Getting To Know Ratchets

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You’ve probably been wondering how capital impaired firms such as Merrill Lynch, WaMu, Citigroup and others can continue to scour the globe in need of fresh capital to shore up their deteriorating balance sheets. The key to attracting new money is a so called “ratchet provision,” which reduces the risk for the party investing the funds. Mish at Global Economic …

Media Garbage

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Over 5 years ago, I wrote the article “Your Worst Enemy to Successful Investing—the Media,” the content which is still true today. Al Thomas, author of “If It Doesn’t Go Up, Don’t Buy It!” recently expanded on my thoughts by describing the role of the media as follows: Every day investors are bombarded with financial news on TV, newspapers and …

A Black Diamond Slope

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To me, yesterday’s market activity, as reflected by the chart from MarketWatch, resembled a black diamond ski slope, which I always tried to avoid during my skiing years just as I now try to stay away by not being an active participant on the long side when the bears rule. The major indexes had to endure a double punch caused …

Tracking The Hedge

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Many readers have sent in questions as to how I track the current hedged mutual fund positions I am holding. Since the funds are not a buy at this point, I have identified them as Fund A and B in the following graph: (click to enlarge)Fund A and B represent 10% each of total portfolio value. The Hedge was initiated …

Sunday Musings: An Unsound Banking System

Ulli Uncategorized 2 Comments

It’s no secret that the credit/banking crisis has the potential of bringing down not just only small banks but some of the big boys as well. As I mentioned before, the FDIC has hired some retired bank specialists who were involved in the S&L; crisis back in the 80s. That appears to be some sort of confirmation that there is …

Do You Know These Numbers?

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I have mentioned from time to time that many investors (or advisor clients for that matter) have very good intentions, but seem to fight a constant battle with their short-term fear pitted against their long-term resolve. Many times, the former wins handily and the latter, which is more important, succumbs to the fear of being too worried about short-term losses. …