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outcastsearcher

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  • Is BP The Best Petroleum Firm To Invest In? [View article]
    The main issue I have is the comparison on the performance metrics in the charts. There is a REASON the performance metrics for BP lag -- the GOM accident.

    Therefore, these types of comparisons aren't apples to apples, and thus have little meaning.
    Feb 18 02:09 PM | Likes Like |Link to Comment
  • Market Timing Report: Bullish Sentiment Reaches Multi-Decade Highs [View article]
    Good points, P.F.
    If these newsletter writing, market timing, "gurus" had meaningful insight to share, they would simply follow their own insight, and significantly outperform the market. They wouldn't NEED to hawk $Xhundred a year newsletter subscriptions via their articles on sites such as this.
    So while interesting and sometimes containing correct guesses, the idea that these can meaningfully beat the market over time doesn't stand up to observation or principles like the Random Walk or the Nobel Prize winning Efficient Market Hypothesis.
    Oh, and clicking on his link to his newsletter above. It looks like he's been solidly bearish (and) wrong since at least 4/2013 (as long as the first page shows newsletter titles).
    Also, per the Dec 2013 title, I suppose I'm old-fashioned, but if a "guru" can't spell "Hibernate", and can't bother to proofread or correct the TITLE of his newsletter, what does this say about his writing?
    Feb 7 11:35 AM | 6 Likes Like |Link to Comment
  • Best Buy's Dip Is A Great Opportunity [View article]
    JC Penney. Another of those "new retail rise from the ashes stocks. Yeah, right.

    I was curious about them, so I walked through a local store in my medium sized city's busiest mall, a couple weeks before Christmas.

    What I found was EXACTLY like what I'd have expected from the Penney's of recent years.

    1). Long lines at customer service. In fact, 80% of the customers seemed to be at customer service, apparently trying to return something.

    2). An incredible lack of salespeople. Lots of merchandise, few customers, and VERY few people to help any hapless customer who might want to buy something.

    3). What few employees were apparant were apparently running cash registers. The lines were moderately long, given the relatively empty store. The customers didn't look happy.

    4). The merchandise in the few places I understand, like jewelry, looked like nothing meaningful had changed since Penney got in big financial trouble.

    ...

    How long will it take these outfits to learn that meaningless marketing yammering will NOT garner new and loyal customers? Or perhaps they'll never learn. As for me, my money will be no where near such stocks.
    Jan 22 10:45 PM | Likes Like |Link to Comment
  • Analysts Rate Salesforce.com A Buy. They Should Be Ashamed Of Themselves [View article]
    Interesting. This article seems to sum up the bear case that has been prevelent for at least a couple of years. CRM is "overvalued" and is due to make shorts a lot of money -- any time now.

    I waited and waited for the "overvaluation" story to take hold -- using diagonal PUT spreads, and thus limiting my risk. I'm glad I took that precaution, only losing a small amount of speculative money.

    For those naked short the stock for years:

    1). How large must your losses be before you say "Uncle"?

    2). Why are you convinced you can (roughly) time the decline, or IF you are even correct that a decline will occur? (Think of AMZN -- how long as IT been "wildly overvalued"?)

    3). Is there any metric under which you admit "OK - I was wrong. I'm out."?

    Disclosure -- after my long LEAP PUTs (protecting my many short term PUTs sold over the past couple years) expired worthless last week -- I have NO position in CRM, nor do I intend to fiddle with the stock and its eye-popping valuation any more. I'm just curious about the mindset of the shorts and/or bears who follow articles like this one.
    Jan 22 03:53 PM | 4 Likes Like |Link to Comment
  • Best Buy's Dip Is A Great Opportunity [View article]
    As an electronics consumer who USED to shop at Best Buy (before the Internet became ubiquitous, and outfits like Amazon made it a low risk, convenient proposition), I find all the bravado about how management NOW will suddenly make things wonderful - puzzling.

    This is the same BBY that wouldn't let me return defective software, even though I spent many $thousands a year there buying software and PC hardware. This is the same BBY whose service became a nightmare -- from the lack of educated salespeople to the lines at the cash register to the nightmare if you had to return something.

    And finally, when BBY was going to "bust out" and compete on pricing terms on the internet -- their website was a TOTAL JOKE. At Amazon, for example, things tended to be in stock and easy to find, and easy to find relevant reviews, etc.

    At BBY, well, almost nothing I was interested in was in stock. The website was confusing and unreliable. This felt to me like the same old "big mouth, small value" management I'd come to expect from Best Buy. No thanks. Outfits like Amazon and Newegg take great care of me -- from my living room at any hour.

