ritholtz's Comments

Ritholtz Says 'Buy and Hold Is a Disaster'

Wed, 25 Nov 2009 15:06:04 -0500

I just watched this, and then reread your comments -- you obviously did not even watch this video.

I should know better than responding to Seeking Alpha free-tards. -- you add zero value.

Ritholtz Says 'Buy and Hold Is a Disaster'

Wed, 25 Nov 2009 14:58:51 -0500

bobbybutte --in addition to your impoliteness, your facts are also wildly wrong.

Buying & Holding stocks have underperformed Cash over the past 11 years, and underperformed Bonds over the past 40 years. These are not opinions, but simple facts.

We run a managed investment firm -- we prefer to trade less, not more. The average holding period in our asset allocation model is 2 years.

As to low P/E, well, you are wrong there also. Many value investors bought the Homebuilders in 2005, the banks in 2006, the investment houses in 2007. All were single digit P/Es, all were investment disasters. You could have bought high P/E stocks like Google, Apple, RIMM, etc.

P/E, by itself, tells you less than you think.

Citi's Pandit Should Learn from AIG's Benmosche About Handling Government

Fri, 28 Aug 2009 06:50:02 -0400

Sorry if my appreciation of financial reality regarding $185 billion in taxpayer money thrown at this bankrupt company somehow interfered with your cheerleading of yet another CEO's sales pitch.

I don't know your investing track record, but this sort of CEO worship typically leads to enormous investing losses.

No One Saw This Coming?

Mon, 13 Jul 2009 11:21:50 -0400

Add this to the list from 2005:
URL: www.thestreet.com/p/rm...

"My position is that housing is not in a bubble -- yet. But it is an increasingly extended asset class that may be subject to a significant correction in the future. But a 25%-35% retracement is a very different situation than a bubble (recall that the Nasdaq dropped 80%), primarily because there are very different consequences for both homeowners and investors."

Clarifying 'Speculation'

Tue, 23 Jun 2009 06:50:55 -0400

That has been my position for many years:

See: Apprenticed Investor: The Folly of Forecasting www.thestreet.com/stor...

Bailout Nation: Merkel Reviews Ritholtz

Sun, 14 Jun 2009 07:59:18 -0400

Sounds like your investment strategy is really paying off!

On Jun 13 08:22 PM StockCreeker wrote:

> lol that's pretty clever +1
>
> I'll probably pickup his book in a couple weeks in the 99 cent bin.
>
>
> On Jun 13 02:56 PM User 430816 wrote:

Bailout Nation: Merkel Reviews Ritholtz

Sat, 13 Jun 2009 15:16:47 -0400

Don't look at the 1980s snapshot, look at the moving picture. Detroit had already begun losing share to imports.

What Detroit had was inertia (people were used to US cars) patriotism (the generation that fought WW2 against the Germans and the Japanese were less likely to buy their cars).

They also had the growth of the baby boomers, whose outsized demographic bulge masked the market share loss. Every year, the Big 3 sold more cars than the year before -- it looked like growth, but it was really population increases.

On Jun 13 02:23 PM JWhitling wrote:

> I'm not really trying to argue the case too strongly, except to say
> that during the 80's, by and large Detroit built what many people
> wanted to buy.
>
> If you look at the proliferation of new brands in the US since the
> early 90's I think you will find that's where the real problems began
> for Detroit. Unions or not, you cannot compete with third world countries
> when it comes to labor intensive production.
>
> You can shed all the unions you want .. but how do you ever compete
> with Korea, for example? I would say that we need to tax the hell
> out of imports from state run enterprises around the world. State
> run enterprises ARE NOT free market capitalism, no matter how cheaply
> they can manufacture.
>
> It's my fervent hope that health care reform will go a long way to
> putting US manufacturing back on track. IMO, without competitive
> mfg we're toast. In a country of 300 million not everyone can run
> a hedge fund, and it's not like our education system is doing more
> than creating the same series of ultra high educated, and ultra low
> educated populations. Like it or not, we have to find a way to put
> the lower classes to work, or there won't be any increases in GDP.
>

Bailout Nation: Merkel Reviews Ritholtz

Sat, 13 Jun 2009 11:25:53 -0400

The case I made is that the US auto industry would likely have been healthier had Chrysler been abler to restructure in 1980 -- shedding the onerous union contract (a carry over from the 1950s) including very generous health care and retirement benefits.

We cannot tell for sure because there is no control group -- no counter-factual universe where Chrysler is allowed to go belly up. In the book, I make suppositions as to what might have happened.

But we do know what DID happen post bailout: In 1980, the big 3 had a 75% market share in the US; Its now down to 47%. And the UAW had 1.5 million members; that is now down to under 400,000, and likely to hit 250k this year.

If that is your idea of a successful bailout, I'd hate to see what you think a failing one looks like . . .

-Barry

On Jun 13 09:15 AM JWhitling wrote:

> I enthusiastically bought this book on it's release and since I follow
> Ritholtz' Big Picture blog I felt I knew what to expect. Early on
> in the book, one of things that disappointed me was Ritholtz' recollection
> of the facts in the Chrysler bailout. One of the key arguments in
> the book is that any intervention/bailout distorts the market.

