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Talking stocks, trading, and investing in general - Page 199

post #2971 of 6095
Quote:
Originally Posted by djblisk View Post

Any talk on good mutual funds for your 401K?

I bought ADAVX 2 years ago because of the steady return. Price doesn't fluctuate much, steady 4 cents a month per share, 3.xx share price.

The basis of the fund is to move money in and out of ex-dividend dates to maximize return.

Note, I invested in this one in a specific situation, its not for everyone. Otherwise my funds are really 401k bla bla. Not really a fan of funds in general. Its good if you dont want to put any time in.
post #2972 of 6095
Quote:
Originally Posted by Cantabrigian View Post

Not 100% sure but I don't believe so.
I believe it tests market-related losses in a scenario where...
vs the ability of Tier 1 capital to absorb that.
I'm guessing - and someone pls correct me if this is wrong - reserves against legal liabilities are not Tier 1 capital. So to the extent that they've budgeted for that, it won't affect the stress tests. But could affect a non stress test related discussion about ability to pay a dividend.

I think your right, its a standardized test for the industries, where BAC's legal issues are their own.
post #2973 of 6095
I knew Lululemon would deliver last quarter, probably going to sell it in the next few days.

Anyone knows why Sbux suddenly jumped today? Is it because the UK tax is finally clarified?
post #2974 of 6095

Apologies in advance for the tardy reply, I've been busy preparing for finals.

Quote:

Originally Posted by Cantabrigian View Post

Like I said, I agree with the short term trade idea.
If you're interested in what I think, and you have every right not to be, here it is.


Quite interested, actually. I've never talked about the market to anyone inside the industry.

Quote:
Originally Posted by Cantabrigian View Post

OECD purchasing power parity shows EUR overvalued by a mere 3%. Using CPI or PPI you get something more like 10 - 13%. Those aren't large deviations from PPP and are sustainable.

Do you mind sharing the formulas you used calculate these?

 

Quote:
Originally Posted by Cantabrigian View Post

You have to differentiate between USD borrowing to fund dollar assets (if you're a foreign investor) and being short spot. Dollar funding needs aren't anything like they were in 2008...

I realize the Fed eased dollar funding abroad, however what makes you say they aren't anything like they were in '08? Was it something you read? Is there a way to quantify this?

 

Quote:
Originally Posted by Cantabrigian View Post
I'm not sure why you expect the dollar to do nothing but strengthen since it's done nothing but weaken except for the height of the crisis.
Don't forget, the Fed's balance sheet has expanded a lot more than the ECB. And our base rates are a lot lower and promised to stay that way.

'08 marks a turning point for many things I readily understand, and many more things I do not understand. One thing I do understand was the USD's weakness from '02 - '07 was caused by the presence of fixed exchange rates and private sector debt. These trends has changed, and the dollar will follow accordingly. The lows set during the financial crisis was violated in May, June, and July of '10 and then again in July and August of '12.

 

Also QE, in its current form, is neither inflationary nor devalues a currency due to any fundamental economic reason. However, I do realize speculators think differently. Thus generating a higher headline inflation and a weaker dollar than would otherwise be the case.

 

Quote:
Originally Posted by Cantabrigian View Post

I agree that 1.3000 looks like it will be resistance. A downward trendline is still intact and the uptren from July broke a while ago.

Where did you learn to trade? And how did you learn to draw trendlines? I use them while trading, but I'm confident I am doing it incorrectly.

 

Did you catch the EUR/USD's move at before the markets opened in the US today?

post #2975 of 6095
Quote:
Originally Posted by ac21686 View Post

I've seen nothing out of AMRN in the last few months that would give me any reason to think a near-term catalyst is coming before more depreciation. If they announce they will launch the product on their own it will likely go down further.

Amarin's Stock Drops on Plan to Sell Heart Drug Vascepa Alone

Yikes...
post #2976 of 6095
It's pretty simple. PPP can use a single good - say something dependent on global commodity prices / urban real estate rents, like a Big Mac, for example.

So 1 Big Mac / X USD * Y Other Currency / 1 Big Mac = Y Other Ccy / X USD = Z Other Ccy / 1 USD which is your PPP exchange rate.

Or you can talk about the basket of all goods (ignoring that people purchase different things in different countries) and see how currencies ought to vary by how much more or less of (whatever ccy) they're paying for thebasket of all goods.

The calculation is similar - you just adjust the price by CPI or PPI each year.

The second approach has the benefit of being closer to how we expect reality to operate since you can't really arbitrage basic consumer staples but it has the disadvantage of showing relative movements (since you never know if / when you were at fair value).

