Jonathan Christopher

15 Comments

    • American Capital Q2 2008 Earnings Update [view article]
      While this company looks very solid, it appears that many positions are illiquid. Unfortunately the housing economy will not be recovering until late in 2009, since there are two additional shocks to come: the repricing of the Option Arm Mortgages, and the failure of several major banking institutions in the US and Europe.

      There will be general market movers and unfortunately the movement will be down. I am unable to tell if there is sufficient liquidity in the company to withstand an additional 10% drop in the market.

      Remember that this long term bear market began in 2000, and the price, in constant real value (using Gold, or Silver, or Platinum, or Copper or Oil) has been down, even though the "dollar" value does not look that bad.

      Net-net: The 20% dividend really helps reduce the risk, and this is a good business, just expect the rough ride to continue for at least another year. There are few places to hid, an this is one of them       Aug 27 11:38 AM
    • Will the Recent Pullback in REITs Create a Buying Opportunity? [view article]
      If you are a long term investor and select REITS carefully, this is a good time to buy. Inflation will tend to increase as dollar growth continues at a higher rate than available product. Real Estate, while seeing the opposing forces of inflation and real estate recession, can provide protection against inflation, while providing income. In the balance, if you can buy real estate at below replacement cost, you WILL make money. Aug 13 04:00 PM
    • The US Dollar Elevator is Going Up! [view article]
      My impression is that the writer has difficulty putting numbers to opinions, and facts to support statements. When Warren Buffet says there are no US companies he wants, and starts buying overseas, I begin to question the value of the future dollar. If the dollar were to go up in value, that makes an overseas purchase doubly expensive. Not a good deal for a guy like Buffet.

      The worsening (projected) dollar drain for energy will reduce the value of the dollar, though there will be short-term rallies.

      The dollar will strengthen when:
      1. We have a positive balance of payments
      2. Our interest rates exceed the value of inflation
      3. The federal budget reflects income and expenses. (Excluding Capital spending)

      There is very little chance that the current export boom will creat enough international income to balance the outward flow of dollars for Oil and Gas.

      I'm not holding my breath. I am 90% invested in companies outside the US.       Aug 03 09:29 AM
    • USG Corp: Another Buffett 'Failure to Sell' Mistake [view article]
      Hi: In May, 2005, after living in Hawaii since 1981, I sold my Honolulu property because it was clear that this down-turn was coming. I also sold my Housing based REITS, moved to North Carolina and purchased Canadian Royalty Trusts and North Carolina Student Housing Real Estate. Perhaps that was luck, but how many people do you think moved from Maui to Chapel Hill on that whim.

      Warren Buffet is human and a very good investor. If I had funds to re-allocate to USG at present, I certainly would. Nuff said.       Jun 01 11:57 AM
    • Homebuilder Executive Pay Suffers Housing Slump Backlash - Housing Tracker [view article]
      Executive pay should be ENTIRELY based on their contribution to shareholder value. If an executive does not contribute to shareholder value, he or she has contributrd nothing and should be paid nothing. I manage investments for a family trust, and in the past 10 years have NEVER had a money-losing year for my investors. I often lose money with my own account, due to excessive risk taking - but it is my money. I manage risk for others in a more restrained way. I would not DREAM of taking money from the trust if I did not get a good return .I feel that is unethical.bb May 26 08:47 PM
    • Time To Abandon Stocks? [view article]
      1. The US fiat currency is under great pressure.
      2. Unless tight monetary and fiscal policy is instituted, and quickly, the value of the dollar will continue to decrease.
      3. Dollar-denominated assets (including cash,CD, and non-inflation protected bonds are likely to decrease in value
      3. Some stocks will go up, some down, but the dollar is certainly going down. Choose your poison.
      4. I am personally investing in hard assets,correctly-value... commodities, and solid Real Estate (yes, real estate.)       May 25 12:46 PM
    • Time To Abandon Stocks? [view article]
      1. The US fiat currency is under great pressure.
      2. Unless tight monetary and fiscal policy is instituted, and quickly, the value of the dollar will continue to decrease.
      3. Dollar-denominated assets (including cash,CD, and non-inflation protected bonds are likely to decrease in value
      3. Some stocks will go up, some down, but the dollar is certainly going down. Choose your poison.
      4. I am personally investing in hard assets,correctly-value... commodities, and solid Real Estate (yes, real estate.)       May 25 12:46 PM
    • Dueling Views on Housing: Buffett's Expert Sees Rebound Underway, Jim Rogers Sees More Pain [view article]
      Is there a way both pundits could be correct? This is my take:

      1. There could be a huge NEGATIVE impact if the CDS (Credit Default Swap) market collapses. Growing from $45 Trillion to $65 Trillion in a short period mkes this look like a bubble ( Did the money go here after exiting CDO (Collateralized Debt Obligations)?
      2. The shifts in population taking place due to retirements and changes in job locations (Go South young man/woman) may keep prices dropping in the Far West, Central and the North East States, while real estate stabilizes in states like North Carolina (which have new jobs and industries moving in). Location - Location- Location.
      3. Long term demographics with retiring baby boomers do not look good, but the next two or three do, with booming exports , especially in food, aircraft and other specialty manufacture.
      4. Then the boomers start retiring, moving to smaller houses in warmer climates (especially if it's cheap), and racking up those medical bills (paid for by the expanded Govt medical system they voted for). Why not - they are retiring and not going to be hit with the tax bill. Economy heads south (figuratively and literally) led by long-term declines in some types of housing and inflationary increases in medical system costs.

