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June 2008



Yes I am Blogging about Oil

June 22, 2008 – Comments (3) | RELATED TICKERS: DBC , USO

Oil:  The difference between now and 35 years ago is that these prices are demand driven.    [more]



Short Interest & Homebuilders

June 20, 2008 – Comments (0) | RELATED TICKERS: XLF , ITB , IYR

I haven't posted much because I have been in Paris I have seen a ton some of the things include, The Louve, Museum De Orsay  Lunch at the top of the Eiffel Tower, Guided Tour around paris with history, Notre Dame, My personal favorite was a day long trip to Normandy where I saw all the beaches and cemeteries it was truly a once in a lifetime trip.  Next up I am going to London.  [more]



My First Day In Paris

June 16, 2008 – Comments (4)

After being up for almost 2 days I am here and had my first doing stuff.  I left saturday evening and arrived sunday morning... Had to wait to check into the hotel until 4 pm Sunday afternoon.  Didn't sleep at all on the flight so I passed out on sunday afternoon, slept for like 12 hours and woke up.  Had a long day in Paris that was pretty cool.   This morning we had  tour of all around Paris.  We got to go see all the major monuments and some history behind them.  I haven't been buying ANYTHING because stuff is so expensive in USD here its not even funny.  I posted some in the link here.  [more]



Europe and College

June 13, 2008 – Comments (0)

For me I read a lot of blogs and would not say that I blog a ton.  I do blog a decent amount but not daily.  I kind of enjoy blogging because it allows me to put my theories on paper.  I am at an interesting point in my life right now and was thinking about earlier, the effect that this is going to play on my blogging.  Right now I am getting ready to go to college in the fall.  I have been busy getting all the crap straightened out for that Choosing classes, getting all the health forms in etc. etc.  I am going over to Europe in a couple of days so I have been getting ready for that.  As I was driving my dad to the airport this morning I had some interesting conversation about college.  I did some stupid stuff in high school but did make some smart moves.  I had a guy ask me onetime what you want out of college??  I have thought about this a lot.  I am really going to college to learn how to think.

Ok here is the second part of this blog post I wrote the paragraph above a couple days ago and thought I would finish it up.  I got most of my college stuff done and am packing this morning.  I am gonna post some pictures and blog on a bunch of stuff from Europe while I am there.  I am going to 4 places, London, Paris, Rome and Florence, and I will def. not be buying much (thanks Bernanke).  [more]



Caps Strategy and the Auto industry.

June 07, 2008 – Comments (3) | RELATED TICKERS: GM , F , XLF

Just some stuff on my mind but:  I have been reading a lot about Valuation Convergance strategies lately.  It it one of my friends favorite strategies and he uses it a lot.  Valuation convergence goes as follows  Say you are bullish on big oil, but can't stomach the volatility.  You would go long 1 an undervalued company and short (not as big a position) an overvalued one.  Your Bullish on big oil COP is trading at 11.9x earnings and say (for example) XOM is trading at 20x earnings (this is hypothetical).  What you would do is go long COP 60% of Equity and Short XOM 40% of equity, since big oil are highly correlated.  Being long and short would help to reduce volatility.  If you are lucky you will be able to close out both at different times at a profit.  There is much more that goes into this and I've used similar strategies with options.  There are very few people who can do this.  Like shorting it takes a different breed.  Yes this will all come togeather.  [more]



The Raging Bull $138

June 06, 2008 – Comments (6) | RELATED TICKERS: DBC , COP , XOM

Free Image Hosting at

QuickPost   [more]



Developing a Global Macro Thesis.....

June 03, 2008 – Comments (14) | RELATED TICKERS: SPY

My Global Thesis has not changed much over the past couple of weeks.  I am always looking to expand my knowledge of different regions and cultures because I believe that the US will start to lag the world in growth.  I have found that learning history and philosophy has taught me more about investing than learning some new financial ratio.  Although I am always looking to develop my own ways to measure companies.  First on America's Position.  I am a believe that history does repeat itself.  Again I will quote Sowell:

"Basic principles of economics apply in many different kinds of economics-capitalist, socialist, feudal or whatever-and among a wide variety of people, cultures, and governments.  Policies which led to rising price levels under Alexander the Great have led to rising price levels in America thousands of years later.  Rent control laws have led to a very similar set of consequences in Hong Kong, Stockholm, Melbourne, and New York.  So have similar agricultural policies in India and the EU contries."

