and if you follow TMF's advice, you should be too (see Jaffe's article here). [more]
There is an old saying: there are lies, damn lies, and statistics. Statistics are the most pernicious because they wear the veneer of truth. Yet a good statistician and he can make numbers do anything. What is even worse is that most people do not understand statistics. Yes, most people (scientists inclued) are statistical idiots (epidemiologists are the worst). Yet everyone needs to understand the basics of statistics. Following are some of the most common statistical problems and a few thoughts on how they relate to investing. [more]
Sentry Petroleum in the last 3 days is down 80% on no news.
Normally I think Mauldin has good things to say, but this week's letter (see it here) shows he is guilty of some pretty sloppy self-serving bias. He goes on and on about the problems with the Dow Jones Industrial Average as an index and then uses its problems to argue against index investing. [more]
Thanks to Southwest's (LUV) recent sale I'll be heading to Seattle for a gustatory vacation in a few weeks (Why Seattle? Why focus on food? As my old college roommate used to say, 'why the #$$% not?'). This midwestern boy is looking forward to hitting up some decent sushi joints and any other excellent (read expensive) restaurants. I feel like it has been too long since I have eaten at a good restaurant (and not just an expensive place with dim lights and quality meat), maybe since I took my girlfriend to Michelin-starred Chez Christian Tetedoie in Lyon ... Anyway, I'm just trying to do my part to combat the economy's downturn. Any ideas for good restaurants in the Seattle area? [more]
From a May 9, 2008 blog post; here are their returns since May 12 (from Google as I write this): [more]
Three bailouts for the car-lords under the sky,
Seven for the giant banks too big to fail,
Nine for cronies with politicians they buy,
One for the evil lord who rides a snail
In the gov'ment desert where the dead never die.
One bailout to rule them all, one bailout to find them,
One bailout to bring them all and in the darkness bind them
In the land of gov'ment where the dead never die. [more]
Here is a look at my dead banks walking from a post on June 30, 2008 and their stock prices (prices from close on June 30, 2008, current prices intra-day today as I write this).
CACB - $4.60 from $7.70 (-40%)
BKUNA - $0.70 from $0.96 (-27%)
GBNK - $1.60 from $3.60 (-66%)
UCBI - $10.01 from $8.53 (+17%)
GBCI - $14.55 from $15.99 (-9%)
CORS - $1.37 from $4.16 (-67%)
Also mentioned in that post was DSL, which I was short at the time
DSL - $.05 from around $3 (-98%)
S&P - from $127.98 to $84.68 (-34%)
Not including Downey (DSL), the dead banks walking are down -32%, slightly less than the -34% decline in the S&P. Some of them also paid dividends, which would probably mean they outperformed by about 5 percentage points. Include Downey, though, and my picks win!
Disclosure: I am short BKUNA and will look to add to that position. [more]
From Floyd Norris, one of the best financial columnists out there: [more]
From a letter to Maxlife Fund Corp from director Daniel Kahan attached to today’s 8k filing: [more]
For those of you who are curious about my profession (stock trader), here are a few statistics on how I did last year.While I am a very bad stock trader I make money by sticking to the few areas where I have a definite advantage. Keep in mind that these statistics come from Tradelog and include some random capital gains / losses that were not part of my trading business: [more]
Normally the SEC likes to just slap these people on the wrists. It is nice to see someone get a sentence of 57 months in prison for pumping a stock while falsely saying he owned no shares. [more]
This article exemplifies why I hate Gary Weiss despite generally liking his work. The whole article is about how people hate John Paulson (the hedge fund manager who made many fortunes shorting subprime securities) and the only evidence of this is some senator's comments. I think it is just Gary who hates people who were right and made money.
And why was Paulson required to blow the whistle? Whistle-blowing short sellers (Manuel Asensio and Andrew Left come to mind) or those who provide them with research (like Gradient Analytics) tend to get sued. Anyway, Paulson did increase awareness of risks simply by making the bets he made--he must have moved the market prices of the instruments he traded, if only a little. It is the bankers and rating agencies other idiots who prevented those subprime securities from reaching a lower, fair value. [more]
Thanks to Mortgage News Clips for bringing this to my attention. [more]