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  • 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
  • Don't Underestimate The U.S. Dollar [View article]
    Mercenary: Wow. With spin like that, Yellen ought to be hiring you as her P.R. man for never-ending printing.

    You can make excuses all you want like (people would be stupid not to invest the currency) -- but the fact that the nominal value of every fiat currency is destroyed over time is significant.

    1). Politicians can destroy it on a whim or via stupidity -- and take people's life savings with it. (How does this square with property rights?)

    2). Especially after taxes, there is no assurance that investments will keep up, especially if bad economic policies are used (like endless printing). Again -- destruction of peoples' property rights is a real risk.
    Nov 29 12:26 PM | 3 Likes Like |Link to Comment
  • Don't Underestimate The U.S. Dollar [View article]
    statisticool: If currencies blow up due to debt, deriviatives, banking, shennanigans, or some combination of the above, I am confident people will be trading, say, gold and silver coins for things of value like food -- at least until the emergency passes and a "new dollar" (or whatever they call it) is issued.

    It's price has stayed relatively steady for thousands of years. EVERY fiat currency has blown up in the long run.

    (And no, I'm not a gold bug, but I do try to look at history somewhat objectively).
    Nov 29 12:23 PM | Likes Like |Link to Comment
  • Don't Underestimate The U.S. Dollar [View article]
    Ponchovilla -- what anyone with the slightest knowledge about computing power knows if Moore's Law reflects the sliding price of computers of a given power level, at least since IBM introduced the PC in 1981, and Apple's computers were behaving that way in the late 70's when I checked.

    This, of course, is an aberration. In nominal dollars, the vast majority of US prices rise dramatically over time. In inflation adjusted dollars, many prices do fall due to technology improvements -- but that certainly doesn't nullify the cumulative erosion of the currency inflation causes.
    Nov 29 12:19 PM | 1 Like Like |Link to Comment
  • Herbalife Could Damn Well Be The Next MBIA [View article]
    I have no dog in this fight, but was curious when the fight erupted between Ackman and Icahn.

    So, I tried to find out about Herbalife products via the internet.

    It is suspicious to me how difficult it is to find meaningful information about the products, aside from the fine print documents available if you look hard enough.

    I did find some of the weight loss shakes on Amazon. They seemed to cost about 3 or 4 times what similar products from nutrition stores, or any drug store do. (That ALONE makes me wonder about sustainable long term true RETAIL sales volume).

    Aside from Herbalife marketing, I see no meaningful difference between them.

    Given what the history of past companies using the MLM model have been: those like Amway (overpriced soap and socks, anyone?) and Shaklee (overpriced vitamins that only the "distributors" buy -- I found a couple cases my mom had as a distributor when I was a KID after she died) -- it seems to me there is plenty of potential risk here.

    Have fun speculators -- I hope you have some clue about the true nature of what you are "investing" in.
    Nov 26 03:29 PM | 4 Likes Like |Link to Comment
  • How Position Sizing Based On Probability Of Returns Can Save Your Portfolio [View article]
    Sumflow: Although most people (especially the investment advisory industry) are in denial about it, since it is extremely difficult to MEANINGFULLY outperform the market over time -- how much you save, and which investment asset classes you invest in (portfolio allocation) are by far, the huge determinants of long term financial independence.

    For people who save EVERY paycheck until it hurts -- long term financial independence is a very real possibility.

    I agree with you that tduong11 is misguided. One of the most underappreciated aspects of index fund (or ETF) investing is precisely that it IS disciplined. It consistently, systematically, tracks a certain aspect of the market. That, a long term time horizon, and consistent dollar cost averaging are the kinds of long term probabilities that matter -- since the huge probabillity over multiple decades is (as history has proven time and time again) that you will make good money consistently investing in the broad stock market(s).
    Nov 20 04:14 PM | 2 Likes Like |Link to Comment
  • A Useless And Dangerous Mountain Of Money [View article]

    Points 1 to 5 make sense to me, especially on the overall demographic trends. Immigration is a definite two-edged sword though. We should be looking to favor productive, educated immigrants who will be net producers to our society.

    Point 6 is a definitely mixed bag. Toyota would seem to be a huge Japanese company which is at the forefront of innovation on an ongoing long term basis -- despite recent Tesla Fanboy touts. Painting Japanese companies with one brush doesn't work. The way the current administration is punishing (and denigrating) economic success, and committing the U.S. to ever more social programs (and lowering the incentive to produce at the same time) doesn't speak well for future US innovation -- unless wiser minds are allowed to prevail in American politics.

    Point 7 is just BIZARRE to me. Do we live on different planets? If the whole world loves us so much, why do we spend so many $trillions on the military, and why so many long running wars in recent times? Does the Middle East not exist for you? Are Russia, North Korea, the Chinese, etc. 100% our allies at every turn in your world?

    Yes, Japan has some contention with China, but your view seems oddly tilted on this item.
    Nov 20 04:01 PM | 1 Like Like |Link to Comment
  • Yellen, Oil, Gas, Gold And Silver [View article]
    zorrba, for someone who clearly expresses a left wing opinion, maybe you should be a little careful about flinging the word "LYING" around, given various developments over the past year and Obama?