Reading foreign policy I see a lot of similarities between the the US and Britian: "The US recent military interventions in Somalia, Afghanistan and Iraq all have parallels in British military interventions decades ago...."

"Britain was undone as a global power not because of bad politics but because of bad economics..... It  was only an economic superpower for little more than a generation, [contrary to popular belief], The good economy in Britain lasted from about 1845 - 1870."
Reasons behind why during 1845-1870 Britain was an economic superpower.
-During this time it was producing more than 30% of global GDP.
-It accounted for 1/5 of the worlds trade, and 2/5 of its manufacturing trade.
-In 1860 Britain produced 53% of the worlds Iron (then a sign of supreme industrial strength).
-The pound was the worlds default currency.
- Oh yeah and all this was accomplished with only 2% of the worlds population.

The US comes in.
By late 1870's US equaled the British economy and even surpassed it.  By WWI the US economy was 2x that of Britain and together France and Russia's were larger.
By 1914 Britain was making less than 10% of the worlds Iron Ore.

Alright Fool's Here's the Homework...
What similarities do you see between Britain and the US and the US (specifically the current situation) and how are you putting this into your global thesis.  Do you see any similarities between the US and Rome.... I do....

I am a big believer in top down investing and have not had any New Idea's lately. As soon as a I do some more research on companies that fit into my global thesis I Will post more of it but to be honest I am a little lazy tonight.  

I love getting your thoughts...




June 03, 2008 – Comments (2) | RELATED TICKERS: USO

Michael Greenberger just shut up, I don't even know what to say but shut up.  Is anybody else watching this on CSPAN?



Burnington Northern...

June 02, 2008 – Comments (4) | RELATED TICKERS: BNI.DL

I just did a video stock cast.  If the link dosent link you can do the copy and paste thing. Link here. 



The I word, prices and do people really understand what prices are?

June 01, 2008 – Comments (2) | RELATED TICKERS: USO , SPY

I have been hearing a lot of talk about prices and the "I word" lately. And what do I mean by the I word? I mean Inflation. When people talk inflation many skip straight to prices. I have been thinking lately about how focused people get on prices, and what prices really are. India obviously will not agree with what I think prices are. Before I started to develop my opinion on the "I" word, I spent some time on the phone with an old teacher of mine who is doing some Doctoral work in Economics. Yes it is Un-American but I actually educate myself on a subject before I form an opinion, and usually form and an opinion based on my values during my research. Back to the subject the guy I talked to is very bright, with some pretty intense convictions. Some background but this guy is very Austrian and is a big fan of free markets. The first thing he said is "Number 1. thing you need to understand is Inflation is always bad" I don't have much of a comment on this because It would be ignorant to form one based on my current knowledge. After some what explaining his thesis behind this he opened up something interestingly (the topic of this post), that many people get way to caught up in prices with referring to inflation. Inflation at its simplest is an increase in the money supply, higher prices are a symptom. To understand this you have to understand what prices are. (and in my opinion why messing with prices is usually a very bad idea). In my mind I think prices as a mere way to rely information about how to divert resources based on individuals value, (hence why Buffett says: "Price is what you pay, value is what you get"). I will quote somebody because I really cannot put into words what prices really are (Don't you hate when you know something but can't word it). Understanding prices is vital to understand economics. Many people see prices as getting in the way of what they want when in fact prices have nothing to do with the transfer of money. As Thomas Sowell puts it:

"Prices (are used) to convey terms of transactions.... Prices play a crucial role in determining how much of each resource gets used & where & how the resulting products get transfered to millions of people....... [ Basically ] prices [ in a free market economy ] provide incentives to affect behavior in the use of resources and their resulting products."

Take into account that this is based on the thesis that the overall economy as a whole society will use its scarce resources more efficiently because decisions are guided by prices. The beef that I have with India is that in todays globalized world everything is so connected that the smallest change in one element is passed along the chain to millions of others. Something that really scares me is the CFTC's decision next week. My intreprtation of prices makes me strongly against price caps or messing with the market. Does messing with prices in the name of fairness among producers (or to help the middles class) at the cost of reduced efficiency and a lower standard of living fair to consumers or the middle class??????  [more]

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