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Dialectical Materialist

Dialectical Materialist
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  • Is a Crash Impending? [View article]
    I'm a third in cash, a third in silver, and a third in equities. I have no clue what is going on anymore...
    Aug 31 07:50 PM | 52 Likes Like |Link to Comment
  • Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof? [View article]
    What is unclear to me is how the inability to foreclose translates into "the buyers have the title free and clear". Just because the title chain is broken does not magically mean the buyer owns the home. In fact, using the same logic, they couldn't actually gain title for the home by paying off the mortgage because it is unclear where the title would come from.

    And it is a relief that millions of people who bought more home than they could reasonably afford will ultimately NOT just be given the home, because that would hurt most the responsible members of the community who chose to live within their means and continue (even now) to pay rent or mortgage. I think the notion of a legal technicality giving a lottery sized windfall to those who acted irresponsibly shares a lot more in common with the problems we have seen on Wall Street than with any notion of a Robin Hood style victory for the little guy.

    We need to return to common sense rules of paying what you owe and borrowing only what you can afford. If we don't, we will deserve the misery it causes to our economy.
    Aug 20 03:18 AM | 29 Likes Like |Link to Comment
  • The Proles Are Waking Up Jobs [View article]
    No flaming here (I must not be a priest of the highest order yet). But I do have a couple questions. It is unclear to me how the collection of my consumer information by Apple would be different from what Google is doing or why it would constitute a "tax". When grocery stores use the savers cards it is so they can track your buying habits. This is why I don't participate, but the tax is being paid by me for NOT participating in the form of higher prices on "savers club" (or what have you) specials that I do not qualify for. So I am unsure how Apple's collection of my data, which I don't doubt for a second, translates into higher costs for me. I am not saying the author is wrong, just that I don't see the connection.

    My data is being collected all the time for fun and profit without my knowledge or consent. At least when I am using an Apple product I get to enjoy the experience. Other marketting ploys are just as brazen but the product often doesn't work well. You pay a price for Apple's seemless integration, but you get, well, seemless integration.

    Finally, there are other ways to distribute a podcast. If the author uses iTunes, it must be for the other advantages that outweigh the disadvantages he cites. There is choice in the marketplace. One's argument about how crappy a system is can be diluted when he chooses to use the system instead of seeking an alternative.

    The temple of Apple has followers for a reason. You may not like it, you may not subscribe to it, but they must be doing something right or the marketplace would have killed them off when they were on their deathbed. Surely the argument can't be that 250 million iPods have been sold to people who were fooled into buying them....?

    I have not flamed anyone in this post for an Anti-Apple opinion. I hope anti-Apple folks will extend me the same courtesy.
    Apr 16 06:46 PM | 24 Likes Like |Link to Comment
  • Why Soros Is Probably Buying Gold Now [View article]
    The gold collapse as I recall it did not come out of nowhere. Silver was cornered by the Hunt brothers and gold followed the price of silver up (because if silver was worth $50 and ounce, holy cow gold must be really valuable). When the silver market crashed, it caused a correction in the price of gold to a more reasonable level. This was a bubble to be sure. But the end was associated with the demise of the Hunt brothers and is not a historical mystery. This is the way I remember it anyway.
    Jan 29 08:54 PM | 24 Likes Like |Link to Comment
  • An Apple Mean Reversion: Not As Crazy As It Sounds [View article]
    Skyler,

    I could easily write an article that explained that what I eat is more affordable and more nutritious than what "the masses" eat. I could explain how people are duped into buying overpriced food that "is not nearly as tasty as it's made out to be". I could cite studies that proved, beyond a doubt that my diet was more affordable and more wholesome than the average consumer who just "buys what everyone else buys".

    But if I try to argue that these people must eventually make the same food choices as I do (because they are eminently rational after all) or that anyone who does not see the logic of my superior diet is blinded by some sort of cultish grip the food marketers have manipulated them into accepting, you would easily spot the logical fallacy.

    I can not assume that just because I can make an argument that my way is more affordable and "rationally superior" that the decisions of these other consumers must be fatally flawed.

    You are looking at technology that you do not understand the appeal of (tablets for example) and concluding that there must not be any legitimate reason for owning one. And since you don't understand why anyone would buy a tablet to begin with, you are not qualified to assess whether one tablet is just as good as another.

    You see an 8 year old with a tablet and you conclude "This can't last, because it's absurd, cultish behavior. Eight year olds don't need their own computers, let alone tablets."

    Perhaps what you should be doing is accepting that the world is changing in ways you may not appreciate. The very use of the phrase "let alone tablets" belies the fact that you think a computer would be the first logical choice for an 8 year old (if there were a reason for him to own one) and that a tablet would be the NEXT logical extension. No, what you fail to see is that children today will be growing up with mobile devices that will replace most of the functions that you assume requires a standard computer. Do 8 year olds even need mobile devices? Well, consider for a minute how odd the phrase "standard computer" would have seemed to someone your age just 50 years ago. And when I was in high school there was no shortage of folks claiming that kids my age "do not need calculators".

