ubuy2wron

I have tried to use the punch card anology but only on the use of leverage. I will only use leverage VERY sparingly when it appears that this is a 3 sigma opportunity. I bought stocks on margin for the 1st time in my life starting in Oct. of 2008 and purchased puts on silver recently.

I ran across a reference to this fellow here I believe. I think his story would make for one heck of a screenplay and he does seem to be someone who is worth listening to. This article in 2007 seems somewhat prescient?http://www.edwardothorp.com/sitebuildercontent/sitebuilderfiles/2007Coastinterview-edwardothorp.pdf

If one looks at the trading in FFH since the NYSE delisting I think one will find a much reduced volatilty{ come on math geeks you can do this in your sleep and tell me if I am right and if the changes are significant}. At the time of the NYSE delisiting we also dropped the options listing. I had a coworker whose first job with his freshly minted MBA was to work for the options mkt. maker for KO on the CBOE his entire job was to buy and sell KO all day long to keep their positions gamma neutral WHAT EVER THAT MEANS. This of course resulted in them being one of the largest daily participants in the KO mkt if this is not tail wagging dog activity I do not know what is. I am unsure if all of the algo trading and derivative activity helps or hurts the fundamental value investor. It is extremely likely that who ever we are transacting with when we buy or sell our positions is involved in unwinding a derivatives trade or trading a modeled arb opportunity in the price of KO and coffee futures. It would seem to me that their exisits more opportunities for mis priced securities when we are trading against a MR Mkt who is a manic depressive human as opposed to a unemotional HAL 9000.

It is unlikely the manipulators own ANY of the underlying security. It is more likely entities short both sides of the options and mkt makers buying or selling or shorting and covering the securities interacting with other participants unwinding their long positins in puts and calls. It is a case which occurs over and over again in derivatives where the tail is wagging the dog. Derivatives in all of their forms may have unintended consequences sometimes the consequences are not unintended.. Without deratives I think the subprime real estate bubble could not have happened and I believe the resultant crash could have also been avoided. Many here have benefited from derivatives because of the timely investments of Prem with CDS. It may interest some that SAC has been mentioned as by far the largest options mkt participant.

This is why I stick to REITs and Equities. My folks owned houses and while its great if you dont have much else to do with your capital inmo it isnt worth the headaches unless you can get a 20% return assuming no inflation in rents or housing and with an adequate allowance for vacancies / repairs. One roof, crummy tenant, or just bad buy can screw up even the most conservative ROI calculations. I can get 10% yield with low risks in the market, now if only I could find cheap long term leverage...... One bad tennant can screw up your ROI ..... and its hard and expensive to get rid of a tennant. Do you have any idea what kind of havoc a loose cannon CEO or other senior manager can do to your investment returns and how difficult it is to get rid of them if you do not own 50% plus of the stock. Its all relative I think that most of us appreciate the fact that with a click we can make our problem investments go away. I have learned from the real estate pros that a good tennant is just as important as a great price

I have been short silver and Osama's death has been a bit of a black swan for commodity investors. The silver mkt started falling minutes after his death was announced. A lot of long term good things can pass from his demise not the least of which may be the ending of two very costly wars which have been largely responsible for a big portion of the build up inthe pre crash debt in the USA.(Remember Clintons Peace dividend) An awful lot of money has been long commodities short the dollar for a long time the Precious metal players particularly the silver players Where CERTAIN that this time is different that US was going to undergo a currency collapse and silver would resume its rightful place as currency. At the same time this has been going on it has come to the mind of a lot of investors that Europes problems are not going away in fact are going to get a lot worse. Greece will be dealt with next week only because the short term fixes to stave off default restructuring are not that expensive. Ireland is not fixable in my opinion to ask the Irish citizenary to pay for the bail out of the Irish banking system is not going to work in my opinion. The amts are too large and the beneficiaries are in London not Dublin the Irish will soon figure out its in there interest to say piss off to the Brits and there goes the Euro IMO. So if any currency is going to crash its prolly the Euro and not the US dollar. If the Euro falls apart an awfull lot of money gets destroyed which I think is deflationary

Interesting chart on home prices and gold.http://www.caseyresearch.com/sites/default/files/US%20Home%20Prices%20in%20Ounces%20of%20Gold_1.png

Can’t see any rate of return on any investment that can compare to my wife being happy. WOW this guy gets ,it they do not teach you this at Wharton ,Mr. Buffett did not get it prolly the best investment advice to appear so far on the corner.

