Archive - May 2010 - Blog entry

Why are the D.C. lenders "overweight" Puerto Rico?

So everybody is asking if "Greece will make it through the Pan-European Sovereign debt crisis and if not, then who's next?" Well, we have spent at least 3 man-months answering this very question, and I am finally getting around to publishing these answers in a formal report. It is the calculations behind this very same report that has allowed me to call this Pan-European Debt thing quite accurately for the last 4 or 5 months - calls that were in direct contravention to practically every quoted political leader and most Wall Street banks may I add. Let's walk through recent history...

The CFA North Carolina Society recently hosted a series of meetings on Avoiding Short-Termism across the state. Jack Gray, Adjunct Professor at the Centre for Capital Market Dysfunctionality at the University of Technology in Sydney, was kind enough to allow us to share his presentation with our readers. Jack's presentation identified the sources of short-termism in addition to offering suggestions for overcoming said barriers, and exploiting long-term value creation.

Another look under the hood of what is driving consumer expenditures...

While the current economic data appears rosy, it won't be sustained without credit or rising wages or job growth. Much of existing spending is from a drawdown of savings and various transitory stimulus programs. These things won't last.

These are the definitive 2010 Berkshire Hathaway Annual Meeting Notes. Almost 15,000 words. This is just about as close to an actual transcript as you are going to find. Enjoy!

These once obscure elements have suddenly become the focus of several converging trends in the global economy. It turns out you can’t build a Prius or fight a modern war without rare earths. After shutting down competition, China now controls 97% of the market. A looming Chinese export ban. Time for a rare earths strategic stockpile? (AVARF.PK), (GWMGF.PK), (RAREF.PK), (LYSCF)

According to one expert, Greece’s bailout was undeserved but happened anyway because the stronger European nations were too nervous about collateral damage to allow default. He asks, by solving one problem have they created another?

Ruh-roh ...

Oil spill + bee collapse + speculation = higher food prices ...

I like Mr. Buffett. I just don't believe everything that comes out of his mouth.

As long as you believe what you are told, all is well in consumer spending and retail land... But you've got to believe!

Weekly technical profiles of Ashford (AHT), Ares Capital (ARCC), Alleghany (AYE), CF Industries (CF), Cummins (CMI), Complete Production Services (CPX), Estee Lauder (EL), National Bank of Greece (NBG) & QQQQ UltraShort (QID) with explicit trade setups

With populations soaring at the bottom end of the economic spectrum, the demand for new apartment buildings is going to be huge. Immigrants joining impoverished gen Xer’s and Millennials aren’t going to live in cardboard boxes under freeway overpasses. Institutions combing the landscape for low volatility cash flows and limited risk are starting to pour money in.

A 17% bonus increase in a recession year with a nationwide jobless rate of around 10%, coupled with a reduction in lending while receving TARP money - a sure fire recipe for becoming public enemy number 1.