Les, that is not the point. I follow the real for many years (and its previous incarnations, decades actually) and you could say I am heavily invested. Nobody is questioning the real appreciation. FYI, Brazil will be either raising the IOF or imposing a new quarentine on inflows. There will be strong opposition to this by HB&B, of which BAC is or was a member unless it its allowed to go bankrupt. The real appreciation is there for a very good reason and without the IOF and other measures it would have been through the roof.
The stuff that people just quote here is questionable at times (some even quote ZH as something reliable). People might believe this stuff.
re. tax in Brazil. That is very inaccurate and probably put out by vested interests who *want* to be able to freely put more money into Brazil, but can't due to the tax. Who wrote that piece? BAC? Next thing you know it will be reported by ZH (or the National Enquirer).
Mackinaw and 2nd, excellent and very correct comments both of you. I do wonder if companies like AIG or GM (or whichever TBTF company of the past 2 years) would not have wiped out the aggregate earnings of the whole group though if the earnings had been accounted correctly.
As we all said in one way or another, these PEs are only meaningful if computed systematically and historically the same way. What we see as reported S&P PE numbers out there is likely just garbage.
I agree that the PEs would make sense if they could be compared over time. The importance some analysts give to the S&P500 PE is puzzling given that some companies lose money, those can't be factored in and then the number becomes not so relevant, not comparing apples to apples. Removing certain companies but not others is tricky though and can be manipulated, like most stats.
FWIW, I have been tracking the S&P500 PE over time at http://nexalogic.com/sp500.html. There are several tabs for past dates.
The numbers are those indicated by Google Finance. Current PE shown is 26.03, which is pretty close. This number has actually been dropping recently (!), as more and more companies stop losing money. In other words, companies that are recovering and that have low PEs are added to the PE ratio, bringing the overall PE down (for instance there are 38 companies with PEs below 10). You could argue that the real PE is much higher (and you could say it's much lower too if we removed other companies). Funny numbers.
Past values:
Oct 25 2010: 27.5
April 2010 30.9
Jan 2010 30.0
Sep 2009 45.0
June 2099 43.2
April 2009: 16.4 (big jump following that quarter)
2nd, and you can also sell covered calls on top of it. CSCO Feb. 21s will add another $0.60 to your income, either lowering your cost by $0.60, or ensuring an exit a $21.60. Then repeat the following month(s), ad infinitum.
Les, if I may, I hold GIX in a long lost account, average cost $1.13..., bought 2 to 3 years ago when it was much touted here. Others are or were in much worse shape, ECU, LYM, PMV, NOT, etc. They are really "dirt", literally. They don't produce anything, sure one day they might, and you might win the lottery too. On the other and, I hold one that was never spoken here, QRM, average cost $0.12, currently about $5. This one's dirt in the backward was uranium, then it claims to have found rare earths. You usually only hear about the people who win on these tickets. So, beware, and take some profits. My advice is worth $0.02, and it might be in dirt.
A couple of months ago contango was 15-20%, now it's zero for the first 5 months of 2011 or so (UNG has just finished rolling over its contracts, so front month does not matter).
UNG has responded kindly to it, and HNU even more, +22% in 5 days ( to compensate a tiny bit for the -99% in the last 24 months ;-))..
Re. "The G20 agreed to implement market-determined exchange rates."
I'd say not at all. They agreed not to agree and to postpone till the next meeting where the same will happen. They cannot possibly agree. Actually, it was quite interesting that they included a sentence allowing emerging markets to do capital controls to counter the USD devaluation.
Also, China will not allow themselves to suffer Japan's fate, re. Yen rising in the 80s.
Thanks for that link Dave. It is always interesting to see others' points of view. What I find troubling with the report is that he does not comment that the money is flowing outside the US.
"The money created by buying trillions of bonds is simply sitting idle, having been deposited by American banks as excess reserves in their account at the Fed,”. Really?
A number of emerging nations would take great exception to that. Those trillions have been flowing into emerging markets where they can earn something, unlike the U.S., and causing all kinds of havoc.
