captmanning

Banning Derivatives and Other Such Foolishness

My brother-in-law hedged his flax, mustard etc. every year based on seed he actually had in his bins.

I bought shares several decades ago in GE because they made pretty good light bulbs. Years later they got in trouble over something that had nothing to do with electricity.

The problem it seems to me is not that "I" have strayed into my area of incompetence, the problem is I cannot avoid it even if I sell GE and put all my cash in a crooked bank that is very competent at the "shell game." And most financial institutions were involved and I have extreme difficulty finding a safe haven not tainted by greed and fraud, or at the very least manipulation and misdirection.


On Nov 16 03:02 PM Wildebeest wrote:

> dividend_growth and The WaveNET Perspective give good examples.<br/>
>
> If you own the underlying asset, derivatives are an important means
> of hedging risk. If you don't own or have some interest in the underlying
> then you aren't hedging you are gambling.

How Apple's Market Share Will Propel Stock to $500, Part 1

Good point and to make it worse, Microsoft isn't actually selling $1000 computers, only an add-on for a license fee costing much less.


On Oct 23 10:02 AM John Galt wrote:

> > It's amazing: people say Apple sells 10 million PCs. There will
> be 300 million Windows PCs sold in the same time frame. So it is
> interesting to me that people spend so much time talking about the
> 3 percent of the market in that case...I wouldn't trade our 300 million
> new users a year for their 10 million. I just wouldn't do it. I kind
> of like what we're doing and the way we're serving the market.<br/>
>
> What are the margins on those 300 million users and what are the
> margins on 10 million users? Would you rather be selling computers
> that cost over 1000 bucks or under 1000 bucks?

John Maudlin: When Debt Gets Bigger than GDP It's Big Trouble

Thanks Roger, for another excellent reminder that we must read the footnotes. Ourselves!

The Recovery Was Too Expensive

My knowledge of economics is not at your level. I do know that growth is not the same as development. The original article with many charts explains in "dollar value" we are not getting our money's worth and the debt is too high. I'm not sure the conclusions, which I generally understand and agree with, follow from the discussion in terms of pure dollar. Differentiated and printed dollars or those on the books, I mean.

But what would the cost have been in those same dollars if we had done nothing? None of us can know, and cannot even estimate because our nation's treasure is impossible to value. Potential value of the labor of an educated work force, research and development capacity of our labs and higher education institutions, mineral extraction capacity are intangibles but certainly have some value.

It seems to me the conclusions talked more about the possibilities of "development" of our overall economy from the destructive aspect of capitalism evolving in favor of simply increasing by 1 or 2% what we have done before that didn't work.

This may be more philosophy or history, but the USA has faced and dealt with crisis in pragmatic terms. It has usually involved someone or some group doing "something" instead of doing nothing. Bernanke can point to the same improving indicators now that people used before to predict doom.

"we are really getting only limited value from
> this bailout" but this is really an impossible statement; isn't it?
> How do you know what might have happened if the fed's actions hadn't
> been taken?
>
> In general, I'm in agreement with you. But I get a little annoyed
> on Seeking Alpha with all the "ditto heads" and permabears and really,
> perhaps Bernanke deserves some real kudos. Who knows, my point is
> we cannot.
>
> We are but fallible humans (actually meaning-making animals) seeking
> to do the best we can for ourselves in our social contracts. I think
> it's better to live in gratefulness for what has been done than perenial
> cynicism.

Lessons from a Market 'En Fuego'

The gamblers, day traders, commission chasers, talking heads are having a ball with this one, Roger, guess you really punctured their balloon filled with hot air.

Companies usually go into business in a capitalist society to produce needed goods and services at a profit or near-profit. That's all. They are not here to add points to the market indexes, appeal to market sentiment, or trace a positive curve on some quant's 3-toed sentimental journey index chart (3-color version).

Sentiment is important because most are hangers-on who follow the talking-heads and carry blackberries so they can trade on the latest rumor. Cash is important because you can't spend allocation %s, index trend numbers.

My broker and I follow an approach very similar to Roger Nussbaum. We think he makes good sense. We have been slowly staying ahead of the game and gaining steadily for a very long time, with the occasional dip. We think the birth rate is more important to P&G and Kimberly-Clark than the rate of twisted knickers on Wall Street.

Get a grip.

But Cash Is Earning Zero

Most of the commenters seem to be in "the wealth management industry" and treat cash as a big pile of Other People's Money and try to get some of it. Mr. Nussbaum reminds small private investors like me to check our bank balances as well as our brokerage account balance. As Yogi Berra says "Cash is just as good as money." Just because you sharks are circling and need to make your commissions is not reason enough to throw money at the flavor of the month abbreviation. Your comments here make Mr. Nussbaum's point.

Is Wells Fargo Regretting Its Wachovia Acquisition?

.... Oh, by the way, I overheard a rumor the sky is falling...

Where do you get these guys?

A Stock Picker's Market? Really?

I had a similar experience with Citigroup and Bank of America. I bought both because they were "dirt cheap." Sold Citi at 200% profit, may sell BAC at over 300%. My wife and I are not plungers, this was 1st "gamble" in over 40 years trading. My broker joked I would get a seat on the board between Obama and Bernanke. The brokerage house sent me a letter saying "you didn't get this advice from us."

