Cardboard
-
Posts
3,622 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by Cardboard
-
-
Even if it does not get into law or even if it is just to once again demonize the rich, the fact that Obama and company are conceiving these plans is disgusting. All these programs have been put together to encourage people to save and to retire without being a dependent of the state. It is really an attack on savers and people trying their best to create a nest egg for their retirement. These are not the tax evaders and abusers of tax loop holes. These are people who earned a salary doing honest work, put money aside in a program that was law and because they were smart with their money or earned too high of a rate of return on capital are now being targeted.
$3 million is not that much if that is all you have, have dependants and you retire at 55 years of age. Actually, many financial advisors will recommend that you aim for such target and I am not talking in 40 years from now.
These proposals are destroying the fabric of capitalism. Once trust is gone and the hope to one day be rich, then capitalism is dead. While Ostog is right that these programs are quite advantageous over time, I think that they have been put in place exactly for that purpose. Also, the fact that not so many have achieved such success is a justification to not mess with these programs and give one more excuse for the lazy and not willing to save in them because they don't trust them.
Regarding austerity, this is not austerity. It is asset confiscation that is coming like we are seeing in Cyprus. The problem with society nowadays is that everyone wants to have everything that others have without saving or sacrificing to get it. Is everyone entitled to a Playstation or Xbox? Is everyone entitled to a large flat screen? A home? A car? Roller blades? Pool? NO! We need to get back to you eat what you kill. That is what my parents did and thought me to do. You work hard, put money aside and when you have cash then you can buy what you want. While I am all for supporting people in need with the essential, I have a real problem with this asset redistribution mentality for people who have already everything in life.
Marc Faber had the best quote this week to summarize the problem: "You have more people that vote for a living than work for a living. I think you have to be prepared to lose 20 to 30 percent. I think you're lucky if you don't lose your life."
http://www.cnbc.com/id/100609635
Cardboard
-
You guys voted for a socialist, sorry to say, but that is what you are getting in return.
Cardboard
-
I noticed, like many others, over the last few days/weeks that both commodities and long term treasury yields are tumbling badly. It wasn't long ago at all that the 10 year treasury was just above 2% and now it is already down to 1.69%. These are signs that the economy is doing pretty poorly, especially considering the speed of correction in these two very broad markets.
Looking at the U.S. numbers or until the terrible employment report today, you could not really figure out what was wrong. I guess we know now. Payroll tax, sequester and more importantly weak global demand are starting to impact the U.S. and has already impacted most countries. While I will not call a global recession, there are some signs pointing to it.
The other thing that seemed wrong was central banks around the world pumping enormous amounts of money into the system while things seemed relatively stable and improving other than for Europe. The scary part now, is what are they going to do if things truly slow down?
It is probably not a bad time to have some cash on hand and some hedges to take advantage of opportunities possibly around the corner.
Cardboard
-
http://seekingalpha.com/article/1320881-an-open-letter-to-bob-benmosche?source=yahoo
I came across this article which highlights a very smart and disciplined strategy used by American Capital to chose between the two. This makes a lot of sense especially for financial companies who are quite dependent on book value since it represents basically their authorization level on how much business they can do.
While this makes sense, for any company that generates excess funds, a small reliable dividend is more appropriate in my view along with the bigger portion allocated between buybacks and a special dividend if you will. I think it would be the best way to attract long term shareholders and reward them in the process.
There has been some debate about BAC's latest choice of buyback vs dividend. It seems that they have made a choice along the lines of American Capital. However, the 1 penny a quarter does not meet the test of a small reliable dividend IMO. It represents a yield of about 0.3% or about what people can receive in a savings account currently. It is not enough to entice people to look at this holding and think it is a good "saving instrument". A more appropriate level would be closer to a 10 year treasury at the moment which is an alternative to investors. For more normal times, a yield close to the inflation rate would make sense. This combined with the annual or quarterly "bump" going to a buyback or special dividend could create a special attachment between investors and their company and would represent very sound capital allocation for their managers: you get long term holders and disciplined managers.
Mathematically, we all know that there is a breakeven point between buybacks vs dividends. However, to apply it in practice and explain it to a board, investors and other constituents is quite difficult. You would need to know very well your future earnings power and along with the unavoidable hiccups would turn out into an art vs science. The approach above would be crystal clear, simple and would make more sense that what is out there for most currently which seems to be a game of handing out candies once in a while to boost the share price. What do you guys think?
Cardboard
-
QE is demand in the market that would not exists otherwise. So whomever is selling these bonds to them (treasuries and MBS) ends up with cash that they are very likely to redeploy in some similar instruments. So it puts pressure on yields (lower) and once they are low enough, some will make its way into equities by more agressive investors.
