I agree with your opinion regarding a flat or fair tax although it would ultimately cost me a lot of money.
With regard to the FED, I also agree. But IMO it would take an economic catastrophe for it to happen. Too many vested interests that fund BOTH political parties.
I disagree with your statement that ALL welfare and govt assistance needs to be done away with to individuals. But …. I do agree that welfare and the various govt assistance programs have gotten completely out of control and reforms should be instituted to aid ONLY those that are in TRULY dire need. IMO these programs are now more about buying votes than aiding or lifting some of the needy out of poverty.
While we're at it we should also reform the many corporate/business welfare programs.
Maybe, just maybe, if some brave politician(s) ties together welfare reform for individuals and corporations/businesses, etc., there MIGHT be a SLIM chance to get something done. But I fear that reforms of this nature will not even be discussed until after the 2016 presidential election and then ONLY if the Republicans take/keep the Senate and a brave and smart Republican is elected President in 2016. So ….. IMO the chances are slim that we'll get/keep a Republican Senate AND a Republican president brave enough and smart enough to take-on these issues (one who values the good of the country above his or her need to get re-elected). IMHO Romney is brave and smart enough but he's Mormon and he's strapped his dog to the top of his car (a little humor here).
So ….. don't get your hopes up ….. the chances are (95%+) you'll be disappointed on these issues.
I'm not confident that a Republican Senate is the answer..... but what could possibly be worst than Harry Reid? The bull market will at some time in 2015 correct significantly and we've got to plan on it ..... and be willing to take actions that are in our own best interest.
Only action will prove to me if EITHER PARTY is capable of making progress needed toward correcting some of our long-term ills.
I do hope that with a Republican Senate we MAY have a SLIGHT chance at MEANINGFUL tax reform, but tax reform will have to get a significant start in 2015 because IMO 2016 will be lost to politics. Who knows MAYBE we'll also eliminate some of the wasteful spending ..... but you can bet that every dollar cut will likely be met with strong resistance in preparation of 2016 election "talking points".
The idiots in Washington have got to stop thinking what's best for ME and start thinking what's best for our country and if they don't "see the light" vote them out!
A very rewarding week in the market.
From COB 10/17, the DOW was +2.59%, NASDAQ +5.29% and the S&P had its best week in years for a +4.12% gain.
Those who had the guts to buy a few days earlier made out much better depending on their choices.
But …... what will happen next week?
IMHO we still face a volatile pre-election market, but history (?) tells us that the week before an election the market has about a 70% chance of going up.
So ….. what am I going to do? I'm going to be very careful and dive into stocks I feel are undervalued on any semi-significant dips.
IF the Republicans take the Senate AND we don't face some other unforeseen disaster (pretty tough with Obama around) I feel the market will be up nicely through year end. Therefore, IF BOTH of these conditions are met, I will attempt to be fully invested shortly AFTER the election and will even do a little tax loss selling on the few under water lots that I hold in taxable accounts. I may even dump under water lots in my sheltered accounts to free-up cash for other market opportunities next year.
I find its always good to have a plan even if that plan changes.
I know its likely that my YTD performance doesn't match some who have been riding this pony all year but I'm satisfied that my 2014 market objectives have been met and thus far have handily out-performed the three major indexes ….. and that's better than many hedge funds can say (unless you're Stevie, and he's a #$%$).
Best of luck ….. Roger.
Even though I'm not normally a flipper ..... I still like my recent flip better.
Bought SSW on 10/15 for $17.004 with fees and sold today for $19.504 with fees for a gain of $2.50 or 14.69%.
Naturally, since I'm a conservative old fart and avoid ALL forms of debt, I just paid cash ..... how stupid am I?
Now I'll just sit back and wait to see if the combined share price of NRF and NSAM reach $40 to $50 by year end with NSAM leading the way ...... but, I've still got a gtc order in for NRF at $16.50 with very mixed feelings.
One other little thing Clrodrick
You are absolutely correct in saying Japans % of debt to GDP is high. As a matter of fact its VERY VERY VERY HIGH and has been for many years!
How then can they possibly sustain themselves? No riots, little public outcry, orderly society, nobody starving, heck they didn't even ask others to help bail them out with their nuclear disaster!
Why? Is it their culture?
NO ..... it's because basically they own the bank! By and large they owe the money to themselves ..... not to a bunch of private bankers who collect the interest on every dollar of debt ..... a huge huge savings and, by the way, the same thing that North Dakota has done with its bank since the early 1900s, it's not just the recent oil boom that has helped North Dakota ..... check it out.
A somewhat simplified answer I'll admit but I'm tired of typing.
