Seeking Alpha

Abraxas

Abraxas
Send Message
View as an RSS Feed
View Abraxas' Comments BY TICKER:
Latest  |  Highest rated
  • Forecasting Cold To Continue Into Summer [View article]
    Nice post, Mike. Thanks.
    Jan 8 03:45 PM | 1 Like Like |Link to Comment
  • Artful Dodger [View article]
    Once again, thank you, Mike.
    Dec 20 11:06 PM | Likes Like |Link to Comment
  • Artful Dodger [View article]
    Thank you, Mike.

    I should have written: the 'yield' of the ten year has very briefly rallied..., but then has proceeded to drop. I think you understood that's what I meant.

    I am, and have been for quite some time, short 20+ year treasuries. It has been a bumpy ride but I have maintained the position because I believe it should serve as necessary hedge, especially under current circumstances. Nevertheless, it is a bit unnerving to see yields briefly spike to then collapse, time and again, once the Fed's stimulus programs end. Seeing yields fall again this morning, in spite of good economic news and equities moving higher, I started to wonder if we would see the patterned repeat itself again.

    I still think that being long 20+ year treasuries would be dangerous and being short, instead, is the right position. I am wrong? It is fine to have doubts and I keep on telling myself that I should never be more invested in being right than in making money. But I am wondering whether this could prove to be one of those times.
    Dec 20 04:35 PM | Likes Like |Link to Comment
  • Artful Dodger [View article]
    Mike,

    Excluding Operation Twist, which didn't expand the FED's balance sheet, the last two times the FED's stimulus programs -QE1 and QE2- have ended, the ten year has very briefly rallied (3 days and 1 day, respectively), as it would be expected, but then have proceeded to drop (150bps over 6 months and 155bps over 3 months, respectively) which, I believe, is the opposite of what conventional doctrine would indicate.

    I would like to know why do you think this has been the case and, more importantly, whether you think it will happen again this time around. Finally, do you see any difference between the 10 year and the longer dated bonds? Thanks.
    Dec 20 12:38 PM | Likes Like |Link to Comment
  • Artful Dodger [View article]
    Great article, Mike. Happy holidays!
    Dec 20 11:54 AM | 1 Like Like |Link to Comment
  • Defensive [View article]
    Yes, writing a public blog can be difficult. But keep it up, Mike, we need serious people writing intelligent pieces. The only advice I can offer, one which, I confess, is almost impossible to follow sometimes, is to have the outmost restrain and simply ignore the unreasonable posters and only address the reasonable ones. Unreasonable people, when ignored, tend to get furiously mad, but eventually, just give up and leave.

    The other option, which I found worked better for me was the following: I used to use a very short prewritten statement that I would post as a reply to those types of posters every single time, without exception. Something along the lines of "I will be happy to reply to you and address your concerns if you post in a civil and respectful way. See you next time".
    Dec 10 06:54 PM | 2 Likes Like |Link to Comment
  • Moving Goalposts [View article]
    The market is a zero-sum game as much as the market is efficient. The market is neither.

    Theoretically and from a purely monetary point of view the market only becomes a zero-sum game if it were to go down (and in some case up) all the way to the various IPO prices of the stocks. In other words, only it the market were to revert back to its starting point. Otherwise, it is theoretically possible for all to actually make money in it. As long as there is wealth creation, the market is not a zero-sum game.

    Let's disregard inflation (and any other external factors) and imagine a market of only one stock with an starting trading price of 100, which goes up, and then up and and down, but never back down to 100. Some will win, some will lose, but as a group there is wealth creation and hence, the market (which is the group) is not a zero-sum game. The market is up and the market participants, as a group are up more than they were when the market started. There is new wealth were there was none before.

    Now, repeat that process thousands of times, for the thousands of stocks, add them up together, and you will see that the market is not a zero-sum game.

    From a more practical point of view, though, what is most likely to happen this time around is that the market will, at some point, reverse from its all-time highs, institutional and professional investors will get out first and retail investors will take the brunt of the losses. This is, naturally, what usually happens and it may be, to a degree, unavoidable. Unfortunately, though, the Fed is compounding the problem and the future losses for the retail investors.

    PS: "for every winner (buyer, these days) there's a loser (seller, these days)."

