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  • Why Kinross Investors Are Over-Reacting To Russian Exposure [View article]
    Agree there are more upside than downside catalysts to the price.
    Would just add two more: the possible restart of La Coipa after promising exploration results and the possible sale of FDN which is carried at a value of $0.
    Aug 8 11:42 AM | Likes Like |Link to Comment
  • Don't Buy This Dip: The Fed Is Not Your Friend [View article]
    Thanks for the link - interesting. Of course some significant differences between then and now:

    By the second half of that decade much of the developed world was in the midst of a massive baby boom. That, combined with post-war rebuilding efforts would ensure decades of strong growth. Those baby boomers are retiring now and will be drawing down investments not adding to them.

    The US was the only major economy whose capacity to produce was not destroyed by the end of the war and so was in a unique position to benefit from the rebuilding.
    Aug 5 03:38 PM | 6 Likes Like |Link to Comment
  • Why I Upped My Gold Short: My Market Outlook [View article]
    I agree re conspiracy theorists and gold bugs but they were around trumpeting the same line when gold was under $300 and over $1,900 so i'm not sure taking the other side is much help there.

    You say record gold demand failed to provide support for the price in 2013. Why is the gold held in ETFs not considered part of gold demand? How could we have record gold demand when there was massive selling by investors in the west? ETFs are backed by physical gold so what we had was selling of gold mostly in the west and buying mostly in the East. To me that says nothing about what the future holds for gold prices.

    "Inflation has an awful lot of catching up to do just to get to gold. Hardly a case for buying $1300 gold. At half that price, maybe."

    Maybe, it depends what you use as your starting point. Gold got ahead of itself in the 1970s because of rising inflation and the expectation of higher future inflation, a situation we may soon face here and now.
    Jul 31 02:36 PM | Likes Like |Link to Comment
  • Why I Upped My Gold Short: My Market Outlook [View article]
    "...starting in 2004, gold climbed with heady double digit annual gains (far exceeding inflation rates by any measure)..."

    Talk about cherry picking a decade. What about the 24 years prior to that during which the CPI nearly tripled and gold went from $800 to $300/oz? As a hedge against inflation clearly the $800 seen in 1980 was overdone just as the low under $300 was overdone to the downside (partly due to central bank selling). It is likely that part of the rise in the last decade was gold playing catch up from an extreme oversold level.

    Gold rose in the 1970s because inflation was increasing and fell in the 80s because inflation was decreasing. We are now likely at a point where inflation starts to increase again. I don't expect hyper inflation but it seems common sense that more money printing will eventually lead to some inflation.

    "It's notable that gold fell mightily during 2013 from $1700 to $1200, a year in which global physical demand for jewelry, coins, and bars by consumers reached a record high. How can this be when there was no glut of mine supply?"

    Its funny, I've seen this same argument used by gold bulls to suggest gold price manipulation by nefarious parties. To me the more obvious explanation is that the physical demand was not independent of the fall in price but in fact an answer to it. And clearly the sell off from gold ETFs was driving the fall in price. But it doesn't follow that this is the dominant force in determining gold price, only that in 2013 it was the dominant force.

    The best argument I've heard for what influences gold price is the level of real interest rates. While there is a lot of talk now of the Fed raising rates soon, I think this will only happen with rising inflation. There is no downside to the Fed continuing loose policy unless inflation rises. I believe they will remain behind the inflation curve and as such real rates will remain low providing support for gold prices.
    Jul 31 11:19 AM | Likes Like |Link to Comment
  • Why I Bought After It Dropped 10% [View article]
    Other companies can and are providing competitive prices and deep discounts in cloud computing - it's called a price war - but I don't think Microsoft or Google refer to the resulting losses as investments in the future (please correct me if I'm wrong on this). Again it may be the right strategy for the moment in order to retain customers, but I don't it qualifies as investing in the future except by a very loose definition of investing. The strange thing is that Amazon investors and the analyst community have in the past gotten almost excited as Amazon margins plummeted because it was always interpreted as evidence of heavier investing because management saw that much more opportunity. You might be able to argue that when investing includes additional fulfillment centres or spending on R&D, but not when it includes the cost of lower prices on products and services.

    As far as "flipping the switch" and increasing prices later, that may be the hope but it's not something I would count on. AWS customers are mostly sophisticated businesses and presumably would take into account that possibility along with the difficulty in switching when they make their decision to adopt AWS.
    Jul 27 01:11 PM | 2 Likes Like |Link to Comment
  • Why I Bought After It Dropped 10% [View article]
    "...this ramping up of spending may also provide an acceleration of future growth akin to how startup companies go through a phase of negative cash flow before breaking even."