BTW, there are exactly zero Brazilian ADRs with a negative return since 2009, and several with returns over +200%. Same applies to Argentina, Chile, Peru. Top gainer in Brazil is our beloved Braskem, BAK, +342% (http://nexalogic.com/latin.html)
"The fed's decision would create a "bubble" in the international market. and [...] exacerbate the imbalances in the global economy, [...] will have "uncertain outcome".
"it does not help the U.S. throwing dollars by helicopter"
Since UNG loses 10-20% every month alone due to rollover, i.e, by doing nothing, I'd say it cannot bottom.
BTW, straddles however for November, December, and January require 12%, 15% and 18% moves 9http://shockedinvestor.blogspot.com/2010/11/profitting-from-ungs-moves-either-way.html). Can UNG move that much either way? It sure can.
UNG, VXX, and leveraged ETFs, best to stay away from. The amount lost in them is in the trillions by now (all likely going to HB&B).
-6.9% compared to what? If that is the DX, that is a basket of other currencies, including Euro, Yen, British Pound, Loonie, Kroner, SFs. Some are strong, others are not, some are printing, others are not, some drop, others go up. If CT is making this comparison, seems naive.
Les, that is not the point. I follow the real for many years (and its previous incarnations, decades actually) and you could say I am heavily invested. Nobody is questioning the real appreciation. FYI, Brazil will be either raising the IOF or imposing a new quarentine on inflows. There will be strong opposition to this by HB&B, of which BAC is or was a member unless it its allowed to go bankrupt. The real appreciation is there for a very good reason and without the IOF and other measures it would have been through the roof.
The stuff that people just quote here is questionable at times (some even quote ZH as something reliable). People might believe this stuff.
Les,
re. tax in Brazil. That is very inaccurate and probably put out by vested interests who *want* to be able to freely put more money into Brazil, but can't due to the tax. Who wrote that piece? BAC? Next thing you know it will be reported by ZH (or the National Enquirer).
The contango situation actually slightly benefits UNG (but not UNL). We discussed this a couple of months ago here when contango died.
There is slight backwardation for UNG now, then contango for later months:
http://shockedinvestor.blogspot.com/2011/01/natura...
"The day contango died". We just need a singer now.
Mackinaw and 2nd, excellent and very correct comments both of you. I do wonder if companies like AIG or GM (or whichever TBTF company of the past 2 years) would not have wiped out the aggregate earnings of the whole group though if the earnings had been accounted correctly.
As we all said in one way or another, these PEs are only meaningful if computed systematically and historically the same way. What we see as reported S&P PE numbers out there is likely just garbage.
(I keep thinking CPI numbers in the U.S. ...).
Great work Mackinaw.
Thank you very much Bill.
I agree that the PEs would make sense if they could be compared over time. The importance some analysts give to the S&P500 PE is puzzling given that some companies lose money, those can't be factored in and then the number becomes not so relevant, not comparing apples to apples. Removing certain companies but not others is tricky though and can be manipulated, like most stats.
FWIW, I have been tracking the S&P500 PE over time at http://nexalogic.com/sp500.html. There are several tabs for past dates.
The numbers are those indicated by Google Finance. Current PE shown is 26.03, which is pretty close. This number has actually been dropping recently (!), as more and more companies stop losing money. In other words, companies that are recovering and that have low PEs are added to the PE ratio, bringing the overall PE down (for instance there are 38 companies with PEs below 10). You could argue that the real PE is much higher (and you could say it's much lower too if we removed other companies). Funny numbers.
Past values:
Oct 25 2010: 27.5
April 2010 30.9
Jan 2010 30.0
Sep 2009 45.0
June 2099 43.2
April 2009: 16.4 (big jump following that quarter)
Bill reports the PE for the Dow30 at 23.17 and the S&P500 as 26.41. Does anyone know the PE for the Russel 2000?
2nd, and you can also sell covered calls on top of it. CSCO Feb. 21s will add another $0.60 to your income, either lowering your cost by $0.60, or ensuring an exit a $21.60. Then repeat the following month(s), ad infinitum.
