FatPat's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/263728/comments http://seekingalpha.com/article/157644-51-68-in-165-days?source=feed#comment-641070 641070 Sat, 22 Aug 2009 13:35:12 -0400 http://seekingalpha.com/article/116700-gold-is-the-only-long-term-bull-market?source=feed#comment-367973 367973
Historically God is expensive at 1.
Stocks are expensive at 40.

Right now we are at 9. So Gold is still cheap considering the economy. We are not quite in the middle yet and momentum is on our side.


On Jan 27 08:35 AM yellowhoard wrote:

> I have held physical gold for 15 years. Having slowly accumulated
> my position, I am now wandering about an exit point. What metric
> should I use to determine the optimal price for a conversion into
> bonds or equities?]]> Tue, 27 Jan 2009 15:50:56 -0500
Historically God is expensive at 1.
Stocks are expensive at 40.

Right now we are at 9. So Gold is still cheap considering the economy. We are not quite in the middle yet and momentum is on our side.


On Jan 27 08:35 AM yellowhoard wrote:

> I have held physical gold for 15 years. Having slowly accumulated
> my position, I am now wandering about an exit point. What metric
> should I use to determine the optimal price for a conversion into
> bonds or equities?]]> http://seekingalpha.com/article/116283-infrastructure-spending-china-knows?source=feed#comment-365391 365391
Face it, America is not competitive, your bridges even crash. You do not have any engineers, because all went to Wall Street. You cannot export stuff, because you can t even build decent fridges anymore. Look at your car industry. Even you aircraft industry is loosing big time to Airbus. This goes so far, that even the US Army wants to buy Airbus for its Service.

And the superiority of Airbus is even more incredible, if you consider the political nature of it.

every part is built in another European nation and then they are flown by AIR! to Toulouse (France) were their are assembled. This is so inefficient. But it is still godd enough to kill the best the US has to offer.

Face it, the devaluation of the USD will continue. America is finished. The only question is: Will they go down with/ or without a war!]]> Sun, 25 Jan 2009 07:35:19 -0500
Face it, America is not competitive, your bridges even crash. You do not have any engineers, because all went to Wall Street. You cannot export stuff, because you can t even build decent fridges anymore. Look at your car industry. Even you aircraft industry is loosing big time to Airbus. This goes so far, that even the US Army wants to buy Airbus for its Service.

And the superiority of Airbus is even more incredible, if you consider the political nature of it.

every part is built in another European nation and then they are flown by AIR! to Toulouse (France) were their are assembled. This is so inefficient. But it is still godd enough to kill the best the US has to offer.

Face it, the devaluation of the USD will continue. America is finished. The only question is: Will they go down with/ or without a war!]]> http://seekingalpha.com/article/115595-will-oil-traders-get-squeezed?source=feed#comment-361641 361641 Wed, 21 Jan 2009 07:03:39 -0500 http://seekingalpha.com/article/111634-35-oil-steve-forbes-was-off-by-two-years?source=feed#comment-334200 334200 Fri, 19 Dec 2008 15:16:29 -0500 http://seekingalpha.com/article/100563-s-p-500-p-e-ratio-still-above-long-term-lows?source=feed#comment-327967 327967
Inflation generally is better than deflation as nominal future earnings potential increases. Stock picking in inflation important as company needs to have pricing power to increase prices with costs. In inflationary scenario firms that do not have big lon-term assets fair better as inflation inflates capital expenditures.

Best scenario for stocks is small inflation.

Next to inflation the interest rate is important for p/e. That is the reason why Japan/Switzerland worldwide highest p/es. They have the lowest interest rate this translates into smaller opportunity costs for holding stocks. ]]> Fri, 12 Dec 2008 20:49:09 -0500
Inflation generally is better than deflation as nominal future earnings potential increases. Stock picking in inflation important as company needs to have pricing power to increase prices with costs. In inflationary scenario firms that do not have big lon-term assets fair better as inflation inflates capital expenditures.

Best scenario for stocks is small inflation.

