Debunking Popular Bitcoin Myths For Goldbugs [View article]
"I also wonder if an antagonistic government could harness enough computing power to take over the blockchain."
Anyone, private or government, who had the computing power to crack a double SHA-256 hash would find far better uses for that ability than taking down Bitcoin.
Debunking Popular Bitcoin Myths For Goldbugs [View article]
"Bitcoin are about as difficult to recreate now as performing gold alchemy or stumbling on newly accessible mineral deposits for all intensive purposes."
Is "for all intensive purposes" pidgin for "for all intents and purposes"?
Get Bond-Like Returns From Uncommon Stocks [View article]
"About 6 months ago Varan a regular commenter was attacking my article stating every retiree needs a large concentration of bonds (TLT) and cited the risk in income by not doing so. I decided to buy one share. That share is down -6.31% since I purchased it."
So in your mind, Mr. Wells, the fact that an investment is down six percent in six months is enough to prove it was a poor choice?
I'm not a fan of bonds either, but I base that on fundamental analysis, not just on fluctuations over the past six months.
Get Bond-Like Returns From Uncommon Stocks [View article]
Bob,
I just did exactly that. I plugged in the numbers for GIS and for the S&P for the last three years into a spreadsheet, and calculated the Beta as per the standard formula. The result, not surprisingly, was 0.4305, or about 43%. By all means, please do so yourself to verify.
The Yahoo Finance pages are riddled with inaccuracies and outright mistakes. I'm surprised that an analyst with your experience doesn't take one look at the chart and realize that a stock that mimics the market movements so closely shows up with a Beta of _negative_ 0.01, of all things. There are some numbers you don't have to calculate to four decimals to realize the quoted figure is bogus.
Please, take the time to correct your article and provide data you either derived yourself or taken from a reliable, trustworthy source.
There's Something Not Quite Right About InterOil [View article]
The current borrowing rate charged for shorting IOC is 76% a year; this is not a typo. That means the stock has to drop to $18 within 12 months just to break even on the short.
If your broker is willing to find shares to short and cover that fee for you, be sure to buy him a nice Christmas gift.
What Is The Best Way To Hedge S&P 500 Exposure? [View article]
> Owen, I think SPLV and VQT were meant as replacement not hedge.
If you're looking to hedge your SPY exposure by replacing it, replace it with cash. That would give you a perfect hedge.
This article clearly states it tries to find the best way to hedge S&P 500 exposure. Why speculate on what the author means when he says it so clearly?
In the world of finance, "hedge" has a clear definition. Of the options listed, the SH ETF is the only true hedge, although the author fails to explain why shorting the index isn't a viable alternative.
SPLV and VQT may very well be a great investment, but they have nothing to do with hedging one's S&P exposure.
The Bank of Japan says it will buy longer-dated government bonds in an effort to pressure yields and "beat deflation." Governor Haruhiko Kuroda said the BOJ, which currently buys three year government paper, will extend the maturity of the government bonds it buys to five years and will also consider "boosting purchases of riskier assets." Kuroda said he will "scrutinize what would be the most effective step, aiming to make full use of the BOJ's capacities."[View news story]
Japan? Inflation?
If they want to achieve a 2% target inflation, should they be _selling_ government bonds?
What Is The Best Way To Hedge S&P 500 Exposure? [View article]
The first two options you list are no hedge at all. While SPLV and VQT aren't as volatile as the S&P, they move in the same direction as the index does. Adding them to your portfolio _increases_ your exposure to market movements, not reduces it. That's the opposite of a hedge.
VXZ and AGG are, statistically speaking, a hedge, but a rather ineffectual one. The correlation between either of them to the S&P is negative, but far from minus one. For example, you'd need about $5m in AGG to hedge $1m in SPY. I don't know where you got those "99%/100%" figures you quote.
The final one, SH, is a true hedge, but with a high frictional cost associated with such ETFs. I'm not sure what your particular situation is that prevents you from directly selling or shorting SPY, but the most efficient way to hedge the S&P is using the tool that was created specifically for that purpose in 1997, the E-mini S&P futures contract. With a tracking error of less than 0.1%, no management fees, huge liquidity around the clock, and commissions as low as $2.50 per $75k contract, no other method comes close. When institutional investors want to hedge the S&P, they use S&P futures.
