opihiman2

Remember, the past two Federal Reserve chairmen did not spot the asset bubbles nor the fallout of their impending bursts. Greenspan said there was no equity bubble at the height of the Nasdaq bubble, and Bernanke didn't even think housing was overvalued at the height of the housing bubble. I wouldn't put much faith in what the Federal Reserve chairman is saying about these things. They seem to have crappy track records. But, here's what I think is probably the most likely outcome of all this. A bust at worst, stagnation at best. Why? We know there is a strong correlation between interest rates and market indices. Stock markets have been on a tear since the early 80's. And, long term interest rates have been falling since Volker's massive fight against inflation. Now rates are at zero. We've only had a few increases in rates, and every time that has happened, the economy has stalled or a major bust followed (would have happened regardless of interest rate increases). I believe that in 2 years, inflation will start to take off. Thin air credit has increased by 9.7% yoy despite the winding down of QE and Fed credit growth. Historically, that is high and often precedes higher inflation by 2 years. The correlation isn't that great, but it's still around 50%. Regardless, I believe the Feds will increase rates at some point to encourage savings. And, even hints of rate increases or winding down of QE have shown drastic responses from the stock market since 2010. I remember when QE1 was going to end, the stock market started tanking hard. Then the Fed came to the rescue with QE2, and ever since people assumed QE infinity, the markets have been taking off. It just makes me wonder what will happen when all this stimulus ends next month and rates start to really rise.

I'll bat. It was easy for me to see a huge tech and stock market bubble in 1999-2000. Also, quite easy to see it undervalued after sept 11, 2001--didn't get into the market until a few months later when prices stopped dropping every other day. It was also easy for me to see a huge real estate bubble in 2007. I completely side stepped the ensuing market meltdown in 2008. To be fair, I didn't think the market back then was overvalued. I just saw a huge asset bubble that was about to blow up, and I lived through that once before to know a huge recession was coming. Things like that will blow up everything. This time, I think the US stock markets are definitely overvalued on every measure. 50 day and 200 day RSI's are often always over bought. Schiller PE is again back to level unseen since the past two market melt downs. The % of assets (including stocks and equity in homes) owned by households to GDP is also back to levels unseen since 1999-2000 and 2007-2008. We're also in a period of zero interest rates with all time high corporate profit margins. I believe that is an implicit ceiling to growth. We're seeing a lot of market valuations and pricing anomalies that absolutely make no sense: AirBNB worth more than the Hilton franchise? Oh puhleeze. Tesla worth half of Honda? WTH?? So on and so forth. And then there are things that make me wonder about growth in consumer spending that are a large part of the US GDP. Anyways, I'm not saying it's a bubble. But, it's bubblish.

Late to the party, but wow, congrats, Sanj! This is awesome. I will definitely be logging on more to check for further news. Especially now since I'm looking for a great money manager I can trust and maybe get free beer from since you guys now own Russell Breweries??? If I become a share holder, can I get free double IPA's from them? J/k'ing. I actually had a bit of their beer when I was in Canada last year, and I'm really stoked to see the craft beer movement getting big in Canada.

Interesting posts. I semi-agree about Heebner. I like his investing style and he's a good manager overall. His long term performance is still pretty good. But, I remember back in the day when people were jumping into his funds after a string of stellar performance. It just reminds me of the obligatory caveat emptor: past performance is not indicative of future performance. edit: It doesn't seem very clear, but TAM blew up their fund and went from 33% CAGR to 10+% CAGR. Not 10% since 2008. That might imply their CAGR is still in the 20+%.

Hey folks, Long time no post. I thought I would make a post about fund managers who blew up their stellar track records over the years. Please add to this list if I'm missing any: Bill Miller Legg Mason Beat S&P for 15 consecutive years, blew his fund up in the next 5 and was ousted as the fund manager Eric Sprott Sprott Asset Management Not that long ago (I can't remember how long), their hedge fund had 18+% CAGR. The Sprott Canadian Equity Fund was averaging near 30% since 1997. Being a gold bug and precious metal fan, Sprott's funds took a big dive and is now averaging 6% and 11-12% CAGR respectively. Trapeze Asset Management Up until the 2008 recession, TAM had unreal returns for 10+ years, averaging 33% CAGR. After the major blow up, their long/short fund is now averaging about 10-11% CAGR since 2008. They no longer post their previous performance graphs that showed their stellar performance up til 2008 Ken Heebner, CGMFX Had the best performing mutual fund there with almost 20% CAGR. Blew up the fund a couple times the past few years ago but seems to be back on track. Now averaging 10% CAGR. Any more?

