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  • Structural Change In The Mobile Processor Marketplace: Intel Wins; ARM, AMD Lose  [View article]
    I'd agree that they certainly can be price competitive if the chose to, but if Intel wanted to do that, its margins would have to be much lower than they are in the PC business, so higher market share could actually still lead to lower profits. ARM chips for tablets and phones are vastly cheaper than Intel chips for PC's.
    May 20, 2013. 01:42 PM | 1 Like Like |Link to Comment
  • The Case For Long-Short VIX Portfolios  [View article]
    Indeed, backwardation is only really helpful if it stays backwardated for weeks or months, like in 2008 or in 2011. And then you'd still need to get your timing right to get out before the inevitable collapse back. Highly risky trade and hard to pull off.

    In the last year or so, the VIX futures were backwardated for a whopping two or three days, and these would have been excellent short entry points. Just think back to Jan 2 2013 - what an epic UVXY / VXX collapse!
    May 18, 2013. 02:56 PM | Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce  [View article]
    "From a theoretical perspective, would it make sense to include stock prices in the CPI? Perhaps....."

    That wouldn't be a Consumer Price Index anymore, but rather an Investors Price Index ... which already exists in the form of the SP500, DIA, etc.

    There are different forms and definitions of inflation: there is price inflation (what the CPI measures) and then there is inflation of the money supply. While the two get often confused, they are not the same at all. In our monetary system actual money is almost entirely created by private bank credit (and not the central bank). If banks just deposit most of the money the get from the Fed back in its reserve accounts at the Fed (which is what is happening), no new money ever enters the economy and therefore it also can't create price inflation.

    The velocity of money is much lower than before the crisis, and the Fed is just trying to counteract that and keep the actual supply of money from shrinking through the general deleveraging.
    May 18, 2013. 01:52 PM | Likes Like |Link to Comment
  • Gold Is Worth $370 An Ounce  [View article]
    That the projected price of gold is below the cost of production is a less convincing argument than it first sounds: gold is not a consumable like oil, so the fixed industrial demand is really low. If the price of gold falls below production cost because the demand has collapsed, that basically means mines will close and many gold producers will go bankrupt. That analysis would lead to a thesis of shorting gold mining stocks. Considering the price action of the gold miners, I would be led to conclude that some smart people entered into that trade already some time ago :-)

    The price of a commodity falling below its marginal cost of production happens all the time in the resources & commodities business. Its also what happened to the solar industry recently.

    An even more appropriate comparison might be uranium: While it was a hot commodity during the cold war, its price of production fell below the costs of most mines for many years, as reactors for twenty years burnt up mostly reprocessed uranium & plutonium from the huge nuclear bomb stockpile.
    May 18, 2013. 01:33 PM | Likes Like |Link to Comment
  • Was InterOil's Chairman Engaged In A Conflict Of Interest With Calvin College And The Fuller Fund?  [View article]
    This company has the most vicious defenders I've ever seen. Its unbelievable. Its shareholders resemble a religious cult in their fervor and defensiveness. That in itself is a red flag. Kudos to you, Adam, for digging out these things and putting up with the abuse in the comments! I have no position in this stock but its a fascinating story: the live anatomy of a stock scam.
    Mar 27, 2013. 12:11 PM | Likes Like |Link to Comment
  • The Institutional Investor Adds GT Advanced Technologies  [View article]
    I am not sure that is what happened, but short selling does create more shares the same way bank lending creates money. 30% of shares sold short means there are 130% shares owned (i.e. the lender of the stock stiil owns the share and the one who bought from the short seller also owns the share...)
    Mar 5, 2013. 09:00 PM | Likes Like |Link to Comment
  • Sorry Bears, We're In A Secular Bull Market  [View article]
    Wow, all the commenters here try really hard to prove your point about the overly bearish sentiment... Fun to watch.
    Feb 23, 2013. 12:35 PM | Likes Like |Link to Comment
  • Sorry Bears, We're In A Secular Bull Market  [View article]
    Come on, horse meat food in products was a case of fraud, not inflation... Thats currently being reversed. I can tell you that here in Europe there is no inflation outside of gas prices and maybe real estate in some cities in Germany.
    Feb 23, 2013. 12:30 PM | 1 Like Like |Link to Comment
  • The Fed Political Conspiracy Theory  [View instapost]
    How is that a conspiracy theory? Thats Mitt Romney shooting himself in the foot, again.
    Sep 19, 2012. 12:49 PM | Likes Like |Link to Comment
  • Is First Solar On The Rebound?  [View article]
    "Traders don't kick back with back issues of The Economist to better understand the Euro-Russian natural gas trading economy when CNN has BREAKING NEWS: IRAN ATTACKS QATARI GAS TERMINALS blasting across their screens."

