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AuCoaster

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  • The Future Of Seeking Alpha [View article]
    McDonalds has far more customers than Le Bernardin in NYC.
    So, is McDonalds food quality better?
    Mar 30, 2015. 11:25 AM | Likes Like |Link to Comment
  • Investors Flee Market At Crisis Level Pace [View article]
    The Headline should be:

    "Investors Crowd into Bond Market, Further Fueling Bond Bubble"

    If I had any money in bonds (which I do not) I would be very worried.
    Mar 30, 2015. 10:53 AM | Likes Like |Link to Comment
  • The 'End Game' - My Take On Indicators Leading To The End Of The U.S. Bull Market [View article]
    This idea of a 6-8 year standard cycle length is totally false.
    Cycles progress at very different rates, and have very different durations.
    The last 10 expansions have ranged from 12 to 120 months.

    Only two of the last ten expansions ended in 6 to 8 years. Only 20% !
    Only 3 of the last 30 expansions have been 6-8 years long. Only 10% !!
    The 6-8 year claim is dramatically False.

    It is true that broad based increases for housing, wages, commodities, etc normally occur somewhat late in the business expansion.
    We have not yet seen those pressures in this expansion.
    This expansion has further to go before those items get frothy.
    Mar 29, 2015. 09:08 PM | 1 Like Like |Link to Comment
  • Sifting The World [View instapost]
    Ah, those beautiful New England winters.
    I do miss the beauty of it, but not the cold.
    But, I can't complain. I am looking out on a beautiful lake. Come on down, and we will take you out on our new "yacht" (a pontoon party boat).
    Mar 29, 2015. 03:00 PM | Likes Like |Link to Comment
  • How To Survive When The Bull Market Tops Out [View article]
    The author's numbers are not quite right.

    This market has gained about 200% since March 2009, not counting dividends. An investment of $10,000 in March of 2009 would be worth $30,000 plus accumulated dividends.

    The calculation of Gain/Month is very misleading number.
    Simply dividing the gain by the number of months is too crude not good for comparing periods with different durations. The duration has a huge distorting effect. For example the 1987 to 2000 market you show a Gain/Month of 3.90%. But, the true rate of gain is actually 1.2% per month.

    Also, when looking at the gains of any bull market, it is important to look at the decline that preceded it. A significant amount of the gains are just the recovery of the panic sell-off that preceded the bull.

    So, the current market is up 200%. But more than half of that is just the recovery from the previous decline. We are only 35% above where we were at the previous peak. That is a compound rate of only 4% per year.

    Over the last 20 years the S&P 500 has gained an average of about 6% per year, plus dividends.

    A correction could happen at any time.

    But, the market top is probably far away.
    Mar 29, 2015. 02:32 PM | Likes Like |Link to Comment
  • Watching The Economy Slow [View article]
    The latest week looks ugly, but YTD looks fine.

    Excluding Coal and Intermodal, the YTD rail traffic looks normal, with a reasonable increase. The coal decline makes sense in light of increased use of natural gas. The intermodal decline makes sense given the port strike.
    Mar 29, 2015. 01:44 PM | 1 Like Like |Link to Comment
  • Sifting The World [View instapost]
    I would feel honored to dine with you.
    However, it might be a while before I am around there, as my wife and I moved to warmer weather a few years ago.
    Mar 28, 2015. 10:34 PM | 1 Like Like |Link to Comment
  • U.S. Equities: The Top May Now Be In [View article]
    DavidLMO,

    I am always fascinated by the complexity and intensity of the short-term trading game. In and out, short, long, on this and that. The diversity and detail required for success is impressive. I am so far removed from that, with my focus on analyzing and playing the longer macro cycles, adjusting to the macro cycle progression, but just riding out those interim movements and opportunities that seem to be your focus.
    Mar 28, 2015. 10:00 PM | Likes Like |Link to Comment
  • Sifting The World [View instapost]
    Chris,

    I am interested, and will explore the subscription when the link goes live.

    I have been a Qualified Investor for over 20 years.
    While I have invested in private deals, I am not likely to give control of $1million to somebody else. I was pitched heavily to jump into some of Paulson's funds a while back. I was not convinced that he/they had the bets figured out. And it looked like he would win no matter how it turned out for me, so I declined.

