Lilguy

Comment Stream

Comment Stream
Filter comments by:
Highest rated Latest comments
Or filter by symbol:
  • S&P's Best and Worst of 2008
    Most interesting insight: 1/3 of the 15 "most successful" stocks were acquired during the year, and Rohm & Haas may still be.

    At least one, H&R Block, was coming off a spectularly calamitous 2007--and had nowhere to go (other than bankruptcy) than up.

    On the down side, financials and real estate accounted for most of the big losers--and I mean really BIG!

    Several value consumer plays in the list, led by Wal-Mart as well as a few bio-techs, led by Amgen. I expect that, if money can be made in the market this year, the trend will be similar: buyouts, consumer staples, and healthcare bio-techs will outperform; stay away from financials and real estate.
    Jan 03 09:31 am |Rating: 0 0 |Link to Comment |View article
  • 2009 Economic Forecasts Ignore Demographic Shift
    Good insights and "guess" about 2009. My bottom line is about the same as yours--minus 5% GDP next year--but I see it declining more slowly, yet longer--at least through 3Q and probably year-end 2009. Why?

    --Home values will continue to deline--probably another 10-20%--as mis-directed efforts to stabilize prices continue to fail. Banks still won't lend to well-qualified buyers no matter how low rates go.

    --Foreclosures will continue to grow at an accelerating rate across mortgage types as more households lose jobs, and many just walk away.

    --Banks worldwide will continue to contract as they write down another trillion dollars in bad, highly leveraged debt. The Fed will pump more money into them by every means possible, but the money will just disappear as the banks reserves are eaten by the bad debt.

    --Unemployment (official U3, which captures only about half of reality) will sail passed 10% (the number the incoming Obama team is projecting) to 12% as retailers, auto dealers, and many others in retailing of all varieties lay off workers and many go into bankruptcy.

    --Tax rebates, credits, and other early efforts to stimulate the economy will go to savings or paying off outstanding debts, not new purchases. Infrastructure investments will play no role in the stimulating the economy in 2009 given the lead time to get organized.

    --The global economy--trade and finance--will slow more than America's, curtailing US imports and exports as well as incoming and outgoing private direct investment. This will have a greater impact on GDP than most people now imagine.

    In short, 2009 will suck. If we're lucky, we'll reach the bottom by the end of the year. Hopefully, 2010 will be better.

    --

    Dec 29 11:22 am |Rating: +3 0 |Link to Comment |View article
  • Lehman, Forecasting, and the Vix
    This article sounds like a long apologia for why the VIX was useless in anticipating September's market drop.
    Dec 23 16:04 pm |Rating: 0 0 |Link to Comment |View article
  • Dividend Paying Stocks: You Only Have to Be Lucky Once
    Interesting article, but a little too anecdotal for my comfort. I'd like to see a more systematic historical analysis of dividend vs. non-dividend paying stocks in this strategy (vs. Red or Black at the roulette wheel).

    Moreover, they certainly is a situational element to the strategy: Right now, in our recession, it makes a lot of sense to be in dividend-paying stocks (if one is in any stocks), but it probably makes sense to move to growth (non-dividend paying) stocks during a period of strong economic growth.

    Without a little more comprehensive analysis, this is just an interesting tidbit of speculation.
    Dec 23 14:10 pm |Rating: 0 0 |Link to Comment |View article
  • Analyzing Market Troughs and Rebounds
    Concur that this is a good analysis. For better or worse, it seems to confirm the "common knowledge," but having an empirical basis for that knowledge is helpful.

    From an investor perspective, however, both economists and analysts are still substantially understanding the negativity in the economy and markets. We seem to have a long way to go to that trough and a possible economic or market rebound.
    Dec 20 09:59 am |Rating: +2 0 |Link to Comment |View article
  • Fundamentals Remain Negative This Week
    Good article! Like the fresh data that is not usually so well aggregated as here. And I generally agree that watching and waiting may be the most prudent strategy now.
    Dec 14 12:41 pm |Rating: +1 0 |Link to Comment |View article
  • Why the Fed Wants to Issue its Own Debt
    So....would you buy a bill/bond backed by "the full faith and credit" of the Federal Reserve Bank (i.e.--not the USG).

    That would be the bank that has more doubled the nominal value of its assets by taking trash from major banks. How much leverage is in that pile of debris? How much would the Fed add by issuing its own debt?

    Do we call its issuances "fed-lars"?

    What is the exchange rate and/or spread between fed-lars and "real" US dollars (which are really Federal Reserve Notes)??

    Maybe I can begin issuing "lilguy-lars"... backed by my smile, a wink, and a handshake. Hmmmmm.......

    Dec 12 12:36 pm |Rating: 0 0 |Link to Comment |View article
  • Last Thursday Was the Bottom - It's Time to Get Back in
    THe key reason for believing the market has hit its cyclical bottom is that most economists believe the economy will begin to turn around in the 3rd or maybe 4th quarter of next year. These same economists earlier thought that we'd hit bottom before the end of this year.

    Most economists are wrong.

