hanumanhojo

Apple Overvalued? Here's What Else You Can Get for the Price

Apple is a great company and Jobs is the Edison of our age. However, a great company doesn't always make for a great stock, especially at high valuations. I believe Apple is what would be termed a "Glamour Stock".

The thing people should be concerned about is Apple's moat. Apple is not a wide moat stock. Its integration of various technologies do give it perhaps a medium moat but eventually, the competitors will breach. Afterall, do we get excited about the iPod or Apple's computers anymore? No.

Why? Because the competitor products have gradually commoditize those segments. Apple needs to keep running to stay ahead of its competition. Granted it has done that well so far but history has shown every company eventually stumbles.

The Recurring Gold 'Bubble'

The bubble is in bonds, not gold. The bond market is much bigger than the gold market. Given the high default rates and inflation risk going forward, which rational person would lend at today's rates?

Debt-Based Positions: The Great Mirage

I also favor equity but have you considered that our current tax laws favor debt? One of the reasons for the debt bubble is that issuing debt is cheaper than issuing equity. Interest payments on debt is tax deductible while dividend payments comes from after tax earnings.

We need to fix this discrepancy, otherwise the tax code will continue to favor an unstable system.

I do wonder if this instability is why some religions favor equity over debt.

Trouble with the Russells

I think in this case, the large caps are up because their size usually imply overseas operations. Thus they are a global plays making money in currencies that are appreciating against the USD.

Meanwhile, the small caps may be more representative of the faltering US economy.

Deficit Doubles for Government's Pension Benefit Guaranty Corp

Another "insurance" program that the government can't run properly and now in the red. How deep a hole will national healthcare be? Remember, these guys don't price the cost of Federal Flood Insurance properly.

Personally, I don't think we should call Ponzi Schemes ponzi schemes anymore. We should call it the American Scheme.

Do We Goldbugs Finally Have Your Attention?

Gold definitively broke above $1K after Hong Kong took delivery of their gold from England.

Then the move above $1.1K after India took delivery of gold from the IMF.

These two milestones do seem to indicate to me that the wood got snatched out from under the gold shorting cauldron. May be a good time to accumulate silver and more gold shares as the time lag catches up to them.

The Unsustainable Lie of Inflation

I think that really should be spoken with a caveat. There are two types of rich...the asset rich and the leveraged rich.

Deflation hurts the leveraged rich because they took out loans to purchase income assets. With deflation, the cashflow generated by income asset falls below the level needed to service their debt and they go kaputz. Case in point is all those LBO's that have gone bk recently.

As for the asset rich that owns their assets outright with little debt, I would say inflation and deflation makes no difference. They win either way.

The problem with out society is that easy money has overweighted us towards the leveraged rich whereas Asian countries have more asset rich...thus our preferance towards inflation.


On Nov 10 07:49 AM Carlos Lam wrote:

> On Nov 09 02:25 PM Michael Clark wrote:

Property Values Set to Fall 43% from Current Depressed Levels

I wonder if a chart for price per square foot be a more accurate indicator of price? Just from observation, the homes built of more recent vintange were much larger than those built many years ago. So just looking at price may be a bit deceptive.

Japan to the U.S.: 'We Don't Want to Exclude You, But...'

Seems to me the historical knowledge of most Seeking Alpha readers is rather shallow. Let me give a deeper historical recap...

For most of Japan's history, they actually existed in China's co-prosperity sphere. The Japanese then were more than happy to grovel in the Chinese emperor's presence in exchange for trade access which benefitted Japan.

Even historically speaking, recent memory isn't the only time the Chinese have been angry with the Japanese. Towards the late Ming dynasty, Japanese pirates ravaged China's coasts and a bitter war in Korea was fought between Ming Chinese/Korean forces on one side and Japanese forces on the other.

However, the final Shogunate under Tokugawa Ieyasu was able to bury the hatchet by apologizing and groveling before the Chinese and all was forgiven and trade ties restored.