    Actually, no. I know it sounds obvious, but the seller only truly loses if it sells below his original price. If it sells above it, it may be leaving potential profits on the table, but it isn't actually losing any money. So, if there ever was a market that would, inexorably, go up, the losses would come from short sellers (if there were any). Long, investors, as a group, would always make money.
    Nov 15 05:29 PM | Likes Like |Link to Comment
  • Moving Goalposts [View article]
    Very good post, Mike.

    One should be happy with the market going up and up, but not like this. Does it matter? It may not, but it should. What happens when it stops working? I am guessing the Fed is betting they can engineer a soft pull back and won't mind a 10% correction if they have pushed the markets up close to 30%. They will see it as a success. And, perhaps, it would be. If they manage to pull it off.

    I doubt it.

    One problem people don't even consider, but will prove costly, sooner or later, is that the Fed is taking the parameters and intelligence away from the markets, and that's terribly harmful. Intelligence and knowledge should be compensated in the market place but the Fed takes that away by indiscriminately melting up the markets, which diminishes the hard earned advantages of the best traders and institutions.

    Yes, I would like everyone to make money, but at the end of the 90s we learned what happens when you have everyone drive a Formula 1 car at full speed, allowing them to think they are in total control, and then take away the automatic pilot.

    The crash will happen again, and this time around, the Fed is providing the high-octane fuel and the blinders to the pilots. That seems suicidal to me.
    Nov 15 09:52 AM | 2 Likes Like |Link to Comment
  • The Solar Revolution: Part 3 [View article]
    Smaller in terms of area, but The Netherlands it is an important European country, which influences European policy, and it has a large economy that punches way about its weight. Is Alaska more important than NY because it is so much bigger?
    Nov 12 04:24 PM | 1 Like Like |Link to Comment
  • The Solar Revolution: Part 3 [View article]
    Jonathan,

    We already own many renewable ETFs such as: PBD, PBW, PUW, PZD, QCLN, ICLN, FAN, GEX, TAN and KWT. In your opinion, which ETF or ETFs better represent the future of solar. Any preference from an investment point of view? Thanks.
    Nov 12 08:23 AM | Likes Like |Link to Comment
  • The Solar Revolution: Part 3 [View article]
    Nice series of articles, Jonathan.

    Some posters have written about the increasing cost of solar installations at home. In The Netherlands municipalities are promoting the use of solar by, amongst others, paying for the installation at homes. They also promote the use of electric cars by building an electric plugging post in front of your home if you buy an electric car. Similar schemes are being implemented in other European countries. As you may imagine, as a result of these policies, the use of these technologies will, most probably, be higher in Europe than in other places.

    This is to say that scalability, installed capacity and costs depend on many factors, which change from country to country and region to region. Make no mistake about it, in Europe, though, the trend towards renewables is crystal clear.
    Nov 12 08:19 AM | 1 Like Like |Link to Comment
  • Emerging Competition Threatens Apple In 2014 [View article]
    "Apple loses money on everything except iPhones."

    You didn't just write that. Did you? Yes you did. Oh well, after that, forget about taking your post seriously.
    Oct 31 07:33 PM | 4 Likes Like |Link to Comment
  • The Solar Revolution: Part 1 [View article]
    Good job, Jonathan. Nice post.
    Oct 29 05:23 PM | Likes Like |Link to Comment
  • Is Inflation Of 2% Enough For You? [View article]
    "To the extent that discussion stays academic, it’s not worrisome. Navel-gazing is an occupational hazard of being a professional economist, after all."

    What's the oldest profession?

    No, not THAT one. It is being an economist.
    God created the universe from chaos, but we needed economists to create chaos in the first place.
    Oct 29 11:37 AM | 3 Likes Like |Link to Comment
  • Battle Lines Drawn [View article]
    Not everyone is fooled by what's going on. This is an interesting interview of hedge fund executive Mark Spitznagel: "The stock market is trading at unsustainable levels that could eventually lead to a major sell-off, with a possible 40 percent drop in stock prices"

    http://cnb.cx/1bXsW0n
    Oct 23 05:10 PM | 1 Like Like |Link to Comment
COMMENTS STATS
281 Comments
414 Likes