Vish_ram

Gio Please continue these kind of posts in "General discussion". It highlights two economic insights that is not generally apparent when currency changes. 1) S&P 500 firms profits from Europe will show big drop due to currency translations 2) Low EUR will create resurgence in exports and it might pull the economy out of doldrums. Any posts that give an insight offers value to others. The ones that don't add value are a) Mindless criticism & ad hominem attacks b) Comments like "I sold BAC/XYZ at $$ before drop and got lucky".... Adding several hundred stocks to a portfolio produces market average (mediocre) returns. I guess the same applies to a forum.

Paulsen's perspectives http://www.wellscap.com/docs/emp/20150108.pdf The median P/E chart is scary. It looks like low interest rates have lifted all boats.

Thanks for sharing. What I've learnt and still learning is 1) value investing can still help you lose tons of money, just like any other forms of investing 2) A P/E of 10 that you think is cheap can trade at P/E of 2 and still be cheap and can still declare bankruptcy. 3) Any famed investor's (or even super investor) opinion can go wrong. The superinvestor will still cling to fame and you wont cling to your money. Remember a famous investor's proclamation "book value is solid" 4) In any successful trade by any investor, it is hard to know what % of success can be attributed to the "dart throwing monkey" or to brilliance. 5) The #1 enemy of an investor is the urge to make extraordinary returns. A high probability of low returns is much better than low probability of high returns. 6) You don't need a lot of money to be happy.

I feel nauseated when ever I read long term predictions and particularly the ones that predict gloom and doom. Every time I go to the county library, I see a rows and rows of books that have titles like "coming collapse of dollar", "coming inflation", "coming deflation", "oil at $XXX"...I wonder if those authors are spending the rest of their lives writing apologies. None of them have materialized. US continues to march ahead Any prediction of unfunded liab is useless. we're seeing great advances in medical technologies (one eg is Elizabeth Holmes). The prognosticators merely want attention and are no different from those clowns standing in street corner holding a sign "The end is near".

I have heard this many times but I don't know what exactly this statement means for small investors. IB claims that their execution is better than other brokers. For a large trader this is probably important. But how does a small investor benefit. Is it in small stocks? In IB, if I use a limit buy, many times I get the trade executed below the limit price. I've never seen this happen in other brokers. These small savings add up.

When GDP falls in two successive quarters. On a serious note, you'll see a recession when - yield curve inverts - your not too bright neighbor or cousin makes a killing trading stocks - quit rate starts dropping - U6 bottoms out - gdp gap goes into negative - Fed tightens - talking heads talk about soft landing - junk bonds live up to their name - inflation heats up - housing permits starts dropping - construction employment drops - LMCI activity graph tops out

I think the saying correlation doesn't mean causation may apply to this. WSBASE bore no relation to market prior to 2008. see graph http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=USL The market wasn't supported by fundamentals but by Fed actions. To that extent, Fed action (WSBASE) supported stock prices, the correlation exists. Once economy recovers, the fundamentals will support stocks and we will start seeing that divergence soon.

When the 70's oil supply shock (Arab oil embargo) came and oil zoomed up, there was an unprecedented capital investment to drill and extract oil. The world became awash with oil and until recently oil was in doldrums. The new commodity demand shock from China (with prices going exponentially starting 2004) caused a similar effect. The commodity co's loaded up on debt and spent capital like drunken sailors. We'll go back to 2004 price levels (WTI @~40, ) and settle down. in the meantime, the debt laden co's will go bankrupt, commodity etn, funds will go under. A bulk of US citizens don't own or own little stocks. They'll get the benefit of lower commodity prices and start spending. A new resurgence will propel non-commodity stocks. The issue with China is that, the Chinese central bank is like 1929 Fed. They may not have the tools/policy/mechanism to prop things up. They'll have a steep learning curve. In the end, the commodity firms will fail to return above cost of capital. RIO Vs S&P (until 2004) https://www.google.com/finance?chdnp=0&chdd=0&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1085169600000&chddm=1771653&chls=IntervalBasedLine&cmpto=NYSE:RIO&cmptdms=0&q=INDEXSP:.INX&ntsp=0&ei=VtWIVJnZM9GtsQfW34GwAQ After 2004: https://www.google.com/finance?chdnp=0&chdd=0&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1418253745909&chddm=1152897&chls=IntervalBasedLine&cmpto=NYSE:RIO&cmptdms=0&q=INDEXSP:.INX&ntsp=0&ei=VtWIVJnZM9GtsQfW34GwAQ

When ever I view the cash flow statement of large companies, I'm stunned by the amount of debt issuance to buy back shares. (look at AMGN) I made a graph of non-corp debt to GDP. http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=TeJ How will this end?

