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MILESCFA

MILESCFA
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  • There Will Be No Oil Storage Crisis In 2015 [View article]
    Thanks for a great article. I trade futures and although oil generated a buy signal recently, I avoided it because of my fear of the potential "capacity caused crash", and of course it's just gone up since then.

    FWIW, I see the short ETFs are "hard to borrow" and I expect this is always the case, so investors should be aware of this. And while I haven't looked specifically at the leveraged oil ETFs (since I use futures), to DS52's point, ANY LEVERAGED fund using futures will be subject to volatility (or "gamma") price changes. In other words, if you wanted to bet on the price of something (oil), in a leveraged way, would you rather it move by small amounts or large. If you're not "fearful", obviously you want to it move big, after all, you're using leverage to place that bet. Consequently, these futures ETFs do NOT move in a set ratio to the underlying (ie, the 2x does NOT move exactly 2x the underlying except in the VERY SHORT term).

    To give you an analogy, I have a trading system that generates 12% returns going short the 3x bullish small cap ETF TNA (if you could borrow it). You'd think that going long the 3x BEARISH small cap ETF TZA would produce a similar result, but it actually loses money. So just remember that any leveraged fund, if it uses futures or options, is subject to "gamma" (volatility) and "theta" (time decay).
    Mar 26, 2015. 08:49 AM | Likes Like |Link to Comment
  • Bullish Percent Indicators Showing Cracks In Bull Market [View article]
    "bookmark comment"
    Jan 29, 2015. 12:20 AM | Likes Like |Link to Comment
  • G And GDP During The Current Recovery [View article]
    Yes, 19 data points makes for a statistically valid sample size and correlation is causation (assuming you buy his ridiculous "statistical proof"). The absurdity of this whole article can be see by the last paragraph...

    "19 data points can't prove anything, but the few data support the Keynesian hypothesis about as strongly as could be imagined."
    MRH translation: Really? Can you not see the absurdity of that statement? "I don't have enough data points...." "BUT it strongly supports my hypothesis"

    "I am impressed by the unreliability of casual empiricism conducted by idealogues."
    MRH: I am impressed by my unreliable observations of casual empiricism!

    "Some people look at this period and see the opposite of what I see."
    MRH: those that do are equally stupid due to sample size and the fact that correlation does not equal causation. Moreover, as mentioned, "ceteris paribus", which is the essential fallacy of Keynes because the economy is not static (except N. Korea). There is no way of isolating and testing "single variables" in an economy, yet this author and Keynesians would have you believe they can (more government spending and investment = more real GDP growth). AND ONE OF THE BIGGEST POINTS OF FALLACY in KEYNESIAN logic is the govt spending in NOT the only method for government to achieve its aims: totally ignored - universally by Keynesians and frequently by everyone else - is government regulation, which puts the Energizer Bunny to shame!

    "Even now, I am shocked that economists didn't bother to look up the data on FRED before making nonsensical claims of fact."
    MRH: LOL... no comment needed.
    Dec 26, 2014. 11:53 AM | Likes Like |Link to Comment
  • A Once In A Generation Change For Stocks [View article]
    The simple fact that there are SO MANY comments to this article proves "Inequality is a hot button issue"; however, it does NOT prove that it is a fact. For the last 30 yrs, income shares have been relatively stable:

    http://bit.ly/1wXG28U

    I don't have the time to research further back, but Nate Sterling (10/13 2:44pm) makes a good point that the speech was at an "Inequality conference". Sadly, this proves how political the FED has become. Many people ask what the FED can do, but what is more important is what SHOULD the FED do.

    IMHO, nothing.. the FED should have a single mandate = a stable money supply, but the mandate has grown to include "everything Keynes", from preventing boom/busts (job well done...NOT!), to "full" employment, and now apparently a small positive inflation rate - theoretically to prevent/reverse deflation (hey FED, maintain a stable money supply and inflation/deflation will take care of itself!).