    I suspect you are not old enough to fully appreciate how rapidly the world is changing. Don't compound this error by assuming that because you have a "better way" to do something that everyone else will eventually come around to your way of thinking.
    Jun 26 04:43 PM | 23 Likes Like |Link to Comment
  • Netflix CEO Reed Hastings Responds to Whitney Tilson: Cover Your Short Position. Now. [View article]
    Stone Fox,

    Spelling out his business model to those who don't understand it is very much the job of the CEO and Reed Hastings has consistently taken the time to explain what Netflix was and where it was going. He publicly explained why Blockbuster would not be able to compete with them. (He said the $1B debt load they were carrying would sink them and he was right.) And when he was asked years ago about the "doomed" future of DVDs through the mail, he opined, "It's not called Netflix for nothing." And he laid out the streaming content strategy that has unfolded even more rapidly than he projected at the time.

    Arguing that the CEO should not explain and promote his company in public is patently ridiculous. That is what the best CEO's do all the time (Steve Jobs and Bill Gates would never shut up about all the great things coming from their companies). Attempts to characterize this response as a distraction or a sign of fear don't convince anyone who bothers to think it through.
    Dec 21 11:42 AM | 23 Likes Like |Link to Comment
  • Grave Warnings to Precious Metal Investors [View article]
    The author could be right. But other possible explanations exist for these "anomalies". For one, the integrity of the scale matters much more with gold, which is about 65 times the price of silver. This reasoning also applies to other details of relative thoroughness. You'd be more inclined to check the chemical composition of a gold bar vs silver, the same way you'd be more worried about making sure a $100 bill wasn't counterfeit than a $1 bill was. The economy/likelihood of counterfeiting gold vs that of silver plays a role.

    Regarding the date format, this could be the result of either the template that was in use for the gold audits or the fact that iShares audit was done with the customer's conventions in mind.

    In any case the suggestion is that a counterfeit audit certificate with a false signature was posted on the web where anyone -- including the auditor who never performed the audit -- could see it? Yeah, I don't buy that. It's not impossible, just not something I will lose any sleep over. There are 100 reasons not to like PM ETF's. This "fake audit certificate" is not one of them.
    Nov 11 01:23 PM | 22 Likes Like |Link to Comment
  • Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof? [View article]
    Fascinating. Yet it seems to me the evidence that there was a lien on the property would be easy to establish, even if the specifics of the lien are not. In other words I think I side with those courts that view this as more of a technical issue for resolution than a fundamental flaw. To pretend that there must never have been a mortgage because there is a problem in the custody chain sounds a little like claiming someone with no birth record was never born. Everyone -- the courts, the homeowners, and the lenders -- knows very well that the buyers did not pay cash. It strains credibility to assume that there is not a legal remedy that can apply common sense. I know the letter of the law is important, but if for example I try to argue that a tax levy does not apply to me because my name is misspelled, I will not only lose my case but I risk being held in contempt as well. Anyone who tries to claim they must not have any liens on their title because of this convoluted and Ill conceived process should be in the same category. It is deceitful and disingenuous and should probably be considered fraud.
    Aug 20 04:21 AM | 21 Likes Like |Link to Comment
  • Silver's Artificial Price Fixing Regime Has Ended [View article]
    Your time periods are wonky. One normally wouldn't describe a price action from 1979-1992 and one from 1980-1992 as two separate trends. Yet your years overlap all over the place. The same thing occurs when you use 2002-2010, 2001-2010, and 2003-2010, etc. It is misleading and does not at all indicate what you think it is indicating. 6 of your 8 "silver to housing at all time lows" are from the 2000-2010 decade. All you are doing is collecting data about silver from a time when housing prices were in a raging bubble. Not at all useful for analyzing silver, in my opinion.
    Jan 2 01:09 PM | 20 Likes Like |Link to Comment
  • Silver: The House Always Wins, Until Now [View article]
    Fourteen US Dollars? Not as long as the dollar remains so weak it won't. In order for silver to drop to $14 you'd need to see a real rally in USD, and I mean a big one. This would require a whole host of other unlikely things to happen. The most reliable way for the USD to rise would be world crisis, since the USD is still seen as a stable place to be in unstable times... but extreme geo-political events would also tend to drive up gold and its little brother silver as well, for the same reasons, so I'm not seeing how we get to silver at $14 an oz.
    Oct 11 02:25 AM | 19 Likes Like |Link to Comment
  • Washington's Dilemma: This Isn't a Recession, It's a Collapse [View article]
    The "experiment of socialism" in the 30's was in many ways capitalism bending its own rules in order to squelch the growing threat of revolution. When huge numbers of people are out of work, homeless, hungry, etc. the social fabric tears. Terrorists breed (as they have fewer compelling reasons to act with moderation) and dissenters grow in power. This is NOT to say that would-be revolutionaries in the 30's had better ideas or would have formed a more perfect country. No, the point I am making is that the powers that be were growing increasingly concerned about expanding anarachy and dis-satisfaction (the history is there in the factory and miner strike-riots).

