"Short positions in the long treasury ETF (TLT) or treasury futures would help offset any losses on your fixed income investments. The risk to this trade is a global event that creates a double market/economic dip. In my opinion, the event would be easy to spot and the trade could be unwound before interest rates decline to crisis levels"
would you recommend SHV as an alternative to shorting TLT then?.
Cramer's Mad Money - Can't Be So Bullish on Google (1/13/10) [View article]
think you miss my point Manuel "proves random events, such as economic, financial and political news actually drive the market direction......don't look at past history or performance to predict future values" Market prognosticators will eventually blow up because the causes of market movements are not in their control.
Cramer's Mad Money - Can't Be So Bullish on Google (1/13/10) [View article]
ah that Cramer, this is what he said a month ago:
“Empire Google (seekingalpha.com/symbo...) is more than doubled since the March lows, but lately over the last couple of weeks the stock seems to have hit a wall. This stock has been stalled…I say, Google, look out $600. You ain’t seen nothing yet. Pictures are worth a thousand words and $750.” — CNBC’s Mad Money 12/15/2009
proves random events, such as economic, financial and political news actually drive the market direction......don't look at past history or performance to predict future values.
VIX: Nearing Crucial Long-Term Support Levels [View article]
Sorry Mr. Waller, have a newbie question, so pls bear with me.
"As a quick primer, among its other purposes the VIX actually measures what option implied volatilities on the S&P 500 Index (SPX) are projecting the 12 month return will be (based on 30 days worth of option pricing). This means that with the VIX at 18.4 currently, market makers are pricing that the SPX could be 18.4% higher or lower 12 months from now"
Isn't it supposed to 3 std dev we use? I believed VIX at 18.4 meant the market makers are pricing the SPX to be within +/- 55.2% (18.4 x 3) In other words, almost back to historical risk (std dev) Per you statement I would have thought the market maker expressed 68% likelihood it would fall within +/- 18,4% (1 standard deviation) Please educate me :)
Excellent work Mr. Kelly. A fellow fundamentalist :)
based on my quick acid test, using EVA principles, PBI is currently fairly priced, I find fair value around $23.50. Company does return excess profits, when subtracting its cost of capital from its return on capital. The ratio between ROIC and WACC is 1.1; the corresponding Market Value to Investment Capital ratio is 1 which is exactly where it should be.
I would wait for a downturn in the price, or improvements to earnings before I would consider PBI a buy.
Investing in 2010: The Opportunity Continues [View article]
Excellent article Mr. Miller (Jeff), I especially liked your investment theme section.
Agree with you for most part of it, and as expressed by other comments, it is refreshing to see articles that are not filled with situational bias, you know the inability to see beyond the doom and gloom we are surrounded by these days.
In a Q&A after his speech, Bernanke said he wasn't "particularly concerned" about a possible loss of investor confidence in the U.S. financial system. The dollar is still the dominant world reserve currency, he said, and when financial conditions become worrisome, investors will still view the dollar as a safe haven. [View news story]
Well thank God Michael you are not the Fed Chairman then :)
I think my initial comment was meant that "Leadership speak" is not the same as "telling it as it is"
The Fed Chairman is obligated to project a calm demeanor, a sense of a big picture view, a belief in the long term viability of both the financial markets and the USD.
Our obligation as investors is to 'read between the lines', trying to make sense of what is not being said (which I think you summed up pretty well) and make our investment decisions accordingly.
But to criticize the Chief for playing the role which he is supposed to play is wrong; it isn't a question of denying reality, it as question of credibility to the market participants.
Michael have you ever held a leadership position? Not talking down to you here, but if you had you would understand why Bernanke is playing his role correctly. Agree with him or not, he is answering responsibly.
In a Q&A after his speech, Bernanke said he wasn't "particularly concerned" about a possible loss of investor confidence in the U.S. financial system. The dollar is still the dominant world reserve currency, he said, and when financial conditions become worrisome, investors will still view the dollar as a safe haven. [View news story]
and how exactly should the leader of your central bank express his long term confidence in the market while supporting the USD?
just wondering how you would have answered during the same Q&A session if you were in Bernanke's position
'Good ale arrogance... I'm sure the Roman empire never imagined its demise as well"
"Sounds like Bernanke is preparing for a new career - in stand-up comedy.For contrarians, since Bernanke ALSO predicted that U.S. housing prices would keep going up forever (at the PEAK of the housing bubble), the fact that he is proclaiming the dollar "safe" is the best possible indicator that it will collapse in 2010."