I haven't been on the forum in ages. I decided to check it out yesterday after hearing the terrible news about SHLD and other retailers like JCP. It's too bad that Sanjeev has decided to go incognito mode. I've used lots of his ideas and others on here as a spring board. But, it seems to me that over time, it's really hard to maintain focus, composure, and conviction with so much eyes on you. Must be a hard game to maintain. I used to follow the Kirk Report too way back in the day. He used to share all of his trading ideas, but then he felt that the pressure got too intense when subscribers to his report started harping at him for all the missteps. But, it wasn't really his fault. Even if you tried following Kirk's trades, he did things that most other followers didn't that would limit their losses. So, he decided to pull the plug on that and go into the philosophy of "teaching people to fish and eat for a lifetime". From what I gather, the Kirk Report has now gotten such a significant following, that he easily pulls in $200k a year from subscriptions. Even without reporting his trades. The cool thing is, he donates most of that to charity or to maintain the website. Anyways, no worries, Sanj. I personally wouldn't want everyone to question my every move all the time. That would be rough, especially given the context.

Pretty messed up... I know there are quite a few WFC fans on here. Personally, I've never liked WFC as a company. As a stock, maybe that's something else. But, as a company, no ways.

Some more anecdotal evidence, but in my neck of the woods in Monterey, CA, houses on the lower end of the market are being gobbled up. I see pending sales signs everywhere. HOWEVER, even from 1-2 years ago the prices of homes around here have dropped. A house that has been sitting on the market for over a year up the street from me has finally sold at 15% below their initial asking price. I've read that in the Bay SF Area, though, there are bidding wars going on for homes with all cash offers. I think the homes in the larger metropolitan areas are doing better simply because of their economic power. They just have more jobs, and I think people gravitate to those areas. My friend who is a senior loan officer is saying that the mortgage refi business is booming like never before. Anyways, regardless of all this, after several years of being on the fence about housing, I think houses are now very attractive in my neck of the woods. I think they are probably the best investment out there. It's now much cheaper to buy here than rent.

I do not understand this purchase. When I bought IBM at $60 a share in 2003, I thought it was definitely undervalued then. At $160 now?? What is the guru thinking??? First, for those of you who keep saying IBM is transforming itself into a services company just don't understand this company and shouldn't invest in it. IBM has been getting away from services and into software where its profit margins have always been the fattest by a sizable amount. I know that since 2003, IBM have been slowly moving away from services as its key driver (just watch some old Palmisano corporate strategy videos where he explicitly says this) to software. Also, even if it was to orientate itself into a services firm, where would their growth areas be? That field is heavily saturated. IBM's strategy in the past several years, to eek out more margins in services since organic growth wasn't happening anymore, was to cut domestic services and rely more on outsourcing. There was an internal project called Project Lean that has been (or currently still is) implemented in IBM to reduce services personnel in the U.S. to over seas accounts. You can infact see this from their employment profile. Employees, especially in services, in the U.S. has been reduced by around 40%! However, their overall worldwide employee base has not changed! That's pretty telling on how IBM is trying to drive more margin out of services. Anyways, I could go on and on. I think this was probably the first buy from WEB that made me go, WTF????

I think the past year just verifies my view that the stock markets are not (or at the very least, should not be) leading indicators. Not only the stock market but the commodities market. First, we see oil going back to $60 a barrel when it seemed like the US was falling into a double dip recession, but then we get some better than expected economic reports (albeit still not good or great) and oil is taking off again like we're back in heady economic times. The same can be said of the stock market. I actually can't believe that the Dow Jones was nearing 15-20% off its all-time highs this past year. It's like it's pricing in the pre-bubble economy when much of the world, including the U.S., is struggling with the aftermath of the financial crisis. That made no sense to me given the context, but I've learned one key lesson from it: liquidity trumps value. Regardless, I still believe there will be another huge leg downwards in the equities markets. If the ECB becomes the lender of last resort, that leg will be pushed off into the future; however, it will come. At some point, rates will need to rise. I don't buy the deflationary scenario. When the entire world starts pumping out the dough, something that has never been done in modern finance, I believe we will see all sorts of distortions in pricing.

A lot of you guys give him way too much credit. It's not Steve Jobs that turned around Apple, it's Jonathan Ive. And Edison? Fuck Edison. He doesn't deserve any of the credit given to him. I think Tesla deserves all the praise and Edison should have gone down in history as the biggest ass of all time.

I can't believe the circle jerk on this site sometimes. Steve Jobs was an asshole and highly functioning sociopath. It saddens me to see a bunch of you idolize this guy. This quote from the book got to me: "Bill is basically unimaginative and has never invented anything, which is why he's more comfortable in philanthropy than technology," Jobs sneeringly told Isaacson. Well, Steve-o, you're were more comfortable with alternative medicine which is why you're now dead. What an ass.

