Skjellifetti

57 Comments

    • Interview with Jim Rogers, Part I: Bigger Financial Shocks Loom [view article]
      chux08: Call him what you will, the smart ones listen <b>with a critical ear</b> to what he has to say.

      There, fixed that for ya!       Aug 21 12:45 PM
    • The Great Consumer Crash of 2009 [view article]
      The author needs to learn the difference between average and median and when it is appropriate to use one vs the other. When Bill Gates builds a house, the average house price looks way out of reach.

      For an alternative take on CC debt, see:

      articles.moneycentral....       Aug 15 04:04 PM
    • Checking In on the All-ETF Portfolio [view article]
      From your Feb article [my substitution]:

      If we have [$BLACK_SWAN], the short-term losses to any portfolio are likely to be far greater than Quantext Portfolio Planner or any other portfolio model can estimate. This kind of massive disruptive event is not what these models are capable of estimating.

      ...

      Ultimately, portfolio models are perhaps most useful because they give investors objective tools to:

      1. examine diversification benefits in their portfolios
      2. estimate total portfolio risk (albeit not very well for market crashes, wars, epidemics, etc.)
      3. estimate total portfolio returns in light of assumptions

      It is point number two that I was trying to highlight. MPT is all about creating portfolios with the best return for a given amount of risk. But if we are doing a poor job of estimating risk, then it is not at all clear that we are, in fact, maximizing expected returns per unit of risk. Tools such as QPP may thus be giving us a false sense of security when they recommend, say, a concentrated position in Malaysia over a larger more diversified basket of emerging market stocks.
       Aug 05 10:56 AM
    • Checking In on the All-ETF Portfolio [view article]
      This may also show the limits of using MPT for divining the best risk-adjusted allocations. You have 5% devoted to Malaysia. But in 1998, during the Asian crisis, Malaysia, IIRC, put strict limits on the repatriation of international investments. That would have meant that 5% of your portfolio was suddenly unavailable. How does a tool like QPP account for this kind of risk (or is this uncertainty)?

      I'm not a big fan of Nassim Taleb. He is a terrible writer who is guilty of some egregious rhetorical fallacies. But his main point, that MPT has a terrible time coping with the unknown and that it is this kind of uncertainty that is the biggest source of investment losses, is spot on. That QPP would include Malaysia in a hypothetical best risk-adjusted portfolio is a good example of Taleb's point.       Aug 04 05:04 PM
    • Delusions of Debt [view article]
      Please explain to me how you can meaningfully compare the purchasing power of a 1914 dollar with a 2008 dollar when 90% of the things that are sold in the market today did not exist in 1914.

      IIRC, one of the Rothschild's died in the 1800s from an infection that we would cure today with $4.00 worth of antibiotics. All of his gold couldn't save him. I'll happily take today's goods and prices over the goods and prices of 1914 any day!       Aug 04 01:04 PM
    • Spotlight on Open Source: Citrix Systems, Red Hat [view article]
      Red Hat is very well known in the Open Source community. But during a quick visit to their web site, I didn't see any Open Source products that Citrix Systems offers. Aug 01 05:16 PM
    • Investing in Currency ETFs: Irony of the 'Bail-Out' Mentality [view article]
      No need to jump to conspiracy theory explanations. The congres... looks like a simple bug in the Seeking Alpha codebase. I suspect that it is trying to treat any set of characters that contains a "/" as part of a URL and simply chopping off the display of the extra characters which would not matter if the the string really was the text displayed in an html anchor tag. Look at morgan77's post where the link text becomes /ec... for an example. Jul 16 01:27 PM
    • Bernanke Testimony: Dove With Gloves Off [view article]
      The Left constantly criticizes the Bushies/Right wing (for good reason!) for ignoring science and making policy choices that ignore evidence even when that evidence is overwhelming.