Will Warren Buffett snack on another company this year to go along with the mega-sized purchase of Heinz with partner 3G Capital? SA contributor John McCoy thinks J.M. Smucker (SJM), W.W. Grainger (GWW), and McCormick (MKC) all fit the Buffett profile with their wide moat and strong brands. A longer shot for a Berkshire Hathaway play could be Tiffany (TIF), right-sized for acquisition in a luxury sector Buffett has dabbled with in the past. [View news story]
> Smuckers is also a multigenerational family business. The company is doing very well and has made good acquisitions.
Yes, and with a solid balance sheet. That was true for 100 years--until 2008, when they over-leveraged themselves for the Folgers acquisition. Their balance sheet is much uglier now.
Will Warren Buffett snack on another company this year to go along with the mega-sized purchase of Heinz with partner 3G Capital? SA contributor John McCoy thinks J.M. Smucker (SJM), W.W. Grainger (GWW), and McCormick (MKC) all fit the Buffett profile with their wide moat and strong brands. A longer shot for a Berkshire Hathaway play could be Tiffany (TIF), right-sized for acquisition in a luxury sector Buffett has dabbled with in the past. [View news story]
The main appeal of the Heinz deal to Buffett were the 9% preferreds. He would have never bought the common at this valuation without having it effectively backed by an overall 6% yield on the whole deal (9% x $8/$12).
If Smucker was willing to shell out this kind of preferred dividend, I'm sure Buffett would listen, but the common stock itself is too expensive for his usual taste. Furthermore, their recent overzealous acquisition of Folgers is sure to turn him off, the same way Kraft's acquisition of Cadbury did.
I don't know about GWW, but MKC is obscenely overpriced. I don't think he'd even go for a 9% preferred on that one.
"Now clearly this Russion Oligarch money was stolen, from the people of Russia, so it's up for grabs."
The dilemma is what to do next. We know that 20% of the population smokes marijuana, an offence punishable by 5 years imprisonment, but finding out who smokes and who doesn't takes a lot of work. So, should we randomly pick 20% of the people and toss them in jail, or should we send every citizen, smoker or not, to jail for one year, spreading the pain more evenly? Clearly, _someone_ has to pay for all that weed smoking.
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
> please tell me what you mean, "illeglaly syphon money offshore"? Is it illegal to have a foreign account?
No, it's not illegal to have an offshore account, but it is illegal for a U.S. citizen or resident to avoid declaring his or her worldwide earnings to the IRS, which is what those people did. Most offshore bank accounts are open to circumvent paying income taxes, not for the view from the Alps.
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
"euro area citizens are lining up in front of banks as we speak lining up...I can sense it."
You can "sense it"? You realize we do, actually, have news agencies who monitor and report such things, don't you? Between Reuters, AP and Bloomberg, there's really no reason to use divination to figure out what's happening in Europe.
Debunking Popular Bitcoin Myths For Goldbugs [View article]
Anyone, private or government, who had the computing power to crack a double SHA-256 hash would find far better uses for that ability than taking down Bitcoin.
Debunking Popular Bitcoin Myths For Goldbugs [View article]
Is "for all intensive purposes" pidgin for "for all intents and purposes"?
Get Bond-Like Returns From Uncommon Stocks [View article]
So in your mind, Mr. Wells, the fact that an investment is down six percent in six months is enough to prove it was a poor choice?
I'm not a fan of bonds either, but I base that on fundamental analysis, not just on fluctuations over the past six months.
Get Bond-Like Returns From Uncommon Stocks [View article]
I just did exactly that. I plugged in the numbers for GIS and for the S&P for the last three years into a spreadsheet, and calculated the Beta as per the standard formula. The result, not surprisingly, was 0.4305, or about 43%. By all means, please do so yourself to verify.
The Yahoo Finance pages are riddled with inaccuracies and outright mistakes. I'm surprised that an analyst with your experience doesn't take one look at the chart and realize that a stock that mimics the market movements so closely shows up with a Beta of _negative_ 0.01, of all things. There are some numbers you don't have to calculate to four decimals to realize the quoted figure is bogus.
Please, take the time to correct your article and provide data you either derived yourself or taken from a reliable, trustworthy source.
There's Something Not Quite Right About InterOil [View article]
If your broker is willing to find shares to short and cover that fee for you, be sure to buy him a nice Christmas gift.
What Is The Best Way To Hedge S&P 500 Exposure? [View article]
If you're looking to hedge your SPY exposure by replacing it, replace it with cash. That would give you a perfect hedge.