Remember the FED is not a government institution it's a bunch of private bankers and while they may WANT to pull-back on funding our debt but they know that government could do away with them as has happened several times before and they WILL NOT let that happen ...... so they're between a rock and a hard place.
Unending QE is something the FED is saying that they want to eliminate (because they KNOW its a disaster in the long-term).
What I'm more concerned about is some other player, let's say China, but it could be others, will say "we're not buying your debt unless we get something in return" if you default or try to pay us back with dollars that are worth much less. That something could be selected mineral rights and/or land etc. ..... hmmm .... think about China having the rights mine coal on selected properties. How would our government respond? By telling us that its a great deal, look at all the jobs that are being created? They probably won't mention all the jobs that will be lost in the private coal sector .... oh wait ..... I almost forgot, Obama is doing everything he can to destroy the coal industry right now. The bigger problem is what the Dems would say to the global warming freaks who are an important part of their base (tic).
IMHO the ultimate answer is simple, do away with the FED and start a government bank as honest Abe did to fund the Civil War. Then add another a little twist ..... impose a small tax on every financial transaction ..... think about what that would do for market speculation or the run-away derivative market.
But alas, these actions will not happen unless we're in really, really deep do, do. Why? Because the politicians care more about their re-election than they do about our country. Some states may, however, take action on their own to solve their problems by establishing state banks a la the bank of North Dakota.
Anyway, thanks for your post ..... at least someone is reads my stupid ramblings
Seems to me I read a post just a few days ago that mentioned something about management compensation.
At the time I brushed it off as vague rubbish by someone who wasn't very perceptive ..... I think I'll go back and read it again.
When I was starting out in business over 50 years ago someone told me "never let all of your little light shine" save some for a rainy day ...... that advice has served me well over the years.
But, thanks DAR, for shining the light on this little twist on management compensation ..... I'm sure most on this board will find it enlightening.
You're the best ..... even with those sleeve guarders and that eye shade.
Ok Dar you've FORCED me to dust off my Frieden again and I don't like it!
Let me make six assumptions for the sake of this analysis:
#1. we start from today's COB for both NRF and NSAM. #2. Combined share prices at year-end are $40. #3. Combined share prices at year end are $50. #4. Growth to $40 and $50 by year-end is split 60/40 NSAM/NRF. #5. Alternately, growth to $40 and $50 by year end is split 70/30 NSAM/NRF. #6. We not include any dividends paid before year-end ….. just raw closing share prices.
Clackty, clackty, clackty, clack.
My Frieden tells me that if combined share prices rise to $40 NSAM would close at $20.40 to $20.87 and NRF would close at $19.60 to $19.13. If combined share prices rise to $50 then NSAM would close at $26.40 to $27.87 and NRF would close at $23.60 to $22.13.
I don't know what's going to happen, but a combined share price rise to $40 represents a 13.22% gain while a combined share price rise to $50 represents a 41.52% gain. I hope you're right but I can't help but say that I don't think that $50 isn't in the cards and IMHO $40 is a stretch ….. but possible.
In any case, if the combined share price rises to $40 or $50 I'll be a very happy person even if my positions represent only 3.16% of my total portfolio at today's close.
Boy ….. I hope my Frieden didn't let me down because over all the years we've known each other (what is it 7 to 10 years?) I know how good you are with that pencil stub and little piece of string.
All the best …. Roger
Very perceptive DAR ..... but you're just talking shorter-term issues.
Everything is still coming up roses and NRF will be at 23 to 27 by year end no problem ..... right???
Very Nice Posts!
IMHO ..... if I HAD TO PICK the SINGLE greatest risk to NRF it would be liquidity ..... not necessarily related to NRF and its businesses but to general economic conditions.
I promised I wouldn't bait you so I'm posting this before you get a chance to reply.
After doing a little wandering through Yahoo historical prices for NRF I found the following data to be of interest:
2/6/07 closing price
3/5/09 closing price
Since most of us experienced this little market correction you might want to compare the hit you may have taken to your portfolio with the above data.
Could this happen again? What's really changed? Is anyone too big to fail?
You can ride the wave but don't ever think its not risky.
Your input will be welcomed.
For the sake of this conservation I'll not dispute anything you've said as it is largely correct in today's environment.
But for my sake and that of inward 1000, will you give us your assessment of the factors that may lead to a “significant decline of NRFs business in the long term” as inward 1000 requested?
I would find it especially educational if you cared to elaborate on the CREs and CDOs, those who participate and causes for them to reduce participation.
I ask this only because over the years I've made my share of investment mistakes and have found that more often than not those mistakes resulted from my failure to adequately assess downside risk ….. in other words over exuberance.
I'm not trying to bait you ….. honest!
Overly aggressive expansion funded by high debt loads leading to an unsustainable yield.
