Lisa

Mid-Year Picks and Pans From Barron's Roundtable Part III

It's helpful also to see their performance in the last round of stock picks:
s.wsj.net/public/resou...

Costco, Wal-Mart Lead a Consumer Revolution

Very interesting data.

Variable Prepaid Forward Contract Draws IRS Ire: Why Now?

Excellent article.

Saut: Opportunistic Buys in This Schizophrenic Market

Jeffrey Saut is exceptionally smart. This is a must-read for me.

Buffett's Strange Bet

Protégé Partners LLC is a fund of funds. That means that in addition to the fixed % fee and success fee you pay the underlying hedge funds, there's also a fee layered on top of that by the fund of funds. The article says that Protege charges 1% for its funds of funds. Because the fund of funds might generate positive returns overall even when some of the underlying funds don't, that means that the extra layer of fees generates a significant additional drag.

In other words, Buffett is specifically betting against a fund of funds, because of the double layer of fees.

It would be great if there as a fund of funds ETFs that we could short as a pair trade with SPY.

The Reverse Wealth Effect

Excellent overview.

Here's an alternative way of looking at the situation:

Unlike the 70s, there's no wage-price spiral now. Inflation is being fuelled by growing global demand due to the opening of the Soviet Union and E Europe and the economies of China and India. That's boosting demand for commodities, particularly oil. But wages are being held down because those countries are also supplying a ton of low-cost labor. As a result, it's hard to imagine that there will be an inflationary spiral as there was in the 70s.

Rather, we're suffering from a repricing of commodities due to a step shift in demand. That means that countries like the U.S. are facing a decrease in relative wealth, because their "cost of living" just went up due to external factors. Nothing to do with printing money. U.S. consumers now have less to spend on other things, because the price of gas and food just went up. Combine that with a negative wealth effect from declining house prices as the article suggests, and there's a big hit to consumer demand. A weak U.S economy will lead to loose monetary policy, and that will leave the dollar weak. Weakness in the U.S will spread to Europe and China; it's only a matter of time.

How best to invest in that environment? The only thing I can think of that's a cert is agricultural commodities. But as the comment above points out, that's somewhat backward looking.

The Foreclosure Tourism Phenomenon [Housing Tracker]

User 169490, the author isn't claiming to be writing an "article". She's collecting together information on particular themes. For those of us tracking this market, where the official stats are highly questionable and the anecdotal evidence is important, this is really valuable.

Homes: Buy One, Get One Free!

This is astonishing.

Dell Acknowledges Need For Convergence Device Strategy

"however, there is still no sign of a convergence device strategy"

What about this:
gizmodo.com/393815/exc...

Dollar Tree et al: Four Retailers

Very helpful article! Thank you Saul.

Analysts Down on Dell Following Earnings

Don't you mean a short here *above* $24?

Ameristock to Close Five Failing Bond ETFs

The ETF shake-out begins. Too many index ETFs are insufficiently differentiated. And some (GLD and IAU; SPY and IVV) are identical.

Chatting With News Corp's Rupert Murdoch

Fantastic summary -- really worth reading. Thank you!

One comment on this:
"Murdoch says every story in the Journal is typed or edited by 8.3 people. That’s ridiculous. The story gets longer and longer and longer. There is not a story you can’t get all the facts in in half the space. To Mossberg: I’m not talking about your column. It’s digestible, it’s short, it’s right. If the whole paper was like that, I’d be a happy man."

What concerns me about this is that if everything gets shortened it gets dumbed down. The WSJ is great because its articles are long.

Barry Ritholtz Sees More Upside in Commodities

There's an article by him today:
seekingalpha.com/artic...

ETF Watch: May 23-29

I'd be interested to hear if anyone thinks the quant ETFs like the First Trust 30/130 are a threat to hedge funds. They certainly have much lower fees.