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July 2010



Idiot of the day: Tony Hayward

July 27, 2010 – Comments (0) | RELATED TICKERS: BP

When Tony Hayward said to Obama, "I am terribly sorry, sir, you can fine me for any amount you think is appropriate", he proved himself an excellent "green" politician, but a horrible CEO. If I were in his shoes, I would just tell Obama to take his case to the British court system where he would most certainly spend the next 20 years shuffling papers around, and in the end, with any luck, he would win just about enough to pay the lawyers' fees. Then I would negotiate from a position of strength and settle for a $100M-$200M compensation which is the realistic amount of damage. BP shareholders must hope the next CEO will not be such a spineless creature, and the Russians should hope he gets videotaped saying something disrespectful about Putin and gets deported before he has a chance to run TNK-BP into the ground.  [more]



Geithner is making sense for the first time

July 25, 2010 – Comments (0)

Hearing a politician make a reasonable suggestion is about as rare nowdays as spotting a Tasmanian devil in the wild. But here it is: the Treasury chief favors a 20% cap gains tax, and as a shareholder, I agree this is the right way to go.  [more]



Tea leaves and animal entrails proved inefficient

July 23, 2010 – Comments (8)

TA doom-and-gloom predictions based entirely on the chart once again fail to materialize, as they failed to materialize during every other pullback since Mar 9, 2009 bottom. The conclusion: when you hear TA people talk about S&P 500 crashing to 500 because the chart says so, you should only infer a small pullback due to those TA lemmings fleeing the ship. To quote myself:   [more]



We'll take the road more traveled by

July 22, 2010 – Comments (3)

Suddenly, there is an acute interest in the deflation topic. Case in point: two articles in two days appeared on seekingalpha, and both articles are quite thoughtful, at least by seekingalpha standards. One of them, titled "Why Bernanke might choose deflation", gives a convincing answer: because it will allow the government (and everyone else for that matter) refinance the debts very cheaply. Wouldn't it be nice if we could increase debt-to-GDP to 200% with impunity? So there is a certain logic here. The other article, titled "Fed failing both mandates", is a typical whining of a homeowner that is best summed us as "please, uncle Benny, I want my ATM back", but it does a good job of illustrating the mentality that has shaped our course so far, and will keep doing so for decades if not forever.    [more]



Idiot of the day: David Levy and Srinivas Thiruvadanthai

July 19, 2010 – Comments (1)

The authors of "The Misguided Sovereign Debt Hysteria" get the award for their discovery that "government can't engineer inflation at will". Just a small hint for the two authors: give every citizen $1 Trillion and see if inflation still remains near 0%.



Ten rules of fiscal conservatism

July 18, 2010 – Comments (4)

Here is what it takes to be a fiscal conservative:  [more]



Current mood: bullish, bearish, and worried

July 15, 2010 – Comments (5)

This is an interesting time to be in the stock market. Three trend changes are occurring at once. All three are equally important.  [more]



Now you too can be a technical analyst

July 09, 2010 – Comments (5)

In this short communication I will try to outline a simple method of carrying out technical analysis that is accessible to anyone. The power of the method is in its simplicity.  [more]



The TA trap

July 08, 2010 – Comments (12)

Is there such a thing as TA trap, by analogy with a value trap? As I said when the Europe crisis started, we did see a technical drop because of all those TA specialists who imagined they saw some "pattern" in the tea leaves. However, chasing imaginary patterns could be dangerous for your health. Just when we were supposed to have "broken" some imaginary support line, new money came stealthily out of nowhere, bought the dip, and left TA affectionados holding the proverbial bag. Same old story that was played out many time before and will be played out many times in the future...  [more]




July 02, 2010 – Comments (5)

Enough bearishness! Reasonable valuations are back. We are resuming our journey to S&P 1200 as the rest of the world is crashing.

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