      So perhaps both are correct?
       May 12 11:18 AM
    • The Impending Mortgage Crisis: Part Three [view article]
      Everyone is ignoring the elephant in the room - The negative side of the Baby Boom Demographics. Just as the current age- group of 45-55 year old consumers has driven growth, in about 3 years they will drive decline. Increasing medical costs, decreasing consumption, and moving into smaller homes, this group will drive the US into extended Recession and perhaps Depression.

      It is highly unfortunate that a housing bubble occurred just before this slide in consumption started. It is possible that the excess housing will not disappear for a decade.

      Our best bet - though I do not see any politician picking up this ball, is to create an economic union with Mexico. The flood of young and willing workers would revive the sagging demographics of the 20 to 35 year olds and simultaneously reduce our National Security problem. Mexico's southern border is much smaller and could be well-controlled if desired.

      I have sold as much residential rental housing and purchased as much student housing as I could- 2 1/2 years ago. As the economy declines, and people have difficulty finding jobs - they return to school - to gain new skills or to delay that day when they need to get a regular job.

      I also shifted from regular equities to Canadian Royalty Trusts, and, as soon as I can find them, suitable, income-producing Limited Partnerships with substantial Tax deferral characteristics.       May 12 09:38 AM
    • News That Moved Friday's Market [view article]
      For the armchair strategists, the word of the day is "Demographics&quo... Not Democrats or Republicans, The buying power of the largest group occupying a single decade - between 70 and 100 million Americans in the 45-55 year group is peaking as we speak. The next three years will be good - but after us comes the long night. May 11 11:43 PM
    • Warren Buffett on the Dollar, the Recession, Subprime and Bear Stearns [view article]
      Of particular interest is what Warren Buffet did not say. The subject of CDS (Credit Default Swaps) is probably high on the list of his concerns. This unregulated security bubble has grown from about $45 Trillion to $65 Trillion in the past month or so. Based on the creation of synthetic BONDS which are related to real companies and their bonds, these CDS have the potential to implode explosively.
      IF you don't know what they are, I suggest you find out.       May 07 02:32 PM
    • Annaly Capital Management: More Than One Way To Milk a Cash Cow [view article]
      You can make money in Annaly in four ways:

      1. High Dividends,
      2. Capital gains during the up cycle
      3. Shorting the stock during the down cycle.
      4. Buy and hold the Warren Buffet way.

      I do 1, 2, and 3 in untaxed (IRA) accounts and 4 in taxed accounts.

      20% per year is doable with this stock.       May 01 11:29 AM
    • Annaly Capital Clicking on All Cylinders [view article]
      With GAAP earnings at $0.54, the dividend will be about $0.51.
       May 01 10:43 AM
    • Wells Fargo Downgraded: Oppenheimer's Whitney Goes Too Far [view article]
      We are entering an increasingly gray area, with several opposing trends and events, with separate peaks, valleys and magnitudes. These I will summarize below. Because of these events, the net net cannot be predicted, all we can really say is that volatility will be increasing.

      The following are the most important factors:
      1. The variable rate resets reach a peak in November. Foreclosures resulting from that peak should peak in February and March 2009.
      2. Increasing exports of manufactured goods and farm products are fighting with increased dollar value imports of commodities. These have different timings, and I cannot tell what the net is going to be for any one month. This impacts consumer's disposable incomes.
      3. Decreased capital availability coupled with increasing unemployment will create increasing rates on Credit Cards and Credit card Defaults. This will roll-over into consumer defaults on fixed rate mortgages.
      4. Increasing unemployment will result in increased movement of workers, putting more houses on the market at depressed values - and resulting in more "jingle mail"
      5. A change - over in the US legislature and Executive branches will increase uncertainty. This will also increase volatility.
      6. Overseas, there is a decrease in reserve food stocks, and what exists is selling at higher prices, increasing political volatility Aded to that is the likelyhood that Putin will see this as a period of US weakness, with increased likelihood of aggressive policy by the Kremlin.

      When you put this all together, the result is a crap-shoot of global proportions. A collar on the price of Wells Fargo, assuming increased volatility is the best bet.       Apr 22 11:13 AM
    • One Reason Apple May Be Hoarding $18 Billion [view article]
      This market is treating many companies unfairly, with small companies hurting the most. In the end, this situation will provide a cash-rich company the opportunity to buy excellent assets at pennies on the dollar. Steve Jobs is right, both short term and long term to keep his powder dry. Mar 31 10:22 AM
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