I hate it when this board cheers on the noise instead of the trend (or signal), but I have to say ouch on BAC. Man, it sure must hurt to own it right now. I love seeing it cheaper, though. However, at the same time, I think the current price reflects the impending reversal of the yield curve. With all of its problems, I'm still on the fence on it.

I think rail shipments needs to be contrasted with other economic indicators. It is misleading just to look at one narrow window into the economy. Contrast this to two declining quarters of shipping volumes from FedEx. It's hard to say where the real economy is going.

What's the easiest to solve sovereign debt problem? I think default and devaluing their own currency is the easiest way to solve a sovereign debt problem.

I guess not. The General board seems pretty quiet after a massive two day drop. Is everyone suffering from volatility fatigue? I'm surprised at the lack of noise on here.

All you guys that ordered from B&N, your orders are now getting cancelled.

Man, go back and have them price match Walmart. Local walmarts are selling the 16gb version for $99. I just picked up a whole bunch.

Just a heads up. Anyone who has been interested in a tablet device should go to HP now! They dropped the 16gb Touchpad to $99 and the 32gb to $149. The 16gb are out of stock, but you can still get the 32gb. If you add a $6 filler item such as the multipurpose 8x11 paper, you can use the save30hp code and save $30 more on the 32gb model. If there is one good thing about this HP fiasco, this is IT. BTW, these were retailing for $400 and $499 just earlier today.

That framework is excellent for making equity and debt investment decisions. However, I think people try too hard to extrapolate it to nearly everything. The problem I find with the rationale on here is that everything has an intrinsic value. This is clearly wrong. In the finance sense, there is a definition of what intrinsic value is. However, in the pure economic sense, there is no IV. Value is what humans place on an object and it is strictly a function of supply and demand. I don't know why people on here keep insisting on doing simple balance sheet exercises with gold to point out there is no "IV". Yeah, there is no IV in the finance sense, but there is plenty of value in the economic sense. As long as people see value in it and want to buy it, there is IV there. Also, to all the gold bashers, remember this: there is a finite supply of gold and it is priced in an infinite supply of something else. Just remember that as QE3 hits.

I expected more from the members on this board. I am definitely not a gold bug, but I do know that chart is very misleading. Adjusted for inflation and the depreciation of the USD, gold is still nowhere near the 1980 highs. Not only is the chart misleading, it's a non-sequitur. Just because gold prices went nowhere for 20 years doesn't mean the current run in prices means it's in a bubble. Gold was priced MUCH lower 100 years ago as was equities and other commodities. The USD was much higher back then too. This just reminds me of when someone else on here claimed that Japanese stocks jumped after their S&P index. It's selective bias, and it was clearly wrong. I hate cherry picking data to fit one's hypothesis. It's not scientific and leads to terrible thinking.

I do not understand the Autonomy acquisition. It is almost as bad as the Skype acquisition by MSFT, and both makes me question the leadership and long term returns of either company. 1) I do know some people at Autonomy and they liken their search appliance to a piece of junk. Google's search supposedly does a much better job and they have the mantra of "do no evil". Autonomy has no moral qualms about throwing you under the bus and will actively collect personal data and sell it. 2) Why is HPQ buying a company that has a $3.4 billion market cap for $10 billion??? 3) How does this acquisition make any sense for HPQ? They look like they are trying to make a run at IBM by leveraging into the software business, but IBM's acquistions at least made sense to their overall software portfolio: webservices, business process management, software development, J2EE and Java. I just don't understand how Autonomy makes any sense for HP's overall strategy. It seems that HPQ is trying to become the next Yahoo. Everything it touches just turns to crap. And it is sad that after 10 years of bad management, they will probably head the way of Sun. I will not pay any money for a company with a decent franchise but horrible management. The market is making a good call on this one. I think HPQ should head to the teens.

Some poignant and wise words. Loved it.

Today's bond action: http://finviz.com/futures_charts.ashx?t=ZB&p=m5 Barely moved since the downgrade. If he or she made any money on this bet, it is way less than $10 billion. Probably near 10-30 million. edit: Man, if I have $1billion, I wouldn't be making bets at all!

Ugh, not the Daily Mail. That is a dreadful piece of tabloid trash. The article is just terrible all around: no real information, no credible sources cited, no anything worth reading. First, if I recall, the bet was a short on Treasuries. Whoever that person is, the thesis, I think, was for rates to skyrocket. That has not happened. The total purchase was for 8470 10-year treasury futures. Each future has a notional value of $100,000 which means that it roughly corresponds to buying that much of a treasury bill. So the notional size of the bet is roughly 1 billion. However, the future has barely move as a result of the downgrade. As it currently stands, the bet hasn't even come close to paying off the 10 to 1 returns. I don't know where they get that number from.