      But the Left is just as guilty in their own way. There is no evidence that speculation has caused the price of oil to skyrocket while there is plenty of evidence that good ol' supply and demand are wrecking most of the havoc. One fact that ought to wake up the "its those evil speculators" crowd is that it is the Left wing economists like Paul Krugman who have been poking the most serious holes in their argument. But, hey, just exactly like the Right, the Left will ignore the evidence when it doesn't fit their carefully crafted internal reality.       Jul 15 03:08 PM
    • Bonds: No Inflation Threat in Sight [view article]
      The argument that rates are low and thus don't reflect inflation because there has been a "flight to safety" seems fishy. If you expect your "safe" investment to be eaten up by inflation, then it isn't really "safe", is it? Jul 10 02:20 PM
    • Judge Protects YouTube’s Source Code, Throws Users To The Wolves [view article]
      The US is in desperate need the kind of privacy protections that are in place in the EU. It really pisses me off when I call up the gas or cable company and they demand that I give them my SSN and mother's maiden name in order to talk to, say, a billing rep. Private enterprise collects way too much info on their customers and has no problem sharing that info with whoever they choose irrespective of whether their customers want them to share that info. We have a few select laws like HIPAA but most have no teeth like the financial privacy laws that allow your bank to share your data with their marketing affiliates who can then share it with whoever they please. Jul 03 04:29 PM
    • Two Moves to Make as the Fed Inflates the Commodities Bubble [view article]
      "It’s fairly clear to me that concerted speculation by hedge funds and pension funds is what’s been pushing up oil prices."

      Then perhaps you would be kind enough to explain the mechanism that is making this happen. If there is a bubble, this implies that current supply is greater than current demand at the current spot price and therefore someone must be buying and storing the excess supply. Show me who is buying the excess supply and where they are storing it.

      On the other side of the coin, there are a number of factors that have reduced the supplies of many commodities (problems in the Nigerian oilfields, lack of investment in Venezuelan and Mexican fields, power shortages in Chile and South Africa, etc.). At the same time, demand is not falling.

      Commodity prices are not being driven by speculators. Simple supply and demand is fully capable of explaining the current high prices. Claims that speculators are driving the prices is a classic example of a wishful thinking logical fallacy. Gosh, if we could just make those evil speculators go away, we could be back in 25 cents per gallon heaven just like in my youth. Better learn to deal with reality, because high prices are going to be around until we can develop alternatives.       Jul 02 12:56 PM
    • Spanish Inflation, Retail Sales and Bank Lending [view article]
      NOBODY expects the Spanish Inflation! Our chief weapon is surprise...surprise and fear...fear and surprise.... Our two weapons are fear and surprise...and monetary growth.... Our *three* weapons are fear, surprise, and monetary growth...and an almost fanatical devotion to oil speculation.... Our *four*...no... *Amongst* our weapons.... Amongst our weaponry...are such elements as fear, surprise.... Jun 30 03:43 PM
    • Adventures in Technical Analysis, Jim Cramer Edition [view article]
      "Charts are great for predicting the past." -- Peter Lynch

      "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" -- Warren Buffett

      "If past history was all there was to the game, the richest people would be librarians." -- Warren Buffett

      Zack Bass, however, is correct that Salmon's argument is a rhetorical fallacy (as is my own appeal to authority argument above). The real question is to ask if there are any definitive studies that show that technical analysis is predictive of the future and not just the past.       Jun 23 05:35 PM
    • Election 2008: Obamanomics and Its Achilles' Heel [view article]
      Alphameister,

      You sound like the modern Bush Republican who really doesn't believe in Democracy when the policy outcome isn't what you think it should be. It seems you further pretend to like rational discourse in one breath while mouthing unsubstantiated smears against those with whom you disagree in a second breath. You are exactly the type that the rest of us are so revolted by after 8 years of ideologically driven politics that has utterly failed to solve a single damn problem and created many, many more of its own. There is a reasonable chance that Obama will be elected in a landslide. Better learn to deal with it.       Jun 23 01:37 PM
    • Election 2008: Obamanomics and Its Achilles' Heel [view article]
      jswede - It wasn't my article. I'm just providing some easily observable counterexamples to show how badly argued this article is. And since we cannot rerun the Reagan experiment exactly with only a change to the defense spending (the "change one thing while keeping all else constant" that is the basis of scientific experimentation), we will never know if your statement that defense hindered the full effects of the Reagan tax cuts is true or not. Jun 19 02:51 PM
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