BobFD

The Federal Reserve Must Die, Part 3

James, researched and brilliant as usual; this piece should be forwarded to for review by all of our corrupt government officials prior to Bernanke's confirmation. I know, it won't matter, but at least the facts are part of the record----as it stands now, most people are afraid to say anything, lest they be crushed by the Chicago mafia.

Great works, as always.

GOLDMAN, CITI, JP MORGAN & BOA ARE CRIMINALS

Thanks James, for being a patriot. This country is in serious trouble. Our stock markets are being massively manipulated (not just in the way you pointed out) by powerful lobbies in government and finance. The very basis that our system was founded on is now being gamed by only the biggest players.

At the end of the day, what bothers me most about all of this is the average investor doesn't understand what is going on, and as usual, by the time they figure it out it wll be far too late to do anything about it as the damage will be done. Currently, the bulk of retail investors are shorting the market; firms like Government Sachs are using this "short" money as fuel to drive the market higher----all in an effort to secure their place with the socialists in government (Frank, Schumer, Obama, Pelosi, Reid, etc). GE has done the same thing with CNBC-----all of this large corporations are selling out their country to secure their place in the new socialist order by rammed down our throats by a fascist government.

Can it be stopped? I seriously doubt. As I said, the average investor is blind to all of this----they read negative news stories and go short the market, not realizing that all of this is a big sucker trap to have them finance the new socialist order. When the market finanally collapses under all of the weight of manipulation, corruption by perpetrated by Government Sachs, the Federal Reserve, etc., as always, Government Sachs and the fascists in government will either be out of the market or short----the average investor will once again be fully invested.

Truly sad to see fascism taking over our country; even sadder that our populace is completely blind and apathetic to it. At any rate, thanks for being patriot.

Why Isn't Microsoft's Strategy Working Anymore?

Great, thanks for your experiences with Microsoft software. Do yourself a favor---DON'T use Microsoft products if you feel that way. As someone who has been in the business since 1981 (when it started), I can say that we have witnessed some pretty phenomenal progress. Yet, we still have idiots that would make comments likes yours. What do you compare to? Think about it. I am so sick and tired of hearing people critisize and complain about all the progress that has made. Personally, I think TOO MUCH progress has been made; thus we have people like you who sit around and complain and whine instead of getting out there and creating something. If you cannot do any better, shut your mouth, please!


On Jun 08 07:12 AM atlasman wrote:

> Here is my Microsoft experience:
>
> 1. Windows has never worked well. Vista is a disaster.
> 2. My Windows-absed Palm Treo was by far the worst cell phone I ever
> had having to reboot it every other day.
> 3. My XBOX360 experienced there ring of death.
> 4. Microsoaft IE is by far the most buggy browser if you are coding
> web pages.
>
> With the exception of Microsoft Office, my experience with Redmond
> has all been bad. I have moved on as well.
>
> -AM

Why Isn't Microsoft's Strategy Working Anymore?

Actually, the whole premise of this article is WRONG! The author states that since he has held the stock for the past 7 years and it has not moved, that somehow there is something wrong with Microsoft. To the contrary, the problem is NOT with Microsoft----it is with an idiot, lemming populace that bids up the price of stocks WAY BEYOND reasonable expectations----it is only logical that it would take many decades for Microsoft to catch up to the unrealistic, attention span of knat population that buys into unsustainable growth.

At the end of the day, the author's comments are systemic of what is truly wrong with our markets. In the current environment, stocks are priced for 2020 earnings; you cannot bet against the market because there are investors like the author who will keep buying, even though the market is priced for 2020. On the other hand, you certainly do not want to be a lemming and buy into some mystical earnings number 20 years out.

Truly sad that our markets are so overvalued; the expectations of the author point out better than I ever could why the market is truly a dangerous place to bet ---- at current prices, the market is priced for perfection; yet, every idiot lemming and their brother thinks it is undervalued.

A Bull Market That Few Are Buying

Bravo!

