logicalthought

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    • Thu Nov 6th 11:42 AM
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      Commented on:
      Don't Follow the Wall Street Crowd - Prepare for Market Rollover
      One thing to keep in mind is that the survey was emailed in late-September, and most of the results came in soon thereafter. Thus, we don't really know how those money managers would've felt by later in October.
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    • Wed Nov 5th 21:35 PM
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      A $40 Bottom in Oil?
      Your "analysis" makes no sense. The price that an oil producer "needs" to run its government programs has nothing to do with where the price of oil will go. Assuming that worldwide demand plunges below production, the price of oil will fall until the market once again reaches a state of balance. No oil producer would "settle" for $40 if it had any control over the situation and, in fact, if demand falls off badly enough, they might pump more and more in order to make up the lost revenue, sending the price all the way down to the marginal cost of production. I'm not saying demand will necessarily evaporate to that degree; all I'm saying is that once there's a glut of oil, OPEC-- due to its own capital needs-- can kiss its pricing power goodbye.
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    • Fri Oct 31st 06:07 AM
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      Why Jim Rogers Is Still Bullish on Grains and Gold
      Rogers has got to be down HUGE, between his commodity bets and his bets on the Chinese stock market. Will it all eventually come back? Sure, probably, but a great money manager doesn't keep you long at the top of a bubble.
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    • Mon Oct 13th 13:09 PM
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      CNBC's Gasparino Problem
      The funniest part is that Gasparino's "sources" are wrong much more often than they're right.
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    • Sun Oct 12th 08:28 AM
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      Was Friday's Rally Just a Hedge Fund Short Squeeze?
      fatcat:

      Blaming these crazy moves on the "lack of specialists" is just wrong. In the crash of '87, almost all of the NYSE action went through "specialists"... and yet the market was down 20+% in a single day. When things are bad, those guys (just like the Nasdaq market makers who stopped answering their phones) will step back in a hurry.
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    • Thu Sep 25th 06:23 AM
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      Profiting from the $700 Billion Bailout
      You've got at least one thing backwards: doing nothing would trigger a "surge of DE-flation."
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    • Sat Sep 20th 16:57 PM
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      Convertibles: Collateral Damage of the Shorting Ban
      upndown1313: What if "the idea" is to stop the company from running out of money and thus wiping out the common shareholders?
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    • Sat Sep 20th 08:59 AM
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      Convertibles: Collateral Damage of the Shorting Ban
      Big Al45: It's incorrect to say that the issuance of convertible bonds necessarily "abuses the equity position of existing stock holders". Presumably, your company is issuing these bonds because it needs money. in that case, it can either issue stock or debt, and if it issues stock, it's going to have to do it at a price that's probably at some discount to where it's currently trading (or, at least, to where it was trading before the company announced that it was going to sell stock). On the other hand, most convertible bonds convert at a premium to market, and some of them quite significantly so. Thus, a convert can wind up being much less dilutive to the common stock shareholder than selling more common stock. However, if you've got a company that issued a convertible with little or no premium in the conversion price (or, even worse, convertible at a discount), then you've got a company that no one was willing to finance in any other way, and you should be asking yourself what the market is seeing that you're not.
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    • Fri Sep 19th 22:52 PM
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      Convertibles: Collateral Damage of the Shorting Ban
      Big Al45: It's all built into the pricing. Sure, you can make an interest rate that's attractive enough to price an unhedgeable transaction. Do you know how you do that? You raise the borrower's cost of capital. That's the unintended consequence of this moronic ruling by the SEC. (Yes, enforce the laws against naked shorting, and yes, reinstate the uptick rule, but no, don't ban short-selling altogether.) And even after shorting of the financials is reinstated, I wouldn't be surprised if investors demanded a bit of a "risk premium" to protect themselves against the possibility that the government will once again arbitrarily prevent them from hedging.

      To answer your second question: in a 144a transaction (which is what most big converts are), there's a press release put out announcing that a transaction will soon take place; this permits the investors to short the stock concurrent with-- or ahead of-- the transaction. In a privately marketed deal, the investors can't short the stock until after the deal is priced and announced.
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    • Sun Sep 14th 09:04 AM
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      How Much Have our Real Estate Assets Gone Down?
      Can someone please help me interpret that chart? I'm guessing that this is in constant dollars with the "0" line menaing one is just keeping pace with inflation, yes? So if I'm right, then a normal housing peak provides a 150% gain, after which inflation and/or the ensuing nominal decline means a reversion to the "0" line, yes? So does this now mean that it's time for "mean-reversion&q... in a positive sense?
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    • Sun Sep 14th 08:51 AM
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      Selling Short America and the Rest of the World
      The "billionaire short sellers" (as long as they're shorting the stocks in a legal fashion) perform an extremely useful function, in that they often call attention to companies that truly are overvalued, either fundamentally or because of something worse (i.e., fraud). Facts are facts, and instead of railing against "the billionaire short sellers" (which, if your name weren't "Levy", I'd swear is some kind of antisemitic code), why don't you just counter what they purport (very clearly, on live TV) to be the factual reasons for why they're taking these positions? If you're right, you'll make a lot of money, and if you're wrong, they will (although not as much as you would, because one can't make unlevered multiples of one's investment on the short side with common stock). As Buffet once said: "I have nothing against shorting stocks, but it's a tough way to make a living." Do you know why he has nothing against it? Because for his companies, the "facts" (i.e., fundamentals) are on his side, and he knows it. On the other hand, that idiot CFO woman at Lehman (now gone, thankfully) spent so much time attacking "the shorts" because she knew she didn't have "the facts".

      Again, I'm not defending naked short selling here, just the legitimate version.
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    • Fri Sep 12th 19:18 PM
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      Can Two Rich Guys Humanize Microsoft?
      The new ad is funny, but a complete waste of money, and it won't sell a single additional Windows operating system. What they need to do is tell me WHY I should buy a Windows machine (or, at the very least, tell me why I should be ANY new computer, on the assumption that 90% or so of those sales will go to Windows, anyway). In other words, they need to tell me what a new Windows computer will do to improve my life. But, whatever... It's Bill's money, and he can certainly afford to waste it.
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    • Tue Aug 19th 21:18 PM
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      Bush Approval Rating and Oil: Interesting Correlation
      Considering Bush's ties to the oil industry, it poses a rather interesting dilemma:

      "Gee, would I rather be rich, or popular?"
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    • Mon Aug 18th 20:36 PM
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      How Does Barron's Move the Market?
      >>On Freddie, a $4.50 gain if it goes to $0, but a huge loss if it recovers.<<

      Michael, I have no opinion about the value of Freddie (for all I know it could go to a trillion), but that kind of comment is just silly. If one thinks that a stock is worth "zero", it really doesn't matter what the starting point is, as 100% downside is 100% downside, and one enters a position via a "dollar amount", not a "share-count amount". The only caveat I have to that is that if a stock gets REALLY cheap (say, under $1), even a small incremental move against you can be very large percentage-wise, and that's just not worth the frustration.
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    • Thu Aug 14th 14:04 PM
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      The Last Days of the Long Investor?
      Quit whining, and start taking ADVANTAGE of others' short-termism. At the end of the day/year/several years, cash flow is cash flow and if you can buy companies that have (or will have) it at dirt-cheap prices because some quant fund is dumping them, that's a gift for which one should be thankful, not complaining.
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