Should the US fall or become problematic, we will see the revision to the historical order. The Japanese of today will finally grovel before the Chinese and profusely apologize for WWII and the Chinese will magnaminously forgive them; then business as usual (from a historical standpoint) will proceed. Taiwan will probably change sides and rejoin China.

The US is still important though possibly fading. From a historical standpoint, this period of American greatness is merely a pimple on history's behind. China has been the world's greatest nation, on average, for most of civilized human history. It was also th world's greatest manufacturing nation as well.

What we are seeing today is a gradual reversion to historical norms. The last 100 years that most of the readers here are anchoring their perceptions on is really a rather extraordinary period, not a normal one.

Key Developments for Spectrum Pharma, Human Genome Sciences and Hemispherx Biopharma

HEB is a stock watering scam. Why is it even being mentioned on Seeking Alpha? Pump and dump?

Talking About a Housing Revolution: Predictions for the Sector

I think the main cause of the revolution in housing is that jobs simply aren't stable. Who can expect to stay in the same area for 30 years? If you can't, why even bother buying? It is a vestige of an era gone bye.

The American Economy Is Spent

Or you can view the opposite. That during the romanticized "golden age" of the US factory worker, those factory workers were actually paid way too much.

Consider the situation at the time. 1) the rest of the world was in shambles thanks to WWII and the Iron Curtain so little foreign competition 2) racist unions prevented US blacks and Latinos from getting factory jobs thus driving wages up by limiting workforce supply 3) women also haven't enter the workforce in bulk again capping the labor supply 4) China hadn't opened itself up to the world yet and neither had India; both were starving from ill advised social engineering experiments gone haywire 5) Japan was only beginning to get its bearing on the world manufacturing stage and so was Taiwan; both had the rep of producing "cheap junk" at the time.


On Jun 23 11:00 PM mlonz wrote:

> I am shocked that nobody commented on what I consider to be the most
> important line in your article:
>
> "When you consider my seven years in college and law school and the
> costs of same, it undoubtedly took me 12-15 years after high school
> just to break even with those who went into factory work straight
> out of high school."
>
> The benefits of a 4 year undergrad education are illusory. Couple
> this with the fact that the debt accumulated for achieving this can
> never be discharged via bankruptcy, and we have a big problem.<br/>
>
> BIG PROBLEM

Systemic Risk and the Mortgage Agencies: All Connected

How about getting government completely out of the mortgage market? Housing is a net wealth destroyer, not a net wealth creator. Government's involvement is subsidizing us to the poor house.

Just let the free market lenders set the rate and appropriate downpayment for the risk. If they don't want to lend, it means housing is overpriced.

Who cares if home prices fall as a result? This simply means their nominal price was artificially high to begin with.

Stocks Are Hot, But Do the Americans on Food Stamps Care?

I have to throw in with the pro 401K and anti pension crowd. Let's face it, pensions invest in all the same things as 401K's so how can one be better than the other? Many pensions are down just like 401K's so they place an additional liability on the companies and the US taxpayer. Don't even get me started on state and government pensions....

I think it would be fair to say that pensions are good for people retiring or near retirement but like the Social Security ponzi scheme which pensions are an extension, they are a disaster for the younger workers.

Profiting from Inflation: 7 Investment Ideas

Nothing irks me more than bad math. For the example in your link, you neglected standard deduction which is the typical newbie mistake. A 5% rate on $100K comes out to $5K. That less than the standard deduction for a single filer thus you pay full freight on the interest.

As for home price appreciation in face of inflation, that would be hard to determine. There is enormous supply fighting inflating currency. The high inflation will also spike up mortgage interest rates thus resulting in a capital loss on the home value.


On Jun 02 04:50 AM capitalisthero.com wrote:

> You can also hedge inflation by buying a house with a low fixed interest
> rate.
>
> Read my article capitalisthero.com/Hed... where
> I explain in detail and crunch the numbers.