Fair Value for the S&P: It's Not 440

I am guessing that you are either joking or confused like most other so-called "investors". While I agree with your statement:

"Barry Ritholtz, market veteran and blogger over at The Big Picture, postulated today that fair value for the S&P 500 might be 440. "

my reason for agreement is quite different than yours. The fact is Barry is off, because the fair value of the S&P is likely closer to 100 than 440. Why? Because I value stocks the way they should be valued----real earnings. Real earnings means you do factor in charges. I always love it when people like yourself try to "justify" a stocks price by taking out all the one time charges. Look, every quarter there will be one time charges,l and they should be accounted for.

Saying that one time charges should not be accounted for is what got us into this mess. Yep, it is people like you that say----well, I only made $50,000 last year but spent $100,000, but that car, vacation, and new refrigerator were "one-time" charges----if I had not bought those I would have only spent $50,000. Companies have figured out that they can report their earnings this way, and the "dreamers, wishers, and hopers" that just want the market to "go up" will accept the numbers without question.

Look, if you give me $1,000,000 a year, I can run a business that can show a profit. Yep, what I will do is take the $1,000,000, buy product and sell it for $800,000. Then, at the end of the year, I will report that I made $800,000 and that I had $1,000,000 in "one-time" expenses.

The bottom line is that saying the S&P is worth 100 is probably a stretch---the fact is most companies do not make money---they exist for nothing more than to enrich the exective insiders and employees. Why is that so hard for people to understand? Is it because you "want to believe", because "hope", because you want the stock to "go up"?

I will never understand how people fall for the ponzi scheme we call the stock market. I will acknowledge that if the S&P dropped to fair value (around 1, maybe 2), perhaps people would finally start reporting real earnings and we could start honest accounting again. However, this "one-time" charge garbage is getting old, and valuing stocks by subtracting one time charges is insane. Like I said, give me $1,000,000 every quarter, I will give you $800,000 in sales and $1,000,000 in "one-time" charges---I have to buy the product to sell---who cares if I sell for less than I paid for it---that is a "one-time" charge.

Investing in Basic Needs: Hedging Your Expenses

Mr. CFA, I forgot to add one more thing: You wrote:
"A knowlege of accounting, economics,
> competitive position analysis, and years of valuation experience"

Hmmm, I used to believe that too, until I witnessed first hand what happens when the herd takes control of the markets like they have for the past 20 years. If there is one thing I have learned, valuation means NOTHING to the herd. Those of us who used valuation during the 1990's got reamed shorting stocks. Yes, I admit it, I lost money using valuation, but have learned that the average professional money manager doesn't use valuation any more than the average idiot and also cannot read a balance sheet. If they could, they would not be able to find more than a handful of stocks to invest in.

The bottom line is the best money managers know that successful investing requires getting in ahead of “trends”, void of the underlying accounting or valuation, and then getting out before the herd wakes up and realized they have been once again taken by empty promises and fraudulent “one-time” accounting. You can use all the quant’s you want; at the end of the day, computer models have proven over and over again that valuation is meaningless. Besides, even if what I am saying is an exaggeration, the fact is if you want to use valuation as a metric, 99% of all companies would be worth $0 because the value they return to shareholders through dividends is not worth the risk investors pay for those dividends. Why would anyone want to "invest" in a company that pays a 3% dividend and take on major risk when they can earn 2% risk free? And please don't tell me about the old “paying for future earnings”----growth. Webster’s dictionary should define growth as the ability of a company to pay it's top executives and their friends increasingly excessive salaries and use "one-time" accounting to ensure shareholders receive as little money today with the promise of growth.

The bottom line is as a person who believes the only way to "invest" in the market is to "short it $0", I will probably never consistently make profits because no matter what you do as a short, you always have the lemmings that invest based on hopes, wishes and dreams, and if you get caught shorting one of these stocks, you can get reamed. Pick a stock, any stock, and you will find that even with multi-year bear runs, they all eventually fall to $0 once the public realizes they have been taken. Even companies like AT&T, have recapitalize multiple times, wiping out existing shareholders. I always laugh when people say “what about AT&T…been around for years”. Yes, the name has, but just during the past decade they wiped out all shareholders and used our criminal investment banks to recapitalize. Your industry prays on this ignorance, and that is why it is self-perpetuating----a fool is born every second, ensuring that there is consistently a new batch of people that buy into “invest for the long term” to keep your industries pockets well stocked with commissions and other wealth destroying mechanisms. This sir, is largely due to people such as yourself that tell people to invest with professionals for the "long-term", while you and your ilk "feed" off of these people's money for your own self-interest.

