Securities Analysts and Your Investments
Securities analysts constantly critique management of the publicly owned companies they review. They profess to know what products and services the companies ought to produce and when not to produce them. To give you investment advice, they freely put in their proverbial two cents. They suggest what securities to buy. They advise when to hire and fire top executives.
Yet very few analysts have the hands-on ability to understand how any business operates from the inside. They are not even that proficient concerning the ivory towers of Wall Street.
As I have often said, they haven’t the business experience to successfully run a pushcart.
You look to securities analysts for your investment advice?
Tuesday, June 30, 2009
Monday, June 29, 2009
Health Insurance Competition From the Fed Government
Health Insurance Competition From the Fed Government
Those operating in the government on the Political Left love to tell you how private insurance companies, or any private business, should be able to compete with any that is government-run, especially with regard to health insurance.
But we know from experience that government entities are not noted for being low cost. The Post Office is a perfect example.
What the pro-government Statists never tell you, and they conveniently overlook, is the fact that government has no capital costs. The taxpayer subsidizes capital and operational outlay.
All private health insurance companies who will have to compete must provide expensive capital and funds of their own.
Never fall for the argument that having a government agency option to choose from, in health insurance, will be a panacea for the consumer.
It’s a ruse. Sooner or later a public health insurance option will drive away private competitors. And eventually it will put a hole in the taxpayer’s pocket because health insurance will get costly.
And it will be coming out of YOUR pocket.
Those operating in the government on the Political Left love to tell you how private insurance companies, or any private business, should be able to compete with any that is government-run, especially with regard to health insurance.
But we know from experience that government entities are not noted for being low cost. The Post Office is a perfect example.
What the pro-government Statists never tell you, and they conveniently overlook, is the fact that government has no capital costs. The taxpayer subsidizes capital and operational outlay.
All private health insurance companies who will have to compete must provide expensive capital and funds of their own.
Never fall for the argument that having a government agency option to choose from, in health insurance, will be a panacea for the consumer.
It’s a ruse. Sooner or later a public health insurance option will drive away private competitors. And eventually it will put a hole in the taxpayer’s pocket because health insurance will get costly.
And it will be coming out of YOUR pocket.
Sunday, June 28, 2009
Investment Strategies Overlooked by Financial Experts
Investment Strategies Overlooked by Financial Experts
The financial media always discusses securities and just infrequently, and in passing, do they mention investment strategies.
When the media does discuss investment strategies, it’s about a favorite strategy of someone being interviewed or reviewed. Perhaps the article is a public relations release disguised as financial news.
The purpose of investigations I have done of literally thousands of independent strategy studies and investing techniques, have helped me delve into the investment strategy phenomenon. My conclusions vary with those of the general financial media.
The media overlooks investment strategies and techniques because it is not up to the task. Furthermore, most reports are not objective. So such strategies get short shrift. Yet, their proper use increases the odds of investing success.
The financial media always discusses securities and just infrequently, and in passing, do they mention investment strategies.
When the media does discuss investment strategies, it’s about a favorite strategy of someone being interviewed or reviewed. Perhaps the article is a public relations release disguised as financial news.
The purpose of investigations I have done of literally thousands of independent strategy studies and investing techniques, have helped me delve into the investment strategy phenomenon. My conclusions vary with those of the general financial media.
The media overlooks investment strategies and techniques because it is not up to the task. Furthermore, most reports are not objective. So such strategies get short shrift. Yet, their proper use increases the odds of investing success.
Saturday, June 27, 2009
Hedge Funds and Regulation
Hedge Funds and Regulation
In the Obama Administration’s suggestions for future financial regulation by the Federal Reserve and the Treasury Department, the government is overlooking its previous vendetta to get after hedge funds.
The truth of the matter is this: Once you really regulate hedge funds, they no longer can operate freely as in the past. Management would be required to tip their hands in advance of investment decisions.
Despite prior threats by the Administration, hedge funds are not being hit too hard by the proposed regulations. They will remain free to perform as they had prior to the current financial mess.
This reprieve is not an oversight. It might owe to an obvious fact. Hedge funds are heavily lobbying Washington with millions of dollars worth of effort.
In the past presidential election, their funds went overwhelmingly to Democrats. They are probably destined to go the same way again.
Enough said?
In the Obama Administration’s suggestions for future financial regulation by the Federal Reserve and the Treasury Department, the government is overlooking its previous vendetta to get after hedge funds.
The truth of the matter is this: Once you really regulate hedge funds, they no longer can operate freely as in the past. Management would be required to tip their hands in advance of investment decisions.
