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Emerald

Emerald
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  • 15 Notes on Our Current Economic Situation [View article]
    The writer is correct in that new money from the government to banks does not add to inflation if the banks don't lend. Consumers are tapped out and, on average, are not looking for more debt. Home prices will continue to fall until excesses are wrung out of the overpriced system. New mortgage debt is limited because few have 20% down for a new purchase and many existing homeowners are upside down on their mortgages. Aggregate demand for new money (debt) will stagnate as consumers save to pay down excessive debts.

    Individual workers have the right to organize a union. However, like most large bureacracies, large unions stagnate and the leadership achieves power only by increasing benefits, not by ensuring basic workplace safety and rights. The auto workers and steel workers unions are perfect examples of this inept management and the workers pensions and helath benefits are now doomed. The major problem lies with overpaid corporate executives who cry the "freedoms of capitalism" yet act with the worst attributes of crony capitalism. They avoid tough decisions to minimize potential strikes that might put pressure on their bonuses and vesting stock options. Reality is now catching up with these clowns and causing increased unemployment for the masses as the sytem corrects. The next managment group to be exposed are governors of states and mayors with large public service employee unions. Overly generous pensions and health care plans will crush budgets this year and next and voters are saying no to tax increases. Where are the leaders who can say we need to live within our means and budget accordingly?


    On May 26 09:04 AM American in Paris wrote:

    > 1. First of all, Japan had very high money supply growth (measured
    > by M1) in the Lost Decade and yet still experienced deflation. Counteracting
    > declines in the velocity money completely offset money supply growth.
    > Hence aggregate demand stagnated.
    >
    > 2. Unionization is a fundamental right, not a luxury. Many successful
    > have unionized work forces.
    May 26 12:53 PM | 4 Likes Like |Link to Comment
  • Building an All-ETF Ivy Endowment Portfolio [View article]
    Some rebalancing is required in unstable markets. Stops of 25% below cost are essential in manipulated markets.
    May 26 12:32 PM | Likes Like |Link to Comment
  • When Long-Term Investors Panic [View article]
    I generally agree with your strategy, but you should seriously consider adding a total bond market fund or ETF to this mix to maiximize returns over time.


    On May 22 10:53 AM thiazole wrote:

    > This is so true. It is hard to feel sorry for people who fall for
    > the same fallacy every time we have a recession - they only buy during
    > the good times (when the market is over-valued) then the turn into
    > super bears every time we have a recession and liquidate their accounts.
    > It is no wonder they are always so negative when you consider how
    > much money them must be losing doing this. I suspect a lot of those
    > people like to post here on SeekingAlpha to spread their doom and
    > gloom (misery loves company?).
    >
    > My 401K strategy is to put 70% of my contributions into stocks and
    > 30% into cash-like investments when the times are good (I'm young),
    > and to switch to 100% of my contributions going to stocks as soon
    > as we enter a recession as well as gradually moving the 30% that
    > I had put into cash previously back into stocks throughout the recession.
    > After we pull out of recession, I slowly move 30% of my stock investments
    > and contributions back to cash again. It works quite well. My account
    > value is already closing in on what it was at the peak of the market.
    May 22 12:11 PM | Likes Like |Link to Comment
  • Goldman Expects Large Drop in Rents; REITS Will Be Affected [View article]
    Broad brush comments on REIT's do little for an in depth analysis by either sector or company. You are correct in that
    1.) malls, office and retail are in terrible shape due to declining rents and the high cost of tenant improvement dollars to either renew tenants or bring in new ones.
    2.) "owner equivalent rent" in the CPI is and always has been a joke since the Clinton administration changed the CPI formula to underestimate inflation. The Bushies let it ride.
    3.) The Wall Street goons have been manipulating real estate stocks to get their secondary stock and debt offerings done. Most of the money went to pay down the bank's (read: underwriters) lines of credit. Self serving and self dealing?
    4.) Some apartment REIT's are in good shape and their stocks are selling at reasonable prices, although dividend payouts are at their cash flow limits today. Many of these companies have refinanced term debt out a few years and have access to agency debt (Fannie and Freddie) that other commercial REIT's do not have. Most have curtailed development and are well managed.

    I would be careful shorting using the SDS because it contains large apartment REIT's. I would consider buying better apartment REIT's (EQR, AVB) on any pullback. Note: Long EQR
    May 22 11:11 AM | 3 Likes Like |Link to Comment
  • Cramer's Mad Money - Abbott's Own Personal Bear Market (5/19/09) [View article]
    "Sell, sell, sell" mantra replaces careful analysis. Enjoy the entertainment but don't believe a word from this circus.
    May 20 10:59 AM | Likes Like |Link to Comment
  • Tax-Free Muni Bonds: Respect the Yield Curve [View article]
    Investors should consider a well diversified muni bond fund from Fidelity or Vanguard and receive 2.5-3.5% tax free interest instead of Treasury money market funds. Other good choices are GNMA funds that pay 4%+. Keep common stock allocations below 50% as a decent bear market correction is coming soon. Long: all the above.
    May 15 01:09 PM | 2 Likes Like |Link to Comment
  • Will the REITs Rally Continue? [View article]
    I would stick with apartment REIT's like EQR and AVB that have taken care of near term debt maturities and have access to Fannie Mae funds. Stay away from hotel, office and retail as the wave is still heading to shore on them as tenanats default or demand lower rents on renewal.
    May 11 05:25 PM | Likes Like |Link to Comment
  • REITs: Cheap Debt, Easy Earnings [View article]
    Buying back debt at a discount is a clear financial benefit and saves on interest expense. However, be careful of companies staring into the financial abyss of lower rents and higher tenant improvment costs, especially retail and office REIT's. Make sure thery have refinanced upcoming debt maturities for '09 and '10 and have acccess to credit lines. The best bets are apartment REIT's who have repurchased and refinanced debt and have access to Fannie Mae debt such as Equity Residential and AvalonBay. Note: Long EQR.
    May 8 11:11 AM | Likes Like |Link to Comment
  • Ed Yardeni Likes Emerging Markets, High Yield Bonds; Believes Europe's in for Trouble [View article]
    Inflationary pressure is two years down the road. We are currently in a deflationary mode with consumers and corporations looking to delever. Although interest rates will start to increase, the credit spread between Treasuries and corporate debt will decline as the economy improves and credit conditons improve. As a result, you will collect say 5-6% on investment grade corporate debt with the underlying value of the debt remaining relatively constant. Stay within a 4-6 year average duration for bonds and you should get equity like returns but higher up on the credit food chain. Note: Long AGG and Ginnie Mae bond funds.


