opihiman2

Not surprising.

Hussman's funds have got to have one of the worst track records these past 15 years. WOw.

http://www.businessweek.com/news/2014-09-25/mystery-man-moving-japan-made-more-than-1-million-trades It jibes a lot with what I've read over the years from other traders. George Soros, for example, said you only need to be right 4 out of 10 times to make money in the market. But, you need to cut the losers fast. I've also heard this from other well known traders. Anyways, interesting read.

I love looking at the macro picture. I know this board has had an aversion to looking at the macro picture because it's too distracting and not helpful to value investors, but I beg to differ. I think if one couples that with being value oriented, one could have avoided the last two bubbles. One could also have gotten in near the bottom to ride the next bubble. It's also why I like Prem as an investor. Although, sometimes, he makes incorrect macro plays (like recently with his past five years of staying out of the equity markets). But, to be fair, he also makes some really bad value plays as well (Blackberry is a value trap, I think). Anyways, I wouldn't read into the USD/JPY rate too much. I think it has something to do with the Yen carry trade. Besides, even during Japan's economic malaise and the US's strong economy, the JPY strengthened drastically against the dollar. I think the yen carry trade is back on, and not just because people think the US interest rates will rise, but because global rates are rising.

Definitely IB. But, I remember there was a tech start up trying to create a free brokerage. I signed up with their beta accounts alerts, and now I haven't heard about them in awhile.

http://dealbook.nytimes.com/2014/09/25/marc-andreessen-sounds-warning-on-start-ups-burning-cash/

I've been reading about this all morning. Really interesting stuff. I wonder what will come of it, though. If the past several years have been any indication, the U.S. gov't is not going to do anything.

Canada is almost a 2D country, though. Most people live in the South, along the US border. Not that many people want to live in the Yukon or Northwest Territories... The US is smaller in total area, but a lot more of it is pleasant to live in. But the whole "running out of space" thing isn't a very convincing argument. China has over a billion people and still has a lot of space to build new cities (which they do, many of them are even empty).. The earth's carrying capacity depends more on our sources of energy and food than on actual living space for people. If we had 100% clean energy and very efficient sources of food that don't require too much arable land, we could probably fit 100 billion people on Earth easily. Oh, most definitely. I read a while ago that if you took the 7 billion people on the planet, stood them shoulder to shoulder, we could all easily fit in LA county. There is a lot of land mass for sure. But, even from a logistical point, it's much better to have more cities than one big one. I read a really good urban planning paper that used a novel simulation in Sim City (pretty LOL, but it was really interesting) to show this. Although, some guy did develop the most evolved city ever using one megapolis in Sim City. Anyways, I agree. Resources will be our major constraint to population growth. Just like it is for bacteria in a petri dish.

For dividends, you have a tangible known return. Of course, though, that company could cut or raise its dividend. Nothing is guaranteed. But, I am willing to bet that on average, a dividend is better overall than a buy back for share performance. Although, I would really like to see a case study that analyzes this.

More bubble news: https://ca.finance.yahoo.com/news/guy-turned-down-500-million-223837069.html $1 billion valuation for a company that does stupid surveys in "the cloud". Hahaha, oh my gawd. This reminds me of the days of Pets.com and Webvan. All you need is some hot marketing buzz words in your business plan and boom, VC's are throwing money right at ya nowadays.

The problem with many share repurchase programs is they are executed with little to no consideration of the stock price. In recent memory, NFLX buying back shares during the period from 2010-2011 (largely to offset dilution) was an egregious use of shareholder funds. The link below is a great read on stock buybacks, with particular emphasis on Henry Singleton of Teledyne, who is celebrated as one of the most shrewd allocators of capital, particularly during the 1970s. http://www.scribd.com/doc/65650082/Teledyne-and-Henry-Singleton-a-CS-of-a-Great-Capital-Allocator "As profits have grown, buybacks have too. Meanwhile, dividend payouts haven‘t changed much at all. Leon Cooperman, an exceptional investor and founder of Omega Advisors, delivered a presentation on Singleton andbuybacks at the Value Investing Congress in New York. Cooperman is a real enthusiast of Singleton‘s career a Singleton junkie, in his own words. He‘s spent a lot of time studying the man and his methods. Cooperman cited many examples of companies that routinely spend billions buying back their own stock. Unfortunately for those shareholders, the stock prices have subsequently gone down, flushing billions down theproverbial toilet bowl.The offenders make up a roll call of blue-chip companies: Microsoft, Intel, Lexmark, Masco, Pulte Homes, Circuit City, Chico‘s and many more. Countrywide is one of the most egregious recent examples. It spent nearly $2 billion on stock buybacks in the last two years. Countrywide‘s stock price has since lost 75% of its value. James Grant, writing in his newsletter Grant‘s Interest Rate Observer, recently wrote about boneheaded buybacks intoday‘s marketplace. Grant then paid tribute to Singleton when he wrote: ―Henry E. Singleton, visionary builder of Teledyne Corp., set establishment tongues wagging by issuing stock at high prices and repurchasing it at low prices.People wondered what he was thinking about. Our postmillennial captains of industry seem not to understand, either." From the article. Exactly my sentiments on buy backs. Most of them are just stupid and mostly a destruction of capital. Unless, of course, the guy in charge is a great capital allocator.

