donzelion

Boeing's Misstep Is Indicative of Broader Misconceptions of Risk

Mathematical modeling of very simple, physical properties (e.g., atmospheric conditions) becomes very complex, unreliable, and indeterminate over long periods of time. It's the height of arrogance to presume human financial behavior is simpler to model than something as simple as rainfall at a specific location 365 days in advance, and the depth of folly to believe comparable claims in other contexts.

That said, engineering is an altogether different beast. With aluminum, steel, fabric, and what-not, you have decades of experience to supplement the models - but it's still a process of testing, testing, re-testing, and testing once more.

Despite Massive Layoffs Nationwide, These 28 Companies Are Hiring

For many major corporations, the pattern has been

(1) lay off personnel, then rehire some in a different position, or as a consultant (reducing long-term pension liabilities, changing vesting rights, and lowering health care liabilities)
(2) lay off personnel from one division, but give others the right to get first dibs on jobs in another division
(3) lay off personnel in union shops and relocate operations in "right-to-work" jurisdictions

Getting a clear picture of employment plans is about as straightforward as analyzing financials from banks with extremely complex financial products. An investor must be extremely cautious about drawing conclusions from any such hiring.

Best to Observe XLI Trading Action at the Moment, Not Act on It

"...I am very reluctant to hop on the coattails of the XLI speculator's "free ride."

Me too. I've seen too many of these rides start and end quickly. But then again, investing for me is about the long haul, not about waiting in line at the amusement park and hopping on a roller coaster (I'm skeptical about my ability to choose when to get off the roller coaster).

"But shorts have been much more tentative this year, making it harder to interpret recent action.."

With five major investment banks either bankrupt, bought out, or converted into mainstream banks (haha), with many hedge funds either closing down or in virtual lockdown mode, and with a massive pool of cash outside the market, wouldn't the shorts necessarily be a bit more tentative this year?

Forget GE, These Are the Industrials Investors Should Consider Owning

In a deflationary environment, big companies with big debt will get choked more than their cautious competitors; in an inflationary environment, the opposite will occur.

GE is a decent hedge against inflation, either from excessive government spending on infrastructure (GE products and services are in high demand for many types of infrastructure), or from inflation reducing the relative cost of their debts.

However, the fact that GE is a "decent hedge" against inflation doesn't mean its the best choice, and certainly doesn't mean GE has the greatest long-term gains ahead of it relative to other contenders who avoided excessive purchases.

Hence, I'll put some money on GE and feel comfortable (unless it goes the way of AIG), but I'd look elsewhere for big gains.