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Lake Investor

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  • Developments In China Explain The End Of Gold's Rise [View article]
    Not sure why you made a reference to "ill-gotten wealth." Do you think China and India don't earn their wealth? People in both countries work hard under tough conditions for sums that Americans won't work for. To me their wealth is anything but ill-gotten.

    Ill-gotten wealth is the stuff Obama hands out to lazy people.
    Jan 30 01:21 PM | 14 Likes Like |Link to Comment
  • Apple May Lose The Smartphone War To Google [View article]
    No you are wrong. Mercedes has a market cap of around $41 Billion. GM's market cap is $36 Billion AFTER it got about $50 Billion in government handouts. Not a great creator of value if you ask me. It is being further propped up now by electric car subsidies.

    We should have let GM go the way of the dodo. It will continue to cost us money. Democrats' big lie was "the auto industry was in bankruptcy." Nissan, Toyota, Mercedes, BMW, Ford and others have been making cars and money in the US. They were not in bankruptcy. We need to let the weak ones go.
    Sep 7 12:27 PM | 11 Likes Like |Link to Comment
  • When Margin Debt Goes Over 2.25% Of GDP, The Stock Market Always Crashes [View article]
    The large amount of cash will help prop up the market.

    I appreciate the author's pointing out this statistic. I read Seeking Alpha articles in the hopes of finding such insights. Still, whenever extrapolating from the past, one has to be cautious. The level of margin I think speaks more to the explosion of hedge fund participants. I would bet the margin is pretty concentrated among the high net worth players. I don't see any evidence of bullish mania overtaking the masses. Most seem very cautious and the market seems to be climbing a wall of worry.

    If we see a major correction the author's thesis would be vindicated but another long-held market bellweather (don't fight the fed) would be debunked because it would be very unusual to see a correction in light of the fed's accommodative stance. I think it's fair to say we're in unexplored ground at the moment.
    Jun 18 01:30 PM | 8 Likes Like |Link to Comment
  • An Apple Mean Reversion: Not As Crazy As It Sounds [View article]
    I have a hard time buying the idea that millions of people can be fooled into accepting an inferior product. When surveyed, Apple users are far more likely to indicate that their next phone, laptop, etc. will be an apple product than are users of other brands. The sample size is too large to fall back on an explanation that people are either acting irrationally or have been duped. I have a degree in economics and have practiced law for 27 years. In that time I have learned that things usually add up when you have all the facts in front of you. You seem to suggest that other products are better and the answer you come up with is that others are acting irrationally. When a sample size is that big it is more likely that your original assumption about the superiority of other products is flawed.
    Jun 26 05:03 PM | 8 Likes Like |Link to Comment
  • 2012 Review: Why Stocks Rose, Where I Was Wrong And What I Would Do Different [View article]
    I agree. Can't fathom the love and respect for the author of this article. I don't remember reading any other articles by him but this is really muddled. Our market ran because Spain contracted only 1.4% instead of 2%? Really? If Spain has that much of an impact on us we're in trouble.

    You were wrong because (a) stocks were cheap, (b) the fed was forecasting long-term accommodation (don't fight the fed!!), (c) QE money flowed into stock (a derivative of point (b)). Your biggest mistake was listening to the endless drumbeat of negativism on Europe. It was so incessant that the concerns were baked in. The point you got right is that the market reacted favorably to European news that was not as bad as feared. However, that is a typical contrarian call that all people long the market made (including myself).

    I agree with Anonymous Guest's comments about the need for humility in predicting the outcome of a market with a million moving parts. Stay diversified and try for marginal improvements in performance by focusing on big things like valuation metrics, fed policy, etc.

    If market goes up 16% and you miss that you have some hard ground to make up. If you were short the market the task of catching up is even harder.
    Jan 31 02:19 PM | 7 Likes Like |Link to Comment
  • Apple Blossoms In The Spring [View article]
    I agree. Take the article for what it is--an interesting statistical view. Thanks to the author for wading through the stats. Criticism should be limited to mistakes in calculation or methodology (which most are probably not qualified to make). I appreciate articles that offer a new perspective.
    Jan 21 01:56 PM | 7 Likes Like |Link to Comment
  • ConocoPhillips (COP) CEO Ryan Lance creates a stir by warning OPEC oil ministers that North America could become self-sufficient in oil by 2025. Even if Lance overstated the likelihood for regional self-sufficiency, the potential for a radical reshape of the geopolitics and business of oil, especially if techniques pioneered in the U.S. can be copied elsewhere, must have been a cold slap in the face.  [View news story]
    Don't need any such inventions--just a US government that will allow development of North American resources.
    Jun 14 01:10 PM | 7 Likes Like |Link to Comment
  • Petrobras' (PBR) worst debt situation in a decade may be boosting the chances it will step aside and let Exxon (XOM) and Shell (RDS.A) buy offshore exploration licenses in Brazil's upcoming first-in-six-months auction, Bloomberg says. XOM is said to have been the most active in requesting data about the acreage Brazil is offering next month to take advantage of PBR holding back. [View news story]
    Tread carefully. Brazil tried to levy a fine in the tens of billions of dollars against Chevron for a 2,000 barrel leak. One little mishap and they own you. I would do everything through a subsidiary if you are going to invest in Brazil. I would also extract concessions in the contract to prevent the crazy regulator actions. There are a lot of places wanting big investments in oil right now from Russia, Iraq, Mexico, Brazil and Africa. Get assurances and contracts that you can enforce in international tribunals.
    Apr 12 06:44 PM | 6 Likes Like |Link to Comment
  • Fiscal Cliff: Let's Call Their Bluff [View article]
    Dumbest article ever on this site
    Dec 20 08:48 PM | 6 Likes Like |Link to Comment
  • Retirees Don't Need Income, They Need Spending Money [View article]
    Financials were in meltdown because of Democrat policies including shoving CRA down banks' throats, and a hands off attitude toward FNMA's and FRE's investment activities. Democratic congress in 2007 didn't help either. Bush fought those policies. He had the misfortune of being president when those chickens came home to roost. However, his economic policies brought years of prosperity through 2007. His policies had nothing to do with troubles in the auto market which were due to labor market excesses accumulated over decades.