Combine that with any drop in the demand for product and rising interest rates (not any time soon) and you get a glimpse at the risk. Also, with aggressive expansion comes the risk of making a bad deal which could compound a problem. Then there are any number of external factors that could throw a wrench into the gears.
Nobody pays you a very high yield with because the like you …... with very high yield comes high risk ….. it's just a fact of life. In a perfect world a good and growing company that is self funded by cash flow is the ticket ….. but the world is not always perfect.
As I have stated before on other boards, a bank (lender) has one unstated objective …. to get you, a company, a government or even a student into as much debt as possible ….. as long as the payments
continue …... as yourself why? Might it be because they have already laid their bets off on some other sucker (can anyone say derivatives)?
In the case of NRF question becomes “how smart is management”? Are they consistently smarter than the next guy? Does their past success make them think they can “walk on water” and lead to mistakes? And lastly, how is management compensated? Is management going to “make out like a bandit” even if the company falls on hard times?
The market is littered with REITS that have seen their day. IMHO you can ride this puppy for a while with a portion of your portfolio ….. how big a portion depends on your risk tolerance and for how long depends on factors to numerous to list.
How is this country going to sustain its debt load? Think collateralize treasury bonds. It would take an act of congress (?). Then think about the implications. A little “over the horizon” pondering for you.
You're obviously not as "mature" as I am.
Humor is a good thing once in a while.
Believe it or not Dar does have a sense of humor which he seldom displays ...... probably because his anger issues take precedence. Or, maybe it's his environment ..... he does live on inconsequential little island surrounded by liberals ...... hence the anger.
Here fishy, fishy.
Walks on water …... come on.
Only Jesus and possibly my long departed father and a young Sophia Loren could walk on water.
Dar on the other hand is like a constipated mathematician complete with sleeve guarders and an eye shade. He works it out with a pencil stub and sometimes a short piece of string.
But alas, he does get the right answer most of the time ….. for that I respect him.
I can hardly wait for the reply.
OK ….. so call me an IDIOT ….. today.
What possessed me to make such a risky prediction when I could have just kept my big trap shut?
It wasn't my fault ….. the devil made me do it!
Or, maybe it was it just hubris ….. overconfidence in my ability and a desire to display that ability…... a bad thing in my view! I've hope I've learned my lesson!
I got carried away because of my YTD performance versus the DOW, NASDAQ and S&P and the fact that we're at a point that is forcing some institutions to reduce leverage. They may have to continue to “throw the baby (i.e. NRF, etc.) out with the bath water” to cover their sins.
What then ….. after these institutions get themselves on a firmer ground to where will they run?
It now looks like higher interest rates are not months away and may not happen until well into 2016, if then, (it is an election year)! So ….. IMHO they will have a much greater tendency seek yield, especially REITS over bonds. In their world boring ..... and not a recipe to beat the snot out of their competitors, but in our world, good news if we have beaten them to the punch and are comfortable with the increased volatility. This move will likely continue until the economy shows “real sustainable growth” which IMHO is a long way down the road.
Oh, man …... have I done it again!
Please forgive me.
I post the BEFORE market open on 10/16/14..
What do I think will happen to share price of NRF TODAY?
Woosh down from yesterdays close of 17.04 to around 16.30 or about 4.34 % and then my crystal ball starts to get real hazy but ....... if I had to guess .... I'd say it recovers and closes somewhere between 16.69 to 16.75.
So ..... here's a chance for you guys to call me an idiot when market action proves me wrong OR to wonder why I could make such a prediction IF the market proves me correct.
Out on a long, long limb ..... Roger.
Why is the market so difficult?
Because it's controlled by large institutions who by and large invest other peoples money (i.e. individuals, governments, pension funds, etc.). For this they reap a huge profit with very little real risk of the loss of THEIR money.
Their major risk is that others will cease GIVING them money if they perform poorly. To reduce this risk they have developed sophisticated computer programs and hedging strategies AND when all else fails, SOME rely on insider information and market manipulation. To maximize profits institutions need one other thing ….. volatility. Their ability to profit from a steady market is limited.
Face it, YOU'RE JUST ALONG FOR THE RIDE. Does this mean you can't profit? NO! You've got to pick your investment with the best of your ability (?) and hold it for the longer term.
Although these institutions do compete against private investors, who are at huge disadvantage, their major competition is other institutions who are similarly equipped.
IMHO trying to out-trade these behemoths is a recipe for failure. If you lose YOUR money that has been accumulated from years of your sweat, labor and sacrifice it's a big deal …... if you lose someone else s money …... not so much.
Bottom line …. institutions are in it for NOT ONLY their profit but for the POWER they need to assure that profit ….. and how they go about getting that power could lead us in another important direction ….. just not on this board.