Gyoza Mimi

Bonds Signal Inflation Is Coming

Great assessment - we could see some rallies (along with a stock market correction). Let's rephrase it: the market may go up or down. Thanks, that was useful.

Two More Indicators of a V-Shaped Recovery

...this recovery rests on a foundation of renewed confidence and declining fears.

It's always good to know that the recovery is based on optimism and not fundamentals. It gives you that confidence feeling.

Why STEC's Pullback Is Buyable

I hope it does rebound to above 40, then, again it will be an excellent shorting opportunity. I am kicking myself for closing a long Feb 10 PUT position yesterday, waiting for a rebound. The models suggested that it will rebound in a short-term to $35, and then down to below $20. It seems that rebound is less likely to take place. Too bad, but I am still hoping that $25 FEB 10 PUTs will drop to below $2 in the near-term.

Two Great Bounces

While I do not question the overall theme of the article, I would suggest to be very careful with the graphs.

Taking a short enough timeframe and matching it to something in the past will always produce a match. I can take the "Great Recession" stretch and match it to 1932 or 1990 or any other year. It is a very poor indicator to what is really ahead of us. Once again, I do not question the article, but I caution against chart tracing. If you take something like a 10 year trend, I'll be convinced. But a 2-months long chart will align closely with 1,000 different patterns that happened in the last 70 years.

Health Care Bill: Prescription for Disaster

Peter,

Thanks for the informative and clear message.

What is your view of the optimal health care system?

Cashing in on Mandela's Legacy: Time to Buy the South African ETF?

Joseph,

Thanks for the article.

What's your view on the social stability and crime situation in S.Africa?

Demographics Make Russia a Risky Long-Term Investment

In a swift response to the population decline Russian government instituted monetary rewards for expanding families. Those who decided to have a second child are eligible for a sum equivalent to $8,000, which is higher than an average annual income of $6,000.

The caveat is in what effect this policy would have on the Russian demographics. The money can be used for one of these purposes (if I am not mistaken):
1. Retirement fund
2. Education fund for the second child
3. Can be used towards real-estate purchase

The first two option are not very popular among the Russian citizens. The government's propensity to initiate abrupt monetary reforms from time to time or allowing Zimbabwean levels of inflation strongly suggest that either the retirement or education funds are highly unlikely to be seen in the future. The third option sounds a lot more attractive.

However, in places where you can actually live, primarily the largest cities, the real-estate prices easily exceed $100,000s for a small apartment, which move home purchases out of the reach of the vast majority of the Russian population. With mortgage rates of 12%-25% it is close to impossible to buy anything livable, especially during the ongoing crisis. Those who have 100s of thousands of dollars in cash are unlikely to be compelled to expand their family by the mere $8,000 reward. With or without the reward, their decision will be based solely on their own preferences. Those who could use $8,000 know that they will not be able to afford any property anyway, so the reward will not play well with them either.

Thus, the $8,000 reward works well in places with low home prices. Not surprisingly, many families in Caucus region made baby-making their full-time job. In fact, Caucus sees a demographic exposure, thanks to the reward policy. The numbers are reflected in statistics. Despite the policy, the Russian population across most of Russia is decreasing, however in Caucus region it is undergoing an explosive expansion. Caucus is historically unstable area inhabited by the numerous ethnic groups that passionately hate each other. Throughout their history Chechens, Osets and a few other other groups make their living by slave capture and trade, and constant raids on the neighboring regions. Perhaps it is not the most politically correct statement, but culturally many ethnic groups existed as the bands of bandits thought the centuries, which is deeply rooted in their cultures and their view of the world. As an example, during the Soviet times, 40 out of 42 underworld criminal leaders resided and controlled their criminal cartels from Georgia.

The unemployment in the Caucus region is off the chart with the majority of population having no employment and no prospects of ever being employed. Add exploding population on top of it. Then add the historical and cultural propensity for the bandit lifestyle. Not surprising, many sociologist predict years, if not decades, of severe civil wars in the region.

So, what was meant to be the solution for the ongoing demographic crisis in Russia is turning into the major factor that will not only lead to the social unrest, but also will force massive relocation of non-Russians to Russia. From the social perspective, Caucus citizens carry very little benefits to the state - the education levels and skills possessed by them is on the lower end of the spectrum. The potent and widespread disliking of any outlandish folks, especially Caucus, amongst the Russian population is well-known. Thus, any mass relocation relocation from Caucus will result in further unrest in places where the migrants will settle.

