Posts filed under “Really, really bad calls”
Lately, there has been a spate of research, analysis and commentary telling us that earnings are at a cyclical high and must revert. Stock valuations, therefore, are elevated and earnings will soon begin to fall, bringing stocks down with them.
This is neither a credible analysis nor a method of valuing equities. Rather, it is an interesting narrative containing two predictions, and generally fails to acknowledge multiple unknowns and variables. (Let’s hold the question of whether anything as complex as the markets can be predicted with a single variable for another time).
Allow me a few more words to explain. Many of the traditional valuation methods rely on two or more variables. For example, price-to-earnings ratio uses both stock prices and earnings to determine if a company or market is cheap or expensive. This raises the obvious problem — obvious to anyone who is not innumerate — of forecasting one unknown by using a second unknown.
Why is that? . . .
Josh has an excellent post up, titled Don’t Hate the Asset, Hate the Price, that makes several important points. I want to reiterate and expand on them here. Some of these are lynchpins of an investing philosophy I have been espousing for many years. Its a broad discussion on price and value, and I think…Read More
Fed Tapering – Shades of 1937? In the press conference immediately following the December 17-18, 2013 FOMC meeting, Fed Chairman Bernanke indicated that it was the FOMC’s current plan to have terminated Federal Reserve outright securities purchases by the end of 2014, commencing with a $10 billion reduction in securities purchases immediately after the December…Read More
500 Years of History Shows that Mass Spying Is Always Aimed at Crushing Dissent It’s Never to Protect Us From Bad Guys No matter which government conducts mass surveillance, they also do it to crush dissent, and then give a false rationale for why they’re doing it. For example, the U.S. Supreme Court noted in…Read More
Here is the latest scam: A call comes in from 415-230-2734 — this is “Internal Revenue” calling. Not IRS, or the full name. San Francisco proper calling NY? No way. I return the call, get someone with an Indian accent. Do it again 3X, getting a different person with an Indian accent each time.They always…Read More
I have long been a reader of Barron’s. I spent countless Saturday mornings early in my career with a big cup of coffee and a hard copy of the weekly. Over vacation, I almost missed this cover story on housing last weekend by Jonathan Laing, Betting on the House. In it, they forecast 5% annual…Read More
There was no background radioactive cesium before above-ground nuclear testing and nuclear accidents started. Wikipedia provides some details on the distribution of cesium-137 due to human activities: Small amounts of caesium-134 and caesium-137 were released into the environment during nearly all nuclear weapon tests and some nuclear accidents, most notably the Chernobyl disaster. *** Caesium-137…Read More
Seals, Sea Lions, Polar Bears, Bald Eagles, Sea Stars, Turtles, King and Sockeye Salmon, Herring, Anchovies and Sardines In The Western Part of North America All Suffering Mysterious Diseases At the Same Time. Is it Radiation from Fukushima? We’ve previous documented that seals, sea lions, polar bears, sea stars, turtles, sockeye salmon, herring, anchovies and…Read More
Dear Sirs, I want to bring to you’re attention a terrible design floor in the MacBook Air laptop: Its power switch. Unlike the MacBoook Pro that it replaced, someone at Apple placed the on/off switch as part of the keyboard. This is a terrible idea. It makes the laptop that much less usable, less efficient…Read More