Despite prior threats by the Administration, hedge funds are not being hit too hard by the proposed regulations. They will remain free to perform as they had prior to the current financial mess.
This reprieve is not an oversight. It might owe to an obvious fact. Hedge funds are heavily lobbying Washington with millions of dollars worth of effort.
In the past presidential election, their funds went overwhelmingly to Democrats. They are probably destined to go the same way again.
Enough said?
Friday, June 26, 2009
Who is Responsible for the Financial Meltdown?
Who is Responsible for the Financial Meltdown?
The media always does a poor job when allocating responsibility for the cause of the financial meltdown.
Example: The left-leaning nature of its pundits make it easy to assign blame to “greedy” Wall Street. Yet, there is a bottom line culprit to all this that differs from this accepted shibboleth.
Nothing really so drastic would have happened to cause a severe recession if the Federal Reserve did not make interest rates so low in the early years of this 21st century. With money so cheap, business people and investors did what they are meant to do–trade and invest with the cheap dollars.
The federal government politicos pushed for home ownership by those who ordinarily could not afford and should not have bought those homes. And at the same time the government gave a monopoly to several rating agencies who provided dubious AAA ratings to bonds backed by those highly risky, “toxic” mortgages.
By the way, in its suggestions for future regulations, the current government is continuing the monopoly for these rating agencies.
There is an alternative market-related method that can give more accurate ratings to bonds but this left-leaning Administration is not market-oriented and will thus continue to be mired in the past, basic problem.
The media always does a poor job when allocating responsibility for the cause of the financial meltdown.
Example: The left-leaning nature of its pundits make it easy to assign blame to “greedy” Wall Street. Yet, there is a bottom line culprit to all this that differs from this accepted shibboleth.
Nothing really so drastic would have happened to cause a severe recession if the Federal Reserve did not make interest rates so low in the early years of this 21st century. With money so cheap, business people and investors did what they are meant to do–trade and invest with the cheap dollars.
The federal government politicos pushed for home ownership by those who ordinarily could not afford and should not have bought those homes. And at the same time the government gave a monopoly to several rating agencies who provided dubious AAA ratings to bonds backed by those highly risky, “toxic” mortgages.
By the way, in its suggestions for future regulations, the current government is continuing the monopoly for these rating agencies.
There is an alternative market-related method that can give more accurate ratings to bonds but this left-leaning Administration is not market-oriented and will thus continue to be mired in the past, basic problem.
Thursday, June 25, 2009
Why Securities Markets are Erratic
Why Securities Markets are Erratic
Why are securities markets so rash and erratic? When you think about it, they ought to be calmer than they are, much more so than we have been led to believe, when the media harps on about the experts who frequent Wall Street.
Institutional investors and their advisers are professionals. They account for 80% and more of all trades and activity. Why then should the markets behave so erratically?
These folks should know what they are doing, not like the other 20% of the public, amateur investors who blindly follow the pros for guidance.
The truth is: Wall Street "wizards" invariably act in a mob-like manner and not as true experts. There is a lot of sour skim milk masquerading as sweet cream. Their investment results speak accordingly.
They may still make their millions. But then again. Aren’t there major league ball players whose averages are down in the dumps, who still make millions each year?
Why are securities markets so rash and erratic? When you think about it, they ought to be calmer than they are, much more so than we have been led to believe, when the media harps on about the experts who frequent Wall Street.
Institutional investors and their advisers are professionals. They account for 80% and more of all trades and activity. Why then should the markets behave so erratically?
These folks should know what they are doing, not like the other 20% of the public, amateur investors who blindly follow the pros for guidance.
The truth is: Wall Street "wizards" invariably act in a mob-like manner and not as true experts. There is a lot of sour skim milk masquerading as sweet cream. Their investment results speak accordingly.
They may still make their millions. But then again. Aren’t there major league ball players whose averages are down in the dumps, who still make millions each year?
Wednesday, June 24, 2009
Investing Analysts on Wall Street
Investing Analysts on Wall Street
Little independent investment thought comes from the analytical professional ranks.
What goes for research on Wall Street is primarily in the form of reports on public companies. These have to do with reported earnings, such as they are, without true understanding of the nature of those earnings. Much of what may be announced by a company could be the result of fanciful accounting, after all.
Most important to the investor, little is done to report on all-important strategy. Most analysts and money managers have no time for careful, insightful thought on the many, many hundreds of those which, along with disciplined use of that strategy, is essential.