What people are missing IMO is that technicals or supply and demand do not determine entirely the pricing of assets. This equation changes all the time. It is even more true when someone is a known buyer out there. Just think about stocks where management is agressively buying stock only to see it drop 30% or more.
If economic fundamentals deteriorate, people will sell stocks no matter what the Fed does. Fear is much more powerful than their buying and early 2009 is a proof to that after QE1 was introduced, TARP and an $800 million stimulus.
IMO keeping some dry powder would be a better strategy for the Fed as I still believe that this program currently is way bigger than it should be vs the need (now larger than when the economy was weaker) and it likely hurts the economy by creating uncertainty (like a crutch). I have yet to read also a rational comment as to how it helps small folks get access to loans at low rates.
Cardboard
-
Thanks for the kind comments.
The EU has given Cyprus till Monday to figure it out. The Turks are also starting to complain about these gas fields situated in the South side of the island or Greek side if you will. They feel they own a share despite the continued dispute on the island and these reserves not being on their side.
The Russians use extensively the detroit of Bosphorus in Turkey to leave the Black Sea. They have always been trapped in there especially for their navy. Just imagine the field day for NATO forces during war times. You need to repair or re-arm your SSBN in the winter time? It is the only passage available to them to get to the Atlantic with the North frozen.
Still to be seen how this works out. If a port is part of any agreement, don't expect to read about it in the news. Kind of like Kennedy giving up missiles in 1962 in Greece. Maybe it was in Turkey too, I can't recall.
Cardboard
-
What about the feel on your body of Athleta and Lucy clothes yoga expert? ;)
I think that you guys are missing the point. It is not just about yoga here. The brand is now selling to other people who are not practicing yoga at all. That is how they grew so big. Some wear it just because of the logo/brand, they are in style. They are now expanding in golf. We are well past just yoga enthusiasts.
Think about the younger girl wearing these things because it is cool and the other girls starting to question her and making a few jokes about see through. And they are expensive, so the other girls unable to buy them are also jealous and will jump on the opportunity. How do you think this is going to work out? You might counter by saying that they sell more to women in their late 20's, but tell me that they never worry about how they look, what they wear, perception from others.
This is not like a woman buying a pack of Maple Leaf bacon or other meat product at the grocery store. The person may recall the previous fiasco, but now trust that quality controls have gone up and there is no one to laugh or comment on her purchase.
Moreover, how much more time will people try the pants on in the stores to ensure that they are not see through in the future? They are $100 or more which is retarded for something that is worth half of that no matter what the material is. Tell me that this has no impact on the reputation again. Time will tell, but I am not shorting just for current valuation here. The snowball effect is possible here on the brand and future profitability.
Cardboard
-
"Wait 'til all the Leno/Letterman jokes and morning shows get a hold of this......women will think twice about ANYthing with the LULU name on it.....they don't want lookloos scrutinizing (and drooling) all over their body, OK? We're not just talking the 17%....we're talking the whole image getting spattered with black ink. Head for the hills, bro. "
That looks like one of "these" posts from Yahoo and that is where it comes from, but think about it seriously. It makes a lot of sense and is indeed a very smart observation.
Cardboard
-
Putin now has the door wide open. They will do a deal to bailout Cyprus, but they will request in return some form of joint venture on their gas reserves AND they will be able to establish a naval base on the island. You might think that this would not go well with the British who already have two bases in Cyprus but, they won't complain too much because it will allow international forces to go into Syria.
Russia has always been in search of a southern, warm port for its navy. It was a main reason to invade Afghanistan. Tartus in Syria offered that and was critical in my view as to why they defended the regime so much. If Assad goes, so much for that port since they are seen by the rebels as the main supporter of the regime. Things are now changing and there is even talk that chemical weapons were used yesterday. The situation is escalating and even Russia can't allow chemical weapons to fall in the hands of muslim extremists for its own protection.
However, Putin don't want to be seen as weak and to lose his port in Syria. The Cyprus situation changes all that. A grand bargain will be struck. Russia will get something in return for giving their blessing to go in there.
Cardboard
-
"Lululemon said it had used the same manufacturing partner for key fabrics since 2004. “We are working closely with them to understand what happened during the period this fabric was made,” said the company, which is scheduled to report fourth-quarter earnings on March 21."
""All shipments to Lululemon went through a certification process which Lululemon had approved," Eclat Textile CFO Roger Lo told The WSJ. "All the pants were manufactured according to the requirements set out in the contract with Lululemon."
