Posts filed under “Really, really bad calls”

Are You a Trader or an Investor?

At the risk of overstating the obvious, there are important differences between traders and investors. Their timelines differ, as do their goals, preferred assets and methods. Yet some of what I have been hearing from members of each group suggests they themselves can sometimes become confused about these dissimilarities. Blame the recent market volatility for this.

Because of my background, I understand both perspectives: I began on a trading desk, where I did pretty well, if you ignore the several times I nearly blew up. Not just money-losing months — all traders suffer through those occasionally. I mean total destruction. Those experiences sent me searching for a better understanding of investor psychology, into a decade-plus doing sell-side research, and ultimately, to the buy side as a money manager.

So I’m familiar with both sides of the aisle, whether it is as a short-term trades or a long-term asset manager. That lets me spot the trouble that arises when I see folks dancing back and forth over that line.

It is an old cliche because it’s true: Trader’s should never let a bad trade turn into an investment; investors should never try to trade in and out or time the markets.

A quick review explains why investors should invest, traders should trade . . .

 

Continues here: Don’t Even Think About Trading Places in Markets

 

Category: Asset Allocation, Investing, Psychology, Really, really bad calls, Trading

Thoughts on Trump

To save myself from answering this question repeatedly, these are the thoughts I have had about Trump since he became a presidential candidate, which were partly expressed in a Politico article over a month ago. First of all, I think his support is firm and shows no sign of diminishing. He has already weathered storms…Read More

Category: Politics, Really, really bad calls

Investors: Another Chance to Clean Up Your Acts

      My Sunday Washington Post Business Section column is out. This morning, we follow up a June column that advised taking advantage of markets at all time highs to clean up your portfolios. This time out, we look at the market turmoil as a reminder, and the snapback rally as an opportunity. The print version…Read More

Category: Apprenticed Investor, Asset Allocation, Investing, Really, really bad calls, Trading

Hurricane Katrina 10th Anniversary

FFF: Hurricane Katrina 10th Anniversary: Aug. 29, 2015 CENSUS, July 29, 2015 Release Number: CB15-FF.16 JULY 29, 2015 — Hurricane Katrina is the costliest U.S. hurricane on record, and the deadliest to strike our nation since 1928. After initially making U.S. landfall on Aug. 25, 2005, in South Florida as a Category 1, it moved into…Read More

Category: Politics, Really, really bad calls, Science

Minimum Wage Karma in Seattle

@TBPInvictus here. [File under: Petard, hoist on one's own] Earlier this month, AEI “scholar” Mark Perry was spotted using a dubious metric regarding minimum wage. Given the point his ideology was trying (apparently desperately) to prove, Perry proclaimed Seattle’s newly-hiked minimum wage a failure:   As evidence to support his claim, Perry showed the following chart:…Read More

Category: Cognitive Foibles, Data Analysis, Really, really bad calls, Wages & Income

Reminder: Stocks Go Up AND Down . . .

I am reminded how utterly worthless as a market observer/financial adviser Suze Orman is in this series of tweets. Its simply amazing how much terrible advice and lack of comprehension people can reveal in a mere 140 characters.   “Demands for low rates begin as the financial class panics”   Hat tip: Vulgar Trader

Category: Markets, Really, really bad calls, Sentiment

Worst. Idea. Ever.

Every now and then a remarkably bad idea springs to life. It gets debated, ridiculed and eventually discarded. In the marketplace of ideas, free and open debate help to determine which ideas are useful and which wind up in the rubbish heap. (John Stuart Mill was onto something). We tolerate reprehensible ideas because, ultimately, free…Read More

Category: Analysts, Corporate Management, Earnings, Really, really bad calls, Regulation

John Oliver on Televangelists

Category: Really, really bad calls, Video

How to Game Google

Since today is the 11th anniversary of first-day trading in Google shares after its initial public offering, I wanted to bring to your attention a recent bit of gamesmanship that has been taking place with its search function. Google rose to its position of authority and influence because it invented a better way to navigate…Read More