This article clearly states it tries to find the best way to hedge S&P 500 exposure. Why speculate on what the author means when he says it so clearly?
In the world of finance, "hedge" has a clear definition. Of the options listed, the SH ETF is the only true hedge, although the author fails to explain why shorting the index isn't a viable alternative.
SPLV and VQT may very well be a great investment, but they have nothing to do with hedging one's S&P exposure.
Get Bond-Like Returns From Uncommon Stocks [View article]
The Bank of Japan says it will buy longer-dated government bonds in an effort to pressure yields and "beat deflation." Governor Haruhiko Kuroda said the BOJ, which currently buys three year government paper, will extend the maturity of the government bonds it buys to five years and will also consider "boosting purchases of riskier assets." Kuroda said he will "scrutinize what would be the most effective step, aiming to make full use of the BOJ's capacities." [View news story]
If they want to achieve a 2% target inflation, should they be _selling_ government bonds?
What Is The Best Way To Hedge S&P 500 Exposure? [View article]
VXZ and AGG are, statistically speaking, a hedge, but a rather ineffectual one. The correlation between either of them to the S&P is negative, but far from minus one. For example, you'd need about $5m in AGG to hedge $1m in SPY. I don't know where you got those "99%/100%" figures you quote.
The final one, SH, is a true hedge, but with a high frictional cost associated with such ETFs. I'm not sure what your particular situation is that prevents you from directly selling or shorting SPY, but the most efficient way to hedge the S&P is using the tool that was created specifically for that purpose in 1997, the E-mini S&P futures contract. With a tracking error of less than 0.1%, no management fees, huge liquidity around the clock, and commissions as low as $2.50 per $75k contract, no other method comes close. When institutional investors want to hedge the S&P, they use S&P futures.
Will Warren Buffett snack on another company this year to go along with the mega-sized purchase of Heinz with partner 3G Capital? SA contributor John McCoy thinks J.M. Smucker (SJM), W.W. Grainger (GWW), and McCormick (MKC) all fit the Buffett profile with their wide moat and strong brands. A longer shot for a Berkshire Hathaway play could be Tiffany (TIF), right-sized for acquisition in a luxury sector Buffett has dabbled with in the past. [View news story]
Yes, and with a solid balance sheet. That was true for 100 years--until 2008, when they over-leveraged themselves for the Folgers acquisition. Their balance sheet is much uglier now.
Will Warren Buffett snack on another company this year to go along with the mega-sized purchase of Heinz with partner 3G Capital? SA contributor John McCoy thinks J.M. Smucker (SJM), W.W. Grainger (GWW), and McCormick (MKC) all fit the Buffett profile with their wide moat and strong brands. A longer shot for a Berkshire Hathaway play could be Tiffany (TIF), right-sized for acquisition in a luxury sector Buffett has dabbled with in the past. [View news story]
If Smucker was willing to shell out this kind of preferred dividend, I'm sure Buffett would listen, but the common stock itself is too expensive for his usual taste. Furthermore, their recent overzealous acquisition of Folgers is sure to turn him off, the same way Kraft's acquisition of Cadbury did.
I don't know about GWW, but MKC is obscenely overpriced. I don't think he'd even go for a 9% preferred on that one.
Yes, Stealing Really Is That Bad [View article]
The dilemma is what to do next. We know that 20% of the population smokes marijuana, an offence punishable by 5 years imprisonment, but finding out who smokes and who doesn't takes a lot of work. So, should we randomly pick 20% of the people and toss them in jail, or should we send every citizen, smoker or not, to jail for one year, spreading the pain more evenly? Clearly, _someone_ has to pay for all that weed smoking.
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
No, it's not illegal to have an offshore account, but it is illegal for a U.S. citizen or resident to avoid declaring his or her worldwide earnings to the IRS, which is what those people did. Most offshore bank accounts are open to circumvent paying income taxes, not for the view from the Alps.
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
LOL! Good use of the meme.
Crisis on. S&P 500 futures -1% and the euro -1.2% as Brussels "faced with a drowning member state, instead of throwing the Cypriot people a lifebuoy, (throws) a millstone around its neck." EU leaders risk triggering bank runs in Cyprus (and elsewhere?) by going after bank depositors to fund the country's bank bailout. [View news story]
lining up...I can sense it."
You can "sense it"? You realize we do, actually, have news agencies who monitor and report such things, don't you? Between Reuters, AP and Bloomberg, there's really no reason to use divination to figure out what's happening in Europe.