Moreover, the investment community is incestuous, feeding on itself in a way which foments herd-like and impulsive instincts. Inanities and gibberish can often become gospel, owing to their repetition over the years.
Little independent investment thought comes from the analytical professional ranks.
What goes for research on Wall Street is primarily in the form of reports on public companies. These have to do with reported earnings, such as they are, without true understanding of the nature of those earnings. Much of what may be announced by a company could be the result of fanciful accounting, after all.
Most important to the investor, little is done to report on all-important strategy. Most analysts and money managers have no time for careful, insightful thought on the many, many hundreds of those which, along with disciplined use of that strategy, is essential.
Moreover, the investment community is incestuous, feeding on itself in a way which foments herd-like and impulsive instincts. Inanities and gibberish can often become gospel, owing to their repetition over the years.
Tuesday, June 23, 2009
Gamblers and Gambling Games Played by Government
Gamblers and Gambling Games Played by Government
One commercial myth that ought to be eliminated from our senses is the one that elevates the term, ”non-profit” to its premium status at the expense of the term "for-profit."
Non-profit supposedly means lower-cost. Not necessarily. Many operate inefficiently, and thus must be subsidized to effectively compete with for-profits. You can be a profit-making operation and be productive enough to have lower-costs that a competitor who operates without profit in mind.
The best example of an expensive non-profit is the Post Office, which always manages to operate at a loss. In New York State the official government off-track bookie operates at a loss or close to it every year. It is strange for bookies not to profit, but leave it to New York State’s Off Track Betting to find a way.
What a way to do away with gambling operators who entice individual-addicted gamblers. Have New York State show how to operate the facility at a loss.
One commercial myth that ought to be eliminated from our senses is the one that elevates the term, ”non-profit” to its premium status at the expense of the term "for-profit."
Non-profit supposedly means lower-cost. Not necessarily. Many operate inefficiently, and thus must be subsidized to effectively compete with for-profits. You can be a profit-making operation and be productive enough to have lower-costs that a competitor who operates without profit in mind.
The best example of an expensive non-profit is the Post Office, which always manages to operate at a loss. In New York State the official government off-track bookie operates at a loss or close to it every year. It is strange for bookies not to profit, but leave it to New York State’s Off Track Betting to find a way.
What a way to do away with gambling operators who entice individual-addicted gamblers. Have New York State show how to operate the facility at a loss.
Monday, June 22, 2009
Hidden Health Care Costs
Hidden Health Care Costs and Finance
With all the talk about health care for all, has anyone bothered to actually get into the cost of administering a government health plan, as compared to what it costs to administer an average for-profit, private plan?
It stands to reason that any Government has a disadvantage in cutting costs.
One point: Politics makes it easier to hire than to fire. Voters you fire will not vote for you again.
Another: Politics makes it easier to overpay. Voters you pay too little will not vote for you again.
Has the government ever run ANYTHING efficiently?
The Post Office, for example? Also: Let us consider our experience with Medicaid and Medicare. How they botched the efficiency and costs of that forerunner to universal health insurance, now that the Feds promise to effectively offer us low-cost health care in the future.
If the cost of Medicaid and Medicare have gotten so far out of hand, beyond their original projections, how can we believe the Health Care Savings Fantasies of the Future?
With all the talk about health care for all, has anyone bothered to actually get into the cost of administering a government health plan, as compared to what it costs to administer an average for-profit, private plan?
It stands to reason that any Government has a disadvantage in cutting costs.
One point: Politics makes it easier to hire than to fire. Voters you fire will not vote for you again.
Another: Politics makes it easier to overpay. Voters you pay too little will not vote for you again.
Has the government ever run ANYTHING efficiently?
The Post Office, for example? Also: Let us consider our experience with Medicaid and Medicare. How they botched the efficiency and costs of that forerunner to universal health insurance, now that the Feds promise to effectively offer us low-cost health care in the future.
If the cost of Medicaid and Medicare have gotten so far out of hand, beyond their original projections, how can we believe the Health Care Savings Fantasies of the Future?
Sunday, June 21, 2009
Government Debt and Your Retirement Future
Government Debt and Your Retirement Future
Concerned about heavy government financing by enormous borrowing, even the equivalent of printing money, or the need to tax?
Governments can only overcome the accommodation for extraordinary spending and the potential problems they will entail, by expanding the economy.
But if the government is heavily taxing while borrowing and literally printing money, to balance its budget deficit, it will be curtailing that necessary expanding economy.
You cannot borrow forever without hurting expansion because you crowd out funds required for private business to operate normally. There is business stagnation. A lack of productivity.
