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  • There's no middle ground in a debate between Ron Paul and Paul Krugman. Paul: "I don't want the government or Federal Reserve fixing the rate of interest... Governments aren't supposed to run the economy. The people are." Krugman: "I want the market economy to be left as free as it can be, but there are limits. You do need the government to step in to stabilize." (video)  [View news story]
    nasdaq99, what is money to you? For most people it is a proxy of an exchange of value. In exchange for hours worked one receives money, which can in turn be exchanged for goods and services. This proxy must be universally accepted and convertible. You seem to believe that having the proxy "collateralized" by gold would solve most of our problems. First of all, given the value of aggregate reserve currencies it would be virtually impossible to accumulate enough gold as collateral unless the value of gold almost qualdrupled from where it is today. If this would happen South Africa would all of the sudden be the new Saudi Arabia, just because it has signficant reserves of a shiny yellow mineral in its ground. A gold standard is just not practical and certainly it would certainly turn global financial markets on there heads.

    Secondly, those who argue for a gold standard alway point to the depreciation of fiat currency against gold, not against a more useful measure of standard of living. Who cares what the value of a currency is against gold. Who needs gold? The answer is no one. However, if you compare the value of an hour worked by the average person in the U.S in terms of how well they can eat, provide shelter, and other necessities, the hour worked today buys much more than it did in the early 1900's. This is why our standard of living has increased so dramatically over the last 100 years.
    Apr 30, 2012. 07:59 PM | 1 Like Like |Link to Comment
  • Telefonica Brasil: A Sleeping Giant? [View article]
    VIV is one of my largest holdings and I add to it at current levels, so I agree with your overall premise.
    Apr 28, 2012. 07:50 AM | Likes Like |Link to Comment
  • Telefonica Brasil: A Sleeping Giant? [View article]
    Rupert, I have owned this stock for a number of years and your characterization of the stock being significantly lower than it was before the combination with Vivo is not accurate. The transaction lowered the stock price, but it was similar to a stock split as each shareholder received additional shares in the deal. This transaction is reflected in most of the stock charts of VIV. If you chart the stock, you will see the the five year high on a transaction adjusted basis was around $32 per share. You should definitely amend your analysis above.
    Apr 27, 2012. 07:13 PM | 1 Like Like |Link to Comment
  • Addressing Vertex / Gilead Confusion [View article]
    Very well said! I share many of you sentiments.
    Mar 3, 2012. 09:08 PM | 1 Like Like |Link to Comment
  • Harris Corp And KLA-Tencor: Technology For Value, Growth And Yield [View article]
    Chuck, absolutely awesome article! I have owned HRS in portfolios going back approximately three years. I find the management execution and top and bottomline growth to be very high quality and contrasted with the valuation, this stock is unquestionably a compelling investment for long-term investors. In terms demand being subject to decline due to government spending budgetary issues, I think that in regard to HRS this risk is mitigated by the transition from analog communication networks to digital networks will continue to drive growth at HRS who is providing the upgraded equipment.
    Jan 26, 2012. 07:29 PM | 1 Like Like |Link to Comment
  • Dendreon: Following Up On Market Mania [View article]
    Nice article; I like your focus on common sense fundamental investing. You are right to point out the mania of the stock market, which to me means don't take stock prices too seriously as any type of indicator of fundamentals.
    Jan 17, 2012. 07:26 PM | Likes Like |Link to Comment
  • Agrium Is A Great Buy On Weakness [View article]
    Nice job making a long-term investment case for AGU.
    Jan 12, 2012. 08:10 PM | Likes Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    There is too much at stake, it is too systemic. Their are far too many lives, economies and governments at stake to allow for what you believe will happen. The only people who I have come across with similar beliefs as you are those who secretly or not so secretly want to see the entire financial system crash, or at think that is what they want.
    Jan 8, 2012. 12:21 AM | 1 Like Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    The other thing about how you are approaching "investing" as you call it is that you can have no conviction because you are not truly investing in anything, you are just playing the ebbs and flows of the market, which can be maddening.
    Jan 7, 2012. 07:23 PM | Likes Like |Link to Comment
  • A Scarcity Of Alpha [View article]