No very little in the way of new rental accomodation has been built during this RE crash either, vacancy rates are dropping across the board rents are going up. As I mentioned in an earlier post Avalon Bay one of the largest apt Reits in the country remarked on increasing rents at 7% in their latest lease renewals and a sharp decline in tennants moving out to become home owners. The sub-prime owners who are at the heart of both the bubble and the crash are becoming renters again and taking a few people with them. If your credit is destroyed you have no choice you rent move in with family or become homeless those are your choices pretty much. Some of the distressed properties are being purchased by owner occupiers who sat on the sidelines and can not believe their luck or wisdom. Other properties aqre being purchased by individuals for 2nd homes which they may or may not rent the rest are being bought by landlords to be rented. This is the only new stock of rental availability. These landlords will be selling these homes in 5 to 10 years to their tennants when they have repaired their credit at elevated prices to todays prices and if they can not they will be quite happen to keep the homes with rents which will be much higher than todays rents the perfect Dhando investment.

Eric I am not making ANY predictions about home prices for the next 12 or 24 months. The house could go to zero value these investments work if you have a tenant and rents stay flat. Heck I have seen deals where if you cut the rents in half you are still making double digit returns.

Carl I did not know the man at all. I did google him and it seems that many think he died of a heart attack. CARL

I AM IN COMPLETE AGREEMENT WITH YOU. I noticed recently that Avalon Bay which is a very large apt. Reit mentioned that they had been able to push through a 7% increase in lease renewals and that the percentage of tenants leaving to purchase a home was at all time lows. New home construction is at lowest levels since WW2 the decline in apt. construction has been just as sharp. Avalons stock price is pretty much at peak valuations. In the US today you can purchase properties from banks with tenants in place that produce VERY positive returns with no appreciation. What has not changed is the formation of households {Americans are still having sex and making babies} A rental property with a decent tennant and a 30 year fixed mortgage is as good an investment as one can make unless you expect war or revolution in the USA. Real estate is a pretty crummy investment in those types of scenarios for that you just want to hold a few gold coins to bribe the border guards.

You know the other Sith Lord really got off quite easily in the end. He gave up about half of his fortune and spent a few years in a medium security facility. Today Mr M is viewed by many as a philanthropist and all round righteous dude. Do you think a Cohen indictment could have any impact on the FFH trial .

Its easy to see who owns the debt. It is not easy to see who owns the CDS on this debt and who is swimming naked here. I believe that only a crises will present an opportunity to get Europe straightened out{ the politicions need to be scared to death} you can not have a workable system under the current regeime. Some want the Euro experiment to fail because it would be profitable for them again again we have hedgies throwing matches and we are all knee deep in gasoline.

Saw this today now if they could just nail Stevie C of SAC. http://www.cnbc.com/id/42936986

"Options as a strategic investment "I think it is still in print explains most of what ya need to know.

Joe is growing on me. Hes annoying, but I dont know. Over the 3 years or so I have been watching I am starting to like him. His dumb persona allows him to ask questions I would want to ask, but wouldnt because I dont want to appear dumb. I hope that makes sense. He definitely was a wedgie giver, I am guessing you were the smaller kid? I was the guy watching saying damn thats screwed up, but better him then me.... I was not on the receiving end of the wedgie's it ALWAYS ticked me off when I saw bullying I usually stood up for the nerds and told the jocks to leave them alone. I find it very interesting how different personality types express their personality through their investing /trading methods. Joe is NOT stupid but he is a bully and I suspect his golf handicap has more influence on his tenure on CNBC than any skill he has as a interviewer or a journalist.

Puhleeezzze bring back Liz Klaman!!!!!! and ditch Joe. I am certain he was the kinda guy that gave the smaller kids a wedgie in gym class.

A lazy mans way would be to go through the Japanese holdings of Tim MacElvaines fund or the Cundill Value fund very experienced value investors with some Japanese holdings and a wealth of Japanese experience

I always enjoy reading. Mr Granthams letters but admit I am a recent fan of his musings. Am I the only one who finds a strong under current of constant pessimism in his outlook. His neo Malthusian commentary makes one want to scout out farm land and defensible castles as a return to the dark ages is possible .

It is interesting and perhaps profitable to discuss just what happens if countries like Greece, Ireland etc. just say screw it we ain't paying. And the grand experiment which is the European Union blows up. Certainly China appears to want the Euro to survive and I think the US does as well. Certain parties long precious metals prolly would like nothing more than to see it blow up as it increases the value of their positions.

I am raising cash and selectively short some commodities and holding the stuff that I think is cheap . It is not all that different from Prem long stocks short the index and long a deflation bet.

I read Dhando Investor while on vacation last month. It has to be one of the best books I have read on "Value Investing" for a layman. Lots of great stuff on moats ,competitive advantages, crisies as opportunity etc. Buy it read it and try to impliment it

If we get to the point where the currency that the world has been used for the last 70 years as a reserve currency has lost its place because of a lack of faith by the majority we are all screwed . The Weimar ? Republic and Zimbabwe were not wonderful places for any one to try to raise a family and make a living the best advice is to get out of the country if you can before it happens. It seems that in the part of the article posted Jim is saying "this time is different" which of course can be true but usually is not.