Same-o, Same-o

Last week's min-bout of volatility notwithstanding, one day just seems to run into another these days, doesn't it.  Consider the following, which makes yesterday indistinguishable from countless others recently:


* SPX makes a new high

* USD/JPY trades at 101 and change

* USD/MXN trades 13.00, +- 10 centavos

* EDZ5 trades 99.00 , +- a few ticks

* An equity guy who loves the sound of his own voice says Herbalife is a fraud

* Another one, who loves the sound of his own voice, says it isn't: nicky-nicky-nah-nah

* A US regulator alleges wrongdoing at a non-US bank

* Ex post facto standards are applied to foreign exchange fixing behaviour by people who haven't got a scooby how the FX market works

* Government and regulatory outrage over the scandalous sums of money thrown at Congress by the corporate sector and other vested interests remains strangely silent

* Allegations of currency manipulation by foreign sovereign institutions, who have had a net impact several orders of magnitude larger than any fixing business, remain absent from the public discourse on the subject

* No one has yet to read the Dodd-Frank act from cover to cover
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Anonymous
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July 23, 2014 at 7:49 AM ×

I sure hope its just robots trying to make money in the ED's. I'm uncomfortable getting too long equities, but just cant find anything else working. Might try a little AUD - seems likely if inflation is to start showing anywhere it'll be there, with at least CB rate talk not far after, right? CB's still do that stuff?

as my kiddo says, fml.

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Anonymous
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July 23, 2014 at 8:07 AM × This comment has been removed by a blog administrator.
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Anonymous
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July 23, 2014 at 1:10 PM ×

In NYC 4 year old children take an admissions test on an iPad to gain entrance into $40,000 annual tuition Manhattan kindergartens...

Can you pass this sample test?

http://www.dnainfo.com/new-york/20140707/upper-east-side/quiz-are- you-smart-enough-get-into-private-kindergarten#quiz

Now look at this chart and tell me what you would do when QE3 ends in October...

http://imgur.com/zKFnRAe

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Polemic
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July 23, 2014 at 1:54 PM ×

Anon 1.10pm .

Is there a weeny chance that your QE dumps are perhaps related to a non US function? Perhaps the shenanigans going on in Europe at that time?

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Anonymous
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July 23, 2014 at 2:54 PM ×

Polemic

Absolutely, that is why I read this forum everyday. BTW, I would like to thank everyone including MM for their input and preventing me from drowning in this sea of liquidity.

Anon 1:10pm

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Mr. T
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July 23, 2014 at 4:11 PM ×

I've been at this game a while and don't ever remember something like AAPL. Its some kind of winner-take-all side effect of globalization - huge moats, incredible margins etc. They are buying a lot of stock (almost 2% of volfrac every day), pay a healthy dividend, and are still ending the quarter with more cash than they begin. When they finish this $160bil cap return program, they are likely to have just as much cash as they had when it started. And all of this on ~$6bil/yr in R&D - roughly the same as IBM generating 1/5th of their cashflow.

On the one hand, it would be amazing if they started doing fundamental Bell-Labs type research with all their cash (think what the transistor has done for us), but on the other I'm quite interested to see what the endgame is of throwing 90% of your cashflow into your stock is. Competitive threats seem unlikely. Its a capital monopoly of sorts.

Incredible.

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Macro Man
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July 23, 2014 at 4:18 PM ×

Mr. T- I quite agree. Apple has morphed from a sexy go-go stock to an incredible cash cow, which makes it a far superior investment IMHO than it was a few years ago. Obviously if multiples expand too much then it becomes riskier, but other than that I think it is just a fantastic investment

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Anonymous
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July 23, 2014 at 4:26 PM ×

Seems the link for the sample test for NYC kindergarten does not work but this link does work and the test is at bottom of the page...

http://www.dnainfo.com/new-york/20140707/upper-east-side/quiz-are-you-smart-enough-get-into-private-kindergarten#ixzz37hEvpiRB

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Leftback
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July 23, 2014 at 4:28 PM ×

AAPL was certainly a good buy some eighteen months ago when MM was buying it and it was close to yielding 3%. That was a great time to get long the Fruit, well done, Squire.

At some point this game is all about timing. We were lucky/smart enough to load up the portfolio wheelbarrow with cheap REITs, preferreds and munis last August and December and that has paid off handsomely.

Just now feels like one of those times when you might have some cash, and get a bit impatient, and finally decide to spend it on something that isn't so cheap any more and then watch it teach you a lesson in Value Investing. (Lesson 1: If it isn't screaming Value, it's too expensive).

Re: the end of QE, it is a really good question that has been posed above, between Anon and Polemic. We all know the End of QE Cometh in October. So we are already in the Crowded Theatre paradigm. We know where the exits are, now who's going to be the one to set off the fire alarm? Not for the first time, US small cap equities and high yield are nothing more than an enormous game of chicken.

In my view, no useful money will be made between now and the end of the year by taking excess risk. The easy money, as they say, has been made.

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abee crombie
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July 23, 2014 at 4:57 PM ×

Re Mr T on AAPL. If you are looking for Bell Labs, try GOOG or FB, AAPL is way too secretive. AAPL is a cash machine, no argument and valuation at this point isnt demanding but given their 1)Above average industry margins 2) Lack of innovation over the past 3 years 3)Competitive dynamics (Xiaomi , Amazaon, Lenovo, Samsung) 4) Cash is all stranded overseas, I am not in love with it here.

What it does have is some of the best brand equity.

On a personal level I hope the iWatch is really something great.

GOOG, imo has a better moat, growth opportunities and R&D

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Skippy
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July 24, 2014 at 4:41 AM ×

New Zealand Unemployment 6%
US Unemployment 6.1%
New Zealand Core Inflation 2%
US Core Inlation 1.9%
New Zealand Wages 2.4%
US wages 2.3%

New Zealand OCR 3.5%
US 0.25%

I'm just saying

I know one is a small open economy and commodity producer and one is very large, but are zero rates still warranted?

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Anonymous
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July 24, 2014 at 12:56 PM ×

C Says
All this talk of a sanctions war with Russian got me thinking how is Cyprus doing. I've always thought of Cyprus being to Russia what Hawaii is to the US. Having been blasted last year what's going on with their assets now. Anyone monitoring?

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