    There may be an issue with "wealth inequality", but rather than ask what should the FED do, one should realize the FED has already done "it", and "it" is that in pumping up the stock market and real estate mkts, the FED has done more to CREATE than PREVENT/CORRECT these (perceived) problems.

    The US is declining on most lists of "how to run a successful society", from "income" lists to "wealth" lists (not on "equality" basis but per capita); from "freedom" lists to "ease of doing business" lists; from "regulatory" lists to the related "best places to start a business" lists, etc. etc. ad nauseam.

    The "winners" on these lists share one major aspect in common: almost without exception, the winners are places where govts (and central banks) simply tend to stay out of the way of business.

    All this "hoopla" about inequality is a rouse, most frequently by someone with an agenda, and more often than not, a liberal / activist / interventionist agenda. Everything they've tried thus far has mostly failed, and sadly, they refuse to see the truth, which is that it does not work in a dynamic society/economy that will adjust to their interventions. Their "jaded eyes" only see that "the reason we've failed is that we haven't done enough!" (read: FED, Obama, Krugman).

    The Millennials are starting to wake up to this fact, and none too soon, because I fear we have already past the point of no return. God help us.
    Nov 2, 2014. 02:47 PM | Likes Like |Link to Comment
  • We Continue To Expect Improved Performance In Small-Cap Stocks [View article]
    really like your "Fundamentals Indicators" table ("bookmark comment").
    Nov 2, 2014. 01:32 PM | Likes Like |Link to Comment
  • Misperceptions About Hayek: A Response To Soros [View article]
    "bookmark comment" for an excellent article
    Sep 25, 2014. 10:53 PM | Likes Like |Link to Comment
  • The Stock Market Machines Are Breaking Down [View article]
    Great article that made me realize I need to watch "the trees" as well as "the forest". Since you're long XLU I'm sure you know the old adage about watching the XLI/XLU ratio (and a bit surprised you didn't mention it). The XLI/XLU ratio has been struggling all year on a weekly basis, with the bulk of the time signaling bearishness (ie, XLU outperforming XLI).

    I also watch XLY/XLP ratio and while the weekly ratio has lagged like it can/does do, the daily ratio has been a good market timing signal with a very interesting twist: in the late JUL pullback, the XLP sector pulled more rapidly than the XLY, implying further bullishness even as everything declined (which actually did occur until the return of a sell signal on 9/10).

    I run a quantitative model incorporating ratios like this (with some other factors) and I've preferred to run it on the "super-charged" (3x) TNA, where it generates phenomenal "paper" returns (just started trading it), but I've worried that the TNA has only been around during a bull market and thus I have reservations. So I had run this quant model on the SPY over the 1/99-now time frame but its "measly" 11.3% annualized return didn't interest me except to confirm that the model seems to work over longer market cycles. Your article prompted me to review my data and that 11.3% return compares to an equal-weighted SP500 return of ~7.3% and an apparent ~4.8% SP500 return. Thanks for an article that helps boost my confidence in my model, an article that ironically looks "from the opposite perspective".

    Having spent a career looking at "the trees", I've enjoyed concentrating on "the forest". Thanks again for an insightful article that prompted me to "take a closer look" at both the trees and the forest. [ although you have given me so much to think about I might be a bit mad at you :-) ]

    fwiw: a look at a lot of "forest" ratios/relationships, and the "red flags" are almost everywhere.
    Sep 25, 2014. 10:07 PM | 1 Like Like |Link to Comment
  • Tell-Tale Signs Of A Market Top [View article]
    Great article! ("bookmark comment")
    Sep 14, 2014. 10:15 PM | 1 Like Like |Link to Comment
  • Obama Outperforms Reagan On Jobs, Growth And Investing [View article]
    Several comments have seen "through" the "Lies, Damn Lies, and Statistics" here but I'd like to clarify their points:

    1) ANY stats, but particularly "Unemployment and recovery" chart in article: As others note, too many variables are NOT controlled by just the President, but if you want to fall prey to this falacy, measuring any President performance from the day they took office is stupid and distorting; they don't "own" the budget of the first year in office, it belongs to the former Adminstration. As you can see in the chart, unemployment had almost peaked when Obama as the FED and Bush had already started the fight against the financial crisis. Reagan, on the other hand, came into office when unemployment was still increasing, and out of control inflation and interest rates were the problem/cause, so he and Volker (FED) had to tighten to finally kill the "inflation bubble". Most knowledgeable people have probably seen the "recovery charts" which measure things like unemployment from the peak (from Calculated Risk?) and it's been the slowest recovery ever.

    2) "Boomers retiring": the author is just one of many who sucumbs to this fallacy. If you look at employment by age brackets (published by many), the causes of unemployment levels and labor participation are NOT Boomers retiring or losing their jobs - they aren't retiring (and can't afford to).

    Finally, if you look at real numbers (per capita), like real GDP PER CAPITA and real final sales PER CAPITA (the ability to spend certainly implies an individuals level of wealth and income), the recovery since the financial crisis has been the weakest ever.

    In fact, all real measures of wealth and income have never recovered to the levels seen when Reagan became president. This statement probably will have liberals rejoicing, but the biggest change at that time is the government began running essentially premanent budget deficits (there was a slight interuption at the end of Clinton's presidency when the technology boom was filling the federal treasure with taxes, and that was at the end of a declining level of deficits caused but Newt's Contract for America which held spending in check for yrs; heck, even Clinton enacted welfare reforms, since abadoned under Obama)).

    Wait liberals before your again cheer by trying to blame Reagan. When he was elected, he made a deal with Tip O'Neil, he would enact tax increases immediately for $3 of future spending cuts. Every year after that, when asked about tax increases, Reagan's response was "I'm still waiting on the spending cuts."
    Sep 13, 2014. 10:10 AM | 5 Likes Like |Link to Comment
  • Missed Lesson Of Great Depression And Financial Crisis Blinds Economists To Bubble And Coming Recession [View article]
    Correlation is not causation. This is "Keynesianism" at its worse: if we tweak A, and B happens, we are controlling B using A... forget about the fact that there is a C,D,E...Z,AA,AB,AC....... (MY EXCEL 2010 has a column "XFD", in other words, THOUSANDS of other variables).

    Keynesians use their calculators, Austrians use their brains (logic), and even though you started with "logic", I find it flawed:

    "If marginal tax rates are too low, business owners take more personal income out of business revenue..."

    If I build a business to revenue of $1,000, well, I'm almost certain it will be losing money. Due to economies of scale, at revenue of $100,000, maybe it makes me $10,000. If I have a tax rate of ZERO - NOT marginal, simply ZERO - perhaps you'd take the money out. Me, well I'm smart enough to realize the potential market size for my company is, I don't know, call it Home Depot and the revenue potential is $70 BILLION with $5 BILLION in profits.

    Your logic fails even before your get to statistics, because only the stupid would remove needed capital from a business of this potential.

    (you make the simple - and wrong - assumption that the ONLY relevant factor in creating a business is determined by the marginal tax rate)
    Mar 25, 2014. 03:08 PM | 4 Likes Like |Link to Comment
  • LiveDeal: Are Restaurants Actually Using It? And Other New Information [View article]
    I posted below on different "thread" then I looked at LIVE today in ThinkorSwim, "off $10". I thought, "Boy was I wrong." (sort of).... Whoops, "TOS" was wrong, LIVE back at highs...

    fwiw: this thread is getting all the "action", so I thought I'd re-post here:
    ******** original **********************...
    I typed LIVE into my brokerage platform looking for live cattle and found this company a couple of weeks ago. I looked at it quickly and the concept looks interesting - better than groupon for sure; however, a company this early in development is a crap shoot... EITHER WAY.