The only result has to be inflation. The proof of this has been shown over and over again, around the world for centuries.
You can be sure that government debt will spell disaster for you.
Concerned about heavy government financing by enormous borrowing, even the equivalent of printing money, or the need to tax?
Governments can only overcome the accommodation for extraordinary spending and the potential problems they will entail, by expanding the economy.
But if the government is heavily taxing while borrowing and literally printing money, to balance its budget deficit, it will be curtailing that necessary expanding economy.
You cannot borrow forever without hurting expansion because you crowd out funds required for private business to operate normally. There is business stagnation. A lack of productivity.
The only result has to be inflation. The proof of this has been shown over and over again, around the world for centuries.
You can be sure that government debt will spell disaster for you.
Saturday, June 20, 2009
Overpaid Baseball Players and Finance
Overpaid Baseball Players and Finance
How come ball players who play what is, after all, a kid’s game, can earn as much as $20 million to $30 million a year, with multi-year contracts. while top executives, with more honed skills, are criticized if they get $1 million or so?.
Execs are easily fired if they don’t produce. Ball player salaries are not cut if they choke up in the clutch. Or have a losing season.
The argument is made about too much exec pay when they are in companies that get federal stimulus money. But athletes work for ball clubs that also get stimulus and/or other tax payer funds.
As I have often pointed out: Each time a new ball park is built, you can be sure some government body has helped in the financing, whether in cash, tax abatement or bond funding. This is a long-time subsidy.
Federal stimulus funds usually back local and state entities with subsidies. So, in effect, funds are made available to pay athletes.
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay. What you save on ball park purchases and interest on any of those loans, you use to buy and pay players.
How come ball players who play what is, after all, a kid’s game, can earn as much as $20 million to $30 million a year, with multi-year contracts. while top executives, with more honed skills, are criticized if they get $1 million or so?.
Execs are easily fired if they don’t produce. Ball player salaries are not cut if they choke up in the clutch. Or have a losing season.
The argument is made about too much exec pay when they are in companies that get federal stimulus money. But athletes work for ball clubs that also get stimulus and/or other tax payer funds.
As I have often pointed out: Each time a new ball park is built, you can be sure some government body has helped in the financing, whether in cash, tax abatement or bond funding. This is a long-time subsidy.
Federal stimulus funds usually back local and state entities with subsidies. So, in effect, funds are made available to pay athletes.
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay. What you save on ball park purchases and interest on any of those loans, you use to buy and pay players.
Friday, June 19, 2009
Investment Controls and Athletes
Investment Controls and Athletes
For background:
We have already noted earlier how the Federal government sets wages of employees. Or fires employees. as the feds have done with General Motors and Chrysler. Or when the banks are interfered with. Under the guise of being rescued. This happens with federal government bailouts, and it is one of the problems encountered in such action.
Firing employees by government bureaucracy can be a slippery slope, when you also consider how government stimulus affects even entertainers-such as sports stars.
Athletes probably get far too much salary and bonuses for what they do. Much more than CEOs ever do. But they are under the public’s radar. So the media, in its ignorance, let’s them get away with it.
Example: Ball parks and ball clubs are subsidized by state and local taxpayers. Each time a new ball park is built, you can be sure some government body has helped in the financing, whether in cash, tax abatement or bond funding. This an ongoing, long-time subsidy.
These days, Federal stimulus funds are usually backing local and state entities with subsidies. So, in effect, funds are made available to pay athletes.
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay.
The public complains about an executive getting more than a million or so a year of taxpayer money. What about a ball player who operates no business, and hires no one, who makes up to thirty million. and more a year? And may actually be a loser at that?
For background:
We have already noted earlier how the Federal government sets wages of employees. Or fires employees. as the feds have done with General Motors and Chrysler. Or when the banks are interfered with. Under the guise of being rescued. This happens with federal government bailouts, and it is one of the problems encountered in such action.
Firing employees by government bureaucracy can be a slippery slope, when you also consider how government stimulus affects even entertainers-such as sports stars.
Athletes probably get far too much salary and bonuses for what they do. Much more than CEOs ever do. But they are under the public’s radar. So the media, in its ignorance, let’s them get away with it.
Example: Ball parks and ball clubs are subsidized by state and local taxpayers. Each time a new ball park is built, you can be sure some government body has helped in the financing, whether in cash, tax abatement or bond funding. This an ongoing, long-time subsidy.
These days, Federal stimulus funds are usually backing local and state entities with subsidies. So, in effect, funds are made available to pay athletes.
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay.