    Disclosure -- I don't invest in ANY retail stocks. It just seems too hard to figure out what is "good" in that space, and customers and management can be VERY fickle. I just wanted to give "real world" input from the perspective of a customer.
    Jan 22 03:42 PM | 1 Like Like |Link to Comment
  • The McDonald's Upgrade Faces 2 Major Risks [View article]
    Let's try leaving the politics out of it and trying simple micro-economics. If you raise the price of something (say, fast food) by a significant amount relative to goods on average, the demand for that good (i.e. fast food) will go down. This is the most basic concept in micro-economics.

    Another way to look at this is common sense. If a little change in 'X' will bring a moderate amount of prosperity, wouldn't a big change in 'X' bring a lot?

    If a 24% rise in the minimum wage would bring moderate prosperity, why not mandate a 500% rise? Wow! Wouldn't almost everybody be just rolling in cash soon?

    The answer is pretty obvious. Either lots of inflation or lots of damage to the economy, or both would result.

    If you want to accelerate the move of businesses toward automation and foreign labor -- go ahead and raise the minimum wage by a LOT (greatly inflating US wages makes the alternatives MUCH more attractive). (But remember, unemployment is a pretty poor minimum wage for those you intend to help).

    Now - for a hopefully productive political suggestion:

    If you want to help workers, offer better educational opportunities for them, including unemployed adults willing to do acceptable academic/retraining work. As a taxpayer, I'd like to invest in that, as more skilled people, employed at higher wage jobs (EARNING those higher wages) and paying more taxes, results in productivity that is good for everyone (including the taxpayer who should get a GREAT return on this investment, over time).
    Jan 17 01:44 PM | Likes Like |Link to Comment
  • Are The VXX And XIV Just Providing Leveraged Market Exposure? [View article]
    Thanks Charles for the article. This is very interesting, and seems to confirm the logic that you can't get something for nothing -- i.e. the short VXX trade is NOT "free money" as many inexperienced traders seem to conclude it is.

    Given the nature of the financial exposure of ETN's as a class -- generally backed by some large bank -- I still have to wonder if this "game" might not end in tears for many investors on some black swan downward event caused by some sort of global financial panic.

    If an investor is invested in stocks (i.e. the S&P 500 index) for the long term -- then he/she knows that as long as the global financial system doesn't actually collapse (and if it does -- it's a new ballgame for ALL financial investments), that holding tight, continuing to dollar cost average and collect dividends, or even buying more as the panic escalates is a long term great investment.

    For ETN's like the VXX, who can say? First, if things get bad enough and the margin calls get major enough, since the underlying financial institutions are NOT (last time I researched it) required to have strong (or any, actually) hedges for these instruments -- what if some of these institutions fail?

    "Everyone" seems to flatly assume that the banks AND ALL THEIR ETN HOLDERS will be made whole, no matter what. How can they be so sure? The prospectuses clearly spell out that these are very risky investments. Do I think congress will pay off FDIC insurance for depositors? Absolutely (though the nominal value of the dollars used could be lower, of course). If the financial world is in the tank, will all holders of the VXX be made whole on their positions? When push comes to shove, as long as closing the underlying bank won't collapse the financial system -- I would NOT bet on it. Look how much debt is being renegotiated or defaulted on (think private and public pensions and medical plans, as an example) -- and those affect wide swaths of voters and "Main street", not just wall street types and aggressive individuals.

    I think the conclusions of past correlations are fine 99.99+% of the time. For the remaining "system stress" times -- past correlations may NOT be at ALL able to predict future results, as the payoff on one's positions may not be realized.

    Just one man's opinion. The way ETN credit risk is completely ignored in many well written S.A. (and similar sites') articles -- I am clearly a tiny minority.

    (Example: the midstream energy MLP ETN, AMJ, is almost always deemed vastly superior to the midstream energy MLP ETF AMLP -- since the ETN offers tax deferral benefits the ETF doesn't -- and thus shows better short term returns. (Both have very similar portfolios). In my experience, the investment community COMPLETELY ignores the credit risk of AMJ (JP Morgan Bank is the underwriter) at least 95% of the time. For widows and orphans investing long term in an MLP portfolio -- HOW can this be prudent? (I want my principal back -- not a slightly higher return at the risk of catastrophe)).

    Am I missing something obvious?
    Jan 8 12:13 PM | 4 Likes Like |Link to Comment
  • Hep C Price War? Abbvie Vs. Gilead [View article]
    With Obamacare likely to be increasingly leaning on companies to "magically" make medicine cheaper as time goes forward, I wonder how this will impact expensive drug prices. (If in doubt, ponder the recent ACA-failure prompted request to have insurance companies provide policies with no assurance they'll get paid. This is how such clowns think). After all, in the minds of a liberal, why pay for a better treatment if you can have a cheap treatment for the masses you agreed to treat free or at a discount with other peoples' money?