The point is we all knew fundamentals, cash flow, "quality earnings", or the two-headed, upside down 6 week conglomerater index didn't have anything to do with it. I felt investor psychology would trump numbers among beat-down investors desperate for any glimmer of hope. When it came, many did not want to be left behind and there were probably articles in trade mags like "10 Stocks You Must Own Now!"

For me, that qualifies as "panic."


On Aug 26 09:59 AM Tom Armistead wrote:

> A few years ago I (briefly) held Office Depot, inspired inpart by
> Olstein's opinion as reported in Barron's, cash flow and new management,
> I bought at 19 and sold somewhat lower.
>
> The stock went down under 1 in March and I bought some at a little
> over a dollar, it has since gone up over 5.
>
> It did not go up because its sector was attractive or its future
> prospects were bright. It went up because it was trading at 1 X
> Cash flow, dirt cheap. Dirt cheap stocks (if they survive) go up
> regardless of sector.
>

A Stock Picker's Market? Really?

Unfortunately, being right twice a day with generalized institutional mush and getting paid high commissions means his clients had the opportunity to be wrong many times a day and are probably still suffering huge losses and some may never recover.


On Aug 26 12:33 PM Alan Young wrote:

> Arguably, fundamentals haven't mattered for at least a year, and
> won't matter ever again until manipulative devices like high-frequency
> trading are banned and the markets can start responding to human,
> rather than computer-driven, judgment. If that's the case, there
> are a lot of analysts who should look for other work.
>
> OTOH, just because there has been a buying "panic", if you will,
> for the last 6 months does not necessarily mean that there's no sensible
> stock-picking strategy going forward from here. I don't know Olstein
> and he may or may not be a "stopped clock"; but even if he is he
> can be right "twice a day" (or once in a secular cycle, or whatever).

Rational Market Theory and Black Swans in Healthcare Reform

Perhaps you missed the point. The reason people buy insurance is to defray cost of health care, auto accident, or catastrophic weather, etc. Making a profit by refusing to pay those claims or provide cover to people who need it is not capitalism, it is fat-cat greed. And I don't really care who is driving the Hummers, they are doing it on my dime, through shady practice or manipulation.


On Aug 18 10:28 AM YoYoMama wrote:

> How? Because insurance companies do not exist to pay on your claims.
> They exist to make a profit.
>
> And it's not the doctors who are driving the Hummers. It's the plaintiff's
> attorneys, who profit by further siphoning profits from insurance
> companies to benefit a select few, and the expense of all.
>
> Drive around your own city. The biggest homes and fanciest cars
> are not owned by doctors, but by plaintiffs attorneys.

Rational Market Theory and Black Swans in Healthcare Reform

It seems to me the discussion should be about taking care of sick people, and the ways and means of doing that.

How quickly these comments and all discussions on "Health Care Reform" turn to ideology, bean counting, and actuarial methodology that allow insurance companies and medical providers to realize huge profits and require unemployed parents to sit up mopping brows of sick children and listening to their whimpers because they cannot afford to seek even rudimentary health care.

How did the practice of medicine ever become about money and profit, and driving Hummers instead of treating sick people?

Roger Nusbaum: Investing Wisely

This article is a great example of why I follow Mr. Nusbaum. He deals with individuals, both human and corporate. Many analysts attempt to personify "the Market" forgetting it's just a place to trade individual stocks. They usually try to group investors as well and then apply some theory, product or even age grouping to all members of the class. Hence EMH, buy/hold, ETF and index funds. Some who invested wisely in recent times were never down a lot, and in recent weeks are probably not down at all, but are lumped in with clients of lazy advisors selling the latest whiz kid product. Of course, Mr. Nusbaum's approach does require a little work.

Apple Asks Microsoft to 'Quit Running Those Laptop Hunters Ads'

Correct, what actually matters is whether the machine works so you CAN check your email, and how long it takes


On Jul 17 11:16 AM Techtrader10 wrote:

> Apple has 7.4 percent of the personal computer market, most of the
> other personal computers run various microsoft operating systems.
> It all comes down to a personal preference or in some cases need
> for a particular specialty. I've been told that Apple computers
> are better for drafting and art applications. But quite frankly,
> none of this matters in the greater scheme of things. I look at
> the Apple crazies as social misfits that don't have a life and this
> is their only interest. Guys get a life, it doesn't matter if you
> check your email with a Mac or a PC!

Apple Asks Microsoft to 'Quit Running Those Laptop Hunters Ads'

I have 3 Macs dating back to the 80's and they are all set up and still chugging. I have replaced printers and monitors, but only a battery, a hard drive and a motherboard upgrade on an older machine. We have sufficient software to meet our home and financial needs. We don't play many games.

I have a PC laptop. It's in the shop again, having bogged down and become inoperative. The 3-in-1 printer I was assured was compatible required several visits from a tech to get into operation, and has no OCR software included (one of its selling points was scan capability, remember). I'm sure Uncle Billy would gladly sell me something, and them something else, and so on.

Someone mentioned value? Yes, each MAC cost more originally. Try amortizing $2k over 25 years... we still use the old software on that machine for DTP of newsletters, brochures, etc. Can't tell the difference... Tell me about value again...

Buy Liberty Capital at a 66% Discount to NAV

If I understand the article above, the analyst is not talking about selling SIRI, the question is valuing it for accounting purposes to arrive at NAV. Current market value seems more honest than some abstract predicted value. Like it or not SIRI is worth something. You may be right to insist on "mark to market" but I'm not sure you can do it in advance. But I could be wrong.