The Lost Decade? Not for Some Asset Classes [View article]
Very good article Jacob, informative, and once again rightly focused on the merits of diversification. If I had a nickel for every 'the end of buy and hold' I have heard....... Just one minor point, the asset classes you listed are not technically 'classes' but 'sub-categories' of the equity asset class.
Cramer's Mad Money - Building Long-Term Wealth (12/31/09) [View article]
Cramer just doesnt get it. Here are some valid reasons why all investors regardless of age should have some bond exposure:
Preserving Principal (A risk-free bond purchased at par and held to maturity should preserve principal and provide a dependable cash flow)
Managing Interest-Rate Risk and for Diversification Diversification is often the most overlooked use of bonds. The generally low correlation between bonds and other asset classes makes bonds an excellent diversification tool. The diversification between bonds and stocks cans help to smooth out market swings
Saving and Long-Term Planning One of the benefits of bonds over other asset classes is that bonds have a predictable stream of income that can be used to fund future expenses
"Cramer recommends an inexpensive S&P 500 index fund. Bonds do have a place in a retirement portfolio, but not for people in their 20s. Thirtysomethings can have 10-20% of their portfolios in bonds, fortysomethings can have 20-30%, and another 10 percent can be added with each decade of age. However, retirees can still hold conservative stocks, especially as people are living longer these days".
articles from you are long over due.!Believe it is time to become a contributor, your comments are excellent; far ahead of most comments posted on SA. I am certain there are many readers who would look forward to some more insight from you. New Years resolution?
"Two things are often lost sight of in these discussions. The first is that the FDR administration came to office well before the publication of ‘The General Theory…” in 1936 and that administration employed a variety of sometimes contradictory economic policies over the years. In fact, deficit spending and monetary easing generally marked the 1932-6 period (and were rewarded with significant success in reviving economic activity) but were not influenced by Keynesian thought while belt tightening after 1936 led to a renewal of economic hard times. For the US, Keynesian thought really had its major impact during and after WW II"
Constructing a Cautious Portfolio for 2010 [View article]
I think the two samples below 'proves' making predictions is an exercise in futility. There are too many noise makers on both buy and sell sides, not to mention in the media; my 2010 resolution is to set the 'noise filter' to Max.
I think investors need to think in terms of what if scenarios. Think of probabilities and adjust asset class allocations accordingly. Having exit strategies for some or all investments, like DVKnapp suggested using trailing stops is a great idea. I have set trailing stops on all my equity and real asset investments; last week took my profits off the table when Gold dropped 8% from its peak. Now back to my original core position for Gold again.
Happy Holidays to everyone.
Windsun33 wrote: Thatgoes both ways - in looking back over predictions made for 2009, manyothers were predicting that gold would never hit $500, one evenpredicted that gold would be at under $350 by Dec.
None of thepredictors will ever be all that good, far too many variables,including Black Swans, Green Turkeys, and the idiocy of politicians.
Butquite often you can get some ideas, especially for broad sectors, as towhere to look for undervalued stocks. Or even better, findsectors/stocks that might be way undervalued for 2010.
On Dec 23 10:39 PM Bensondog wrote:
> After reading the analysts in 2007 who said oil was going to $200 > I have kinda taken what these 'professionals' say with a pince of > salt..........not to mention the $2000 for gold of course..........!! >
Thank you Scott's. looking forward to it. If you have time would you please check the following co's too. Maybe better value here?: INSM, SNTA, PRGO, TSYS, INOD, ELNK
On Dec 23 01:32 PM Scott's Investments wrote:
> All good points, thus it is a list for further investigation. QLTI > is the most promising in my opinion but I have no position. I prefer > to look for value with momentum (see some of my previous articles). > I will run a follow up screen w/ positive ROA , ROE, and ROI to further > dwindle the list and publish it tomorrow morning.
Thanks for the suggestions, good work Scott's Investments, don’t take this the wrong way, unfortunately to me these are all clear value traps.
Investors need to remember that companies that trade close to or below their book values, or their total asset values, do so because they deserve to. The suggested companies actually do not earn any profits once cost of capital has been accounted for.
There is a correlation between market prices and companies earning real economic profit; companies with higher profit ratios also trade at higher market to capital ratios. In the old days we used to perform regression analysis to show the correlation between earnings and market values.