    On May 08 08:21 AM prairiedog555 wrote:

    > So, if the economy is recovering, and inflationary pressure is a
    > factor, why are bonds a good buy? Don't they go down when rates rise?
    May 8 10:43 AM | 1 Like Like |Link to Comment
  • Goldman Sachs Updates Its Conviction Buy List [View article]
    Should Goldman also issue their trading positions in the same stocks when they add them to the Conviction Buy list? Did they establish a trading position in these stocks a month or two ago and now are trying to lure retail and mutual funds back into these stocks as they sell from their own book? Beware sell-side firms suggesting you buy when the horse is trotting out of the barn and the market has already run up.
    May 6 11:49 AM | 15 Likes Like |Link to Comment
  • Jeff Immelt's GE: A Study in Corporate Leadership [View article]
    Dave Magee offers up a self-serving GE article and is hardly objective. Welch ran the company on short term commercial paper and turned GE into a shadow bank, financing the buyers of its products. Bill Gross of PIMCO finally called this financing structure "insane". Trying to be masters of many different industries (banking, real estate, hard asset manufacturing) plays well to CEO ego's but rarely provides a sustainable business plan. GE did their best to hide the negative effects of the lending and real estate operations by smoothing earnings (i.e. selling off subsidiaries) over the last few years without getting out of the finance business. Cutting the dividend is a clear indication that this multi-faceted organzation is still too risky as a blue chip investment.

    GE needs a makeover and their new "green" ads are simply corporate image making and not a true transformation of the company. The author states that once the economy turns around, the risky businesses that got GE into trouble will be wildly profitable. Perhaps, but what business or non-related businesses does this conglomerate want to be in to provide investors with a believable business plan. It's not the one the author says will be great. I still hold a few GE shares but sold the majority a year ago. Many of us are waiting to see if a "new" GE emerges before buying anymore.
    May 6 11:25 AM | 5 Likes Like |Link to Comment
  • 22 Dividend Stocks with Good Fundamentals [View article]
    Dividends are grate until they are cut. Solid, low debt balance sheets with quality management are best. Even better are investment grade corporate debt from these companies as spreads are wide and will come in as the economy improves over the next two years. Meanwhile, you can earn 6%. Buy dividend stocks after the next corrction, not now.
    May 5 11:16 AM | 5 Likes Like |Link to Comment
  • Cramer's Lightning Round - Jamie Dimon Is the Next Warren Buffett (5/4/09) [View article]
    JPM holds the largest derivative book in the world and claims it is fully "hedged". No details follow. Credit cards and mortgages to continue eroding and everyone claims this bank is great. Sweetheart deal to acquire Bear Stearns by feds because JPM had large exposure to no less than Bear Stearns! JPM will survive but it is a risky bet at this time.

    Cramer is a carney at the sideshow. The Chrysler Town & Country minivan (on eof the world's worst vehicles) is the new Cramer. Bring back the Yugo, the Edsel and the K car; we need some competition for all the lemons being sold out there. Jim will be snapping up the new franchises to sell to you each night. Come on down!!!
    May 5 11:10 AM | 3 Likes Like |Link to Comment
  • Use Conservative Growth to Conquer the Current Market [View article]
    The fundamentals of this market are negative with narrow trading breath and volume. Earnings are down. Credit spreads ae wide on corporate debt, so I agree AGG is a good bet as are Ginnie Mae bond funds. Common stocks are risky with an impemding correction due to the rapid growth over the last month. Note: Long the above.
    May 5 11:01 AM | Likes Like |Link to Comment
  • Sell in May and Go Away: Good Advice? [View article]
    Fools and their money are easily parted. Let's look at the current economy. Earnings are down and will say down for the next two quarters. Ther is basically no new lending tking place and the velocity of money is down. Deflation rules as companies and consumers deleverage. This bear market rally is based on thin air and no real breath from the pro's. Banks and hedge funds are manipulating the day trading trying to outguess each other. Job losses are continuing and home prices are falling. Commercial real estate will now be the headline and it is downright ugly! Yes, opportunities are available in gold and shorting the long Treasury bond. Stocks can be had for a cheaper price this fall when investors realize the game has changed for the next decade or two and dividend yields must surpass 5% on intermediate bonds for buyers to come back. If you must buy stocks, look at China and the FXI. For myself, I am long GLD, integrted oil companies, Ginnie Mae bonds, inetrmediate investment grade corporates and muni's. Cash is in the SHY (1-3 year Treasuries at 32%). I am also short the Dow, the QQQ and the S&P. Am I talking my book - absolutely.
    May 3 11:35 AM | 1 Like Like |Link to Comment
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