    Natural Gas is certainly clean burning compared to, say, coal. It appears to be a good bridge fuel as the world tries to gear up to go green with technologies like solar power. (I'm all for things like solar power -- but the amount of reliable solar and wind energy available is still TINY compared to what fossil fuels produce - like it or not).

    So while you and your ilk may hate any energy but pure "green" (even while you fly, drive, heat and cool your home, raise a family, and generally inflict a relatively large and growing energy footprint on the planet with hardly a thought) -- your name calling is just as unhelpful as the science denial the right is often involved in.
    Nov 20 02:32 PM | 4 Likes Like |Link to Comment
  • 4 Costly Investment Themes [View article]
    Interesting. Both Sonia's comment, and the responses from tomsum and sarichter (who think that Sonia is so wrong as to be unwise) below assume that:

    a). They can time the market -- or at least have a good feel for what the market is likely to do.
    b). They can time interest rate changes -- something even harder to do than time the market.

    I have no dog in this fight -- I just find the arguments and the confidence shown by those making the argument that "they are right" rather interesting and somewhat entertaining.

    How can any of us accurately predict what the Fed strongly influences in the short to intermediate term, egged on by Capitol Hill despite their purported "independence"?
    Nov 20 01:41 PM | 1 Like Like |Link to Comment
  • Tesla: Learn From The Mess [View article]
    Whatever you do, never buy a Prius with a much better life cycle energy footprint and very well proven technology and service for under a third of what you can buy a rich man's Tesla for if -- it has a bump in the floor.

    If you have to stretch this far to make your case for Tesla, good luck with that.
    Nov 19 12:05 AM | 3 Likes Like |Link to Comment
  • There Is More Than A Mere Bubble In The Stock Market [View article]
    Timmy: Well, economics is CERTAINLY not perfect -- not by a long shot. That's why they call it the "dismal science" and my favorite joke about economists (since it is largely based on truth) is: "If you lay 10,000 economists end to end, you could not reach a conclusion".

    I remember pointing out in my micr-econ class in college that using all these supply and demand curves and the theory extrapolated from them assumed that people behave rationally. They don't.

    To which my econ professor (35+ years ago) replied something like -- you're right, but we don't get into that until more advanced econ classes. Feel free to sign up for some and learn how we deal with that.

    That's all well and good, but if you feel like the attempt at ANY economic analysis is a moot point -- what are you doing reading articles on S.A.? Instead of bashing John for a nice effort, why not just invest in an asset allocation basket you like including appropriate index funds, and spend your time doing something more productive?

    I applaud John's effort and find it interesting and thought provoking -- even if I realize that trying to divine future financial charts from past charts is a less than scientific enterprise.
    Nov 13 03:41 PM | Likes Like |Link to Comment
  • There Is More Than A Mere Bubble In The Stock Market [View article]
    Pathfinder's: You're right, of course. However, given the political and economic direction of this country, feeding off of the "political correctness" and the "we are all 'winners' and therefore deserve something for nothing" (i.e. regardless of merit or contribution) mentality -- I would expect the majority of voters to hurl insults at you instead of being willing to simplify the system in a way that encourages productivity.

    If in doubt, consider all the hate spewed at "evil" profits and especially "evil profits on medical care". It's as though medical care improvements come from unicorns instead of productive people and corporations willing to shoulder risk for profit.

    Sadly, we sow what we reap, and then the "something for nothing" crowd screams for more governmental interference to "fix it".

    Ayn Rand predicted all this in "Atlas Shrugged" of course, but THAT is certainly politically way out of favor and of course having people read it would be "mean" because that would be "hard" in the era of the 30 second internet article being our primary information source.
    Nov 13 03:30 PM | Likes Like |Link to Comment
  • Leap Secured Options Writing - The Ultimate Safe Investment Strategy [View article]
    For those interested in LEAPS (I have been using them for a variety of trading strategies for years, including calendar spreads) -- instead of using a one-article approach, where the article seems light on research, specific examples, and systematic disclosures on risk, etc., one might consider a book on options.

    One on LEAPS I like is: "LEAPS - What they are and How to use them for Profit and Protection" by Harrison Roth. It's a bit dated (C: 1994), and a bit simple (you won't find a lot on the Greeks, for example) -- but it systematically and clearly goes over a WHOLE LOT of viable strategies, and is very clear about the key concepts like relative time decay between long and short term options.

    I think before investing money in such a strategy, some time spent reading books like this and doing some hard THINKING is a very worthwhile investment of time and effort.
    Nov 12 02:40 PM | Likes Like |Link to Comment
  • Leap Secured Options Writing - The Ultimate Safe Investment Strategy [View article]
    Erickaye, I don't think that's feasible for single options. I use Tradeking, which charges $4.95 for the first option, and $0.65 for additional options. They also don't penalize you for, say, rolling over 10 options -- treating it as one trade ($4.95 plus $.65 times 19).

    So you can approach about $1.00 an option, if you trade in some size.

    Disclosure: Tradeking is great EXCEPT they have some failures which can cause you to be unable to trade or even log on for part of a day or even a whole day. Their marketing responses that they are hard at work fixing this are less than convincing as time rolls on and the events keep occurring on random days. Thus I have another brokerage account I can use if needed if Tradeking is down.
    Nov 12 02:34 PM | Likes Like |Link to Comment