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  • Pandering Pandit  [View article]
    I believe that if given the chance, a (small) portion of the population will exploit others - will cheat. I believe that this portion will increase when the rewards for cheating are high and the costs are low. Professional sports and the markets are great examples of high reward systems.

    I believe that the flow of information, transparency and other pillars of a free market do not magically happen.

    I'm a free market capitalist - but right now the socialist countries are looking pretty good. I think that is because we expect an efficient free market to be free - it isn't. In an efficient free market, where cheating is rare and there is a lot of transparency, I agree that the system is self correcting. On a global scale I agree to - as things ranging from our (US) education levels to manufacturing base decline, other countries are more than happy to pick up the slack - and they are.
    Nov 14, 2010. 02:19 PM | 4 Likes Like |Link to Comment
  • Pandering Pandit  [View article]
    >in which bankers, brokers and insurance companies are already the pets of regulators.

    I think you have this backwards. But I'll go with it. . .

    Lets get rid of the umpire too. No one likes him; he is an undue burden on the system. He is also damn hard to bribe which is really annoying. If we must keep him, lets take out his teeth so big cooperations can hire lawyers to challenge his decisions.

    Same for the referees in the Super Bowl - there are to many of them and they have far to much power. We all want to watch THE GAME, not a bunch of guys dressed like zebras.

    I'm sure we can trust people in high stakes competitive environments to be altruistic.

    While we are at it, we don't need police, firefighters and especially good teachers. Less government! Lets keep kicking the can down the road for future generations to deal with - we are on a great trajectory! Who wants to pay a few pennies for oversight, transparency and a level playing field when we can pay so much more and force tax payers to take the hit?

    An ounce of prevention is. . . boring. Lets trust minimally regulated businesses to act in societies best interest.
    Nov 14, 2010. 01:52 PM | 5 Likes Like |Link to Comment
  • A Few Decent Longs and a Few Shorts  [View article]
    "Note on shorting: It's way better to buy put options that are a few strikes in the money then to short a stock. The squeezes in the names above can potentially wipe out an account. It is very important to start short positions small and add as they go higher and the company's fundamentals remain overvalued."

    Nick, would you mind explaining your caution in a bit more detail to someone who is relatively new to options and has done more with call than puts.

    I do buy puts a few strikes into the money - but isn't buying any put "shorting the stock"?

    I don't understand "squeezes".

    Nov 13, 2010. 01:57 PM | Likes Like |Link to Comment
  • Bad News for Private Real Estate Investors Is Good News for REITs  [View article]
    Good point. Expenses relative to profit depend on performance and are less (in terms of their effect on the % returned to investors) in the good years.

    I was not aware that active managers of REITs might just beat the average. I will take a look.

    Thanks again.

    Nov 13, 2010. 12:58 PM | Likes Like |Link to Comment
  • Is Socialism Winning the Wealth Game?  [View article]

    I'm glad you included relative declines in US education in your article.

    Real life isn't multiple choice. Who knew?

    I suspect that most here are bloomers. Kids in school now or just starting to work, your grandkids, will have to support more retirees than ever. And do so with less manufacturing jobs and with an education that continues to erode. I view this as another type of debt.

    With regards to eduction, the environment and opportunities we are leaving a poor legacy for the generations that follow.

    Gen X
    Nov 12, 2010. 03:14 PM | Likes Like |Link to Comment
  • Is Socialism Winning the Wealth Game?  [View article]
    I'm not sure that is still true. Cooperations now have the rights of individuals. Special interests and big businesses can now anonymously buy political adds and say whatever they want. The role of the individual is diminished in this environment. . . and so is their opportunity.
    Nov 12, 2010. 02:47 PM | 2 Likes Like |Link to Comment
  • Bad News for Private Real Estate Investors Is Good News for REITs  [View article]
    Good points about the over levered big guys driving up the bubble.

    For ING, it looks like management fees for YTD, 1, 3 and 5 years take about 25% of the return.

    Data from

    The Vanguard option looks like the better choice thought it is hard to compare apples to apples.
    Nov 10, 2010. 07:38 PM | 1 Like Like |Link to Comment
  • Constant Stream of Banking / Foreclosure Revelations Make the Case Against Less Regulation  [View article]
    They wanted me to spend thousands of dollar to buy points to lower my rate on a 30 year loan. This was on top of the jacked up "I want to play more golf and you to pay for it" fees . . .

    Find someone else.