    To make it a little bit easier to understand for you: Europe does not buy gas from "traders".
    Aug 7, 2012. 08:38 AM | Likes Like |Link to Comment
  • Is First Solar On The Rebound?  [View article]
    What part of "long term contract" do you not understand?
    Germany f.i. still pays gas prices much higher than current market rates, because contracts and prices are set for years ahead.
    I agree that LNG prices could co through the roof, its just that the Europe does not get gas from the LNG market, nor do we pay spot prices. (Japan, on the other hand would be in big trouble, as they get all their gas as LNG, and they now use a lot of it.)

    The real trouble would be exploding oil prices, and that would be a problem to the economy as whole, not just solar stocks.
    Aug 7, 2012. 08:35 AM | Likes Like |Link to Comment
  • Is First Solar On The Rebound?  [View article]
    You obviously understand very little about the gas trade between Russia and Europe. While Russia might be an ally to Iran, its economy and state budget depends entirely on selling gas to Europe, and therefore it won't break its contracts with Europe. It has never done so, even in the Cold War with nuclear armies staring at each other, and its not likely to do so now.
    Spot prices for LNG might go anywhere but Europe does not buy LNG.
    Aug 6, 2012. 05:29 PM | Likes Like |Link to Comment
  • Is First Solar On The Rebound?  [View article]
    Europe does indeed get most of its gas from Russia, whats more, there aren't even many LNG terminals in Europe, plus gas prices are set by long term contracts for russian gas that gets delivered by pipeline.
    Gas prices will be the last thing to worry about in Europe in case of a war with Iran.
    Aug 6, 2012. 01:05 PM | 1 Like Like |Link to Comment
  • Should Emerging Markets Investors Care About Corruption?  [View article]
    Interesting thoughts, but I see a serious selection bias in your choice of countries. For every corrupt country that has boomed, you can probably find three that have become poorer. Just look to Africa, South America in the 20th century or the all of the post-soviet-countries. I would say countries boom when they #start# to become less corrupt and more transparent. It might look like a messed up place from the outside, but from inside the country, people would probably perceive things as becoming better. Classsic comparison would be South and North Korea. In the 1950s South Korea was actually poorer than the north! Then when it started to transform to an open economy, it exploded, whereas the north just stayed poor. When thinking of very corrupt places, these are not places like Japan (with all the problems it has), you got to think of examples like Russia, Belorussia, Ukraina, Niger and Zimbabwe (indeed, nearly all of Africa).
    It is true that most countries on earth are more corrupt than the US, but that is mostly because a very large number of countries are completely corrupt kleptocracies.
    In Russia, the police will steal money from you in broad daylight, or not let you go until you pay them a bribe. If you pay enough to the right people, on the other hand, you can buy emergency lights & sirens and not be required to obey traffic laws or stop at red lights anymore. If you kill somebody in the process, you will not go to jail. This is all normal in Moscow. So its a long way down.

    On the other hand, the financial and political system in the US seems to indeed have become frighteningly corrupt in the last two or three decades, and you can see the results: enormous profits for the financial system (and for the politicians too!) and enormous losses for everybody else, combined with a gradual loss of general competitiveness.
    Aug 3, 2012. 06:24 AM | 1 Like Like |Link to Comment
  • Should Emerging Markets Investors Care About Corruption?  [View article]
    Just to add to this: Making a profit and being competitive are not necessarily linked if you can manage to rig the market in your favor.
    Aug 3, 2012. 05:54 AM | Likes Like |Link to Comment