Next to inflation the interest rate is important for p/e. That is the reason why Japan/Switzerland worldwide highest p/es. They have the lowest interest rate this translates into smaller opportunity costs for holding stocks. ]]> http://seekingalpha.com/article/110334-asian-and-latin-american-markets-where-the-economic-upswing-could-start?source=feed#comment-327962 327962 Fri, 12 Dec 2008 20:37:16 -0500 http://seekingalpha.com/article/96785-baidu-vs-google-who-s-the-1-country-specific-search-engine?source=feed#comment-325166 325166 Tue, 09 Dec 2008 22:27:50 -0500 http://seekingalpha.com/article/99397-jim-rogers-speaks-out-where-is-he-putting-his-money?source=feed#comment-279212 279212 ]]> Fri, 10 Oct 2008 14:33:15 -0400 ]]> http://seekingalpha.com/article/98223-goldman-says-trust-us?source=feed#comment-271428 271428
Goldman is way to expensive. Short Goldman if it will be allowed again!]]> Thu, 02 Oct 2008 09:32:37 -0400
Goldman is way to expensive. Short Goldman if it will be allowed again!]]> http://seekingalpha.com/article/98060-does-warren-buffett-think-goldman-is-more-creditworthy-than-ge?source=feed#comment-271041 271041
Anybody who claims that Buffett has not done a great deal should go back to school and study Black&Scholes option pricing. Given an implied 5 year volatility on the GE stock of roughly 35% and the fact that they are in the money already by USD 2, gives these Calls a market value of almost USD 1.5 B. This means Bufett only paid 3-1.5= USD 1.5 B for a 10% dividend with the face value of 3 B. This leaves him with a real interest rate of 20% plus the capital gain of 120% on the preferred (3Billion +10%of 3B). All in all he earns 3 dividends at USD 900 M and is redeemed at 3.3B = USD 4.2 B.
This means he gains (4.2-1.5)/1.5 = 180% in 3 years = 60% p.a. under the assumption that the options have a fair value of USD 1.5 B. If a certain pay-off of 60% p.a. is not a good deal on preffered stocks that are more senior than normal stocks, then what is a good deal???
]]> Wed, 01 Oct 2008 21:20:16 -0400
Anybody who claims that Buffett has not done a great deal should go back to school and study Black&Scholes option pricing. Given an implied 5 year volatility on the GE stock of roughly 35% and the fact that they are in the money already by USD 2, gives these Calls a market value of almost USD 1.5 B. This means Bufett only paid 3-1.5= USD 1.5 B for a 10% dividend with the face value of 3 B. This leaves him with a real interest rate of 20% plus the capital gain of 120% on the preferred (3Billion +10%of 3B). All in all he earns 3 dividends at USD 900 M and is redeemed at 3.3B = USD 4.2 B.
This means he gains (4.2-1.5)/1.5 = 180% in 3 years = 60% p.a. under the assumption that the options have a fair value of USD 1.5 B. If a certain pay-off of 60% p.a. is not a good deal on preffered stocks that are more senior than normal stocks, then what is a good deal???
]]> http://seekingalpha.com/article/95789-depressionary-tales?source=feed#comment-256311 256311
1. Prohibit short selling. That is what leads to stock prices of financial institutions leading to zero. This in turn scares away customers and deteriorates credit rating. The revenue base of the institution fails and refinancing debt becomes more expensive. A death spiral.

2. INJECT MORE LIQUIDITY. Inflation is not a problem. Federal tendor offers are oversubsribed 4-fold. What is a 2% repo rate good for if nobody can really use it. We need a steep yield curve.

3. Prevent house prices from falling. The easiest way to do this, is by ensuring that homebuilders that DECIDE to fault on a mortage for financial reasons are not allowed to do this for poorly speculative reasons (if theay can afford to pay the loan). This will prevent many houses from getting on the supply side.

4. Grant government loans at very low interst rates and long maturity to homebuilders who really cannot afford to pay mortages any more.

By taking these steps most of the other problems (falling stock market due to banks, insurances, real estates firm writing down/collapsing) will be solved simutaneously. Many people are asking: How does this affect the real economy, it is paper money burning here. This is far from the truth. The American stock market capitalization is bigger than the entire GDP. Most people are stockowners. Retirment plans are mostly defined contribution not defined benefit any more. This means, people WILL START SPENDING LESS when they see their saving of year shrink dramatically. This will lead to less spending, sell of houses, lower prices, lower stock markets, and so forth. We NEED INTERVENTION.

And the moral?

FIRST: I think we see now how dangerous financial derivatives really are. This time it is credit derivatives. But, the same is true for equity derivatives. They allow uncontrollably high leveraged balance sheet and fuel contagion between institutions and nations.

I see this crisis as very, very dangerous. ]]> Tue, 16 Sep 2008 17:55:27 -0400
1. Prohibit short selling. That is what leads to stock prices of financial institutions leading to zero. This in turn scares away customers and deteriorates credit rating. The revenue base of the institution fails and refinancing debt becomes more expensive. A death spiral.

2. INJECT MORE LIQUIDITY. Inflation is not a problem. Federal tendor offers are oversubsribed 4-fold. What is a 2% repo rate good for if nobody can really use it. We need a steep yield curve.

3. Prevent house prices from falling. The easiest way to do this, is by ensuring that homebuilders that DECIDE to fault on a mortage for financial reasons are not allowed to do this for poorly speculative reasons (if theay can afford to pay the loan). This will prevent many houses from getting on the supply side.

4. Grant government loans at very low interst rates and long maturity to homebuilders who really cannot afford to pay mortages any more.

By taking these steps most of the other problems (falling stock market due to banks, insurances, real estates firm writing down/collapsing) will be solved simutaneously. Many people are asking: How does this affect the real economy, it is paper money burning here. This is far from the truth. The American stock market capitalization is bigger than the entire GDP. Most people are stockowners. Retirment plans are mostly defined contribution not defined benefit any more. This means, people WILL START SPENDING LESS when they see their saving of year shrink dramatically. This will lead to less spending, sell of houses, lower prices, lower stock markets, and so forth. We NEED INTERVENTION.

And the moral?

FIRST: I think we see now how dangerous financial derivatives really are. This time it is credit derivatives. But, the same is true for equity derivatives. They allow uncontrollably high leveraged balance sheet and fuel contagion between institutions and nations.

I see this crisis as very, very dangerous. ]]>