Lo also said that Lululemon hasn't contacted Eclat since the incident."
Customers are complaining, are saying that this was known and are no longer all in ah ah about Lulu:
http://finance.yahoo.com/news/lululemons-biggest-fanatics-want-ceo-202400854.html
Same stores sales growth are on the decline since Q3 have been announced. Starting to talk about single digits or a major change. Expansion in the U.S. is almost halted and they are now pushing overseas. There are many things going on here that could indicate that unheard of sales per square foot are coming to an end. If the die hard fans are disappointed and starting to bitch about them, it could be telling. It is a very tough to please clientele these ones. They were kind of brain washed, but now they are coming to their senses. Women like that who get angry can do a lot of damage to a brand especially since they are using the no commercial approach. It is all grass roots and social media.
As usual do your homework, but IMO it would not take much more for this one to get kicked out of the momo club and for sales to really take a turn for the worse. Here I am not talking about just a case of overvaluation, but possibly an implosion of profitability.
Cardboard
-
"so does this mean to fight inflation we all should lever up with low interest rates :)
and use the proceed to pay for cash generating assets
(obviously timing is another issue all together)"
I think that if you are financially solid: a stable job or income, your house paid off and at the very least as much investments on the sideline as the value of your home. It may make a lot of sense to borrow against your home at locked rates for 5+ years and to wait for fat pitches to appear. In Canada, the longest locking period is 10 years if I am not mistaken, but it could be much longer in the U.S., 30 years? It is a collateralized loan, your home is at risk if you will, but the rates are so low that it is almost free money.
You have to remember that once the locking period expires, that rates will skyrocket on you under high inflation. Renewing may not make any sense at all, so you have to be ready to pay the balance in full. The key with such approach will be to be patient and to only buy when true fat pitches appear and not fear the monthly interest payments and small principal repayments (you have to amortize over as many years as possible). Not everyone has that discipline. If you think of deploying the capital as soon as you can and things like the dividend or yield matches the loan payments, then it is not for you.
Cardboard
-
LULU
Short at will!
Cardboard
-
I would like to hear some thoughts from Moore Capital as to what he meant exactly from "unencumbered cash" recently.
Obviously, holding any cash in a country where banking is weak would not qualify. Moreover, brokerage accounts in Canada are protected only for the first million dollar. If a broker goes belly up, then what you have above $1 million could be gone. I can't recall if it is only for margin accounts since cash accounts have to be segregated from broker's assets. And, this protection fund is only useful or won't get depleted if it is not all the brokers going belly up at the same time.
Cardboard
-
Yes, 1.1% normally is not a big deal, but it is on a market that exhibited very low volatility recently and now used to the DOW going up daily. I even heard the term "slump" regarding the tiny drop on the DOW Friday in a news outlet following the 10 up days!
It puts us down to 154 on the SPY and it certainly creates a big blip on the chart. Fear could re-emerge at any time with big profits not booked yet. I agree with you that what comes next is much more important in terms of direction. What happens with the banks in Southern Europe tomorrow could be crucial. Will people just brush it off as stuff only happening to a tiny island or they will see the writing on the wall and realize that their own country has no real solution to the problem?
Cardboard
-
They made a terrible mistake. Genie is now out of the bottle regarding confiscation of assets. Something that people other than gold bugs have never thought about before or even possible is now contemplated as a real practical solution by politicians. Markets around the world are now coming down. S&P futures are down 1.1%.
And remember that if you are on this board, you are the rich. You are the "enemy" of at least 90% of the people. You may not all be in the 1% yet, but close enough to be lumped in. Lots of people, an overwhelming majority that will not protest at all or drop a tear for you and could easily be persuaded to take over your assets by force if things get really out of hand.
I have warned about this before, especially concerning Obama who made a huge deal about taxing the rich more which provided next to nothing in terms of budget solution. I was not opposed to more taxation on the rich to ensure fairness, but I was opposed to making them THE target. His intention seemed almost entirely aligned to gain political points with the vast majority instead of resolving the issue. It has succeeded and now, the door is open for much nastier stuff. Highlighting a minority as the problem has led to terrible stuff in the not so distant past.
Cardboard
-
Imagine that our planet contained a lot more cheap oil than what is the actual case and that global warming is a direct cause of CO2 from humans. Add that a few more degrees is all it takes to mess with ocean currents, make melt ice caps releasing tons of methane trapped eventually killing most if not all due to unbearable temperatures and the destruction of the atmosphere. Do you think that Moore's law would have kicked in on time to make wind and solar affordable to save the planet?
