themicrokid

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    • Sun Oct 12th 16:32 PM
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      Commented on:
      Comparing This Past Week to the '87 Crash
      The DJIA regained its post crash high on 1/26/1989, 322 trading days since the crash. On 3/29/1889, the 2274 By 3/10/1993, the DJIA visited double the 1738.74 trough for the first time. By June of 1993, the DJIA had established this level of 3478 as a floor, not to be seen again.

      By 2/6/1996 the DJIA was a double, 5445 from the 2722.42, 1987 peak

      We have now lost 39% in 254 days.

      254 days versus 39 days, quite a difference.

      But with all the stimulation pumped into the economy, it is hard to beleive when the economy starts working, the response won't be fast and furious.

      I regret doing this analysis using the DJIA, but it seemed to best address this post. The DJIA, the most poplular average IMO should be relegated to an arcane position for multiple reasons. 1) Small number of stocks 2) Manipulated by periodic changes of divisors 3) Stocks added and deleted 4) Price weighted rather than market cap weighted.
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    • Wed Jul 30th 08:48 AM
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      Commented on:
      Impact of GM Destroying the EV1
      Those who commented the EV1 was never designed nor practical to produce as designed are probably correct. It costs a lot more and takes a lot longer to make a true cost effective production design. Hopefully the learnings for the EV1 will assist in true production designs.

      As far as the electrical supply, we have to think those anti nuclear folks. They and the don't drill in ANWR, don't drill offshore crowd might as well realize they are closet Al Qaeda supporters.

      I am not suggesting we don't hold companies responsible for safety and avoiding pollution. I have no problem with even holding their executives liable to criminal penalties for pollution and safety issues.

      Now if we could just hold those in congress liable for the lack of a policy to supply the energy this company needs.
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    • Sun Jul 20th 11:25 AM
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      Commented on:
      The SEC's Campaign Against Naked Shorting: Misguided or Right On?
      The SEC should have long ago stopped all naked shorting.

      Their continued allowance of the practice is criminal.

      Those spreading false rumors leading to the demise of stocks, should be viewed as an act against the United States itself and therefore they should be tried for treason. Of course free speech should be allowed.
      View article »
    • Tue May 20th 20:38 PM
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      Commented on:
      Leveraged ETFs: Buy and Holders Beware, These Are for Active Traders
      I am not so sure, financials are dead. They seem to have a way to keep making money, probably because everybody has to use them. I am less certain, if a bottom is in. There seems to be a water torture way to try to find a new set of problems.

      One of the most interesting investment methodologies I know of is the statistical work Robert Drach has done. He has data back to 1977 validating his timing model to beat the averages. He is heavy in financial's. At this web site, with data back to 1995, you can see his model portfolio changes every day. www.pbs.org/nbr/site/r.../

      He has much better results on his subscription timing model.

      And every time he goes long, everybody says, it's different this time.

      ********** Switching Gears********

      Leveraged funds have a couple of other characteristics. 1) They are
      not an investment in equities, but in futures and other derivatives. Therefore, they do not always meet their 2x objective, even while in a trend and occasionally beat it. 2) On some of them the spreads and the intraday hysteria may make them significantly off their tracking index.

      I did a quick study on QQQQ, QLD, and QID to see some real cases.

      I picked 5/19/2008 as the closing date and assumed purchases on three dates of an equal dollar amount. The first two dates were picked without paying attention to the market. The third was picked to assure the QQQQ's were high, to see, the effect of the QID's.

      One issue with this study is leveraged ETF's are a new phenomena. I could have performed this with Rydex mutual funds and went back much farther.

      Purchase 8/1/2006 a few weeks after the launch of QLD.
      Gain 5/19/2008 QQQQ 37%, QLD 59%, QID -46%

      If you were long QLD, you are much happier than long QQQQ. If you were long QID, you were out to lunch.

      Purchase 7/31/2007 a year later.
      Gain 5/19/2008 QQQQ 5%, QLD 1%, QID -16%

      Spinning wheels, unless you were in the bearish QID.

      Purchase 10/26/2007 chosen to have a fairly high QQQQ
      Gain 5/19/2008 QQQQ -8%, QLD -20%, QID 9%

      Only QID would have you happy and you would be much happier, if you had bailed from it on March 10, 2008. Gain 5/19/2008 QQQQ -23%, QLD -44%, QID 65%

      This suggests, if you can play horseshoes with tops and bottoms, you can make yourself very happy with leveraged ETF's.

      All these percentages are adjusted for dividend payouts. Yes, even leveraged ETF's may pay out dividends at times.

      I write about topics such as this and other things at themicrokid.blogspot.c.../
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    • Mon May 19th 07:42 AM
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      Rating: 0 0
      Commented on:
      Is It Time to Buy Ambac?
      Balance sheets, those are the things S&P used to rate ABK, BSC, DRL, etal, aren't they.

      Screwed by proforma, screwed by GAAP, screwed by the rating companies.
      View article »
    • Mon Apr 14th 10:21 AM
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      Commented on:
      Gold’s 'Grand' Illusion
      Very good article. You have hit the key points. The person who committed on guns and ammunition as being stores of value in an unstable world is on the right track.

      You are clearly going against the established grain. Columbus also fought the establishment who thought the world was flat.

      People don't understand, GOLD WAS NEVER MONEY! It was only accepted as money and the acceptance of it as money makes it defacto money. Gold coins are money, but the operative word is coins. But GOLD IS A STORE OF VALUE.
      View article »