    I see you are on Forest Street. My daughter worked at Gates Rest. while home from college one summer.
    Mar 28, 2015. 08:26 PM | 1 Like Like |Link to Comment
  • Here's Why A Total Market Approach Is Better Vs. The S&P 500 [View article]
    I believe that SPY covers about 75% of the total market capitalization.
    So, 75% of the total market is also in the SPY. And the largest cap companies dominate SPY. So, total market funds are mostly large cap. That is why there is so little performance difference between SPY and the total market.
    Mar 28, 2015. 03:57 PM | 2 Likes Like |Link to Comment
  • The Future Of Seeking Alpha [View article]
    Indeed, it is strange and contrary to normal protocol for this to come out in such an article, rather than directly from the SA. But, SA did allow the article to be published. So, they must have been onboard with the method of announcement.

    I sincerely doubt that the pennies from reader views was a motivation for Chris writing this article.
    Mar 28, 2015. 03:29 PM | 1 Like Like |Link to Comment
  • The Future Of Seeking Alpha [View article]
    The paradox need not exist. That is a straw man.
    You can write about what you are about to invest in, or are simultaneously investing in. But, that is not the issue.

    There is the potential for abuse through pump and dump using SA as the platform for pumping a stock.

    The tactic of buying a stock and then touting it to the public to run its price up is an old ploy. SA is a big forum, and probably a fruitful place to do this if one has a large following. Even better if people will pay for the first peek at what will be publicly touted a day later. The subscribers will initiate the run up, and then also benefit from the main run up when the SA readers jump on.

    Of course, such a run up would be short lived and likely reverse itself if the stock was not really deserving of the recommendation. But, if the proposition to the subscribers is quick profits on very short term positions, then the structure of SA is ideal for this. Pump and dump to the SA readers for a quick buck for the author and subscribers.

    Of course, eventually the SA readers should lose faith in those recommendations.

    If the stock pick is an honest longer hold recommendation, then nobody is harmed by publishing the recommendation. And there is no harm in charging money for an early look at those recommendations.
    Mar 28, 2015. 03:05 PM | 5 Likes Like |Link to Comment
  • Here's Why A Total Market Approach Is Better Vs. The S&P 500 [View article]
    In the long run it is hard to beat real estate and small caps.
    Mar 28, 2015. 02:08 PM | Likes Like |Link to Comment
  • Corporate Profits Are Still Very Impressive [View article]
    I think this analysis is spot on.

    It seems that the PE is slightly low for this point in the cycle.
    And the Equity Risk Premium is too high, suggesting PE should expand.
    However, low interest rates are a major factor in the ERP being high, and also a boost to corporate profits. When these numbers are adjusted to see what we would have with 4% Treasury rates, the profits shrink a bit, the ERP shrinks, and the PE is higher. Still not excessive. So, the market seems to be priced for a 4% Treasury rate environment.

    Will Treasury rates rise to 4%, or will stock prices rise to a higher PE?
    Mar 28, 2015. 01:55 PM | Likes Like |Link to Comment
  • U.S. Equities: The Top May Now Be In [View article]
    Owen,

    You list four reasons for not selling out now.
    1) Yes, of course there will be another severe bear market.
    So, it is foolish to stay in based on the belief that no bear will come.
    2) Surrender value - Buy and Hold investors do ride the market down.
    This is not in my playbook. But, so many investors do follow it (at great cost), largely because... 3) they are not confident that they will exercise good timing. They are probably right about that. But, long-term Buy and Hold is generally better than Not investing at all. And finally, 4) Tax motivation is a trap. Trade when it makes sense, and pay the taxes. Taxes are cheaper than losses. I paid massive taxes in 2007.
    But, riding the market down would have cost far more.

    But, your list omits the very best reason for Not selling out now.
    The reason that I am not selling out yet, is that I expect the top to be further up the chart in time and price level.

    None of the classic end-of-cycle economic conditions are present, yet.
    The economy is nowhere near the bubbly end of cycle excesses and cost pressures that squeeze profits, and end the party.
    And valuations give no solid clue, except by comparison to the bond market. And in that comparison, stocks are not expensive.

    btw, If you bought at 1000, you have a 100% gain, not 200%.
    I did buy in late 2008 and early 2009 at an average cost in the 800s, and used sector rotation and leverage all the way, so I have tripled my money since 2008 (and since 2007 as well, since I sold everything in late 2007).

    My key basis for market exit and reentry is the ending of the trend.
    I watch for end of expansion conditions to shift to a sell bias, and then sell on the decline. In mid 2006 I became sell biased on the belief that the expansion was about spent. But, I waited until late 2007 to actually dump all of my stock. For the repurchase signal, I look for the signs that the recession has made its deepest cuts, and for fear and panic to have crested. Nobody rings a bell at the top. But, the media bombards us with doom and gloom as the bottom approaches. And the crowd sells in despair and panic. They just want out, to end the pain.
    Somebody has to be there to buy from them.
    Mar 28, 2015. 12:33 AM | Likes Like |Link to Comment
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