Malkiel

582 Comments

    • Is the System on the Verge of Collapse? [view article]
      Capitalism is not the best system ever devised, it's just the system you're accustomed to, and can't imagine anything else. Capitalism is also not the free-market mechanism you imagine it to be--Capitalism as we know it today is a partnership of corporations and their servants in government designed for manipulating market conditions which once went by the name "fascism" in its European setting.

      The best system to be found in the world today is the light form of socialism we find in Europe called "social democracy". It allows corporations and private interests to pursue their aims with reasonable levels of regulation and attends to public needs in an effective way, unlike America, which is hamstrung by the "culture wars" at our highest levels of society...       Sep 26 10:57 AM
    • AIG Downgrades Should Create an Endgame [view article]
      I'm with JasonC, it is truly bizarre to see how sincerely some of these "free market" radicals believe in that concepts so implicitly, like God or the tooth fairy, when the evidence for the manipulative nature of corporate capitalism and its reliance on government for its very existence is everywhere evident. Capitalism is not about free markets and is only possible as an interaction of government and corporations at their highest levels. Unless you're naive enough to believe the engines of wealth creation are going to be reconstructed after a crash without a central bank and monetary policies it would be better to use the organs of government to head off the crash. It will be interesting to see if the former chairman of Goldman Sachs could really be such a naive true believer in "free markets" as treasury secretary that he fails to use his powers to save the goose that lays the golden eggs... Sep 16 12:29 PM
    • SPDR GLD ETF Unloads 79 Tons of Gold - Should Investors Follow Suit? [view article]
      It's a mystery to me why ETF's that deal in a commodity like gold wouldn't have been organized to allow the fund to arbitrage and keep the profits aside as operating cash so that it wouldn't be necessary to dump the commodity at unfavorable prices or be unable to acquire it at favorable prices. Maybe instead of commodity ETF's we really want commodity arbitrage funds... Sep 11 12:13 PM
    • Energy Sell-Off Overdone [view article]
      I suspect hedge funds and perhaps even mutual funds are selling off everything to meet redemptions. There won't be any reason behind market and sector performance so long as the only players left in the game are dumping their mega-positions in everything... Sep 10 12:50 PM
    • $300/Barrel Oil Is Coming - Barron's Interview [view article]
      Natural gas, like Helium, is a natural byproduct of hydrocarbon aging that exists in limited supply and cannot fill the mass energy role you imagine. Propane, a man-made version of it, does not supply the same energy level for a given quantity... Sep 07 10:37 PM
    • Why ETFs Will Overtake Traditional Mutual Funds [view article]
      Discussing ETF's versus mutual funds without describing their distinct functions and advantages is like talking about satellite radio as though it were just radio. Mutual funds originally gave the buyer diversification and simplification of some tax situations, but nowadays most funds are so large that even the themed funds function like just a market index. ETF's allow the buyer to drill down more specifically into certain commodities or to execute short positions with less risk, nice options for the retail buyer. While major pension funds will likely play footsie with big mutual funds for a long time to come, the tide can't be held back forever. There are too many mutual funds today and they're all becoming homogenous index funds, giving the buyer little reason to choose between them and a stronger desire to master one's own fate by buying commodities when they seem cheap or shorting things that seem ready to fall... Aug 26 12:58 PM
    • The Strange Case of Dr. GLD & Mr. Bullion [view article]
      "Paper has been money for 37 years"

