Starbucks: Highly Overvalued in a Mightily Overbought Market [View article]
Surprised that you are not short SBUX, although your disclosure says you are brave enough to be short other stocks, which you must perceive to be even more overpriced.
I believe many stocks are very overpriced right now, but I doubt the wisdom of shorting anything in this highly manipulated market. All I do is sell some of my long positions and book profits as momentum takes them too far ahead of fundamentals.
Looking at the Market from a Rational Perspective [View article]
" Here are some examples. Deere & Co (DE) fell from about $94 down to $25 at the March low and has rallied 88% up to $47 ...."
I had never owned DE before, but recently purchased a position in the high 20's after a little research, intending to hold it for the long term. My thoughts were intrinsic value in the mid 30's. After holding it for a few weeks, I sold most of my position in the mid 40's for an attractive return in excess of 60%.
This illustrates the enormous divergence of sense of value between different market participants. Some thought it was worth $90+ just a couple of years ago. I was glad to sell it in the mid-40's for a tidy profit, to someone who obviously thought it was a bargain. I don't think that anyone involved is smart or stupid, it's just that different market participants can look at the same thing and come up with very different conclusions regarding value.
Preview from Europe: Swine Flu, Stress Tests and Green Shoots [View article]
The video of the new model homes being destroyed is shocking. This should be illegal, as it is a true destruction of real value, not just virtual value represented by numbers on a bank's balance sheet. There is a law against "malicious destruction of property", and it should be enforced even if the malicious destroyer owns it.
Would be far better to sell it at pennies on the dollar than to destroy real wealth, which historically only happens in wars.
Starbucks: Highly Overvalued in a Mightily Overbought Market [View article]
I believe many stocks are very overpriced right now, but I doubt the wisdom of shorting anything in this highly manipulated market. All I do is sell some of my long positions and book profits as momentum takes them too far ahead of fundamentals.
Looking at the Market from a Rational Perspective [View article]
I had never owned DE before, but recently purchased a position in the high 20's after a little research, intending to hold it for the long term. My thoughts were intrinsic value in the mid 30's. After holding it for a few weeks, I sold most of my position in the mid 40's for an attractive return in excess of 60%.
This illustrates the enormous divergence of sense of value between different market participants. Some thought it was worth $90+ just a couple of years ago. I was glad to sell it in the mid-40's for a tidy profit, to someone who obviously thought it was a bargain. I don't think that anyone involved is smart or stupid, it's just that different market participants can look at the same thing and come up with very different conclusions regarding value.
Preview from Europe: Swine Flu, Stress Tests and Green Shoots [View article]
Would be far better to sell it at pennies on the dollar than to destroy real wealth, which historically only happens in wars.