There is a tremendous misconception that leveraged (double, triple, long or short) ETFs are to be used as long-term investments. On the surface they make a lot of sense. You want to hedge your stock portfolio, for instance, you buy a double short ETF of the market SDS (double short of S&P 500) or QID [...]
Got a letter from Bank of America (BAC) today that informed me that I am a great customer and also mentioned that B of A will be raising fees and canceling rewards on my credit card. Maybe this is the time to own well-run bank stocks with solid balance sheets. They’ve got incredible pricing power. Though [...]
I own Microsoft (MSFT) stock, and I do believe it is one of the steals of the century. But when I read that the code name for a phone, that is supposed to capture the days of glory from Apple’s (AAPL) iPhone, is “Pink,” I lose some of my faith in the company. I know it [...]
Mr. President is facing the first econ lesson of his presidency. According to a New York Times article Mr. President is trying to figure out what to do with shortage of doctors. He said “we are not producing enough primary care physicians”. Education is expensive, consumes a lot of time and the payoff is not worth the [...]
One more bubble, please. After the bubbles in technology, housing, and commodities, we saw the mother of all bubbles: the one in global liquidity. The world economy seemed to require bubbles for its continued functioning. I get the distinct feeling that investors’ prayers are now being answered: There’s a new bubble now – or an [...]
When I was invited to give a presentation in March about my book to South African CFA Society members in Cape Town and Johannesburg, to say that my expectations for South Africa were low is a tremendous understatement. Click here to see pictures from this trip (opens PDF). Preparations included a visit to my doctor [...]
Banks opened a dirty, ugly Pandora’s box when they destroyed their balance sheets to the point that the Federal government HAD to bail them out. Unfortunately now they’ll be paying for it, dearly. President Obama is going after their credit card fees and will likely not stop there. Our government will start setting interest rates banks can charge [...]
If you thought banks like Citigroup (C) made money in the first quarter, think again. Its business just deteriorated and bonds declined so much, but ironically that was one of the biggest moneymakers for Citi. The lesson is: if you screw up, screw up big, drive your bond prices into the ground and voila your profitability increases. [...]
“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” - Warren Buffett After muting CNBC for years, I turned it on by [...]
The economic picture has changed dramatically since Active Value Investing came out. Over the last six months I’ve been getting a lot of questions from readers that have the same theme in common – now what? This made me think that I should either update the book (write a second edition) or write a series [...]
I’ll not make a prediction if this latest rally in stocks is sustainable or not. I don’t know. But it is self-fulfilling. Rising stock prices improve consumer confidence, and more importantly send a signal to CEOs and other executives that maybe there is a light at the end of the tunnel, and maybe that light is [...]
Israel Old Ruins by Naum Katsenelson I’ll be attending Berkshire Hathaway’s annual meeting at the beginning of May. After attending it last year, I had serious doubts about returning. The Q&A session, which is really the reason to attend and consumes three quarters of the meeting, was not very fruitful. Questions asked by attendees [...]
It is amazing what companies will do to cut costs during recession. We know that demand for oil will decline during a global economic slowdown. Basically, global consumption of goods decline, fewer goods manufactured, and fewer ships are needed to cross the Atlantic. Simply, less petrochemicals used. Today’s article in the WSJ discusses how Maersk [...]
I am back from South Africa where I spoke about my range-bound market thesis to South African Society of CFA in both Johannesburg and Cape Town. I’ve visited many countries over last few years, but none have amazed as much as South Africa. I hope to write my thoughts about South Africa soon. It is [...]