to $5 or less. Unless your broker was kind enough to "guarantee" your stop loss order (highly unlikely), your stop loss would be forced to sell at $5 because there are no available buyers at $8. The price jumped from $10 to $5 instantly.

This is one of the reasons businesses make announcements after trading stops. It allows all shareholders and potential investors equal access to information, so that the share price can adjust appropriately and the market open at a fair price given the new information.]]> http://seekingalpha.com/article/85793-majority-of-americans-support-ethanol?source=feed#comment-210223 210223
Unfortunately, ethanol requires costly modifications or replacement of pumps, tanks, and fuel lines. This has prevented many gas stations from adding E85 as an option. If there is one good reason for a subsidy, it is this: the subsidy helps promote the ethanol infrastructure.

Quite frankly, I would like to see this go further. The best way to prevent huge spikes and volatility in the price of any item is to make sure there are plenty of subsititutes. In our current state, oil obviously has very little price elasticity -- despite gasoline prices increasing by over three times in one decade, we are actually using more gasoline than we were then. Imagine what would happen if you could pull up to a gas station and have your choice of gasoline, natural gas, propane, ethanol, electricity, and compressed air. Then, imagine if every car is "flex-fuel," by which I mean every car can work on at least two different fuel types.

When I owned convenience stores, we often discussed adding E85 capability. Our biggest concern was the government. We were afraid we would make the investment only to see the government change direction in the same way it did with CNG (compressed natural gas) and EVs (electric vehicles in California).

Making vehicles "flex-fuel" is not expensive. In the case of ethanol, the cost is only a few dollars.

My suggestion ... 1) stop subsidizing alternative fuels, 2) increase taxes on gas from oil by 50 cents over 10 years (5 cents / year), 3) require all vehicles sold be flex-fuel within 10 years by incrementing the amount that should be flex-fuel by 5% each year.

One last note: let's be a little more fair about the effect of ethanol on food prices: 1) the increased demand for grains from China and India exceed the worldwide demand from ethanol by a factor of two, 2) the byproduct of ethanol production is used for feed for cattle so that only half of the food value is lost, 3) a large portion of the grain price increase is from the fall of the dollar and 4) one of the biggest reasons grain prices are up so much in third world countries is because the cost to transport the grain has skyrocketed along with the price of oil. I'm not saying that ethanol doesn't compete with food, but it is a much smaller part of the equation than many like to think.]]> Sun, 20 Jul 2008 21:22:49 -0400
Unfortunately, ethanol requires costly modifications or replacement of pumps, tanks, and fuel lines. This has prevented many gas stations from adding E85 as an option. If there is one good reason for a subsidy, it is this: the subsidy helps promote the ethanol infrastructure.

Quite frankly, I would like to see this go further. The best way to prevent huge spikes and volatility in the price of any item is to make sure there are plenty of subsititutes. In our current state, oil obviously has very little price elasticity -- despite gasoline prices increasing by over three times in one decade, we are actually using more gasoline than we were then. Imagine what would happen if you could pull up to a gas station and have your choice of gasoline, natural gas, propane, ethanol, electricity, and compressed air. Then, imagine if every car is "flex-fuel," by which I mean every car can work on at least two different fuel types.

When I owned convenience stores, we often discussed adding E85 capability. Our biggest concern was the government. We were afraid we would make the investment only to see the government change direction in the same way it did with CNG (compressed natural gas) and EVs (electric vehicles in California).

Making vehicles "flex-fuel" is not expensive. In the case of ethanol, the cost is only a few dollars.

My suggestion ... 1) stop subsidizing alternative fuels, 2) increase taxes on gas from oil by 50 cents over 10 years (5 cents / year), 3) require all vehicles sold be flex-fuel within 10 years by incrementing the amount that should be flex-fuel by 5% each year.

One last note: let's be a little more fair about the effect of ethanol on food prices: 1) the increased demand for grains from China and India exceed the worldwide demand from ethanol by a factor of two, 2) the byproduct of ethanol production is used for feed for cattle so that only half of the food value is lost, 3) a large portion of the grain price increase is from the fall of the dollar and 4) one of the biggest reasons grain prices are up so much in third world countries is because the cost to transport the grain has skyrocketed along with the price of oil. I'm not saying that ethanol doesn't compete with food, but it is a much smaller part of the equation than many like to think.]]> http://seekingalpha.com/article/84605-setting-the-record-straight-taxpayers-not-funding-jp-morgan-s-bear-buyout?source=feed#comment-203635 203635 Of course, this does not address the costs of "easy money," which has it's own problems. By flooding the economy with easy money, the Fed certainly contributed to the housing crisis / finanicial collapse in the first place. That is where the taxpayers really were hit.]]> Sat, 12 Jul 2008 10:32:12 -0400 Of course, this does not address the costs of "easy money," which has it's own problems. By flooding the economy with easy money, the Fed certainly contributed to the housing crisis / finanicial collapse in the first place. That is where the taxpayers really were hit.]]> http://seekingalpha.com/article/77621-spy-the-myth-of-a-decline-in-corporate-earnings?source=feed#comment-169275 169275 Sat, 17 May 2008 09:29:58 -0400 http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn?source=feed#comment-160498 160498 Fri, 02 May 2008 02:04:03 -0400