>
> I agree with that, in general. But Ritholtz makes a case that letting
> Chrysler fail in the early 80's would have been good for the US auto
> industry. He then states that the US auto industry sucked in the
> 80's. I think not. Ford, for instance, in many of those years had
> 8 out the top 10 vehicles in the US. That is pure dominance. And
> in Chrysler's case, the advent of the mini van opened up a whole
> new market segment for the customer to choose. So, in short, it was
> not at all like Ritholtz states, and since this is one of his key
> examples it kind of invalidates the book's arguments. Actually one
> could easily argue that the Chrysler bailout was a nearly ideal example
> of the good that can come from a bailout.
>
> After that example I lost interest. I'm sure I'll finish it on some
> dredge of a flight but I wonder, after that, if I can really get
> behind the book. If you're going to hang a book on a premise, you
> should carefully review your facts first.
>
> as a last point .. should it be called bailout if the loan is repaid?
> I think not ..

The Strange Death of American Capitalism: A Review of 'Bailout Nation' by Barry Ritholtz

Sun, 24 May 2009 15:03:56 -0400

Thanks for the thorough and detailed review! Its obvious you read it closely, and I appreciate the effort.

And I am very pleased you enjoyed it!

What Others Are Buying on Weakness

Mon, 22 Dec 2008 11:05:06 -0500

We were short JEF back in October and November -- it hit our downside target of $8, and we covered.

The Myth of the Credit Market 'Push'

Sat, 27 Sep 2008 04:15:07 -0400

I cant find any prior examples from history. Can you show me something specifically that proves this statement is false:

"During a 5 year period from 2002-07, the basis for mortgage lending was NOT the borrowers ability to pay -- it was the lender's ability to securitize and repackage a mortgage. This has never happened before . . . "

Financial Terrorism of the Real Kind?!

Mon, 22 Sep 2008 15:38:35 -0400

You omitted this paragraph:

"Joe asked the question: Is anyone investigating whether this is a case of financial terrorism? He wanted to know if someone was at least looking into this question (Joe is buds with Jim Cramer, and mentioned it to him, who then omitted to cite in his column that this was Joe's theory, not his own)."

Cramer took the idea from Joe

Big Picture Points Out 50% Retracement

Tue, 16 Sep 2008 16:00:05 -0400

That was off of the July 15 lows, which also presented a trading opportunity (see this: finance.yahoo.com/tech...? )

But it did not hit the 50% retracement line of the 2002-07 cyclical bull -- this drop did.

Bull or Bear Market?

Fri, 08 Aug 2008 14:33:53 -0400

On October 11, 2002, the S&P500 stood at 835. Six months later, on March 07 2003, it was 829. That's why most people mark the end of the Bear market as march 2003.

Note that SPX is are far better proxy DJIA (500 stocks versus 30)

OER, CPI, New York Rentals And The Fed: A Strange Love Story

Tue, 29 Jul 2008 16:12:00 -0400

Excellent criticism -- its now 1 year later, and pretty much every critique you had proved to be wrong.

We Don't Need No Stinking Market Capitulation

Fri, 25 Jul 2008 12:15:49 -0400

Its not that I want to see a 5% down day -- its just that such a day will have significance reflecting a better psychology. As of now, there is still too much complacency for the bear market to end.

We own selective equities, closed most shorts early in the month, but still have a decent cash position. This rally can run for a few weeks or months, but we doubt it reflects the 08/09 recessionary lows . . .

Blogonomics: The Seeking Alpha Model

Mon, 14 Apr 2008 07:03:28 -0400

My last comment on this issue -- if you believe this was merely because of an embarrassingly poor headline not of my writing, then you have a fundamental misunderstanding of contributor complaints.

For example, grabbing 4 of my posts a day was simply excessive. It made me realize how one sided the arrangement had become.

I noticed you posted a help wanted ad for "Contributor Relations Manager" -- that certainly won't hurt.

But I do not think you actually understand the situation at all. I suggest that we should take the rest of this conversation off line -- for your benefit.

Blogonomics: The Seeking Alpha Model

Sun, 13 Apr 2008 07:34:16 -0400

Two clarifications, David:

A) I never stated I was pulling out of SA -- I wrote I was reconsidering my relationship with you guys after the 3rd mangling of my content. While I determine what arrangement makes the most sense, and is also equitable for both sides, I halted SA from publishing my content.

B) I find the cash flow arguments about operating income versus expenses to be irrelevant at best and disingenuous at worst.

