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.
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