Honestly, I don't even know if it is not too late or not already despite remarkable progress in just a decade. People talk about the planet and the next generation, but the only reason why solar and wind are making progress is because of money. If oil had remained at $20 a barrel for 5 more decades, don't you think that the result would be dramatically different? We get into the alternative histories as discussed by Taleb.
By the way, where are the space stations to protect us against an asteroid that will hit us one day for sure? Why is progress so slow? Oh yes, and who is going to make money with that project?
Cardboard
-
Right... So what about the population born and raised on this island who have saved a bit of money through their hard work? There are 1 million living in Cyprus. They can't all be Russian oligarchs.
Cardboard
-
"The trigger for Greenlight was an unheralded item that came across the wire in late July: The largest bank in France, BNP Paribas, had frozen its depositors out of their money-market accounts, an event that caused barely a ripple of coverage in the United States. But at the Greenlight office, an alarm went off. “I was thinking to myself that these people are workers in France, they’ve got a money-market account that they’re earning no money on. Their only goal is to have that money available to them whenever they want it; that’s what a money-market account is. You can’t freeze the money market. "
That was July 2007. Cyprus might not be France, but the actions are unprecedented.
Cardboard
-
You got that right no_free_lunch and your name represents exactly what I think about all these bailouts.
It is very sad that savers around the world are paying the cost for over-levered folks (some are dumb, some have abused the system, maybe that some are unlucky but, it has to be mainly because they lost their jobs because of the former two). Responsible people, not all rich, who have made sacrifices throughout their lives end up poorer because of the irresponsible. It is not the way things should work.
We need to go back to the old rules: 25% downpayments, 25% of your monthly income to service mortgages. Anything else is leading to trouble down the road or over-levered situations somewhere else. Hence No Free Lunch. People thought and keep thinking that government insured mortgages is a good idea. It just means that someone else in the system is absorbing the risk for folks who should not receive a loan in the first place. It is prone to blow-up and these organizations will come to the taxpayers to cover the gap that will inevitably come.
Now if someone in the private sector with no government backing or guarantee and properly supervised wants to do that, then fine. At least this way, you would get rid of unwanted incentives such as keeping mortgage rates low and premium below true cost to please the electorate.
Cardboard
-
Hi Sanjeev,
You got it man! Baller in Vegas... Didn't even know about that term! A night at the Bellagio in their suites would be already awesome!
Check out the Black Card Amex feature on their site or the Centurion card. That is the right match for Ericopoly!
Cardboard
-
Sanjeev,
I can't waste my time anymore with this value for the long haul shizer. I need to compound what I got at 100% a year for the next 8 years to be a billionaire. Well maybe more accounting for taxes... Even if I don't get there, I want an AMEX black card asap!
Cardboard
-
"Samsung Smart Pause' enables you to control the screen by where you look. When you are watching a video, the video pauses when you look away then it starts right up again when you are back," Samsung said in a statement."
Cardboard
-
Some of you guys are way too rational. The market won't care about a small little buyback and resulting value accretion. It is way too mathematical, way too logical.
If you want to make big returns in the stock market like Ericopoly then you need stocks to move up fast. Sell, then buy a cheaper one. Then repeat again. Not to go up at decent returns over the long haul. If I was running a business I would buyback shares too, but here what counts to a degree is Mr. Market impression.
That is why I am disappointed here. The stock will go nowhere now until earnings emerge. There is nothing else before the next round other than upside on settlements which I think are likely the opposite.
Cardboard
-
Actually Sanjeev lost since he predicted $7 billion returned to shareholders. We are only getting $5 billion back. The other $5.5 billion is to buyback debt. That is what a preferred really is. I don't consider it any different than what they have been doing all year or retiring long term debt.
I am quite disappointed here. A dividend increase would have attracted investors and paid me while I wait. $5 billion buyback does very little at their size and also since it is not a mandatory thing. They could decide to buyback only $3 billion if they find the price too high. What is too high for them?
Cardboard
Something smells bad
in General Discussion
Posted
FFHWatcher,
Roughly 10% of the value of my longs in free cash.
Roughly 30% of the value of my longs in shorts with enough cash aside to cover.
Then I have SPY puts very slightly out of the money to cover 1.2 times the value of my longs. My stocks tend to be more volatile than the index hence why I have a larger notional value in puts.
I am giving you "blended" numbers since this goes for non-registered and registered accounts for which you can't short.
If you can help me, how do you calculate a % long vs % short for a portfolio or as described by hedge funds? This would have helped me answer your question more easily.
Cardboard