inoculatedinvestor's blog

This week's link fest has a common theme: the unintended consequences of government actions. I include the US Fed in the government category for obvious reasons. Between Greenspan’s beliefs in efficient markets, Bernanke’s Great Moderation, tax credits for housing and the Fed’s current unlimited money printing, it is amazing how much damage can be done by the wrong ideas and policies.

In the ongoing debate between the so called freshwater and saltwater economists about how the US got into this mess and how we are going to get out, what somehow often gets lost are the prophetic words of Hyman Minsky. Investors would be well advised to understand Minsky’s ideas concerning financial instability, especially given the current market euphoria.

Definitely some interesting articles in my weekly link fest. We’ve got inflation, deflation, oil, jobs and of course plenty of Goldman barbs. What more could you ask for?

There is some interesting new data out on how recessions affect people who come of age during distressed times. Not surpisingly, recessions can have a lasting impact on young people and literally alter the way they view the world going forward. Therefore, it makes sense for investors to understand exactly who the financial crisis will influence and what that will mean for companies and products.

The following post is a revision of an article I wrote for my blog. The topic is the similarities between the leap of faith that investors took when they gave their money to Bernie Madoff and the leap of faith required of those who currently own and buy shares of Goldman Sachs. Upon some reflection, there are a number of interesting parallels. The data does not include the most recent earnings report, but given another incredible performance this quarter I thought the commentary was still very relevant.

My version of link aggregation is slightly different from that of many other bloggers. I try to be highly selective in terms of what I link to and focus on themes that I think are really important for all investors. As such, I usually provide just a few links but include the most relevant excerpts and my own commentary. I hope enjoy the links I have selected for this week.

Blackrock's Trillion Dollar Man Bob Doll claims that the impacts of current cyclical positives on the US economy are outweighing those of secular headwinds. Therefore, according to him we should all be plowing into US equties. But is he right or is he just talking his book? And if he is right, should he be making what is nothing more than a trading call on the ability of government stimulus and Fed money printing to prop up the economy? I say no.

For my Zero Hedge debut, I decided to introduce myself to readers by making an admission. Yes, I am a value investor. This means that I refuse to chase liquidity driven rallies and to buy stocks that are discounting operating margins and earnings that may not be realized for years. Sorry if this makes me an investing lunatic. But, if that is the case, I assume I will fit in quite well here at Zero Hedge. Welcome to my world.