David Sullivan

Consumer-Driven Deflation? Not Even Close

When Israel bombs the Iranian nuclear sites, expect at least a 25% increase in the price of oil and gold.

Cramer's Stop Trading! Why Is Boeing Flying? (11/16/09)

Boeing will get the 787 problems resolved and then sell 1000+. It was crazy like a fox to delay the planes which would have sat unsold in the depths of a recession. Getting the S. Caroline facility up to speed just as the market for planes recovers is smart.

And then the development team will turn to a 737 replacement and sell 5,000+.

Do ETFs Inflate Emerging Markets?

In every case I have investigated, ETFS substantially outperformed managed mutual funds, sometimes by 5-10%, year in and year out.
The indexing approach seems superior to the managers in the U.S. in selecting the stocks in the portfolio.

And Bernanke Didn't Think Unemployment Would Reach 10%

Unintended consequences of big government brought us here. Subprime lending is still the law of the land.

And they say the twelfth century was the age of faith.

Auto Sales Stabilize in October

As baby boomers retire, they drive much less. As retirement looms, people become savers.
All those Toyotas and Hondas on the road with 300,000 miles, plus the information in Consumer Reports, push buyers to avoid Dodge Caravans which only make it to 120,000 (and then with a lot of costly repairs.)

Is There an Opportunity in First Solar?

The problem with investing in solar is that residential, kilowatt scale solar is dumb, while utility, megawatt scale is OK. Fortunately, few small businesses are doing suicide by solar. It is mainly just lawyers and Sierra club types and it couldn't happen to a nicer bunch.

Crude Oil and Gold: Not Worth Worrying Over

Israel bombs Iran, oil goes to 150. Iran explodes bomb, oil goes to 150.

Why Gold, If Deflation Is the Threat?

I prefer oil to gold. Either Iran will explode a bomb or Israel will bomb Iranian choke points in the next year. In either case, oil doubles. The oil shock may only last a month or so, but it will be severe.

What's Holding Back Singapore's ETF?

VNM, the capitalist ETF on the Ho Chi Minh exchange looks like an even better asian kitten.

Outlandish CEO Pay: How to Fix the Problem

Boards of Directors represent shareholders and hire and fire management. They need incentives, regulations and customs to start doing their jobs. Board members of the world unite! Too often now, management de facto hires and fires boards of directors who spend more time golfing than governing at board meetings.
We need laws to shift the balance of power from management to boards. Silicon valley has done a much better job than wall street and should be a model. Managers should be paid mostly in restricted stock which they must hold for 5-7 years.

No Five Year Carry Trade Punishing the Dollar - At Least Not Yet

There are hundreds of news reports implying that Japan's problems were finance. Japan is a one trick pony. It improves U.S. technology and leapfrogs us to make the best in the world. Technology transfer to other Asian countries enabled them to do the same. Japan contributes very few science PhD's, patents, scientific papers, etc for its size. It is like Canada, a freeloader a tenth the size of the U.S. which under contributes for its size in science and technology. I don't expect the next vaccine for HPV or life saving drug to come from Japan or Canada. Japan's MRJ regional jet and Bombardier's will have little economic impact.

Mexican Math Doesn't Add Up

Mexico celebrates a national holiday Dia de la expropriation. Pemex is taught to school children as a core national value. This dysfunction is good for the U.S. Even though Mexico now trains as many engineers as the U.S., it exports crude to the U.S. to be refined and reimports the gasoline and jet fuel. State enterprises like Pemex are ridden with corruption and badly run. Mexico should be building refineries for Venezuelan crude and pocketing tidy profits.

Why Mexico's ETF Is Doing So Well, Despite Glum Economy

Mexico can profit from California's meltdown. A new LPG terminal in North Baja, the new Toyota plant in Tijuhana. The aerospace companies. The next container port strike in CA will see competition from Mexico. Mexico now trains as many engineers as the U.S., and in the very long run may figure out how to use them. Mexico can build refineries for Venezuelan oil, a much more profitable choice than sending crude to be refined in the U.S. and reimporting products.

Could Texas Land the First State-Focused ETF?

I'd like to be long TX and short CA. It would be like being long SWA and short US air. How could you lose?

California on the Brink?

Is there a way to profit from the inevitable decline and fall of CA? I'm stuck living here, so I need a hedge. Is there a way to short CA? Seems to me there should be an ETF for CA if the Netherlands has one.