      Honestly, where do some of you guys come up with this stuff? Paper currency has been around since the first Chinese emperors and all of the issues about backing and convertibility have been there from the beginning. Even in the US we've been off the gold standard for longer than 37 years. Those of you who believe that gold was what gave currency its value need to read your Communist Manifesto again and understand how the social abstraction of commuting labor into currency is what gives money its value, not the ability of a handful of survivalists to acquire some ingots...       Aug 25 11:56 AM
    • The Disconnect Between Supply and Demand in Gold & Silver Markets [view article]
      You've got to love a good conspiracy theory, and this one was so entertaining I think it should get a Pulitzer for the new category of "financial fiction" while we sort out whether any of it may be true... Aug 20 03:40 PM
    • Fannie, Freddie Bailout To Wipe Out Equity Holders? [view article]
      If I were a significant shareholder in either of these companies I would be preparing a fight to force the chair and boards of these companies to reject bailout--after all, why accept saving the company at the expense of one's own investment? Tell Paulson to screw himself and see who blinks first when you threaten to burn down the company rather than give it away... Aug 18 06:01 PM
    • Everything They Tell You About Solar Is Wrong - Travis Bradford [view article]
      It's disingenuous to claim that wind can only be aggregated and that there are somehow more limits on it's effectiveness than solar. It all depends upon local conditions, which is why all the new technologies will prosper with the right products in the market. The central problem for the future is whether energy industries will win or lose the fight to keep individual homeowners with wind, solar/photovoltaic and solar/radiant equipment from escaping the grid with household power setups... Aug 15 06:12 PM
    • Predicting the Bottom in Gold [view article]
      Gold's long-term track record is no better than the currency or the economy as a whole. Did you ever know of a gold owner whose horde's value wasn't affected by the rest of the economy? Did you ever know an owner of gold who didn't live in an economy and under a government? Trade gold if you like, but never for a minute believe the hype surrounding it... Aug 15 06:05 PM
    • Financials To Resume Meltdown Momentarily [view article]
      "we always under estimate the consumer and their need to spend on themselves and their children without including intangibles"

      Be that as it may, over 2 million households will have been foreclosed by this time in 2010. I see those as households whose financial and emotional crises will take them out of the consumer economy for a decade or more. Doesn't 2 million households sound like a lot to you? I can't imagine the consumers returning to their place as the engine of the economy any time soon. Especially when the credit card debtors discover what the real estate debtors have, that there's safety in numbers and defaulting with the crowd is a sound strategy for the overextended.

      As for short selling, indicting a couple of traders and brokerages should do the trick. Nothing like a good execution now and then to keep order on the street...       Aug 15 11:54 AM
    • Sears Faces Risk If Economy Doesn't Improve [view article]
      "He is probably on his yaht simping champage and eating cavier."

      Funny, but that's the essence of the problem here, isn't it? When your boy wonder has more money than god, what's going to motivate him to bust his butt to prove doubters wrong? You guys believing in his black box magic had better hope he's a guy with a massive ego, otherwise he'll do what any sensible billionaire will do and walk away to enjoy life in the Hamptons and let someone else sort it out...       Aug 12 12:38 PM
    • Using Futures To Hedge Your House [view article]
      If you're one of those unfortunate California buyers who paid $700,000 for a 700sf 2-bedroom one-bath fixer-upper ranch built on a slab next to a freeway in 2005 you might want to stay permanently hedged... Aug 11 03:29 PM
    • The Only Chart True Investors Need to See [view article]
      "Just when doesn’t really matter"

      Wrong, wrong, wrong, when you buy is almost the only thing that matters, much more important than your little portfolio mix formula. I can't remember which author went over this ground, but there's probably more than one analyst out there who's pointed out that people who did their buying at market tops did much worse in the long term than buyers who did their buying at market bottoms. The people who were fully invested in 2001 before 9/11 have still not caught up after 7 years with the people who got fully invested in 2003, and that interval may push out to 10 years or more. The person who got fully invested in 1929 before the crash appears not to have caught up with the person who got fully invested in the '30's until around 1991.

      Choosing a variety of stocks on the basis of some diversification formula doesn't ever rescue you from the need, at some point, to make a market timing choice. Your entry point and your exit point are crucial to your success and they are market timing matters, and no amount of puritanical dislike of market timing nor nostalgia for "value" investing can erase that problem...       Aug 07 10:14 AM
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