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User 25172973

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  • The 'Real' Reason Gold Will See $5000 [View article]
    While I find the discussion about JPM as an agent of evil (they actually ARE but for entirely different reasons than the gold and silver folks think) pretty tiring, I think there is a huge disconnect between the perspective of Mr. Gilburt and the more rational cohort of the metals investors.

    This is not a trade, it's insurance, that's it.

    When you look at all of the things that the bugs say, much of it makes sense from a certain point of view. We also need to live in a world where fiat currency is the norm and every single one of the bullion dealers and miners takes fiat currency for their precious metals. You need to be rational and understand that in the unlikely event that we see some societal breakdown a small position in PMs could help you. The price paid for this insurance is likely not material because it isn't a trade and shouldn't be a big enough position to hurt you if it goes the other way on you. Everyone says that "it can't happen here" and frankly I don't know. Nobody does. If you ask yourself if the average Soviet citizen could foresee the economic chaos that unwound in the former Soviet Union, I think they'd say that it was wholly unexpected.

    Do we want to buy low and sell high? Yes, probably. Does "selling high" mean that you never sell it, never needed it in the first place and your heirs get it so they don't need to buy their own insurance? It could.
    Nov 3, 2014. 10:31 AM | 2 Likes Like |Link to Comment
  • Why I Bought Arch Coal [View article]
    With high yield bond issuance and demand at an all-time high, interest rates bouncing along the bottom here and a billion bucks on hand, I don't quite understand why they don't roll the debt out 5-10 years. At that point they could do a management-led LBO or private equity deal. There are some investment banks that will happily underwrite bonds like that and tee them up to do a deal....all the while driving down the equity price...oh wait, there are targets far below the current closing price of $3.11.
    The current market cap is roughly $650MM+/-
    Where's Wilbur Ross?
    Jul 18, 2014. 06:57 PM | 1 Like Like |Link to Comment
  • Why I Bought Arch Coal [View article]
    The debt is a good research idea, especially the closer maturities.
    Jul 18, 2014. 06:57 PM | Likes Like |Link to Comment
  • Enjoy The Ongoing Secular Bull Market: Part I [View article]
    points well-taken.
    At the risk of sounding like the fuddy-duddy I am, I'm not a fan of the current RSI on the SPX and the volume is falling. True that could be seasonal but if you choose to look at the recent rally that has included some smaller stocks as a relief rally from an oversold condition...you could as I do remain unconvinced. Of course, volume has fallen for this entire bull market.

    Do you prefer to deploy capital near lows when a panic is in the air or do you prefer to buy when the unemployed discuss the stock market at barbecues? I feel more comfortable in the panic, when the front pages of newspapers (dating myself here) are covered with pictures of those other dinosaurs (floor brokers) are mouthing the f-word and holding their heads with both hands. Simply put, this feels much more toppy than anything I've felt since the Fall of 1999 and the Summer of 2007.
    Jun 4, 2014. 03:05 PM | Likes Like |Link to Comment
  • Enjoy The Ongoing Secular Bull Market: Part I [View article]
    Regan deregulated everything. At that time policy had become too restrictive, just as now it has become too lax.
    I certainly understand your point about the boomer generation preferring stocks and the sheer number of them having an impact on valuation. I'm afraid that you may be correct about dividends being cut at some point to service debt in a rising rate environment. In the mean time, let's hope that our "lost decade" doesn't stretch to "twenty-four years and counting" like it has for our friends in Japan. We are committing essentially the same policy mistakes that they have committed for the last quarter century.
    Jun 4, 2014. 03:04 PM | Likes Like |Link to Comment
  • Enjoy The Ongoing Secular Bull Market: Part I [View article]
    If only this article were true!
    Two observations:
    1). From a valuation standpoint we haven't gotten to the point where a secular bull would start. In 2009 we briefly touched "fair value" and were at no time "undervalued"--certainly oversold and ready for a FED punchbowl rally.
    2). If a secular bull started in 2009, the secular bear from 2000-2009 would be the shortest one in history. To start a secular bull you need to scare a generation away from the stock market.

    Essentially, there is no catalyst for a secular bull market at this point. Demographics, debt, profit margins and policy all point to malaise. I do believe that you can point to the election of Ronald Reagan as a catalyst for the 1982-2000 bull. As he began to dismantle the regulatory constriction that occurred in the Seventies there was room for equity valuations to improve. It is hard to believe that after all of the money printing, governmental interference, and record corporate profits that we could have room to go up further. The governmental and Wall Street mechanisms that have been in place have been pushing valuations up for some time: a loose FED, unclear accounting, shoddy underwriting, underwriting a record number of money losing companies, unfettered corporate participation in the funding of campaigns and the subsequent regulatory favor granted by Congress. All of these things and more suggest we are closer to the highs than the lows.

    A secular bull begins from extreme undervaluation and moves to extreme overvaluation. I believe, along with the few bears left, that valuations are high and we are past due for some mean reversion. Your ideas about the underpinnings of the next secular bull are compelling, the problem is that the valuation of the equity market is not. One can buy spectacular companies with mind-blowingly innovative products and services, but if you pay too much for them they are lousy, unsuccessful investments.

    The rally is narrowing and fewer and fewer stocks are participating. From my perspective, taking on more risk at this point in the cycle is like picking up pennies in front of a steam roller.
    Jun 4, 2014. 11:19 AM | 1 Like Like |Link to Comment
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