It is not to suggest that the suggested companies do not have potential, but at their current levels they are risky investments
In particular, CACH, HDNG, PCTI, RCMT, VOXX have horrible earnings, currently destroying capital between 10% and 40% annually . The other ones are losing up to 10% asset value currently; unable to comment on QLTI and WSTL, I have no relevant info on them.
I usually stay away from buying into companies until they start earning real profits irrespective of current free cash flows or estimated future growth. To me these companies are at fair values.
Interest Rate Outlook [View article]
"Short positions in the long treasury ETF (TLT) or treasury futures would help offset any losses on your fixed income investments. The risk to this trade is a global event that creates a double market/economic dip. In my opinion, the event would be easy to spot and the trade could be unwound before interest rates decline to crisis levels"
would you recommend SHV as an alternative to shorting TLT then?.
Cramer's Mad Money - Can't Be So Bullish on Google (1/13/10) [View article]
"proves random events, such as economic, financial and political news actually drive the market direction......don't look at past history or performance to predict future values"
Market prognosticators will eventually blow up because the causes of market movements are not in their control.
Cramer's Mad Money - Can't Be So Bullish on Google (1/13/10) [View article]
“Empire Google (seekingalpha.com/symbo...) is more than doubled since the March lows, but lately over the last couple of weeks the stock seems to have hit a wall. This stock has been stalled…I say, Google, look out $600. You ain’t seen nothing yet. Pictures are worth a thousand words and $750.” — CNBC’s Mad Money 12/15/2009
proves random events, such as economic, financial and political news actually drive the market direction......don't look at past history or performance to predict future values.
VIX: Nearing Crucial Long-Term Support Levels [View article]
"As a quick primer, among its other purposes the VIX actually measures what option implied volatilities on the S&P 500 Index (SPX) are projecting the 12 month return will be (based on 30 days worth of option pricing). This means that with the VIX at 18.4 currently, market makers are pricing that the SPX could be 18.4% higher or lower 12 months from now"
Isn't it supposed to 3 std dev we use? I believed VIX at 18.4 meant the market makers are pricing the SPX to be within +/- 55.2% (18.4 x 3)
In other words, almost back to historical risk (std dev) Per you statement I would have thought the market maker expressed 68% likelihood it would fall within +/- 18,4% (1 standard deviation)
Please educate me :)
Valuing Dividend Stocks [View article]
based on my quick acid test, using EVA principles, PBI is currently fairly priced, I find fair value around $23.50. Company does return excess profits, when subtracting its cost of capital from its return on capital.
The ratio between ROIC and WACC is 1.1; the corresponding Market Value to Investment Capital ratio is 1 which is exactly where it should be.
I would wait for a downturn in the price, or improvements to earnings before I would consider PBI a buy.
Investing in 2010: The Opportunity Continues [View article]
Agree with you for most part of it, and as expressed by other comments, it is refreshing to see articles that are not filled with situational bias, you know the inability to see beyond the doom and gloom we are surrounded by these days.
Job well done.
In a Q&A after his speech, Bernanke said he wasn't "particularly concerned" about a possible loss of investor confidence in the U.S. financial system. The dollar is still the dominant world reserve currency, he said, and when financial conditions become worrisome, investors will still view the dollar as a safe haven. [View news story]
I think my initial comment was meant that "Leadership speak" is not the same as "telling it as it is"
The Fed Chairman is obligated to project a calm demeanor, a sense of a big picture view, a belief in the long term viability of both the financial markets and the USD.
Our obligation as investors is to 'read between the lines', trying to make sense of what is not being said (which I think you summed up pretty well) and make our investment decisions accordingly.
But to criticize the Chief for playing the role which he is supposed to play is wrong; it isn't a question of denying reality, it as question of credibility to the market participants.
Michael have you ever held a leadership position? Not talking down to you here, but if you had you would understand why Bernanke is playing his role correctly. Agree with him or not, he is answering responsibly.
Economic Double-Dip? Try a Triple [View article]
en.wikipedia.org/wiki/...
In a Q&A after his speech, Bernanke said he wasn't "particularly concerned" about a possible loss of investor confidence in the U.S. financial system. The dollar is still the dominant world reserve currency, he said, and when financial conditions become worrisome, investors will still view the dollar as a safe haven. [View news story]
just wondering how you would have answered during the same Q&A session if you were in Bernanke's position
'Good ale arrogance... I'm sure the Roman empire never imagined its demise as well"
"Sounds like Bernanke is preparing for a new career - in stand-up comedy.For contrarians, since Bernanke ALSO predicted that U.S. housing prices would keep going up forever (at the PEAK of the housing bubble), the fact that he is proclaiming the dollar "safe" is the best possible indicator that it will collapse in 2010."