---

To assess dollar funding needs, you can compare LIBOR to the Fed Funds rate. This relationship is called Libor - OIS. It's a measure of stress in the USD finding market.

People are short the USD / long other currencies as speculative positions, generally speaking. But they're also short EUR / long other ccys as speculative positions.

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There are very few fixed exchange rates in the world. USD - Argentina exploded a while ago. Off the top of my head, they big ones are USD - Hong Kong and EUR - Denmark.

USD weakness wasn't caused by private sector debt. But what spurred private sector debt also spurred USD weakness.

Low rates and roaring risk markets, made people feel comfortable about grasping for yield. US risk free / not too risky rates were pretty low so why not plow some money into emerging market bonds since they pay a lot more. So you have to sell USD and buy ZAR, TRY, AUD, etc.

And, while you're at it, buy a subprime mortgage or credit card debt.

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Something I'd highly recommend reading is Ray Dalio (hedge fund = Bridgewater) piece on how he views the economy. It's free on their website. And as a spectacularly successful manager of an absolutely massive fund, his view while unorthodox has some merit.

This is simple supply / demand. The supply of USD has increased. Demand is static-ish. So the price / value has to decline.

---

Trendlines are pretty easy. If it looks like something is moving in a straight line, draw that line on the chart.

Their usefulness is highly debatable.

--

I got hosed on yesterday's EUR move because I'm a moron.
post #2977 of 6095

Thanks for taking the time to educate me. 

---

Two sides of the same coin really. Weak currency and relatively low rates in the US increase risk appetite abroad. But the private sector was creating a lot of USDs via credit. Thus weakening the USD. These two factors created a positive feedback loop; a loop that was broken in '08.

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You like Ray Dalio too? He's one of my favorite macro thinkers. Are there any other great macro thinkers you pay attention to? 

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Why do you consider treasury bonds to be different than USDs? I conceptualize them as being the same thing, almost, the only differences are the duration, interest rate, and liquidity (although they are both highly liquid). When the Fed buys bonds from the primary dealers, it is really an asset swap. The private sector is left with the exact same amount of assets as when QE started. No new USDs were created. The only thing that changed was the duration, interest rate, and liquidity of the bank's portfolio.

post #2978 of 6095
You have to read Soros's book - Alchemy - even though the biographies I've read about him suggest that for all the theoretical framework (reflexivity, etc.) he's 100% an intuitve trader.

Cash =/= bonds (even super short term ones) is kinda the basis of open market operations. They mop up liquidity / decrease money supply through selling bills.

So when the Fed buys bonds, the (differnt part) of the public sector has bonds and the private sector has more money / M1.
Edited by Cantabrigian - 12/7/12 at 3:06pm
post #2979 of 6095
Quote:

Yeppers, I think the selloff is an overreaction of course. Hired equal number of reps that it took to market Lovaza...oh yeah and who brought that one to market again? wink.gif

Also, this doesn't mean AMRN is going it alone either, the continual NCE delays are forcing them to get started on their own IMO, but a buyout offer can come at any time of course (but likely won't until we know whether we get 5 years exclusivity or not).

edit: Hopefully the FDA will decide one way or the other on the 15th of this month, but I wouldn't be surprised if it kept getting delayed until Feb. Huge positive news got buried under all this mess though, notice of allowance on the 520 patent.
post #2980 of 6095
Quote:
Originally Posted by Cantabrigian View Post

You have to read Soros's book - Alchemy - even though the biographies I've read about him suggest that for all the theoretical framework (reflexivity, etc.) he's 100% an intuitve trader.

I've come to the same conclusion. Realizes he is wrong based on, "a pain in his back." Which is absurd if you think about it because his framework is, despite its simplicity, very dense.

 

Quote:
Originally Posted by Cantabrigian View Post

So when the Fed buys bonds, the (differnt part) of the public sector has bonds and the private sector has more money / M1.

That money never makes it into the money supply. It only shows up as bank reserves. The private sector does not use bank reserves to pay for goods and services, although the financial system does use reserves to meet reserve requirements and settle interbank payments.

1000

post #2981 of 6095

I realize it has appreciated some, but is the Renminbi not pegged to the USD? Also are many Asian currencies not pegged to the Reniminbi?

post #2982 of 6095
Nothing is pegged to CNY. CNY itself is a managed float. And offshore CNY, in practice, floats even more freely.

Singapore doesn't have a rate setting body, they manage the currency relative to trade partners.
post #2983 of 6095

Bernanke gave us another bite at the apple.

post #2984 of 6095
Seems as if Bill Gross did not like the decision. major changes in the PIMCO total return fund.
post #2985 of 6095

Video of Ray Dalio from yesterday's Dealbook conference. He's always worth listening to. That guy from PE is boring.

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