Bulls vs. Bears: Where Gold Goes Next [View article]
It was not due to management fees. The reason is straightforward. In May 2010, investors buying PHYS were paying more than $1.20 for every $1.00 of gold owned by the fund. Sanity has returned somewhat and investors in PHYS are now paying only $1.04 for every $1.00 of gold. This drop is the cause of the poor performance.
Unfortunately, Serennity, you have made two basic errors. Your first error was investing in something that you don't understand. Your second error was selling PHYS simply because of the poor performance, and again without understanding the cause of that performance.
Netflix (NFLX -1.4%) should trade at 20x earnings, not 67x earnings, T2's Whitney Tilson says in explaining his short position in the stock. It's a good business, he says, but will need to "really pay up for streaming content." Open Table (OPEN -1.8%) is another favorite short, whose "fair value is well south of 50-60% decline from here." [View news story]
Consider this quote from Barry McCarthy (Netflix CFO).
"I want to remind everyone on the call that earnings is a managed outcome. [For example,] ... during the [Q409] quarter, because the business was much more profitable than we forecasted ..., we allocated during the quarter additional spending to marketing ... But we delivered earnings we’d forecast we were going to deliver."
When evaluating Netflix, earnings is not really a very good metric.
The author makes several claims, but is unable (or unwilling) to support any of them.
"They are afraid that the Fed and the Treasury are not on the right path ... that the U.S. dollar will lose even more of its value if the Fed actually embarks on another round of quantitative easing "
This is accurate, yet the author provides no counter-argument other than that the Fed will reverse course eventually. In my opinion, "eventually" is at least 2 years away.
"Nonetheless, we believe that gold prices have surged too high. The stock market is up almost 70% from its March 2009 low, yet gold has rallied about 40% during the same period."
He claims that gold is a bubble because of its 40% rise, but does not make the same claim for the stock market's 70% rise.
Right on, DrBenway! All you have to do is look at the 2000 Q1 statement (www.thestreet.com/tsc/...) to see how on target you are. Mr. Wilson's position on the TheStreet.com buyback (and the buyback, itself) is absurd, or at best, naive. Sure they had $100 million in cash, but they were losing $13 million a quarter (twice the rate of the year before). The absurdity is the buying back the shares that were sold in their IPO just a year earlier. What was the purpose of the IPO?
Actually, their stock IPO buyback sounds more like a scam. They sold 5.5 million shares for $105 million in the IPO, and then 18 months later they were buying back most of those shares for only $10 million (pocketing the difference, of course).
I would like to point to the 1979 Ixtoc I oil spill in the Gulf of Mexico as evidence of the accuracy of this statement. This oil spill was bigger (so far) than the BP oil spill, and the fact that nobody remembers it or even talks about it shows how life does move on. Beaches in Texas were covered in oil in 1979 -- the same beaches that are now covered in hormone-crazed college students during Spring Break. Oh, things are bad now, but in a couple years it will be old news.
Why Exploding Trade Deficit Fears Are Hogwash [View article]
It is astonishing to find that more than 200 years after Adam Smith and David Hume put a stake in its heart, mercantilism continues to thrive. Trade surpluses and deficits are neither good nor bad.
A Busted 'Bailout and Stimulate' Formula [View article]
Can the Fed write off its U.S. debt and still wind down its stimulus? Can it write off the debt without triggering inflation? It seems to me that once the economy gets going again, the Fed will need to sell that debt to soak up the excess money supply.
How I Minimize My Taxes on Stock Investing [View article]
In summary, you minimize your taxes by donating your taxable gains to charity.
A more effective way to rebalance while minimizing taxable gains would be to eliminate selling and just buy underweighted positions. It is not as reactive (or nimble, one might say), but it achieves the goal without having to give your money away.
Threat of Hyperinflation: Real or Not? [View article]
I don't think any of your points argue effectively for hyperinflation.
Government borrowing and spending themselves do not cause inflation. The inflation comes when currency is printed to support the borrowing and spending.
Excessively low interest rates also do not directly cause inflation. Inflation comes as a result of excessive lending, which would normally be the result of interest rates at 0%, but has not been occuring due of other factors in the economy.