    Trying to short this stock, especially since it is hard to borrow, I'll leave to fools and hard core gamblers because any investor who lived through the late 1990s - or even heard about it - knows sentiment knows no bounds.

    originally at:
    http://seekingalpha.co...
    Feb 12, 2014. 04:08 PM | Likes Like |Link to Comment
  • What's The Deal, LiveDeal, Inc.? [View article]
    I typed LIVE into my brokerage platform looking for live cattle and found this company a couple of weeks ago. I looked at it quickly and the concept looks interesting - better than groupon for sure; however, a company this early in development is a crap shoot... EITHER WAY.

    Trying to short this stock, especially since it is hard to borrow, I'll leave to fools and hard core gamblers because any investor who lived through the late 1990s - or even heard about it - knows sentiment knows no bounds.
    Jan 27, 2014. 11:49 AM | Likes Like |Link to Comment
  • The Effect Of The Affordable Care Act On Medical Care Inflation [View article]
    If you haven't seen anything about Obamacare's effect on medical cost inflation, I assume you haven't looked very hard because I've read the same info by at least 2 different authors.

    Without bothering to seek out the exact data myself - you should have and therefore can do that yourself - but the CBO (or perhaps a notable research organization, but I lean heavily to believing I read "the CBO"?) recently updated its projections on medical care inflation.

    Overall they lowered projections for medical care inflation and broke down the factors into 4 or 5 categories. All BUT one of the factors had a "positive effect", that is, meaning they helped lower the medical cost inflation. There was ONE factor that had a "negative effect", meaning it pushed medical inflation up: Obamacare.

    In other words, in an environment of declinging medical cost inflation, Obamacare is "going against the grain" and is pushing medical costs higher.

    Surprise, surprise, surprise!

    And note, CBO projections for this type of expenditure/program are notoriously "lowball", so expect Obamacare to drive up medical costs - probably (primarily) insurance - significantly... and don't forget, having your existing doctor unable to care for you under Obamacare is "a cost" of Obamacare that NOBODY puts in their numbers!... Or having a "death panel" refuse to treat an over70 year old for a slow-growth cancer, for example (like prostate cancer), is "another cost" that will not show up in the inflation numbers.
    Dec 6, 2013. 01:02 AM | Likes Like |Link to Comment
  • Even Europe Is Recovering [View article]
    Your 1st paragraph speaks to 3 aspects of the stock market(s) and then you conclude that Europe's economy is falling behind (because it's stock market is lagging???). Like almost all economists, you're assuming correlation with causation.

    Admittedly, in the long term, there is causation (-?-, the stk mkt leads the economy by, what, 6-9mns... and ~ "has predicted 9 of the last 5 recoveries!"). While I'm less of an Keynes fan than you, two Keynes quotes:

    1) "In the long run, we're all dead."
    2) "The stock market can remain irrational longer than you can remain solvent."

    If you look at your economic charts later in the article, the "correlation"... sorry, the "causation" I see is that the European stock market "correctly" reflected the weakening in the diffusion indexes whereas the US stks mkt "had a blip", but only a blip, and then barreled on.

    Looking at GDP growth (on "FRED") rather than "a diffusion index", the rebound on growth has been anemic, "eyeball averaging" 1% whereas around 2000 and 2006 (~the stock market highs), the "eyeball average" is around 1.5%, so GDP growth is lower BUT we're making new highs in the stock market.

    According to what I read, the stock market is not out of line with earnings. The caveat is that the stk mkt is suppose to lead the economy and profit margins are at record levels... I guess corp profit margins (and therefore earnings) are going to just keep barreling ahead!

    As Tunaman noted, QE to infinity!
    Oct 15, 2013. 12:27 PM | Likes Like |Link to Comment
  • 28 Stock Selections From Reverse Engineered Stock Analyst Ratings [View article]
    good article ("bookmarking" for future reference)
    Aug 15, 2013. 09:26 AM | Likes Like |Link to Comment
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