    I did some research and settled for a 15 year loan a full percentage point less than the 30 year loan rate. Even more amazing, that lower rate was done w/o buying any points. On top of that, the guy I worked with helped me understand and track the MBS market. There are good guys out there but you have to look for them.

    Transparency and oversight is NOT in the best interest of some of these deep-pocked institutions. . . Especially the type mentioned in the first paragraph.
    Nov 10, 2010. 07:37 PM | 2 Likes Like |Link to Comment
  • Constant Stream of Banking / Foreclosure Revelations Make the Case Against Less Regulation  [View article]
    Don't forget the robo signing happened after people were aggressively sold very "creative" mortgages with ever increasing sell side commissions. I was personally pressured into paying way more than I needed to for my mortgage (and said no thanks!). That kind of thing leaves a bad taste in consumer’s mouths. Then, after that, we hear about robo signing and the crazy over the top eviction stories.

    Most people do not read investment blogs or know what a P/E ratio is - I believe that it would be good if they did, but that they shouldn't have to in order to avoid being completely hosed.

    I agree that homeowners that default are to blame but do not believe that they are solely to blame. There is plenty of unethical if not illegal behavior on the banking side - robo signing is just one aspect of the ongoing saga. It is a continuation of a pattern.

    Transparency and trust remain low - I believe there are very good reasons for that.


    Nov 10, 2010. 02:19 PM | 5 Likes Like |Link to Comment
  • Constant Stream of Banking / Foreclosure Revelations Make the Case Against Less Regulation  [View article]
    Regulation has become a bad word in some circles. Lets look at it this way:

    How many professional sports can you name that do not have judges or referees?

    Would society exist without some form of police?

    As I see it, a certain small percentage of the population will cheat if given the chance. In order to level the playing field, oversight is needed. A fair and efficient market needs transparency and the flow of information. Those things do not magically happen, rules and enforcement are needed. The costs to keep most people in line most of the time are minimal, the costs of the alternative is not.
    Nov 10, 2010. 01:55 PM | 4 Likes Like |Link to Comment
  • Analysts Expect BP Recovery to Continue  [View article]
    Analysts Expect BP Recovery to Continue

    I agree, and that worries me. Almost all Analysts said sell when BP was $27 USD.

    In general, being a contrarian has served me well. I find that most analysts are really great at predicting what already happened.

    Your mileage may vary.


    Long on BP and NE
    Nov 10, 2010. 12:48 PM | Likes Like |Link to Comment
  • Pending Home Sales - Don't Fight the Trend  [View article]
    Florida had its own population, plus speculators, plus seniors from the entire US and Canadian eastern seaboard bidding up prices. . . As I understand it, Vegas is similar. The bigger the bubble, the harder the fall. Prices are great for buyers right now, and they might get better when more foreclosures hit the market. For sellers, not so much. . .

    Grew up in Florida
    Nov 9, 2010. 11:00 AM | 5 Likes Like |Link to Comment
  • Gestalt Investing: Looking for Value Others Don't See  [View article]
    Is comparing to a US benchmark fair if most stocks they hold are not in the US?
    Nov 8, 2010. 01:12 AM | Likes Like |Link to Comment
  • 9 Stocks to Protect Yourself From Dollar Devaluation  [View article]
    With more dollars being printed, the value of each dollar will go down. I get that. The amount of goods that a dollar will purchase will eventually decrease - inflation.

    Why is buying a house now, or even better in a few months when the supply of forclosures increases, a bad idea? Like oil, gold or silver a home is a fixed asset, the mortgage is at a fixed and historically low rate. Wouldn't I be better off owning a home than say renting?

    Otherwise I'm with you. For example I have been buying long term calls in NE for several months now. These are options so they to are leveraged.

    What am I missing?

    Nov 4, 2010. 06:25 PM | 3 Likes Like |Link to Comment
  • School Specialty: A High Quality Business for the Contrarian Investor  [View article]
    Thank you for bringing this opportunity to our attention.

    Government seems to have a challenge scaling back with the rest of the economy. Unfortunately, teachers seem to have taken the brunt of much of the reductions that have been implemented - shorting the education of the next generation.

    My gut tells me that the recovery for teachers and education is likely to lag that of the rest of the economy unless education becomes a top political issue. The federal money helps but is a band aid - those that were laid off an rehired at the 11th hour are not going to be in a mood to spend much for some time. Also, as you mentioned, the debt load of this opportunity is a concern.

    I think this is something to watch, but the timing isn't right yet for me.
    Oct 19, 2010. 01:56 AM | 1 Like Like |Link to Comment