Why? SA is a start up, and the payout comes when the firm either gets bought or merged into another, larger firm. The house built on other people's content may be looking at a huge payday somewhere down the road.

~~~

Far be it from me to give unsolicited advice (heh), but if I were running SA, I would effect 2 changes immediately:

1) I would reveal the ownership structure, VC investments, operating losses, traffic data.

2) I would pull a side 20% of the equity, and create an option pool for contributors. It should vest after two or three years, and be based on the amount and traffic of written contributions.

That would be an equitable solution in my eyes . . .

"Reluctant Banks" Let Defaulted Borrowers Stay in Homes

Fri, 04 Apr 2008 18:05:35 -0400

That headline is awful -- I didn't write it.

Internet Hoax Gooses Stock Market

Tue, 01 Apr 2008 20:50:25 -0400

Yes, of course it was a goof

Doesn't anyone recognize an April fool's joke when they see one anymore?

Understand the Fed's Actions by Examining the Past

Mon, 28 Jan 2008 06:03:20 -0500

You think "Price stability and maximizing employment" is my "personal interpretation of the Fed's mandate?"

Seriously? Your position is that's not the Fed's mandate? That its some kind of subjective, personal whim?

Why Technical Analysis is Nonsense

Thu, 10 Jan 2008 15:26:16 -0500

This was the funniest post I have ever read.

Not only are you an inexperienced child, but you completely mischaracterize what the usage and value fo TA is.

Even funnier, you have the nerve to call yourself Prince of Wall Street -- that's hysterical!

Come back after you have spent some time and money learning to trade. As of right now, you are just another loudmouth, a minister with no portfolio . . .

The Buffett Sell Signal

Tue, 27 Nov 2007 15:30:20 -0500

ALEX, I'LL TAKE READING COMPREHENSION FOR $100

HAS BUFFET ACQUIRED USG? NO.

HE OWNS A 17% PIECE OF IT.

AN ACQUIRER OWNS 100%

The Realities of 2% Inflation

Thu, 11 Oct 2007 23:31:00 -0400

I do not understand your math:

Housing up over 50% over the past 7 years (higher in some areas);

Medical care up 11% per annum for the past umpteen years.

College costs up over 7%+ per year. Insurance costs rising rapidly.

Dairy is up nearly 100% over the past 18 months,

Beef prices up almost as much.

The CRB index has reached an all time high, with Soybeans, Corn, Wheat all breaking records.

In 2001, Oil was in the teens, and now its over $80.

Timber, aluminum, steel, copper all have gone way way up, breaking record highs.

Yes, iPods and plasma tvs are cheaper, thanks to manufacturing economies of scale as these became mass market products.

But these fun items hardly cancel out all of the goods and services that have risen so significantly in price. Especially when you consider these are items people need -- not discretionary wants . . .

Job Growth? This Economy Is Hotter Than I Thought

Tue, 09 Oct 2007 06:08:55 -0400

I like to look beyond the headline and take apart the actual underlying data. You can call it "lawyering" -- misleading -- thought that statement may be; I prefer to call it data analysis . . .

As I have said many many times, any single report doesn't matter, the overall trend does:

- In 2006 was 226,000 new jobs created per month
- In 2007, that number fell to 122,000;
- In Q3 2007, that number fell to 74,000.

That's before we look at the Birth/Death adjustments. In the 1990s, these were relatively insignificant. In 2001-02, it was less than 10% of total NFP each year. After a 2001 change to the format and weighting (effective in 2003), the B/D contribution to NFP went up dramatically. From 2003-06, Birth Death adjustments contributed between 35-41% of the total non-farm payroll job creation. In 2007, the B/D contribution is in excess of 76% of new jobs.

~~~

You have misconstrued my comments, and ignored the main point -- (Sounds like some "lawyering" on your part!)

Regards,

BR

Inflation Statistics Can Deceive You - Don't Trust Them

Wed, 03 Oct 2007 06:09:05 -0400

Why do you think that if money supply rises by 5%, everyone has more money to spend? This is the fatal flaw in your argument.

How much money the consumer has to spend is a function of wages and income gains, not money supply.

As we have seen over the past 5 years, the money supply has risen vastly more than either nominal wage gains. That means the after inflation purchasing power of most consumers has gone down. This is why inflation has been called "the cruelest tax."

There is a disconnect between what the Fed + BLS have been reporting on inflation, and what people in the real world are experiencing. Pardon my obsession, but Fed policies based on misrepresented data have a hard cost in the real world.

Feeling Bearish? Don't Short This Market Yet

Sat, 14 Jul 2007 06:19:30 -0400

BTW, my post title (This is a bullshit rally) was based on me quoting a trader who I disagreed with -- the full post explains why I thought he was wrong

Most Over/UnderValued U.S. Housing Markets

Wed, 20 Jun 2007 05:52:06 -0400

Yes -- see the chart above to see how much "over-valued regions are becoming a little less overvalued"

Real Inflation Measurement: The Core/CPI Spread

Wed, 16 May 2007 21:38:55 -0400

Incidentally, those were amongst the first 5 hits when I went to The Big Picture and searched for "Efficient Markets."

Let me know when I can swing by to chew your food for you . . .

Real Inflation Measurement: The Core/CPI Spread

Wed, 16 May 2007 21:35:32 -0400

I do not believe markets are, (At leats as has been classically described) particularly efficient.

At best, they are kinda-eventually-sorta... Efficient bigpicture.typepad.com...

The frequently are Hardly Efficient
bigpicture.typepad.com...

And there are times when they are Astonishingly Inefficient bigpicture.typepad.com...