    I think if one looks at what's driving the economic decline, one has a hard time seeing it turn around anytime next year. Layoffs will continue throughout next year (with a possible seasonal uptick in temporary employment for next holiday season). The financial crisis will continue as banks, insurance cos., etc., continue to writedown bad derivatives based on residential and commercial mortgages, credit card debt, etc. And ultimately, the continuing increases in foreclosures linked to mortgages across the spectrum from prime to sub-prime will not subside next year.

    About the only serious help to stem these economic forces must come from the USG. It is clear that Obama intends to try to use major fiscal stimulii to do so. The Fed has already tried to use monetary policy to ease the decline, but so far has generally failed (although things could have been a lot worse without their efforts to date, especially in preventing a complete financial sector meltdown).

    NTL, I don't think anything the Obama administration can do will have significant effect until at least 2010. It just takes that long for even continuing fiscal injections (such as infrastructure development) to make their way through our economy.
    Nov 30 11:35 am |Rating: +1 0 |Link to Comment |View article
  • The Really Scary Thing is the Debt Itself
    I won't quibble with the basic premise of this piece--that we have too much public debt--but one major shortcoming undermines the argument: You have failed to account for inflation in your historic record. While this is not necessary when looking at ratios (National Debt to GDP), it is crucial when looking at the real value of debt over time.
    Nov 23 11:49 am |Rating: 0 0 |Link to Comment |View article
  • TIPS Strips, Redux
    OTOH, as the article above suggests, Treasury has made TIPS so complicated most individual investors can't figure them out. They buy what they know: The certainty of good ol' T-bills and bonds.
    Nov 21 10:37 am |Rating: 0 0 |Link to Comment |View article
  • Valuing Stocks During a Recession
    I use fundamental analysis to help me in making investment decisions, and it is consistently a great "plus" in that effort. So, I appreciate your POV on the infinite timeframe cash flow horizon.

    Still, I find it almost impossible to see around the corner, that is, the next market upturn (or downturn in happier times). As a result, I tend to use fundamentals, especially PE ratios, as a way to look at the intermediate term. This enables me to consider the earnings issues you mention and their implication for price. Other things being equal (a rare occurrence), I find that a combination of a low PE ratio, a high dividend yield (ie--higher than USG or bank CD returns) from companies with a long history of steady or increasing dividends, and sound prospects for participating in an economic recovery (I won't be in ANF) whenever it comes makes for the basis of a pretty good quantitative valuation analysis.
    Nov 18 14:08 pm |Rating: 0 0 |Link to Comment |View article
  • Expert Predictions: Finding Value in Knife's Edge Markets
    I've have begun to re-invest in the market altho I expect it to continue to drop another 100 or so points on the S&P500.

    My investments have been in high yield, low P/E companies that (a) have little debt, (b) have a promising business future (not GM), and (c) a record of steady (if not growing) dividends over an extended period (25 years or more). I am not expecting these companies to cut their dividends (altho their market value has declined) and, in the meantime, reap real returns greater than most fixed income alternatives.

    Nov 12 11:11 am |Rating: 0 0 |Link to Comment |View article
  • Nassim Taleb: Renegade Trader with Renegade Ideas - That Work
    Neither Taleb nor Roubini--nor a host of others--are in a position to destroy the financial system. They are simply exploiting flaws in the thinking and actions of others (ie--highly leveraged derivatives, NINJA mortgages, failed risk management) to make some money for themselves and their clients--just like all the other hedge funds and many mutual funds and ETFS (eg--triple-X short ETFs!).
    Unless we understand the underlying causes of the current financial crisis, we are certain to repeat them. And, unfortunately, even when we learn the lessons, we seem to forget in a very short period of time.


    On Nov 09 10:23 AM Gtarras wrote:

    > Is not Universa the reason Taleb is suddenly all over the place with
    > "doom and gloom" predictions? I am curious if Dr Roubini and others
    > in the same camp have vested interests in destroying the financial
    > system?
    Nov 09 12:14 pm |Rating: +1 -1 |Link to Comment |View article
  • Nouriel Roubini Predicts (Surprise!) a Long Recession
    Hey, Roy P--Some of the economists have been right some of the time, none have been right all of the time, and all have been wrong some of the time.

    I just can't figure out which ones are which, but Roubini has come as close to any in recent times in accurately assessing economic trends. I'd pick him if I only had one choice.
    Oct 09 10:02 am |Rating: 0 0 |Link to Comment |View article
  • Why Is Everybody Selling as Buffett Is Loading Up?
    If I could get the deals that Warren has, I would invest too. Unfortunately, I don't have billions sitting around in my mattresses.

    This capital enables him to get extremely good deals--at the front of the line in terms of preferred shares, earning interest at rates unheard of for the "common man," and having an option to buy stocks below at or below current market prices when the long-term expectation (& Warren's only concern) is that they will go up.

    About the only way I can get that deal is to invest in BRK!
    Oct 08 08:52 am |Rating: 0 0 |Link to Comment |View article

Lilguy's Comments Stream Stats

  • 60 Comments, 8 , 1
  • Total Comment Stream rating - = 7