    Also, this crisis is repeatedly and everywhere described as being brought on by excesses of greed and capitalists gone wild (leveraged risks on steroids, buy-now-worry-later consumers, etc.). This is hardly the fault of socialism or socialist policies. True, the government has been overspending for decades. It may be a fly in our democratic ointment that promising people they will get more programs and not less is the way to stay in office (like bedtimes for children, responsibility may be prudent but is always unpopular.) We have multiple problems -- unchecked greed that put the whole economy at risk and a government that spends like a drunken sailor on shore leave are but two of them. But I disagree that somehow reducing taxes or eliminating entitlements would magically pave the way for an enlightened future. Were this true, the depressions of the 1890's and the 1930's would never have happened. We simply haven't found an economic process that is both stable AND efficient yet. I'm not sure one exists. But I don't simply blame the "socialists".


    On Jul 15 01:35 AM Alphameister wrote:

    > Only the beginning of the end (of the experiment with socialism),
    > which may yet be a long, painful way off, tragically.
    Jul 15 02:32 AM | 19 Likes Like |Link to Comment
  • U.S. Stock Market Complacency On Verge Of Collapse [View article]
    JK,

    I wonder if you'd address your thinking on any of these issues:

    You gave a 950-1020 target on January 23rd.
    http://bit.ly/OD3uDp

    The S&P closed at 1316 that day. Since then it has bounced around, up to 1420, down to 1280, and sits today at 1360.

    You say your analysis has been correct. Does that mean you stand by these targets for the S&P as the matters you detail continue to develop in the second half of this year?

    You also indicated that cash was the place to be (I'm paraphrasing from the Dec 21st interview titled, "James Kostohryz Positions For 2012: 100% Cash The Only Way To Play This Market"):
    http://bit.ly/KYWQCG

    You suggest that some folks feel threatened by your logic. I have no problem with your logic, but I do feel that some of your bravado about the accuracy of your analyses is misplaced.

    Why would anyone want to be long in this market? Because it was headed higher. It was headed higher when you gave a thoroughly convincing argument in October about why we ware doomed, and it was headed higher in January when you said that cash was where it was at.

    You did correctly surmise that April-ish was a market top, but after such a run-up that was a pretty popular call.

    So don't add me to your troll list. When I read your articles I see a great deal of thought and a cohesive analysis. I even read a convincing case for why the little guy should be scared to be invested in this market with such dark clouds looming.

    But as an investor who is always trying to learn, I struggle, as many do, with how to square a convincing case for market decline with the reality that by and large has only advanced since I began reading you last fall.

    So do you still think someone who went to cash in January will finish ahead of someone who merely kept pace with the S&P, and do you still expect to see 950-1020 this year?

    You don't have to convince me the world is going to hell in a hand basket. That fact is precisely why I am trying to get something out of the market in order to pad the nest egg. But where you have seen inevitable decline, I have seen some pretty healthy returns. We can't both be right, can we?
    Jul 6 07:53 PM | 18 Likes Like |Link to Comment
  • The Disturbing Truth About Silver's Rally [View article]
    I mostly agree...

    I have been very enthusiastic about silver, but I have long said I would start getting more cautious at $40 an oz. By $50 an ounce, folks really need to think about downside risk protection even if they feel the core reasons for PM investments (usually the problems with the US dollar and/or JPM's "involvement" in silver) will continue to propel the value upward. As the trade attracts more interest, it becomes more speculative by definition. Some folks have been warning about silver since $22, but I think some of these warnings gain credence if silver moves much higher.

    But let's be clear that $50+ silver is only record territory in nominal terms. In 1980 $50 was a different animal. We are nowhere near the inflation adjusted bubble level of the Hunt Brothers era.

    For long term physical holders of silver, the obvious choice is to keep holding. But I'm not sure I'd want to be adding silver at $40+, at least not without downside hedging.
    Apr 15 02:19 AM | 18 Likes Like |Link to Comment
  • Consensus Earnings Growth Doesn't Justify Share Price for Some Tech Bellwether Stocks [View article]
    So quite simply you are stating that Microsoft is a better buy than Apple and Research In Motion is better than either one. Good luck with that. As with so many analyses, value calculations are very sensitive to assumptions, in this case earnings growth assumptions. You can call it an upside surprise if you like, but the reality is that many folks will not be surprised when Apple continues to beat earnings projections in the coming year.

    Locking in some profits is rarely a bad idea, but anyone who entirely bails now will miss plenty of upside in the coming quarters.
    Oct 6 02:38 AM | 18 Likes Like |Link to Comment
  • U.S. Stock Market Complacency On Verge Of Collapse [View article]
    So just to be clear... I should sell AAPL and go to cash? Let's check back on that call in October. Or if you prefer, in August, September, and October. AAPL has crushed cash since last fall and we've been driving off this cliff for a while, now haven't we?
    Jul 6 04:26 PM | 17 Likes Like |Link to Comment
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