turar Posted March 9, 2011 Share Posted March 9, 2011 It's a little weird hearing all the talk about bubbling market, while stocks like CSCO, MSFT, FFH, RSH, SVU, etc., are going lower and lower every day for the past month. Link to comment Share on other sites More sharing options...
Parsad Posted March 9, 2011 Author Share Posted March 9, 2011 It's a little weird hearing all the talk about bubbling market, while stocks like CSCO, MSFT, FFH, RSH, SVU, etc., are going lower and lower every day for the past month. Why are they going lower? Cheers! Link to comment Share on other sites More sharing options...
omagh Posted March 9, 2011 Share Posted March 9, 2011 Because the market is efficient? :) Why are they going lower? Cheers! Link to comment Share on other sites More sharing options...
rijk Posted March 9, 2011 Share Posted March 9, 2011 wondering if someone could help with the following questions: - fairfax used to have a Market Cap/GDP slide in the AGM presentation (most recently in 2009 see attached), any idea why that practise has been discontinued in 2010? - although directionally similar, the Gurufocus chart (attached) doesn't use the same values, example the 2000 peak is 150% while the fairfax chart showed a figure slightly over 170%, what could explain the difference? - does anyone know if there is a real-time online version other than the one on GuruFocus? regards rijk Link to comment Share on other sites More sharing options...
turar Posted March 9, 2011 Share Posted March 9, 2011 Why are they going lower? Cheers! I wish I knew. Or was that a rhetorical question which I didn't quite get? Link to comment Share on other sites More sharing options...
Parsad Posted March 9, 2011 Author Share Posted March 9, 2011 I wish I knew. Or was that a rhetorical question which I didn't quite get? Yup! ;D Cheers! Link to comment Share on other sites More sharing options...
gfp Posted March 9, 2011 Share Posted March 9, 2011 wondering if someone could help with the following questions: - fairfax used to have a Market Cap/GDP slide in the AGM presentation (most recently in 2009 see attached), any idea why that practise has been discontinued in 2010? - although directionally similar, the Gurufocus chart (attached) doesn't use the same values, example the 2000 peak is 150% while the fairfax chart showed a figure slightly over 170%, what could explain the difference? - does anyone know if there is a real-time online version other than the one on GuruFocus? regards rijk I don't have a link to the ned davis version, but the difference between the two is from the Guru Focus graph using the Wilshire Total Market index, which contains 98% of all US stocks, while the Ned Davis Research version adds the other 2%. By Ned Davis' method, we were at around 101% at the beginning of this year. Sorry, I don't have anything better than the gurufocus chart you found. Link to comment Share on other sites More sharing options...
rijk Posted March 9, 2011 Share Posted March 9, 2011 thanks for the information globalfinancepartners do you know what type of companies the 2% represent? that 2% was mighty expensive at the peak in 2000 as they seem to have accounted for approx 20% of GDP...... regards rijk Link to comment Share on other sites More sharing options...
twacowfca Posted March 10, 2011 Share Posted March 10, 2011 Here's how we hedge with a barbell strategy. We have long term core holdings that are goosed with non-recourse, long term total return or mostly total return derivatives that require no MTM collateral. These are equivalent to owning the underlying securities with a long term low interest rate loan that doesn't have to be repaid if the market value declines. This gives the upside of owning certain stocks, but limits the downside to about one third to half the notional value. How do you get derivatives like these? My knowledge of derivatives equates my knowledge of plumbing. I take it this isn't just a two year call option. Investment banks will create these for you if you are considered to be a sophisticated investor. You may or may not get an attractive price on one of these, sometimes depending on whether or not the bank is a market maker in the stock. Market makers may sometimes offer incredible bargains on derivatives if they are engaged in delta hedging in a stock and its derivative(s). Otherwise, sift through the various warrants that exist on some stocks. If you find that a stock you like has an interesting warrant outstanding, consider buying it after thoroughly understanding its terms instead of buying the stock. The various warrants resulting from the bank bailouts are very interesting because they are very long term and they have substantial protection against loss of value from the payment of dividends on those stocks. However, you shouldn't buy a warrant if you wouldn't buy the underlying stock. Link to comment Share on other sites More sharing options...
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