ikkyu

Robert Shiller on America's 'Speculative Culture'

You are sounding more and more like big-government dude. Greenspan is a small government dude, so i can see why you seem to detest him.

I for one don't want moralizing financial posts, that rant against what...? Speculation! I am sure all alpha-seekers are non-speculative (said in a sarcastic tone).

As a speculator I will ignore your assertion that i should not speculate in certain asset classes. You have got to be kidding right? Schiller designed a new way to engaged in leveraged speculation on real estate through housing futures.


This is another alpha-less post.

cheers from osaka....
john

Learning from George Soros' Books

Greetings,

I too would say that the Alchemy of Finance is an excellent work as well. I have considered the "theory of reflexivity" outside of finance, too. You can really see this as a philosophical school in finance that is based on the philosophy of Karl Popper and is represented by the ideas of Soros and Nassim Nicholas Taleb (of Black Swan fame), though clearly the former is more interventionist and the latter more libertarian.

Nice review.

Cheers from Osaka,
john

Why Is John Mauldin Defending Greenspan?

Greetings Mr. Iacano,

You do lay out a case here and at least it is defended. Nonetheless, i remain entirely unconvinced. I would call your attention to the work of Dr. Schiller that shows over the long term home prices have little to do with interest rates (it is all accessible online).

Your graph is not only unconvincing. but it is only a single business cycle for housing. It goes from parabolic (before the rate cut) to 45 degrees after. A perfect inverse correlation would be much more obvious, like the USD and gold.

Actually, none of this stuff will help in the seeking of Alpha as it were. If you have a theory try and publish it academically and see how far it takes you! Greenspan could do it. Mr. Mauldlin could do it. Axe grinding is probably not alpha-conducive.

Best wishes from Osaka,
john

Housing as an Inflation Hedge: It's Not Magic, It's Leverage

Amazing how your little linked math thing completely left out the COST OF CAPITAL! Um, yeah leverage ain't free dude....

Active vs. Passive Asset Management: Are We Nearing the End of the Struggle?

Nice. I like your consistently good pieces. I think you spell the beta vs. alpha stuff out well.

Cheers from osaka,
john

Employment Figures Mean Big Fed Cut, More Dollar Weakness Likely

WHat? I thought i just saw you on Bloomberg saying the yen had bottomed.

Yen Carry Trade Hits a Critical Juncture

Wow, that is a random basket of 1 major currency and 4 exotics funded by JPY, and you think that the resulting trendline has a special significance? If you trade this way with greater than like 3:1 (with 25:1 leverage available on exotics for many marker makers) you will blow up sooner or later without stops.

How about the ten year triple bottom test in USD/JPY?

I for one think that most of the weak hands are gone from carry trades. It is only the careful who are left at this point my friend.

For carry trading, you should probably concentrate on market ( all markets!) volatility.

Nonetheless, this is obviously a topic i like to see.

Cheers from osaka,
john

Treasury Yields vs. Commodity Prices

Really nice analysis. Thanks!

World Interest Rate Overview: Abandoning the US Dollar

It's true. The USD is now with the yen and CHF in the bottom 3 yielding currencies of the G10 and DBV will reset to show this on Mar 17 when they roll the futures. Now whether you or i have the huevos to carry trade currently is another issue altogether! I want to see volatility hit an intermediate extreme and then i am there.

Cheers from osaka,
john

Seeking Alpha in Indian Real Estate

Quite interesting. Thanks!

REITs Seem Ready to Explode

The author said:"Disclosure: none"

Now that is a convincing argument!
cheers,
john

Derivatives: The Only Way to Win is Not to Play

Holy cow. I have been a fan of your stuff but this is over the top. I am assuming by "derivatives" you mean option, futures, swaps and all the exotic stuff that some might not understand. This site is called "seeking alpha" and excluding the largest markets in the world(derivatives) (just say no) sounds weird and naive. The word "derivatives" has become like a populist catch phrase for everything that is wrong with the markets.

You have lost my ear, my friend...
john

ETFs and Index Funds: Still Modest in Most Categories

Perhaps if you consider futures, options, and swaps, indexed products look a little more formidable, even dominate.

Cheers,
john

Black Swans, Portfolio Theory and Market Timing

Sorry. Volatility is rather high. Right now, 10% ITM SPY DEC 2009 calls run about 20% of what the equivalent underlying position would be.

If i recall correctly, Taleb mentioned about 15% of a port in speculative call positions. He mentions venture capitol specifically, where winners win big.

Nonetheless, for people who can not visually process simple weekly and monthly charts for mean reversion, i think you have provided an good tool. What you haven't addressed is when to EXIT! That makes this a tool that requires an investment strategy or a trading system.

Cheers from Osaka,
john

Black Swans, Portfolio Theory and Market Timing

Nice article Dr. Considine. I am still not sure if you have read the Black Swan or not. Taleb describes one investment method, where he buys calls on highly speculative companies and keeps the the bulk of the port in treasuries. This exposes you to positive black swans and protects you from negative ones. I believe in "Fooled by Randomness" he describes how essential things like stop-losses are.

I have not heard you describe how a 1 in 45 or 1 in 20 chance translate into investment decisions. Maybe my brain is not so analytic. I can, however, understand that buying 10% in the money SPY calls can give me virtually the same exposure to a market with sharply defined risk parameters, maybe around 7% for the same deltas. (Opps... Will this be quoted in another article?)

Best wishes,
john