    It may. However start up companies also carry a significant risk discount in their price (or should) and typically do not account for significant allocations in most equity institutional funds the way Amazon does. For every wildly successful start up there are a hundred that go bust. While I'm not suggesting Amazon as a whole is about to go bust, any one of its many businesses could and that would most certainly result in a massive decrease in its market cap as the Bezos infallibility myth falls off.

    You also reference the conference call and planned spending, including providing discounts to AWS customers. This seems to be a recurring theme in Amazon conference calls that I find quite astounding. The idea that discounts to customers or lower prices in general should be considered investing in the future, on par with say investing in a new plant or R&D, is quite a stretch. I'm not questioning their low price strategy, but I don't get how this has future benefits that will ultimately result in higher margins. And it is clear that the current stock price has built in to it both much higher future revenues and margins.
    Jul 27 11:53 AM | 7 Likes Like |Link to Comment
  • The 'Come To Jesus' Earnings Report [View article]
    I'd be curious to know what qualifies as "growth spending that gets directly expensed to the income statement". I suspect it is a very loose and subjective concept.
    Jul 26 10:05 AM | Likes Like |Link to Comment
  • The 'Come To Jesus' Earnings Report [View article]
    So far I haven't heard from any analyst all excited about gross margins surpassing 30%! Remember when that was all the rage as GMs moved up from 24 to 28%? That was supposed to be proof of the earnings power Amazon commanded.

    I'm also interested to hear from analyst (I forget his name now) who touted how Amazon regularly beat operating profit expectations. While this is true (even this Q), its not much of an accomplishment when you regularly guide lower on that measure.

    One last thing I haven't heard much comment on. This Qs disappointing results were aided by a favorable exchange rate, without which both revenue and net earnings would have been significantly lower still.
    Jul 25 10:02 AM | 6 Likes Like |Link to Comment
  • Daily State Of The Markets: Which Matters More: Yellen Or Earnings/Econ Data? [View article]
    "Which Matters More: Yellen Or Earnings/Econ Data?"

    Interesting question. The answer should be earnings/econ data. The problem is we watched as the stock market rose for 4 years through mostly dismal economic data from 2010 - 2013 because of the Feds unprecedented intervention. So to expect the markets to continue to rise on the back of stronger economic data now as the Fed starts to lean against the wind seems a perfect example of having your cake and eating it too.
    Jul 16 09:52 AM | 1 Like Like |Link to Comment
  • John Hussman: The Delusion Of Perpetual Motion [View article]
    Your comment captures perfectly why so many people buy high and sell low.
    Jul 2 10:35 AM | Likes Like |Link to Comment
  • Daily State Of The Markets: 2014: Macro Crowd Getting It Wrong, Again [View article]
    'If you followed the crowd's "consensus" view on what was supposed to happen this year, the answer is probably a resounding "No!"'

    I think there is an issue here with your characterization of the crowd's consensus view. While some people were predicting a correction earlier this year, clearly the "crowd" was not. We saw (and continue to see) record bullishness on the part of investment news letter writers and most of the major banks projected higher markets in 2014.
    Jun 19 09:39 AM | Likes Like |Link to Comment
  • This Is's D-Day And The Alibaba Troops Are Disembarking [View article]
    You might want to check GS track record for its conviction buy list (hint: it leaves a lot to be desired).
    Jun 11 12:43 PM | 5 Likes Like |Link to Comment
  • John Hussman: We Learn From History That We Do Not Learn From History [View article]
    All true, but when was the last time markets peaked with a recession clearly on the horizon? By that time markets will have been in decline for some time or worse, have crashed spectacularly. For most of this bull market economic data has been on the border of recession and yet stocks continued to climb. Even though the data is finally somewhat positive now, it seems as though markets already fully reflect the improvements. Bottom line, nothing is normal or usual about the last 5-10 years so I wouldn't expect the market to follow historical examples now.
    Jun 9 11:13 AM | 1 Like Like |Link to Comment
  • John Hussman: Cahm Viss Me Eef You Vahn To Live [View article]
    Ordinarily I'd say you were right. Bear markets come with recessions. But, and I can't believe I'm saying this, this time is different.

    Just like bear markets come with recessions, so bull markets come with economic expansion. We've had a bull market for 5 years now and a roaring bull market for all of 2013. During most of this time economic expansion has been non-existent and recently modest at best. A bull market that far exceeds actual economic expansion can easily be followed by a bear market without economic contraction.
    May 7 11:56 AM | 1 Like Like |Link to Comment
  • John Hussman: Cahm Viss Me Eef You Vahn To Live [View article]
    Not necessarily. If you determine that markets are overvalued and decide to sit on the sidelines in cash, as long as at some point markets are lower, you will have an opportunity to get back in at lower price. If in 1998 you decided to sell you might have missed 2 years of further gains but you could still buy back in at lower prices 4 years later.
    May 7 11:46 AM | Likes Like |Link to Comment