If people were invest in hard assets like physical gold, real estate, even ones that depreciate in value but provide happiness (e.g. backyard pools, vacation homes, etc), they would have much more fulfilling and enjoyable lives void of the pain of feeding the massive ponzi scheme we call a stock market that is nothing more than a way to distribute money from those that have to those that do not.

Investing in Basic Needs: Hedging Your Expenses

On Dec 30 01:12 PM Mike Kayes, CFA wrote:

> The idea that one can hedge against the expenses related to basic
> needs is idiotic. I am resigned to the fact that I have to buy toothpaste
> every once in a while. To think I can somehow hedge this expense
> by buying shares in Procter and Gamble (as I prefer Crest toothpaste)
> and that somehow if I brush my teeth a lot, then my investment in
> PG will pay for my expenses makes absolutely no sense. Same applies
> to buying shares in XOM to hege the fact I have to fill up my car
> with gasoline once a week. There are many variables which affect
> stock prices, but my personal consumption is not one of them, nor
> should it play a meaningful role in any investment decision process.
> The author's basis for thinking that personal preferences should
> be correlated to investment decisions is based on his mistaken belief
> that everyone can become their own financial advisor. Even if I asked
> my entire home town how much they floss, this does not make me a
> dentist. A prudent, value-added financial advisor understands that
> there is a lot more invovled in the investment decision process than
> intuition and anecdotal evidence. A knowlege of accounting, economics,
> competitive position analysis, and years of valuation experience,
> to name a few. If 2008 has taught us anything, it is that investing
> is a risky business and that relying upon a true professional, one
> that employs a time-tested disciplined process to make investment
> decisions, is the most prudent strategy. One last point - the author
> also seems to believe that if we watch the masses then we can know
> how to invest. Following the heard is only a good thing to do from
> an investment perspective when the heard is moving in the right direction.
> Often it is not. Conversely, being a contrarion doesn't work all
> the time either. Keep this thought from Ralph Waldo Emerson in mind
> when you approach investing and you'll at least have a fighting change
> -"It is easy in the world to live after the world's opinion; it is
> easy in solitude to live after our own; but the great man is he who
> in the midst of the crowd keeps with perfect sweetness the independence
> of solitude."

I sure hope you are joking, Mike Kayes, CFA. If there is one thing this year has taught us, it is that financial planners and the entire financial services industry have one thing in mind when they make recommendations----the... own self interest. With mutual fund companies like T.Rowe Price, their conflict of interest is management fees and the desire to get money to invest based on their socialistic view of the world. In the case of fee on planners and advisors, their self-interest is fees. The bottom line is yes, I lost money this year (about 10%) on the money I managed----the money I let others manage lost about 40%. Hmmm, let's see, should I invest based on fair value and intuition and lose 10%, or let others whose interests do not align with mine and lose 40%. I am guessing your CFA training taught you to do that math; now, if only in your training they taught you to put the interests of your clients ahead of your own, maybe, must maybe, it would make sense to use a so-called "professional".

Mr. CFA, don't take this offensively, you are only human. It really is not possible for a person to put others interests ahead of their own----it is not wired into any of our DNA----we are programmed to put our self-interest ahead of others, so I am not attacking just financial services people. However, when you start making claims that amateurs should not take control of their own finances and should instead enlist so-called professionals, well sir, that is just plain irresponsible. A monkey could have thrown darts and possibly have outperformed the average money manager this year, and most years.

AIG: The Cramer Conspiracy Theory

Awesome summary of Cramer----the fact that he is so successful with his show demonstrates just how ignorant the average viewer is.