The Lost Decade? Not for Some Asset Classes [View article]
Just one minor point, the asset classes you listed are not technically 'classes' but 'sub-categories' of the equity asset class.
Cramer's Mad Money - Building Long-Term Wealth (12/31/09) [View article]
Here are some valid reasons why all investors regardless of age should have some bond exposure:
Preserving Principal (A risk-free bond purchased at par and held to maturity should preserve principal and provide a dependable cash flow)
Managing Interest-Rate Risk and for Diversification
Diversification is often the most overlooked use of bonds. The generally low correlation between bonds and other asset classes makes bonds an excellent diversification tool. The diversification between bonds and stocks cans help to smooth out market swings
Saving and Long-Term Planning
One of the benefits of bonds over other asset classes is that bonds have a predictable stream of income that can be used to fund future expenses
"Cramer recommends an inexpensive S&P 500 index fund. Bonds do have a place in a retirement portfolio, but not for people in their 20s. Thirtysomethings can have 10-20% of their portfolios in bonds, fortysomethings can have 20-30%, and another 10 percent can be added with each decade of age. However, retirees can still hold conservative stocks, especially as people are living longer these days".
Why Fear Keynes? [View article]
articles from you are long over due.!Believe it is time to become a contributor, your comments are excellent; far ahead of most comments posted on SA.
I am certain there are many readers who would look forward to some more insight from you.
New Years resolution?
"Two things are often lost sight of in these discussions. The first is that the FDR administration came to office well before the publication of ‘The General Theory…” in 1936 and that administration employed a variety of sometimes contradictory economic policies over the years. In fact, deficit spending and monetary easing generally marked the 1932-6 period (and were rewarded with significant success in reviving economic activity) but were not influenced by Keynesian thought while belt tightening after 1936 led to a renewal of economic hard times. For the US, Keynesian thought really had its major impact during and after WW II"
Constructing a Cautious Portfolio for 2010 [View article]
I think investors need to think in terms of what if scenarios. Think of probabilities and adjust asset class allocations accordingly. Having exit strategies for some or all investments, like DVKnapp suggested using trailing stops is a great idea. I have set trailing stops on all my equity and real asset investments; last week took my profits off the table when Gold dropped 8% from its peak. Now back to my original core position for Gold again.
Happy Holidays to everyone.
Windsun33 wrote:
Thatgoes both ways - in looking back over predictions made for 2009, manyothers were predicting that gold would never hit $500, one evenpredicted that gold would be at under $350 by Dec.
None of thepredictors will ever be all that good, far too many variables,including Black Swans, Green Turkeys, and the idiocy of politicians.
Butquite often you can get some ideas, especially for broad sectors, as towhere to look for undervalued stocks. Or even better, findsectors/stocks that might be way undervalued for 2010.
On Dec 23 10:39 PM Bensondog wrote:
> After reading the analysts in 2007 who said oil was going to $200
> I have kinda taken what these 'professionals' say with a pince of
> salt..........not to mention the $2000 for gold of course..........!!
>
14 Value Stocks Worth Considering [View article]
INSM, SNTA, PRGO, TSYS, INOD, ELNK
On Dec 23 01:32 PM Scott's Investments wrote:
> All good points, thus it is a list for further investigation. QLTI
> is the most promising in my opinion but I have no position. I prefer
> to look for value with momentum (see some of my previous articles).
> I will run a follow up screen w/ positive ROA , ROE, and ROI to further
> dwindle the list and publish it tomorrow morning.
14 Value Stocks Worth Considering [View article]
Investors need to remember that companies that trade close to or below their book values, or their total asset values, do so because they deserve to. The suggested companies actually do not earn any profits once cost of capital has been accounted for.
There is a correlation between market prices and companies earning real economic profit; companies with higher profit ratios also trade at higher market to capital ratios. In the old days we used to perform regression analysis to show the correlation between earnings and market values.
It is not to suggest that the suggested companies do not have potential, but at their current levels they are risky investments
In particular, CACH, HDNG, PCTI, RCMT, VOXX have horrible earnings, currently destroying capital between 10% and 40% annually
.
The other ones are losing up to 10% asset value currently; unable to comment on QLTI and WSTL, I have no relevant info on them.
I usually stay away from buying into companies until they start earning real profits irrespective of current free cash flows or estimated future growth. To me these companies are at fair values.
Happy Holidays.