- One is using GDP and other GNP - In many places i've seen them use non-financial corporate eq , the fortune one may be adding financial ones as well. I followed the ones in http://www.advisorperspectives.com/dshort/updates/Market-Cap-to-GDP.php - Also the fortune one seems to include OTC stocks, the others may not be including those - I tried to gauge the impact of adding financial ones and it pushed the ratio to above 3; I dont know why this differs from bloomberg/fortune ones Here is another graph where i'm showing the fin equity in right y axis. https://research.stlouisfed.org/fred2/graph/?graph_id=164130&category_id=0 The right y axis is interesting as fin co's never dropped much in 2000 and had a real bubble in 2007. Their collapse in 07 was very dramatic compared to 2000.

You can get this using FRED data. https://research.stlouisfed.org/fred2/graph/?graph_id=152517&category_id= The more I analyze the economic data, the more I'm convinced that market participants collectively do not pull themselves out of a bull market based on valuations. If you are in a bull market, irrespective of valuations, the market keeps on going up until Fed applies the brake. The braking action acts as a pin that pierces the valuation bubble. The market cap to GDP should be viewed in context of Fed's actions.

This is about wealth inequality. The pattern that I'm seeing is that any Stock market boom exacerbates the wealth inequality. Look at 1929 and recent 82-2014 booms. see http://www.economist.com/blogs/graphicdetail/2014/11/daily-chart-2?fsrc=scn/tw/te/bl/ed/somearemoreequalthanothers

sorry, i don't know much coding. but this one works =ImportJSON("http://api.stlouisfed.org/fred/series/observations?series_id=DGS1&api_key=bfa8a53421e527e0d002630712500fd9&sort_order=desc&limit=1&frequency=d&file_type=json","/observations", "noInherit, noTruncate") you need to pass the second parameter, you left it blank.

Get the google script ImportJSON from https://github.com/fastfedora/google-docs/blob/master/scripts/ImportJSON/Code.gs then in google spreadsheet, use this script and give the URL that fetches the JSON as a parameter. I used this to show data in econtracker.com

I spent 2 hours reading major portions of the book in B&N. His honesty was refreshing. This is biography, psychology, investment wisdom/methodology, career advice all packed into one. My main take away was that, you try to be true to yourself and have the right perspective.

here are a few options 1) treatment center for Autophobia (fear of being alone) 2) make shift kids soccer playground 3) Halloween haunted house (to capitalize on being desolate ) 4) Build prisons as this segment is growing 5) Retail museum to sell cool '60s retro stuff. This also boosts revenue ......

Only banks can officially lend. This includes central bank and commercial banks. If Joe lends $10 to Jill, then this lending doesn't show up in official books. Lending doesn't come from savers directly. It comes through the banks. #3 is partly wrong. Fed directly controls bank's lending by setting discount rate (rate at which banks can directly borrow from FED, this is generally frowned upon), controlling fed funds rate using open market ops (banks have to borrow the fed funds and use it as reserves) and Reserve requirement (% of reserves to be kept in case of loan default). Velocity is determined by economic activity. Higher activity increases velocity for a given money supply. The Fed can only indirectly control it by cooling the economy. Another caveat. FED is great in reducing the lending (akin to pulling a string) and FED is poor in increasing/stimulating lending (akin to pushing a string). FED can encourage lending by setting low rates, but the banks should decide to lend freely and above all ,the consumers/corp should feel good about economy to borrow. i.e. pulling is more effective in pushing.

I'm more worried about Asian countries that have much higher population densities and poor hygiene (India in particular). Its a question of time before it turns up in places like New Delhi and others. They need to contain it in Africa first. Hope we find a cure fast enough.

The income inequality is also muddled by wealth inequality. The risk takers (those having higher equity exposure) have been handsomely rewarded. I'm seeing many high income earners (docs making 300K+) afraid to invest and end up with less wealth. Bottomline, low wage earners got a double whammy. Productivity and politics on income side and FED on wealth side.

It is stunning to watch the median income graph. I wonder how long this can go before we see a revolution. This is bad news for Republicans.

What if he is going to prison for the safety of his family? You don't leave a criminal enterprise and go back to normal life.

There will be plenty of service jobs created. example - huge % of population in US will be morbidly obese. You need some help them change their bed pan, give them a sponge bath etc. The big % of young and unemployed (unemployable) will become (already did become) electronic addicts (years of playing clash of clans, and other games). There'll be more de-addiction centers than McD's. More jobs.. I can go on and on

If Wal-mart along with other companies are forced to increase minimum wage, then you'll have less income inequality. The lower and middle income wagers who are customers of walmart can buy more stuff (their spending relative to income is much higher). The wealthy would shop less at Tiffany. It may not be a bubble after all. It could be a wash too. Someone should prepare a Laffer curve for minimum wage to better understand the impact.

R.I.P. What a shocker!! His performance was awesome. if he had lived for another 10 years, he could have brought his AUM to a billion dollars.

Your sister would have learnt something about the market, interest rates, fed etc after 11 years; something that the university can never teach. Now that's an education.