Isn't 3-5x on the high side for North America. I think something like 2.5 - 3.5x is the norm historically (but I'm going from memory of a GMO slide from a few years ago). Yeah, 5x is definitely on the high side. But, it's doable. I think 10x is what it was at the height of the real estate bubble, and that's like, dumpster diving for food because all of one's income is going into their mortgage. I have this interesting story about that too. I met and dated this girl online back in 2006 or so. This was the height of the real estate bubble in the Bay Area. She was living in the East Bay, and she just bought a house. It was a crappy house, but that's all she could afford on her single and moderate income. I found out that she paid a little over 11x her income for that house. She then later told me on our first date that she couldn't afford food, and was scrapping by whatever she could get at the office or from her back yard. I almost LoL'ed but then realized she was serious. So, I paid for her dinner. After awhile, I started realizing that she was doing this online dating to meet guys who would take her out and buy her dinner or lunch. Man, people will do whatever nowadays to buy a house.

Are you being serious or sarcastic??? Please be the later. PUHLEEZZZEEE LOL.... i just simple minded i guess.... i wasn't sure when the planet is at 12B people... where those 6B should go.... China ? India ? Europe ? I logically see North America, South America and Africa... I like to think with the natural resources here ; the technology and the "matured" political system, there's a good chance good things could continue to happen. Just my view :) Ok well, I was just wondering, because you said the global population doubles. I'm like, 7 billion to 14 billion? I don't think that will be the case for another 200 years or if ever. In fact, I think the general consensus is that the global population will top out at 10-11 billion and then start to fall. But, in terms of land mass, Canada has most countries beat. They should just start creating more cities and develop them. You just can keep jamming people into Vancouver.

Are you being serious or sarcastic??? Please be the later. PUHLEEZZZEEE

First, if 12% CAGR from 2000 is accurate, that is NO way sustainable. All median housing prices per sq ft, in the U.S. at the very least, has only increased with wage inflation--which, since the late 70's, has mostly gone up with regular inflation. The notion of housing affordability is strictly tied into incomes. An "affordable" home should be, by a standard rule of thumb, 3-5x the household income. A simple thought experiment will vet out that home prices cannot go up higher than incomes in the long term: Suppose median house prices for homes are going up 1% higher than median house prices, then in 30 years, home prices will be 1.01^30 times higher than incomes (roughly 34%). In 50 years, prices will be almost 64% higher. That's just unsustainable. Although, I do know that Vancouver has seem some tough times. When I was there in 1999-2000, they were just coming out of a big recession, and back then, the USD/CAD was awesome. The people I talked to around the city said that their local economies to a huge hit, it was hard to find jobs, etc... So, I think that housing there must have been depressed--I'm speculating on this. Thus, maybe the boom in housing up there is occurring from a very low point, and 12% CAGR for 14 years has now just created super expensive housing--possibly bubble territory. So, this crap could keep going on for a few more years. Who knows. What I do know is that my old alma mater had probably the best value in higher ed back in the early 90's. It was all over US News and Business reports. Since then, though, the state has cut back majority of its funding, and tuition there has been skyrocketing. It's insane, but I calculated the CAGR from when I went to school there, and tuition has been increasing by about 9-10% yoy for the past 20 years. I thought in no way is that sustainable, but it has been growing at those rates for 20 years. So, who knows when this sucker will blow up. But, I believe that it will. There is no way 12% CAGR for housing prices is sustainable. Even in the SF Bay Area, I calculated long term CAGR at just 5%. I don't see how Vancouver has a leg up on SF's incredible tech economy--which I definitely think is in a bubble.

Worked for a company who was buying back shares at $30-40/sh. Then the financial crisis hit and shares dropped to $9, at an all company meeting someone asked why they weren't buying back shares. The CEO stated they thought shares were a good value but wanted to preserve cash. Shares recover to $40-70 and suddenly the buybacks begin again. They loved to buy at all time highs and do nothing at lows...many companies are like this. Yep. This is why I have a lot of contention with that article. I thought it was a bit non-sensical. I've never seen buy backs done at valuations that make sense. They just re-affirm my view that the guys driving these things are morons. Sometimes, I see buy backs when the company shares are drastically under performing the markets. Dell comes to mind. And, going private is just a affirmation that they really believe they are being undervalued by the market. I've seen that happen a few times before in companies I believed were truly undervalued (a small REIT I owned back in 2000 comes to mind). But, for the most part, I've seen buy backs done that just didn't make sense. And, I believe if we looked at short term and longer term performance, the markets will probably agree. At least that is from my own experiences seeing these things. BUT, I would still love to see a rigorous study done on buy backs and share performance. I think I've read an article on it once a long time ago, and I remember not being impressed by it. I mean, if I was, I would be looking for good companies announcing large buy backs and using that as a strategy. For some reason, I am not. So, that tells me I haven't read anything so convincing to lead me to believe these are ultimately great things to the shareholder. Personally, I would rather take a dividend versus a buy back. But, better than either, a buy out at a set target price that is at a premium.

