Here we go, the VIX has spiked 25% so far today. Hold on for the ride, hope you sold last week.
That GDP number wasn't so great after all.
http://www.cnbc.com/id/33549682
I heard on NPR that Obama has proof that his stimulus has created or saved about 600,000 jobs. Too bad 500,000 were lost last week.
Friday, October 30, 2009
Thursday, October 29, 2009
GDP 3.5%? No, "Cross-Addicted" Economy
3.5% Really? No, reeeeeeeeaaaaaaaaaallllllllllllly?
Here are the questions you should be asking yourself: Is it sustainable? Is it real? Is it accurate? Unfortunately the answer to all three is a big fat NO.
This guy came up with the term "cross-addicted" and I agree with him:
http://www.cnbc.com/id/33530661
Here are the questions you should be asking yourself: Is it sustainable? Is it real? Is it accurate? Unfortunately the answer to all three is a big fat NO.
This guy came up with the term "cross-addicted" and I agree with him:
http://www.cnbc.com/id/33530661
Tuesday, October 27, 2009
What About Risk?
I get very irritated when people who are supposed to be investment "experts" talk about return without relating it to risk.
Over the last six months I have been wrong about the direction of the stock market. The bounce from the lows in March has been much bigger than I thought was possible. But then one of my failings is that I fail to realize the human minds potential to delude itself for long periods of time. (I do not exempt my own mind from this judgement.)
But to all of you who are so worried about missing the unprecedented run up we have has since the March low, I tell you this: you are ignoring risk. Return is a meaningless concept if risk is not considered.
Is a bond yielding a 16% annual return a good investment? Is it better than cash? The answer to both of these questions (as my favorite professor from CSOM said) is, IT DEPENDS. In this case it depends on a lot of factors, the most important being risk of default.
So, if you are an investor, not a trader, do not fret about missing this last run-up. It probably isn't sustainable (if you were in and stay in you will likely lose most if not all of your gains). If you are a trader, missing that run-up was a huge bummer. If you didn't miss it, lock in your profits now.
In the following video Rosenberg is right:
Over the last six months I have been wrong about the direction of the stock market. The bounce from the lows in March has been much bigger than I thought was possible. But then one of my failings is that I fail to realize the human minds potential to delude itself for long periods of time. (I do not exempt my own mind from this judgement.)
But to all of you who are so worried about missing the unprecedented run up we have has since the March low, I tell you this: you are ignoring risk. Return is a meaningless concept if risk is not considered.
Is a bond yielding a 16% annual return a good investment? Is it better than cash? The answer to both of these questions (as my favorite professor from CSOM said) is, IT DEPENDS. In this case it depends on a lot of factors, the most important being risk of default.
So, if you are an investor, not a trader, do not fret about missing this last run-up. It probably isn't sustainable (if you were in and stay in you will likely lose most if not all of your gains). If you are a trader, missing that run-up was a huge bummer. If you didn't miss it, lock in your profits now.
In the following video Rosenberg is right:
Monday, October 26, 2009
Worse Than The Great Depression?
Could the period we are entering end up being as bad or even worse than the Great Depression?
My humble answer: Yes. I simply do not buy the idea that because our economy is bigger, it is more resilient.
Now, I am not trying to depress you, just give you a chance to prepare for what may be coming. The temporary relief we are feeling from massive government stimulus is not sustainable.
As I have said before, our economy will recover, but it will take from 7-10 years for it to do so. The changes we are seeing are fundamental. They are going to change our economy from a debt driven one, to a more balanced one, where investment and exports catch up with consumerism.
The recovery process, though, while painful like withdrawal, is necessary if the healing of the economy is to be sustainable.
I just hope we don't have to hit rock bottom before we change our overspending, over consuming ways.
Here is an informative article for those who think things can't get as bad as the Great Depression this time:
http://www.cnbc.com/id/33481862
My humble answer: Yes. I simply do not buy the idea that because our economy is bigger, it is more resilient.
Now, I am not trying to depress you, just give you a chance to prepare for what may be coming. The temporary relief we are feeling from massive government stimulus is not sustainable.
As I have said before, our economy will recover, but it will take from 7-10 years for it to do so. The changes we are seeing are fundamental. They are going to change our economy from a debt driven one, to a more balanced one, where investment and exports catch up with consumerism.
The recovery process, though, while painful like withdrawal, is necessary if the healing of the economy is to be sustainable.
I just hope we don't have to hit rock bottom before we change our overspending, over consuming ways.
Here is an informative article for those who think things can't get as bad as the Great Depression this time:
http://www.cnbc.com/id/33481862
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