Sunday, January 16, 2011

The Sarcasm Report v.80

MSN Money: StockScouter Stock Rating System

StockScouter compares the fundamental and technical qualities of stocks to measures that have proven statistically predictive of stock performance in the past.

I have similar devices installed in my car. I don't know where I would be without them.

If there is one "sure thing" we can count on, it is the predictive power of complex gambling systems.

MSN: SLV

Morningstar Risk: Low

MSN: GLD

Morningstar Risk: Low

Here's a chart showing the returns over the past few years.

This is great news for the "fringe pundits" who think the "exponential explosion" in the price of gold and silver will continue. Imagine all those future profits with so little risk?

And if you can't trust Morningstar to say it like it is, then who can you trust?

January 20, 2005
U.S. real estate funds still hold rewards

Do not assume that it is time to bail out, though. "The future may not be as bright, but we're not in a bubble mode," said Dan McNeela, an analyst with Morningstar. "Real estate is still a good diversifier."

December 5, 2007
AIG CEO says subprime risk manageable, shares rise

Morningstar analyst Matt Nellans said AIG had shown that its margin of safety was great enough to survive everything but "the Great Depression."

Here's a chart of AIG. Note its stock price in 2007. If we can believe Morningstar, then this must be "the Great Depression". Check out AIG's "margin of safety" as seen in the rear view mirror. How could anyone have seen this coming?

March 2, 2009
AIG reports record $61.7bn loss

Insurance giant AIG has reported a loss of $61.7bn (£43bn) in the final three months of 2008 - the largest quarterly loss in corporate history.

Thanks Morningstar! What would we do without you?

11 comments:

watchtower said...

"For having lived long, I have experienced many instances of being obliged, by better information or fuller consideration, to change opinions, even on important subjects, which I once thought right but found to be otherwise."

Benjamin Franklin

I sold the rest of my PM's last week, except for a core group of circulated pre-64 coins, i.e. my tinfoil SHTF 'just in case' insurance (not that I hold much faith in it).

I guess this means I've changed my mind, it means that I believe that the US will stay on top at least until my demise (I'm 46) or (place tinfoil hat on now) the nukes fly.

I'll probably end up with egg on my face over this, but it wouldn't be the first time.

Besides I did almost double my money which ain't too shabby for a dumb redneck such as myself.

Mark,
On a side note, I noticed your comments over at GYSC's site.
Once again it conjured up the image of Elias and Barnes vying for the "soul and mind" of Chris...lol.

I do enjoy hearing both sides of an issue, especially when it's done civilly as you two have.

Mr Slippery said...

Gold has been on quite a run over the last 10 year, the price up an amazing multiple of 5.

Guess it's time to jump into something less speculative like Apple stock. Let's see, over the same period as gold, Apple has increased their revenue by 10 times, and their stock price has risen a multiple of 46! Nine times the appreciation of gold. Of course, unlike gold, you can eat Apple stock. ;)

I'll be following Mark into the 10 year TIPS auction this week (with my puny investment funds), but I will also be adding to my gold holdings when it looks like the correction has run its course. No Apple stock for me.

Stagflationary Mark said...

watchtower,

"I'll probably end up with egg on my face over this, but it wouldn't be the first time."

Since we are both 46, I suggest we eat eggs now! Lots of them.

1. They are VERY cheap relative to gold.
2. If an egg only diet kills us before the USA completely falls apart then we can go to the grave without needing to eat crow, lol.

If the nukes fly and there are just 10 humans left alive on this planet, then history will probably show that there was a gold bubble. That's assuming that multi-metric ton golden earrings don't become a fad of course, lol.

Stagflationary Mark said...

Mr Slippery,

Here's the best of all sarcastic worlds.

A Golden Opportunity

What's not to like? The USA can *never* have too many restaurants. People have to [all you can] eat somewhere, especially if food prices rise, lol. Sigh.

Stagflationary Mark said...

Here's an added bonus from that site.

"To be the leader in the family restaurant segment by making pleasurable dining affordable for every guest, at every restaurant, every day."

Holy cow! I may consider adding a franchise within my extended pantry! ;)

Stagflationary Mark said...

One more thought before I head off to bed (no joke, I'm an idiot!)...

I honestly believe that in this ultra low interest rate world, basic necessities (such as canned goods and TP) continue to be the safest possible investments (quite possibly for many years to come).

The Fed desperately wants us to embrace risk though. I'm that stubborn horse by the water refusing to drink. Perhaps I saw someone pee in it (again)!

Mr Slippery said...

"StockScouter compares the fundamental and technical qualities of stocks to measures that have proven statistically predictive of stock performance in the past."

Notice the wording. Their math predicts stock performance in the past. Hey, that's pretty easy to do. You can do that without a computer, just look at yesterday's newspaper.

Now, predicting stock performance in the future, that is a real trick.

getyourselfconnected said...

SLV and GLD were low risk for a while (last 10 years), but now I would say they represent significant risk. Not sure about metals right now, will need to watch the sector but large cap gold miners are looking good on a technical basis.

No worries on my NFLX buy Mark. It was a pure TA find and based on a trading algo I have been using for screens. I would not want to hold NFLX for any serious amount of time.

Stagflationary Mark said...

Mr Slippery,

Now, predicting stock performance in the future, that is a real trick.

Now here's something we hope you really like.

It's a bullwinkle market!

Stagflationary Mark said...

GYSC,

The "Buzz" this "year" is that NFLX, gold, and silver are headed to infinity and beyond! ;)

I sure hope I am wrong long-term on at least two of those three (at least over the long-term), lol.

Stagflationary Mark said...

I should qualify that.

When I say long-term I really mean during my lifetime.

Even if inflation averages just 2% per year going forward, gold is clearly headed to infinity.

That doesn't mean gold will necessarily keep up with inflation overall nor does it mean it represents value at any price though.

Housing and stock prices will also head to infinity in such an environment, but those who placed leverage bets on them at too high a price (after the easy money was already made) got spanked hard.