    I like your honesty. I would say however that if you are young, you don't have to worry about those inevitable ups and downs for a long time. Also, your apocalyptic forecast is likely a low probability event. Not impossible, but low probability. I knew a lot of people who were adults during the depression and they looked for another big crash for their entire lifetime and it never came. Living through a crash like we had in 2008 creates the view that you have, its human nature. I would think that a more sensible strategy for you would be to invest for a longer time horizon, but keep 20% to 25% liquid so that you can buy aggressively if I am wrong and you are right about the next big crash.
    Jan 7, 2012. 07:21 PM | 1 Like Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    McGonicle, you say it is suicide if a stock is cut in half once you own it. Why is that? Are you buying that position with margin debt? If so, you are absolutely correct. If not, it is just the price of the moment. Take a look at KRA. Within the last 12 months this stock fell dramatically to the low 20's just because it is characterized as cyclical and the mood of the market turned unjustifiably toward pricing in a double digit recession. Let's say the stock was purchased at $21 in June or July and then a couple months later it is it at $13, which happened in September. If you have done your research and are convinced that this stock is worth at least $27 - $28, you buy more and average your cost down. Now maybe your cost is $18 or so. Fast forward to today and that stock is at $24. So, explain to me how it was suicide for an investor when it dropped to $13? Today that investor, in less than a year, has a 33% gain. That is called investing an it is not dead. The problem is too many people like yourself put far too much credence in the price of a stock on a given day. It is just a price and if you are not margined, it does you no harm at all and could be a huge gift if you have some liquidity and can add to your position at a lower value.
    Jan 7, 2012. 05:28 PM | 2 Likes Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    Most investors these days cannot think about investing in any other way than a directional time sensitive bet. Buying a call instead of the stock because you get to leverage your investment dollar, involves picking a relatively short-term direction and puts a definitive time line on that bet. That is speculative, not investing. Shorting the Chinese market is simply speculative unless you are an expert on the Chinese economy and policy makers and have information from the source, instead of what is fed to the markets by the Chinese goverment.

    It just seems that speculative investing among a large segment of the population has become the norm. I guess that it should not be surprising since most investors do not mentor under experienced investors, but instead learn how to invest by watching Fast Money or Mad Money on CNBC.
    Jan 7, 2012. 01:34 PM | 4 Likes Like |Link to Comment
  • A Scarcity Of Alpha [View article]
    Here's an idea; how about simply investing in growing profitable stocks that are selling at ridiculously low multiples and waiting it out until you get a double or triple? These types of companies are not that hard to find given that most "investors" these days are simply trying to play the market instead of actually looking at the underlying investment. Somebody please tell me why GLW at a 6 PE is not a great investment?
    Jan 7, 2012. 11:13 AM | Likes Like |Link to Comment
  • A major surprise, the Obama administration will allow the states to decide what treatments many insurance plans must cover under the new health car law. The decision deflects a major criticism of the plan - that it imposed a rigid, bureaucrat-controlled, one-size-fits-all standard atop the entire country (substituting it with 50 bureaucrat-controlled standards?).  [View news story]
    Having healthcare standards differ just because one decides to live on one side or the other of an invisible state boundry line makes absolutely no sense and just causes complying with insurance requirements much more expensive for healthcare companies which provide services nationally or regionally. An American living in Georgia does not have different healthcare needs than someone living in New York. Why should states decide fifty different ways that healthcare insurance is delivered, when an American healthcare needs for all Americans are the same regardless of where they choose to live?
    Dec 17, 2011. 06:18 PM | Likes Like |Link to Comment
  • Fixing Wall Street: Cutting The Gordian Knot [View article]

    That was a spectacularly written and comprehensive guide to what is wrong with the global economy and why 10's of thousands are protesting. These 10's of thousands cannot articulate their grievances as you have, but I think you nailed it.

    As far as executive compensation in U.S. company's, it is far out of whack. It is justified by what you described as "paying whatever it takes to get the best". But answer me this question: Our companies are competing in a global economy that is driving labor costs down with the exception of executive compensation at U.S. companies, but why is this when comparable executives of foreign companies make far less than their U.S. counterparts?
    Oct 17, 2011. 02:44 PM | 9 Likes Like |Link to Comment