Finally, while the price of gas is up, the price of oil is down. That's hardly convincing. In fact, overall commodity prices are currently at about the same levels as they were before the 2008 spike, rising steading over the last 9 years at about 4.5% per year. Commodity prices have increased about 50% over the last year, but it is not clear if that is due to inflation or if it is simply a recovery from the 2008 crash.
How to Tell if It's Time to Sell? (Part 1) [View article]
I sell for two reasons only: when I want to spend the cash, or when a better investment comes along. Really, there are no other rational reasons (keeping in mind that holding cash is sometimes a better investment).
The Gold Standard Is No Silver Bullet [View article]
Similarly, there is also not one example of a successful gold-based currency.
Bulls vs. Bears: Where Gold Goes Next [View article]
Unfortunately, Serennity, you have made two basic errors. Your first error was investing in something that you don't understand. Your second error was selling PHYS simply because of the poor performance, and again without understanding the cause of that performance.
Netflix (NFLX -1.4%) should trade at 20x earnings, not 67x earnings, T2's Whitney Tilson says in explaining his short position in the stock. It's a good business, he says, but will need to "really pay up for streaming content." Open Table (OPEN -1.8%) is another favorite short, whose "fair value is well south of 50-60% decline from here." [View news story]
"I want to remind everyone on the call that earnings is a managed outcome. [For example,] ... during the [Q409] quarter, because the business was much more profitable than we forecasted ..., we allocated during the quarter additional spending to marketing ... But we delivered earnings we’d forecast we were going to deliver."
When evaluating Netflix, earnings is not really a very good metric.
Mortgage-Title Fraud: A National Catastrophe [View article]
Shorting the Gold Bubble [View article]
The Fed has pumped a trillion dollars into the economy via the finance industry, and the money has gone directly into bonds, stocks, and gold.
This also explains why consumer inflation is relatively low despite the increased money supply.
Shorting the Gold Bubble [View article]
"They are afraid that the Fed and the Treasury are not on the right path ... that the U.S. dollar will lose even more of its value if the Fed actually embarks on another round of quantitative easing "
This is accurate, yet the author provides no counter-argument other than that the Fed will reverse course eventually. In my opinion, "eventually" is at least 2 years away.
"Nonetheless, we believe that gold prices have surged too high. The stock market is up almost 70% from its March 2009 low, yet gold has rallied about 40% during the same period."
He claims that gold is a bubble because of its 40% rise, but does not make the same claim for the stock market's 70% rise.
Why I Don't Like Stock Buybacks [View article]
Actually, their stock IPO buyback sounds more like a scam. They sold 5.5 million shares for $105 million in the IPO, and then 18 months later they were buying back most of those shares for only $10 million (pocketing the difference, of course).
Why I Don't Like Stock Buybacks [View article]
BP in Deep Trouble [View article]
I would like to point to the 1979 Ixtoc I oil spill in the Gulf of Mexico as evidence of the accuracy of this statement. This oil spill was bigger (so far) than the BP oil spill, and the fact that nobody remembers it or even talks about it shows how life does move on. Beaches in Texas were covered in oil in 1979 -- the same beaches that are now covered in hormone-crazed college students during Spring Break. Oh, things are bad now, but in a couple years it will be old news.
Why Exploding Trade Deficit Fears Are Hogwash [View article]
A Busted 'Bailout and Stimulate' Formula [View article]
Four Stocks Going Ex-Dividend Last Week of April [View article]
How I Minimize My Taxes on Stock Investing [View article]
A more effective way to rebalance while minimizing taxable gains would be to eliminate selling and just buy underweighted positions. It is not as reactive (or nimble, one might say), but it achieves the goal without having to give your money away.
Threat of Hyperinflation: Real or Not? [View article]
Government borrowing and spending themselves do not cause inflation. The inflation comes when currency is printed to support the borrowing and spending.
Excessively low interest rates also do not directly cause inflation. Inflation comes as a result of excessive lending, which would normally be the result of interest rates at 0%, but has not been occuring due of other factors in the economy.
Finally, while the price of gas is up, the price of oil is down. That's hardly convincing. In fact, overall commodity prices are currently at about the same levels as they were before the 2008 spike, rising steading over the last 9 years at about 4.5% per year. Commodity prices have increased about 50% over the last year, but it is not clear if that is due to inflation or if it is simply a recovery from the 2008 crash.
How to Tell if It's Time to Sell? (Part 1) [View article]