Archives of “February 11, 2019” day

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14 Meaningless Phrases -You Will Always Hear on Blue Channels

  
  Education
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  1. The easy money has been made

When to use it: Any time a market or stock has already gone up a lot.BLUE CHANNELS IN INDIA

Why it’s smart-sounding: It implies wise, prudent caution. It implies that you bought or recommended the stock a long time ago, before the easy money was made (and are therefore smart). It suggests that there might be further upside but that there might also be future downside, because the stock is “due for a correction” (another smart-sounding meaningless phrase that you can use all the time). It does not commit you to any specific recommendation or prediction. It protects you from all possible outcomes: If the stock drops, you can say “as I said…” If the stock goes up, you can say “as I said…”

Why it’s meaningless: It’s a statement of the obvious. It’s a description of what has happened, not what will happen. It requires no special insights or powers of analysis. It tells you nothing that you don’t already know. Also, it’s not true: The money that has been made was likely in no way “easy.” Buying stocks that are rising steadily is a lot “easier” than buying stocks that the market has left for dead (because everyone thinks you’re stupid to buy stocks that no one else wants to buy.)

2.I’m cautiously optimistic. (more…)

Shenq and Hong, Value Investing in Asia I can’t begin to guess how

  
Analysis, Education

I can’t begin to guess how many feet of library shelves it would take to house all the books that have been written on value investing. The best answer is probably “too many.” So do we need yet another one? Yes. Value Investing in Asia by Stanley Lim Peir Shenq and Cheong Mun Hong (Wiley, 2018) takes the value investor into uncharted waters, waters rife with dangers but with the potential for solid profit.
The authors offer general, somewhat eclectic, guidelines to screen for companies that may be worth investing in. More important, however, as they stress, is knowing what not to invest in. They highlight both financial and non-financial red flags. Among the financial red flags are abnormally high margins, trade receivables growing faster than revenue, inventory growing faster than revenue, consistent excessive fair value gains, companies in a dilutive mood, leverage, and seemingly unnecessary borrowings. Among the non-financial red flags are massive reshuffling of the company’s officers, infamous directors and shareholders, when things vanish into thin air (e.g., a fire destroys a company’s books and financial records or a truck carrying five years of financial documents is stolen—the truck is later recovered but not the documents), and “innovative” business deals.
Five case studies illustrate the way the authors invest, each with a unique “hook”: value through assets, current earning power, growth through cyclicality, special situation, and high growth (Tencent).
The book concludes with five interviews with Asian fund managers. There’s also some online bonus content.
Investors who are thinking about buying individual Asian stocks would do well to read this book, not so much as a value investing primer but as an Asian investing primer. 

Ben Bernanke bails out Time Magazine

  
Analysis, Economy, Education, LINKS, US Market
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timemagazinegreenspan

WASHINGTON – After naming Ben Bernanke Person of the Year for saving us from the crisis that he helped create, Time magazine sales have “dropped off a cliff,” according to one Time magazine employee, speaking on condition of anonymity.

As a result of the drop-off in demand, Time magazine is now going through a liquidity crisis. Because of this situation, Ben Bernanke has decided to provide Time magazine with the necessary liquidity to stave off bankruptcy. The Fed has added millions of editions of Time to its balance sheet.

“From what we can tell, these Time magazines – especially the edition with Greenspan on the cover – have more intrinsic value than do Treasuries. There is actually stuff to read in them. So our balance sheet isn’t impaired in any way by paying cover-price for these issues,” said Fed Chairman Bernanke. “We also felt it would be best for the economy to take these editions out of circulation, and we are asking the American people to sell their Greenspan editions to the FOMC.”

The preliminary numbers are showing that the Fed, through Open Market Operations, has monetized at least 500,000 copies of the edition with Greenspan on the cover – the last time a Fed Chairman appeared on the cover of the prestigious magazine.

“If necessary, the Fed has the tools it needs to remove any excess liquidity from the markets,” said Bernanke. “We could start by selling off the Jim Bunning baseball cards that we have on our balance sheet.”

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