Longs story short, the brewing Caucus problem will amplify any demographic issues that Russia will face, making matters significantly worse than currently foretasted by different accepted models.

Boomers in Trouble: The Unheralded Economic Mega-Trend, Part 1

What is applicable to Boomers applies equally well to any other generation that had any soft of savings. It is just happen that as the generation at their earning peak, boomers have the most savings of all generations. The upcoming structural change will affect spending and investments habits of all all money-earning generations, not just boomers. I am not quite sure why you singled this generation out in that regard.

What's interesting about boomers is their investment horizons. This generation is too close to the retirement to suffer such massive losses, which are unlikely to be fully recouped over the next 10-15 years, considering the economic situation.

Aleynikov's Code Dump Uncovered

Outstanding job, Tyler!

Employment: Minimum Wage, Maximum Stupidity

The minimum wage notion is geared towards those who don't typically have a great understanding of the supply/demand relationship and things like marginal revenue/cost. Their ignorance makes minimal wage an indicator of the wealth that can be received, but not the jobs that will be lost. It in turn translates well into a potent political driver, especially in a predominantly blue-collar states. Well, the whole vicious circle is more or less inevitable.

Stocks with the Highest Short Interest

Paul,

STEC is of a particular shorting interest of mine due to the seemingly "pump-and-dump" scheme going one around it. The company's management screams "We are The Monopoly; We Own the World", while dumping their stocks. Within a month, they reduced their exposure by 20%, and the selling accelerating. There are no "buy" orders by the insiders, only "sells". P/E is at 200+ (under the assumption that they will remain a monopoly perpetually) and shorting interest is insanely high. Other players are entering the same field, and within next 3-6 months we will see some competition. Thus, I (and those 38.9% of shorts) expect it to plunge rather sooner than later.


On Jul 10 04:07 PM Paul Zimbardo wrote:

> @Bespoke
>
> Your analysis was great and I could see this type of information
> being very useful for a contrarian trying to take advantage of a
> short squeeze.
>
> What is the data source and what date is the data from?
>
> @Gyoza Mimi
>
> I also checked and STEC is not at the list. As of 6/10/09, the short
> interest was 38.9% according to Yahoo Finance. If this is correct,
> it would be right on top of the list...
>
> Source: finance.yahoo.com/q/ks...

Stocks with the Highest Short Interest

The list is missing (unless it is there and I didn't find it) STEC.

Investment Opportunities Are Knocking

Keith,

Did you just create three additional accounts to evenly downgrade critics?

Investment Opportunities Are Knocking

Keith,

The article reads as a juvenile uninformative piece authored to self-promote the greatness of the Guru Investor Keith the Marvelous!

Profiting from Peaceful Uranium Use

Joseph,

With all due respect, but it is a stretch to call Russia a "nation with lightning-fast armored, mechanized infantry and fine special operations forces". Georgian war showed that nearly 30% of all armored vehicles sent on their own didn't reach destination, breaking down in transit. Georgia managed to shot down numerous Russian planes with its virtually nonexistent air defense system. And Russian special forces showed themselves well in many places - Kosovo (kicked British and American butts by taking over the Pristina airport, just to find themselves asking Brits for food within 2 days due to the ran out food supplies ran), Beslan - murdered 10s of people due to the poor planning and lack of any respect for human life, the theater siege in Moscow - look at the casualties due to the poor planning. So it is a stretch to call Russian military even remotely capable of carrying out any kind of operation besides outright nuclear war or raids to loot unprotected neighboring countries.

U8 is a good subject. From $7 to $137 in no time. However, now it is hovering near 10x price of what it was 10 years ago. It is still a substantial increase, even if it is not $137 anymore. Perhaps in a long run, it may reach above $100 again. But it will be some time before it happens. The Chinese plants are not due for another 5-10 years, and the mid-term supply can be satisfied with the existing resources, including dismantled nukes. During the bonanza of 2007, everyone join the Uranium mining business, so there is no shortage of new discoveries and upcoming mines. What time period do your projections cover?