    Disclosure: long both GILD and ABBV for the long term, despite increasing government interference in medicine.
    Dec 17 11:56 AM | Likes Like |Link to Comment
  • The WSJ Says Invest Your Emergency Cash, What?!? [View article]
    RWMostow: Thanks for making the same point I was going to make. You don't have to make zero percent if you do just a little work. Getting nearly 1% for a no-risk (FDIC insured) bank account in a low inflation environment (especially THIS environment) is at least a prudent way to invest one's emergency cash.

    (Mine's with American Express (no affiliation), with online convenience). I fund it and make withdrawals to my local bank household checking account via ACH (electronically). They have no balance limits, etc. The only drawback is they wait 6 business days for deposits to clear before you can have them back -- which I'd bet is pretty typical for banks in general). Relatives and friends who I've mentioned this alternative to (vs. basically zero yielding checking and savings) haven't had any complaints.

    More and more, I believe the WSJ talks the "book" of its advertisers. This includes the blatant trend of so many magazines, etc. advertising and trying to make it look like "an article". This naturally GREATLY diminishes the credibility of the publication doing this. Thus, this terrible advice from the WSJ (I followed the link the author provided), unfortunately, isn't all that surprising, at least to me.
    Dec 6 10:52 AM | 3 Likes Like |Link to Comment
  • Oil Market Karma: U.S. Shale Oil And OPEC [View article]
    Sounds about right. And pretty much flies in the face of the many people who keep saying "Inflation? What inflation?
    Dec 4 05:03 PM | 2 Likes Like |Link to Comment
  • Demographics, Manias And The Short Case For Apple Explained [View article]
    fgrindle: Right. No Apple fanboy ever uses emotion when making the bullish case for Apple. Strong argument -- like unending exponential growth (NOT).
    Dec 3 12:20 PM | 2 Likes Like |Link to Comment
  • Demographics, Manias And The Short Case For Apple Explained [View article]
    hereinNC: Ignoring limits to growth and acting like a company can have INFINITE growth is a classic mistake that has been well documented for at least half a century in the modern stock market. Much further back if you look at things like the Tulip Bulb mania.

    If you think AAPL is undervalued, fine. To act like its product growth can be anything remotely approaching infinity, however, is madness.
    Dec 3 12:17 PM | 1 Like Like |Link to Comment
  • Demographics, Manias And The Short Case For Apple Explained [View article]
    To be long options means you have bought them. (This is a more basic point than your nitpicking about saying long or holding).

    There are many options strategies, including calendar spreads, that involve being long options. To flatly state that experienced options traders don't go long options is like saying half the market doesn't exist.

    Are YOU new to options trading?

    Try reading a book on options and learning what you are talking about. THEN maybe you'll be in a position to intelligently criticize another options trader (or realize you have no business doing that in this case).
    Dec 3 12:13 PM | 5 Likes Like |Link to Comment
  • Don't Underestimate The U.S. Dollar [View article]
    reevenadin -- as has been answered thousands of times in articles like this all over the internet -- it is because so far, the VELOCITY of money has been very low, since the economy is so sick.

    There is plenty on this on credible internet sites - look it up.

    Unfortunately, like with all things related to "the dismal science" of economics, this is an unproven theory.

    Also unfortunately, lots of self serving "investment adviser" and newsletter writer types have insisted they could predict the time and magnitude of the inflation.

    Even if monetary velocity is actually the key -- I don't think even the Fed could time this. The danger is that if it comes, the resulting inflation could make the 70's look like a Sunday picnic.

    Given the games the government keeps playing with how it measures CPI and how it buys votes with unsustainable programs -- an inflation storm is a possibility not to be taken lightly, if you want a secure retirement.
    Nov 29 12:44 PM | Likes Like |Link to Comment
  • Don't Underestimate The U.S. Dollar [View article]
    Mercenary: Wow, again. So if you are implying we should take US politicians at their WORD, given what has been going on for the last 60, 40, and especially 20 year time frames -- you must be delusional.

    Your property can now be stolen without even a TRIAL. All a cop has to do is plant some drugs in your house or car. (They call it "asset forfeiture" as the word stealing might actually upset people re this policy).

    Whether people can do things like own an apartment building is completely arbitrary. Doubt it? What do you think happened to the property values of apartment buildings in New York City once the rent control laws went into place.

    Obama is merely the lastest "leader" in an escalating trend of those who use lies for policy, and blame the other side when they get caught.

    I don't trust the Chinese leadership, but I sure as HELL don't trust our own leadership -- they don't deserve trust or respect.
    Nov 29 12:33 PM | Likes Like |Link to Comment
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