Les, if I may, I hold GIX in a long lost account, average cost $1.13..., bought 2 to 3 years ago when it was much touted here. Others are or were in much worse shape, ECU, LYM, PMV, NOT, etc. They are really "dirt", literally. They don't produce anything, sure one day they might, and you might win the lottery too. On the other and, I hold one that was never spoken here, QRM, average cost $0.12, currently about $5. This one's dirt in the backward was uranium, then it claims to have found rare earths. You usually only hear about the people who win on these tickets. So, beware, and take some profits. My advice is worth $0.02, and it might be in dirt.
natgas is no longer in contango for the first part of 2011 (http://shockedinvestor.blogspot.com/2010/11/attent...), so UNG is now, for the time being, almost a real ETF.
A couple of months ago contango was 15-20%, now it's zero for the first 5 months of 2011 or so (UNG has just finished rolling over its contracts, so front month does not matter).
UNG has responded kindly to it, and HNU even more, +22% in 5 days ( to compensate a tiny bit for the -99% in the last 24 months ;-))..
Hummm, is that in Ft. Knox? Do they discriminate where that gold is supposedly?
BTW, total global gold holdings are in the $1.5T range, which is really small compared to Forex or derivatives markets.
For those interested in tracking all bond ETFs: http://nexalogic.com/bonds.html, they are separated by corporate, intl, munis, and leveraged bond ETFs
Still adding some to the list. Many crashing but also many of these are still doing quite well since July and January 2010.
Re. "The G20 agreed to implement market-determined exchange rates."
I'd say not at all. They agreed not to agree and to postpone till the next meeting where the same will happen. They cannot possibly agree. Actually, it was quite interesting that they included a sentence allowing emerging markets to do capital controls to counter the USD devaluation.
Also, China will not allow themselves to suffer Japan's fate, re. Yen rising in the 80s.
Thanks for that link Dave. It is always interesting to see others' points of view. What I find troubling with the report is that he does not comment that the money is flowing outside the US.
"The money created by buying trillions of bonds is simply sitting idle, having been deposited by American banks as excess reserves in their account at the Fed,”. Really?
A number of emerging nations would take great exception to that. Those trillions have been flowing into emerging markets where they can earn something, unlike the U.S., and causing all kinds of havoc.
BTW, there are exactly zero Brazilian ADRs with a negative return since 2009, and several with returns over +200%. Same applies to Argentina, Chile, Peru. Top gainer in Brazil is our beloved Braskem, BAK, +342% (http://nexalogic.com/latin.html)
And the new uranium ETF, URA, jumped 11.1% today) http://etfreport.blogspot.com/2010/11/going-nuclea...). 0.69% MER.
Not a recommendation!
Actually, VXX has to roll over VIX futures contracts every month. Does it remind of another similarly dreadful ETF out there?
Correlation between UNG and VXX is consistently over 0.83 since... June, and has topped 0.88. (tool: http://nexalogic.com/nexacorrelation.html)
Both things have no possible floor, they lose value by doing nothing.
Brazil today blasted the U.S and the Fed for QE2 (see http://etfreport.blogspot.com/)
"The fed's decision would create a "bubble" in the international market. and [...] exacerbate the imbalances in the global economy, [...] will have "uncertain outcome".
"it does not help the U.S. throwing dollars by helicopter"
Since UNG loses 10-20% every month alone due to rollover, i.e, by doing nothing, I'd say it cannot bottom.
BTW, straddles however for November, December, and January require 12%, 15% and 18% moves 9http://shockedinvestor.blogspot.com/2010/11/profitting-from-ungs-moves-either-way.html). Can UNG move that much either way? It sure can.
UNG, VXX, and leveraged ETFs, best to stay away from. The amount lost in them is in the trillions by now (all likely going to HB&B).
You can always exercise your ITM options and sell right away.
I'd personally take the profit and run, and if you really like the stock, take a smaller position with the profits.
Jack, like "ENDING THE FED"? ;-)
DaveM. "dollar only dropped by 6.9%"
-6.9% compared to what? If that is the DX, that is a basket of other currencies, including Euro, Yen, British Pound, Loonie, Kroner, SFs. Some are strong, others are not, some are printing, others are not, some drop, others go up. If CT is making this comparison, seems naive.