    Stock market bounced back quickly
    Sep 5 12:39 PM | 6 Likes Like |Link to Comment
  • Why Dividend Stocks Will Significantly Lag Cyclicals Over The Next 5 Years [View article]
    I agree that many cyclicals have become more attractive recently.

    Can someone give me a commonly accepted definition of dividend stock? The author uses the term in a manner that seems to exclude many stocks which I would classify as dividend stocks--stocks that pay good dividends and have had a history of raising them over a long period. The author talks of cyclicals and dividend stocks as if they are mutually exclusive categories.

    I considerenergy and other cyclical names as being part of my dividend portfolio. Same for some tech stocks and financials. It seems the author is treating consumer staples as the only "dividend stocks."
    Jun 13 02:06 PM | 6 Likes Like |Link to Comment
  • Apple (AAPL +3.2%) is reportedly offering $17B in its bond sale, making it the largest U.S. corporate debt deal ever. Bloomberg reports $5.5B in 10-year debt will be sold at just a 75bps premium to 10-year Treasury yields (currently at 1.68%). (previous: I, II) Update (3:47): The deal is official. Reuters: "The company is offering $1 billion of three-year floating-rate notes, $1.5 billion of three-year fixed-rate notes, $2 billion of five-year floating-rate notes, $4 billion of five-year fixed-rate notes, $5.5 billion of 10-year fixed-rate notes and $3 billion of 30-year fixed-rate notes." [View news story]
    The two things are not mutually exclusive. They say new products are coming and that is their history. They have the money to do this as well and they should do it. It would be better if we had a sane corporate tax policy that didn't destroy jobs through double taxation and excessive rates. However, right now Apple has to live within the existing system. They are doing the right things in the face of current environment by floating debt, buying back shares and continuing to keep foreign earnings parked offshore--all things that are in the interest of shareholders. Cook gets an "A" for getting this right.
    Apr 30 04:36 PM | 5 Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    That is true of many companies but not Exxon. The most shareholder friendly company in the world. Too many let cash burn a whole in their pockets and they make stupid acquisitions.

    XOM has shown discipline in buybacks which have resulted in major decreases in the float--not more awards to execs. They are not like tech companies who hand out stock too freely to employees.

    They miss on some investments. XTO was not well timed given the gas glut. However, their size, scale and expertise let's them get in on a lot of great deals. They are a preferred partner in the Russian Arctic. They hedge against nationalization risk there by requiring Rosneft to invest in their North American deals (giving them an offset if they get worked over). They seem to be walking a fine line in Iraq and despite some early indignation from the Iraqi government may end up with deals with the Kurds and Iraq (and maybe an improved Iraq deal).

    Most important they understand the money belongs to shareholders.
    Mar 26 06:51 PM | 5 Likes Like |Link to Comment
  • 2012 Review: Why Stocks Rose, Where I Was Wrong And What I Would Do Different [View article]
    I disagree that you have rebutted in any meaningful way the reasons I cited for the gains.

    I'm not sure the point of your last paragraph. You put a lot of words in my mouth. I did not imply in any way that there is no value in correctly predicting down moves. There is great value in correctly predicting moves in any direction--if you can do it. I don't need the third grade math lesson. I was merely pointing out that your call missed last year's gains. I don't know what market positions you actually took but if you truly believed what you were selling then you probably (a) got out of the market, (b) shorted the market, or (c) bought puts, sold calls or made other bets leveraged to a downside move. Any of those would have made your losses even greater.

    Stop and think about your main point--the tiny lever that is Spain can create havoc in financial markets all over the world. Really? The real things that move markets are (a) changes in monetary policy (don't fight the fed), (b) changes in fiscal policy, and (c) changes in trade policy. Zweig, Laffer and plenty of truly smart guys ahve written and commented on these macro levers. Sure there are scary things out there to which you should pay attention but Spain is not on the top of the list. The fed is still accommodative. No big changes in fiscal policy as we still have divided government and gridlock. No real move to bring back Smoot-Hawley as people and politicians mostly realize that trade is good. That is why I am staying long. I would be scared to death to hold long US bonds right now. Understanding and watching those main macro levers is about as much as the average investor can process.
    Feb 1 12:36 PM | 5 Likes Like |Link to Comment
  • General Dynamics: Stop The Roller Coaster, I Need To Get Off [View article]
    Mike,

    I think you're reacting too much to the news of the day. Here are some salient facts about GD.

    Trading at 9.45 times forward earnings.

    Nearly as much cash as debt.

    Dividend has increased 340% in the last ten years ($.15 to .51 quarterly). Payout ratio is 29%.

    This company knows how to treat shareholders well. I charted its progress since 1977 against the S&P, Boeing (another defense aerospace name) and KO (a low beta dividend stock) over that period and GD beat all of them handily. Easy to compare on Yahoo Finance.

    The down market the last couple days is giving you a chance to reverse course and get back in.
    Dec 26 02:13 PM | 5 Likes Like |Link to Comment
COMMENTS STATS
198 Comments
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