Has there ever been an intensive study on the effect of buybacks on its company's long term share performance? It makes sense that a company's finance board should have the best insights into its own value. But, after seeing my own company, and many others, buy back shares when I thought they were way expensive makes me think otherwise. Personally, I think companies don't have great track records for these things.

Really? So, were people spending a lot during the 70's oil shock and stagflation? I don't think so.

Actually, the best thing to do for medical is this: 1) move to Canada if you can 2) work part time for health insurance (in some states, such as Hawaii, it's mandatory for part time workers to receive full health benefits) 3) if you do fully retire, get on Medi-Caid and find local medi-caid providers. If you have an emergency health scare, medi-caid will cover all of it and you can find good health providers. The real worry is cancer. Medi-caid will cover all the costs of that too, but you will need to find a hospital and doctors that will take you on. Especially a good CCC center.

That's a good tool. I love monte carlo simulations as opposed to making averaged assumptions as inputs. That's the worst kind of analysis and thinking. The biggest expense that I can see for early retirees is buying your own medical insurance plan in the U.S. The rates as one gets older is quite expensive--at least in my opinion. Or, you could just qualify for Medi-caid since there is no asset test anymore. But, your ability to find hospitals and doctors willing to take you on will be much harder. Sad but true. I looked at HMO low deductible plans, and for 55 year old, it's almost $5000 a year. And that keeps getting higher as you get older. So, I think you'll probably need to spend around $75k total on private insurance until you can reach Medicare age of 65. Finally, if I do run out of money and am still alive, I plan on just kicking the bucket somehow. LoL! Probably just jump off a bridge. edit: oops, I said 75k a year. I meant 75k total

Nah, too early. I'm in cautiously defensive mode. End of QE3 should be interesting. I don't think the markets will react like they did to QE1 and QE2 given the macroeconomic picture is much more better now than then, but it will still be interesting to see. I just checked, and both times QEn ended, markets tanked from 15-19%. So, the next month will be super interesting to watch. In 2 years, though, I think the pain is coming. Inflation is coming for sure. There is most definitely asset price inflation. Currently, holding gains of US household assets as a percentage of gross domestic purchases is at levels only seen during the dot com and housing boom. There is also rapid expansive of thin-air credit even though QE is winding down. There is just under a 50% chance that inflation will start to rise in 2 years. I believe that's when the crap will hit the fan.

For the tech bubble? Hard to say. It's definitely a bubble, but not nearly as bad as it was during the dot com boom. But, I also see a lot of heady valuations that don't make sense. For example, in the venture capital arena, people are throwing money again at stupid ideas. I haven't seen that in a long time. It's almost like the days when IPO's in crappy companies would result in half a billion dollar valuations. Except, the difference now is that these companies are not rushing for instant gold IPO's. They're just burning through all of this investment capital doing ideas that are staid and stupid. For example, Tindr knock-offs and things like that. Also, in SV, I see some other disturbing signs of a localized over heating economy due to the tech bubble. The regional housing boom is pretty well known, which already shows signs of weakening. But, the more interesting thing I've seen is the amount of construction I'm seeing all over the SF Bay Area--especially in SF. I have NEVER ever seen that much new construction in SF ever. There are so much cranes around the city, that I've counted over 25 huge cranes just from the bridge. I must be missing some over the hills, etc... I have never seen that before. I would like to think that economically, that is a great sign. However, the contrarian side of me thinks this is going to end in a bust. Why? That kind of economic activity cannot be sustained forever. Once that construction is done, what else are they going to fix/build? That will slow a lot of construction activity, and I'm sure that will create a slowdown in SV.

http://www.wired.com/2014/09/money-pouring-tech-like-1999and-thats-good/ I work in SV and in tech. I saw the dot com boom and bust personally. I think there is most definitely another tech bubble.

Thanks folks! Interestingly, I guess not much response so far. Hmmm, for some reason, I thought there were quite a few analysts and PM's who frequented this forum. I think Myth something something was an analyst before. I forget. Anyways, I guess I will just need to try it out to see what it's about. Kinda excited, kinda worried. I guess I'll have to just see how it goes.

I just got offered a gig as a junior analyst with a local asset management firm (around 200 million AUM). I've worked most of my career in tech, but I've always wondered what it would be like to work in finance. I'm an older dude, so I'm not sure I can even make a career outside of this in finance. Anyways, I was wondering if there were others here with experiences doing this. If so, could you PM me? I would like to know what the job is like before I decide to take it. Thanks for any helpful replies.