Lion of the Blogosphere

Archive for the ‘Investments’ Category

Response to a comment about stocks

B.T.D.T. wrote in a comment this morning at 9:00 AM:

The coming rate cuts by the Fed will have the stock market on a tear once all this hysteria settles down. Are you sorry that you sold your stocks yet? I’m not…I bought more.

Well talk about a comment that didn’t age very well. This morning, Fed announced an emergency rate cut of half a point, but the Dow Jones fell 785 points today.

Totally not sorry I sold my stocks. The S&P 500 is down more than 10% since I sold my stocks on February 6th. They can only fall further now that the Fed is out of ammunition. Rate cuts won’t fix supply chain havoc caused by China shutting everything down, won’t fix the massive drop in demand that will be caused when the U.S. has to start shutting things down.

Once I feel that there’s no more bad news ahead, it would be time to buy stocks, but there’s a lot of bad news still ahead.

Written by Lion of the Blogosphere

March 3, 2020 at 4:15 PM

Wuhan virus: sell sell sell

Stock market at all-time high while the Wuhan virus is about to crush global demand and wreak havoc on global supply chains? The market was already in bubble territory before this.

Up until yesterday I was lulled into thinking that the Wuhan virus was no big deal, that it would go way just like viruses had in the past, like SARS and Ebola. I now realize that this time it’s different. China is not able to contain the virus to Wuhan or the Hubei province, the entire country is going to be infected. We know little about what’s going on in China because the totalitarian government has locked down the flow of information, but it appears that this virus is way worse than seasonal flu. Much deadlier and more contagious. Even if this is only a Chinese thing, it’s going to cause a global recession, but there’s no confidence that it’s only going to stay in China. The virus has shown up all over the world and who knows if it’s gotten loose somewhere and is spreading in another country?

So I’ve sold all of my stocks. Which I already had been woefully under-invested in because I failed to heed the lesson that you can’t predict the market. Except when there’s an external force that’s going to tank the market. You see, professional Wall Street people know way more about what other Wall Street people are going to be doing, and the market is a big herd mentality. But Wall Street people know jack shit about viruses. Here’s the one chance to know more than they do.

Written by Lion of the Blogosphere

February 6, 2020 at 9:49 AM

I’m in favor of the Schumer Sanders plan

Chuck Schumer and Bernie Sanders propose restricting stock buybacks. I agree with this policy! But not for the reasons they say.

The reason that a corporation exists is to make profits for its shareholders. Why would anyone buy stock if the companies will use all their profits to pay higher wages to its workers? Our entire financial system would collapse! So I ignore the socialist nonsense in the op-ed.

However, the correct way for companies to pay profits to their shareholders is by issuing dividends and not by buying back stock. Corporations like stock buybacks because they are a tax loophole that allows the return of profits to shareholders without a dividend tax, and they create the illusion of steadily increasing earnings-per-share. Wall Street loves buybacks because they make money on the buying and selling of securities.

So I’m all in favor of ending stock buybacks. I hate tax loopholes, and I hate the value-transference Wall Street scum. No to stock buybacks, but yes to dividends!

Written by Lion of the Blogosphere

February 5, 2019 at 12:53 PM

Posted in Investments

When NFL players invest in cryptocurrency

That probably means that there’s a bubble. It’s well known that NFL players are the world’s worst investors. Getting ripped off is what they are famous for.

But as I have pointed out before, my investment advice has often been badly timed.

Written by Lion of the Blogosphere

March 2, 2018 at 2:50 PM

Posted in Investments

Never come to my blog for stock advice

Another bad day for stock prices. This post could have been me capitulating to the bull market.

Written by Lion of the Blogosphere

February 8, 2018 at 3:55 PM

Posted in Investments

MSM blaming stock market volatility on Trump tax cuts

They say that the possibility of inflation and budget deficits are hurting the stock market.

I don’t actually buy it. Why didn’t the volatility start in December? Unlike all other tax cuts in my lifetime, the HUGE tax cuts on corporate income are beyond a doubt bullish for stocks (at least in the short run). Rational analysis is that stocks are worth more after the huge corporate tax cut.

Bubbles pop for no reason at all. But if Trump took credit for a bull market that started many years before he actually became president, then it’s to be expected that the people who hate him will gleefully blame him for a bear market (although it’s not at all clear yet that a bear market has begun).

* * *

My opinion on the wisdom of the tax cut is that it’s bad policy to feed a bubble, and that the top 1% rich didn’t need their taxes cut, and based on how much they hate Trump and supported HRC, they didn’t deserve a tax cut from Trump and Republicans. The tax cut should have been more targeted to benefit the prole whites who voted for Trump.

Written by Lion of the Blogosphere

February 8, 2018 at 8:30 AM

Posted in Investments

The CEO with the bad toupée

Many years ago, shortly after I started working for a biotech company in Phoenix, I asked someone, “who’s the old guy with a bad toupée?” That was the CEO. His bad toupée was legendary. A topic of discussion on the Yahoo Finance message boards.

Written by Lion of the Blogosphere

January 29, 2018 at 1:24 PM

Posted in Investments

Bitcoin bubble?

Jonathan Ratner writes in the Financial Post, “Whether it’s the shoeshine boy of decades past, or the taxi driver of more recent times, an old investing adage suggests that when somebody you wouldn’t expect is talking stocks or giving you portfolio advice, it’s time to sell.”

I just overheard one Indian IT person teaching another Indian IT person how to buy bitcoin.

Time to sell?

* * *

Can bitcoin ever be a useful unit of exchange for the AVERAGE person? Today, the average person doesn’t know how to buy or use bitcoin, and even people who know how to buy it and use it all too often have their bitcoin stolen by hackers.

(Of course, things can change. I once thought the average person would never use the internet, and boy was I wrong about that!)

Credit card transaction fees suck, but nevertheless the credit card companies provide enough added value and security that they are almost universally used and accepted by both consumers and merchants. What’s the catalyst that will cause everyone to switch over to using bitcoin?

I recently pointed out that computer game site Steam recently STOPPED accepting bitcoin because it’s less expensive/risky to just take credit cards and Paypal despite the transaction fees.

Written by Lion of the Blogosphere

December 28, 2017 at 5:03 PM

Stock market advice

I just bought some SPY (a large ETF that tracks the S&P 500).

Based on the proverb to “buy the rumor, sell the news,” this is a good time to sell, with the news being the Republican tax bill.

But I think that post-tax-bill animal spirits plus the January Effect will keep stocks buoyant through at least February.

However, I don’t feel strongly enough about this to go 100% in. And there’s the usual warning that my timing advice is more often wrong than right.

Written by Lion of the Blogosphere

December 20, 2017 at 11:03 AM

Lion car recommendation: Honda FIT

Total cost of ownership is only about $5000/year (because of low price and high gas mileage). That’s a lot less expensive than any electric or hybrid car. Furthermore, because it’s a hatchback, it’s very practical for being able to transport a lot of cargo for a small car.

It’s also good for keeping gold diggers and other high-maintenance women away.

Written by Lion of the Blogosphere

October 23, 2017 at 12:24 PM

Posted in Investments

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