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3 February 2011

Michael Lewis and “Learned” Iconoclast Behavior

Every now and then, I get asked how can the individual investor learn to invest like Warren Buffet (an iconoclastic personality) or invest so they’re not always following the herd. The simple answer, aside from turning off financial television… The wise advice for the individual investor: be conservative, don’t listen to brokerage advice, and index. [...]

2 February 2011

Long “The Nickel”: Michael Lewis on The Colbert Report

I’ve got just one word for you… just one word… plastics nickels. Nickels are the next bubble: the metal content is now worth $0.07. If you melt it down, it’s worth 7 cents. One of the characters who made a fortune betting on the financial collapse of the system, is buying nickels. So he rings [...]

2 February 2011

The Q Ratio: Quantifying Reversal to the Historical Stock Market Mean

Being a total chartology geek and lover of anything that tracks the historical record of stock market performance (e.g. supercycles), it’s hard to resist posting these graphics discussing the Q Ratio. Briefly… The average (arithmetic mean) Q ratio is about 0.71. In the chart below I’ve adjusted the Q Ratio to an arithmetic mean of [...]

5 January 2011

Chartology: Setting Up for Commodities Bubble Part Deux?

Right on cue, I’m starting to field reader questions about commodities. In particular, are companies who sell oil, fertilizer or any other raw commodity might need to fuel their rapidly growing economy. Making money is always the prime objective, just remember that the last time these were in play — the 2008 commodities bubble — [...]

15 September 2010

Vulture Investors Love the Real Estate Bubble & the 50% Plus Discounts

For vulture investors, the real estate bubble is about to become an all you can invest eat buffet. As a vulture investor myself, I’m finally beginning to see some additional capitulation in sellers (and bank owned REOs) lowering their asking price to meet lower demand. Case in point: a 3BR/2BA condo, short sale, only 3 [...]

8 September 2010

Academic Inflation: The Mother of All Investment Bubbles

I keep a fairly watchful eye for investment bubbles, but the rise of America declaring war on work and degree factories pumping out diplomas (subsidized by Federal & State governments) not worth the paper their printed on have created an unsustainable academic system if Generation Y, and the generation behind them, can’t get a job [...]

31 July 2010

The Questionable Business Connection Between Glenn Beck & Goldline

 Consumer Education         4 comments

You know how the drill works… Find a product that allows you 100% deniability and inculpability post sale. Create a demand for that product (long term organic demand vs. short term disposable demand is immaterial). Pay the loudest mouthpieces lots of cash to hype your product with some semblance of credibility. Upsell your highest profit margin [...]

29 July 2010

Real Estate Bubble Chartology Post-Government Home Buyer Tax Credits

Depending on your views (optimistic vs. pessimistic) of the housing market, you can probably make a pro or con argument on the future direction of home pricing based upon the following 10 year chart. (aka – the Bubble Decade). Personally, I’m in the glass half empty camp, and like many, I think that nationwide real [...]

24 March 2010

Why Are So Many Mainstream Media Websites Saying Real Estate is a Bargain?

 Real Estate         5 comments

I occasionally wonder if some publishers are pushing an agenda, or if they don’t follow the trends closely enough before they give advice to us common folk. I say this because many of the well respected finance websites I frequent have been increasingly hyping real estate as if it were a serious bargain, or in [...]

23 February 2010

Knowing When ‘Not to Buy’ is Just as Imporant as Knowing When to Buy

If you’re curious why I take most investment advice and the majority of news/analysis from mainstream financial media with a grain of salt, this chart might answer your doubts. (Note: Y axis is percent increase or decrease.) At their peak, the mania driven belief in the bubble that these investments were ironclad, bulletproof, and would [...]

22 February 2010

10 Easy Ways to Go Broke

With so much financial information readily available telling us how to make more money or the nonstop investment advice telling us how to get rich quick, it’s quite obvious that many of us invest too much time and brainpower trying to get our money to make more money instead of focusing on ways to preserve [...]

3 January 2010

The Bubble Decade Documentary

Perhaps nothing encompasses the roller coaster ride that was the 2000 to 2009 decade better than David Faber’s The Bubble Decade. If you haven’t seen it, set 45 minutes aside and take a look back at just how gullible we actually were to follow the herd and buy into some of the most hyped, sure [...]

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