The public complains about an executive getting more than a million or so a year of taxpayer money. What about a ball player who operates no business, and hires no one, who makes up to thirty million. and more a year? And may actually be a loser at that?
Thursday, June 18, 2009
Wall Street and Bank Salary Controls can Affect Athletes Too
Wall Street and Bank Salary Controls can Affect Athletes Too
Taxpayer money that is used to bail out Wall Street and the banks gets the public riled up only when it goes into exec salaries and bonuses.
Of course it makes no sense for a politician who generally has never had to hire anyone within a free, supply-and-demand, employment market, to thus contribute nonsensical rules, opinions and regulations on the matter. The politicians usually never understand basic economics.
And neither does the brainwashed public, which stands for it. Especially those who ardently follow sports.
Athletes probably get far, far too much salary and bonuses for what they do. Yet the taxpayers never complain.
The glaring example: Ball parks and thus ball clubs are invariably subsidized by state and local taxpayers. Each time a new ball park is built, you can be sure some government entity helped in the financing, whether it be in cash, tax abatement or bond funding.
This is an ongoing subsidy over many years. And these days, Federal stimulus funds are actually backing up those local and state entities who backed up the athletic subsidies.
The public complains about a "rich" top executive getting more than a million or so a year of his taxpayer money. What about a ball player who hires no one, who makes ten million and more a year? And may actually be a loser?
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay.
Taxpayer money that is used to bail out Wall Street and the banks gets the public riled up only when it goes into exec salaries and bonuses.
Of course it makes no sense for a politician who generally has never had to hire anyone within a free, supply-and-demand, employment market, to thus contribute nonsensical rules, opinions and regulations on the matter. The politicians usually never understand basic economics.
And neither does the brainwashed public, which stands for it. Especially those who ardently follow sports.
Athletes probably get far, far too much salary and bonuses for what they do. Yet the taxpayers never complain.
The glaring example: Ball parks and thus ball clubs are invariably subsidized by state and local taxpayers. Each time a new ball park is built, you can be sure some government entity helped in the financing, whether it be in cash, tax abatement or bond funding.
This is an ongoing subsidy over many years. And these days, Federal stimulus funds are actually backing up those local and state entities who backed up the athletic subsidies.
The public complains about a "rich" top executive getting more than a million or so a year of his taxpayer money. What about a ball player who hires no one, who makes ten million and more a year? And may actually be a loser?
Always remember: Money is fungible. The payment does not have to be direct. Money can be substituted from one pocket of government or payer to the other, to hide the source of funding.
It adds up to the same total outlay.
Wednesday, June 17, 2009
Wall Street Blind are Leading the Blind
Wall Street Blind are Leading the Blind
The majority of securities analysts on Wall Street could not operate a pushcart. Yet, they constantly choose to critique top business executives. Notably in the way they run billion dollar operations.
And of course, Wall Street experts have an extremely limited time frame. While a business must look years ahead, those involved with securities usually operate with a day-to-day or month to month perspective. That can be dangerous for those who are impressed by the advice.
No commentator has had to pass a business-achievement test to determine expertise. The public assumes critics know what they are talking about when it comes to business operation punditry.
The majority of securities analysts on Wall Street could not operate a pushcart. Yet, they constantly choose to critique top business executives. Notably in the way they run billion dollar operations.
And of course, Wall Street experts have an extremely limited time frame. While a business must look years ahead, those involved with securities usually operate with a day-to-day or month to month perspective. That can be dangerous for those who are impressed by the advice.
No commentator has had to pass a business-achievement test to determine expertise. The public assumes critics know what they are talking about when it comes to business operation punditry.
Tuesday, June 16, 2009
Faulty Decision Sources
Have you ever stopped to think how you get much of the information you use for making decisions for investments or for important purchases?
Ads and headlines are the means by which a large percentage of our population learns about business and finance. Whether in the form of sales pitches for a product or service or as general news items.
Thus the information can be stale, corrupted or misleading.
Worse: You often get one side of the story, the one that an advertiser or public relations, or news source is trying to convey. That is, hardly ever a balanced viewpoint.
Yet, these sources of popular knowledge play an important factor in the way many of us make our decisions.
Ads and headlines are the means by which a large percentage of our population learns about business and finance. Whether in the form of sales pitches for a product or service or as general news items.
Thus the information can be stale, corrupted or misleading.
Worse: You often get one side of the story, the one that an advertiser or public relations, or news source is trying to convey. That is, hardly ever a balanced viewpoint.
Yet, these sources of popular knowledge play an important factor in the way many of us make our decisions.
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