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  • The Day I Sold Everything  [View article]
    The shorter term your horizon, the less knowable the market...
    Aug 4, 2014. 04:21 PM | Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    It must be a lot of luck. Otherwise you should become a fund manager ;-) You will be the greatest ever if you can keep this up :-)

    But anyways, well done!
    Aug 4, 2014. 04:13 AM | Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    The good news is that in July the US manufacturing expanded at the fastest pace in three years. Enjoy your bearishness ;-)

    Aug 2, 2014. 06:26 PM | 2 Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    Well, her son will learn from his mistakes :-). Like all of use, I suppose :-)
    Aug 2, 2014. 04:45 PM | Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    "My mom went through the 2008-2009 sell off and did just fine holding everything she had."

    She is a real investor, not a speculator chasing a quick buck and trying to time the market.
    Aug 2, 2014. 03:36 PM | 3 Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    You're wrong on that... Forget about QE. Nothing happened when tapering started. The talk of the day is rate hikes.

    Aug 2, 2014. 03:30 PM | 2 Likes Like |Link to Comment
  • The Good News From A Bad Friday  [View article]
    Not sure 5% is a correction if it last just for 5-6 weeks only for the market to go higher... I'd say correction is when valuations go down and the long term trend changes visibly for at least 6 month. All the rest is more of a noise.

    Also, I can't understand why would anyone sitting on the last two-three years' of gains would be bothered about a correction...
    Aug 2, 2014. 03:26 PM | 3 Likes Like |Link to Comment
  • Is A Bear Lurking?  [View article]
    No, no, no! :-)

    QE lowers interest rates and that raises slightly the relative attractiveness of stocks and pushes them slightly up. This effect cannot account for the rise of the S&P 500 in the last 5 years. It was basically driven by outstanding fundamentals and profitability of US companies.

    Now it is true that QE helped companies and banks clean their balance sheet and borrow cheaply and lock in the low interest rates on the bond market. But this effect is there to stay even after QE/low rates is withdrawn.

    It is totally misguided to think that QE (printed money) lifted the market 200% and now it will crash back down to where it was.

    Aug 2, 2014. 01:18 PM | Likes Like |Link to Comment
  • Is A Bear Lurking?  [View article]
    When buying bonds, the Fed is paying with newly expanded deposits at the Fed. In other words the Fed creates bank reserves. This is not in circulation, it is not part of M1. These reserves, in fact trillions of dollars of excess reserves, give the possibility to the commercial banks to create M1 money. But they do so only if there are good leaning opportunities.

    Have a look here for more detailed explanation:

    Aug 2, 2014. 01:12 PM | Likes Like |Link to Comment
  • A Frothy Market Has Nothing To Do With Investing In Individual Stocks  [View article]
    >Only 40 trading days before the QE music stops.

    QE stops, interest rates will go up at one point and stock will become relatively less attractive because of that. So a small correction may happen.

    So what?

    Fundamentally the US economy and the US companies are well position for growth. Now profit margins at a historic high and could go down. But with improving job market and consumer and business sentiment that will be offset. So do not worry about the music... There is no danger for long term investors.

    If you are done of those that freak out about QE read this: http://bit.ly/1kbWKPi
    Aug 1, 2014. 08:44 PM | 5 Likes Like |Link to Comment
  • Is A Bear Lurking?  [View article]
    Also bull on the US here. But...

    1) market may correct (it's a bit extended now)
    2) market can collapse under the weight of self-genrated pessimism

    Fed is pumping optimism (not printing money as some misguided folks think) and relaxing the survival constraint on firms. But enough misunderstanding of monetary policy can turn things badly into a self-fulfilling prophecy. Although this is highly unlikely given the very strong positive fundamentals.
    Jul 31, 2014. 04:47 PM | 1 Like Like |Link to Comment
  • Chicago Bridge & Iron: Why You Should Grasp This Rare Opportunity  [View article]
    Nothing freaks out Mr Market more than uncertainty. Uncertainty is much worse than plain bad but certain news.
    Jul 30, 2014. 02:05 PM | Likes Like |Link to Comment
  • Bulgaria's Strange Bank Run  [View article]
    You do not understand money.

    Yes, in the past people used some commodities that served as money (i.e. means of exchange and store of value). But that can only work in a very primitive economy. If the only means of exchange is a certain commodity that will make some desirable transactions and exchanges impossible because there will not be enough of that money to serve the purpose of exchange.

    The reason why the gold standard worked for so long is precisely because of the fractional reserve system. This allowed banks to create and manage a huge body of credit money that was necessary for the commercial transactions.

    You can imagine money this way. In an economy in which there is only me and you, we can use pure credit money in the form of a blackboard where we write who owes whom what. We could devise a certain abstract measure of value and use that to show our balances.

    Although commercial banks create money out of nothing, it is fully backed by the promises of debtors to whom this money is issued. Bankers' job is to assess which promisers are reliable. Bankers trade with and discount promises.

    So imagine I am a producer of apples and you know me and you trust me. I can issue to you a promise written on a note to deliver to you in a year from now 100 tonnes of apples in exchange for goods (or even for another promise, that you build a house for me). So once you have that piece of paper you might further trade it with other people who also trust me. But if they don't trust me (because they don't know that I am a trustworthy apple producer that has delivered for the last 30 years)? Then you go to a third party, a dealer of promises, that is trusted universally.

    Are you following me? Have you figured out how money works? Or I need to continue the apple story so you can see what money is and how it comes to be? And do you still think that it comes out of the thin air with no link to the reality?
    Jul 29, 2014. 03:39 PM | 1 Like Like |Link to Comment
  • The Day I Sold Everything  [View article]
    Yeah, sell everything guys!

    Then watch nervously the market going up for another year or two.

    Then, when things begin to really look good, get in again in 2016... and then when finally a recession hits, freak out and sell low, making zero profit in 8 years...

    Yeah, go ahead, try to time the market!
    Jul 28, 2014. 04:31 PM | 1 Like Like |Link to Comment
  • The Day I Sold Everything  [View article]
    Like it! On top of that the only winning long term strategy is investing long term. Selling all stocks after holding for just three years is an imprudent attempt to time the market.

    It's particularly dangerous to try to time the market based on flimsy observation about the macroeconomic picture and misunderstanding of monetary economics.
    Jul 27, 2014. 04:37 PM | 4 Likes Like |Link to Comment