Category: Politics, Really, really bad calls, Wages & Income, Web/Tech

Mark Perry Doesn’t Understand Geography

@TBPInvictus here: As I recently highlighted, Mark Perry – an AEI scholar and professor of economics - is playing very fast and loose with data surrounding employment in Seattle post its recent minimum wage hike. In his recent “report” on the subject, which was picked up far and wide by conservative outlets, Professor Perry wrote (emphasis mine):

“In June of last year, the Seattle city council passed a $15 minimum wage law to be phased in over time, with the first increase to $11 an hour taking effect on April 1, 2015. What effect will the eventual 58% increase in labor costs have on small businesses, including area restaurants? It’s too soon to tell for sure, but there is already some evidence that the recent minimum wage hike to $11 an hour, along with the pending increase of an additional $4 an hour by 2017 for some businesses, has started having a negative effect on restaurant jobs in the Seattle area. The chart below shows that the Emerald City MSA started experiencing a decline in restaurant employment…”

The minimum wage hike took place in the city of Seattle, population ~650,000. What’s all this talk about “area restaurants,” “the Seattle area,” and the “Emerald City MSA”? (Note that companies with under 500 employees — that includes most restaurants — the actual date is 2021, not 2017).

This is simply someone with an agenda deliberately being intellectually dishonest in an attempt to mislead readers and spread misinformation widely through the conservative echo chamber. It’s a tried and true method that, unfortunately, has worked time and again.

When Perry talks about Seattle (city proper) and the “Seattle area,” you may not know it, but he’s talking about two very, very different areas.

Legislatively, economically, legally and socially, these are two completely different regions. Perhaps most important of all, in terms of data collection for the subject at hand, the map below shows exactly how different they are:

 

Screen Shot 2015-08-17 at 6.08.17 PM

 

Seattle, the city in question whose minimum wage is now $11, on its way to $15 over the next 3-7 years – is (as best as Paintbrush lets me draw it) the area within the red oval. The “Seattle area” or “Emerald City MSA,” as Perry misleadingly wrote, are the three more darkly shaded counties – Pierce (bottom), King (middle), and Snohomish (top) – engulfing Seattle and making it look, well, geographically tiny in comparison.

The MSA Perry referenced as being impacted by the new minimum wage has an overall population of some 3.6 million versus the aforementioned population of Seattle at about 650,000. What’s to compare? As Media Matters put it in their takedown of Perry’s work: “The employment trends of the entire region are not representative of the impact of a local wage ordinance in a single city.” But Perry does not care, as he’s repeatedly referenced the same irrelevant data point multiple times on Twitter. He is exactly the man whom Upton Sinclair was referring to when he said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”

Why would anyone look at a MSA when it is the city – and ONLY THE CITY  - that has the new minimum wage law. The New York equivalent would be to suggest that perhaps an ordinance in New York City might somehow have a ripple effect in White Plains, N.Y., or Hackensack, N.J. After all, they are both part of the greater tri-state region (there is a massive New York-Newark-Jersey City MSA). It’s absurd on its face, and any honorable analyst understands this.

This suggests that Perry is engaging in fraud or ignorance. Neither reflects on him favorably. Perry should apologize and AEI should retract that piece in entirety.

~~~

An analyst as intellectually dishonest as Perry apparently is could do something similar on the flip side:

Seattle Passes Higher Minimum Wage; Area Food Biz Employment Now at 134,000!

First, I’d point out that at the end of 2013, the most recent year for which we have good statistics on the city itself, Seattle city employment in two broad categories combined – Arts, Entertainment & Recreation and Accommodation & Food Services – totaled about 40,000, as seen below.

Screen Shot 2015-08-15 at 6.36.53 PM

Source: American FactFinder

Then, I’d trumpet the “fact” that the “Seattle area” or “Emerald City MSA” (see what I did there?) has more than tripled that total to a whopping 134,000. I’d then claim victory at having “demonstrated” that the ordinance I supported was having its desired effect.

Screen Shot 2015-08-17 at 7.47.13 PM

Source: St. Louis Fed

But I’d never do such a thing. Most reputable people wouldn’t.

Read More

Category: Cognitive Foibles, Current Affairs, Data Analysis, Employment, Really, really bad calls, Taxes and Policy, Wages & Income