WC Whiner

Has Dell Hit Rock Bottom?

Wouldn't you rather be long Dell against a competitor short to hedge out industry effects?

FD: briefly lost a percent or so on a quick DELL bounce bet this year before throwing in the towel, so I may be partial.

Get Your Rally Shoes On Because This Rally's Got Legs

In re DJI 15k, that's because 5% and 50% are practically the same, yeah?

I have made any number of embarrassingly wrong market calls, but I find it best to revisit them when wrong and identify whether I made ex-ante errors, or whether once again I simply fell prey to bad luck. Luck swamps skill every time. I might be happy to believe your index call last fall was simply bad luck, but I just can't respect the, "I shall be proven right in the end, just you wait," elision of events.

FD: like the folks at PIMCO, I see the housing slowdown taking down marginal consumption, hence marginal GDP, corporate profits and as soon as the market gets what's happening, the indexes. I am ready for my call to be wrong, but so far, the data are coming in much along that scenario. You won't want to be overweight US equities if I'm right.

Dow 15,000? (ETFs: IVV, IWV, IYY, SPY, VTI)

In re DJI 15k, that's because 5% and 50% are practically the same, yeah?

I have made any number of embarrassingly wrong market calls, but I find it best to revisit them when wrong and identify whether I made ex-ante errors, or whether once again I simply fell prey to bad luck. Luck swamps skill every time. I might be happy to believe your index call last fall was simply bad luck, but I just can't respect the, "I shall be proven right in the end, just you wait," elision of events.

FD: like the folks at PIMCO, I see the housing slowdown taking down marginal consumption, hence marginal GDP, corporate profits and as soon as the market gets what's happening, the indexes. I am ready for my call to be wrong, but so far, the data are coming in much along that scenario. You won't want to be overweight US equities if I'm right.

Warren Buffett Knows Something About USG Corp.

Seconded.

I think the short-term pressures on USG are going to rattle a few folks, JJC included, WB excluded. If you're going long homebuilders here (defensibly, though I think incorrectly), then sure, add USG. If you're staying out of that group waiting for better visibility, as I am (closed my shorts a while back, missing the bottom, oh well), then stay out of USG waiting for the same.

What Buffet knows is a good business when he sees it, and that he personally is not much good at timing entry points.

Oil Price Will Continue to Rise Long-Term. Our Advice: Buy the Dips

Yeah, I'm unconvinced. Cf my post in response to your last note on days inventories. Short story shorter: days inventories were in a long downtrend from the beginning of the data I can find ~1980 through about 2005, during which we saw two very different crude-market regimes. The idea that inventory trends speak to anything in the long term is contradicted by the data.

As I say, in the short term, they matter. In the long term, not so much. Then again, in the long term, you were long oil in 1981. How'd that work out for you?

It Just Can't Get Any Bigger

Er, straw man?

The Yen is Over-Rated: Don't Buy the Hype

And really, the Euro is the Pound, and the Aussie is the Kiwi dollar. So your call is long RY and long AJ. Time will tell, I suppose.

Why The Pundits Are Wrong On Caterpillar

24% a year is quite a goal. I tried checking your site to see how close you've come since '97, but am stymied. Any luck reaching those numbers across portfolios?

In re: CAT, I think I'm with PIMCO: housing slows, consumption growth slackens, and all cyclicals watch their markets slow. International is no great help then, not 'til the US ceases to be the consumer of last resort.

America's Growing Reliance on Foreign Gasoline

Whose crack spread is $20 this week?

The traditional 3-2-1 crack currently is around $5/barrel. Yeah, it was over $20 pretty recently, but it varies a lot. I don't have a WSJ sub, so perhaps you were just parroting the article and perhaps it was written a couple weeks back when cracks really were well above $20 -- but they ain't today.

NB: -1 CL + 28 HU + 14 HO at current prices

The Consolation Prize Theory: Why Home Depot Should Profit From the Housing Slowdown

They have, however, seen his contractors.

I like your idea. Still, my prediction is that the housing slowdown is going to take down all its suppliers too hard for you to notice the effect unless you have a long-short approach. If you get a good short rebate, then sure, short homebuilder suppliers against Home Despot. Otherwise, I'd probably just keep fading homebuilder rallies.

(FD: out of that trade again now, but I'll be back in.)

Homebuilder Stocks Not The Bargain They Seem

Nice piece, though I caution that I share your view of the likely path of homebuilder earnings. That said, like you I currently have no position, though I have shorted the group, covered, shorted and covered again this calendar year.

Earlier this year I made my own version of an affordability index. The chart is at www.bignose.org/~wcw/mortgage.pct.med... Mortgage payments at fixed rates on an OFHEO-index home as percentage of median four-person income are at twenty year highs, so either we're in a new era of housing pricing (possible, but not my bet) or something has to give. Since I doubt rates are headed back down and I am quite certain incomes are not about to balloon, my bet's on prices heading down instead.

Also worth noting: for-sale inventory as a percentage of owner-occupied housing is at forty-year highs. Cf www.bignose.org/~wcw/forsaleonly.sd.2...

Xethanol Shares Plummet After Sharesleuth.com Story Appears: Coincidence?

Maybe Cuban finally rounded up inventory somewhere. When they posted to Sharesleuth, he was short only 10,000 shares, under a basis point of exposure for him so basically a rounding error. XNL's been on my list to short for a while, but none of the brokers through which I trade my little account has been able to short it for me. Say he scared up 100,000 shares. That's still a rounding error, but it accounts for a lot of the volume.

I guess being a billionaire might just have its advantages, huh?

Why The Dollar Hasn't Collapsed Amidst The Trade Deficit

While on your prediction for the dollar's future course we can respectfully disagree, on your factual assertions I am afraid you're just wrong. Basing your investment theses on counterfactuals can work (viz going long internet in the late '90s), but only if you get lucky.

To enumerate just a few of your hits:
+ foreigners are getting "one helluva deal"
- the US return on FDI dwarfs that to foreigners
+ "you betcha" that's a good idea
- borrowing high and lending low is a bad idea
+ China produces cheap t-shirts
- I don't have the heart to quote the data to you

I gave you one star, and I fear that may have been generous. No, scratch that: your long-dollar posture is working today. "WOrking today" is always worth one star, no matter how perplexing the rationale underlying the trade.

Lots of Value Riding the Railroad

I don't know the freight business well, so bear with me: what's to keep UNP from, well, sucking less and bringing up their margins? They're as big as the others, and trading at the lowest P/S. Sure, because their margins suck. Why?

The Rate Decision and The Dollar: Why The Fed Is Sweating Bullets

Good column.

One note: the USDX isn't much of a dollar index. I think of it as the DJIA of currency indexes: it's been around and hence is useful if you need an index that goes back a ways. However, its weightings are historical, not objective. As a result, the USDX is probably two-thirds Euro.

The CME publishes a dollar index which is "competitiveness weighted" using Fed-published numbers. While this might not be exactly what you want, it is a) an objective scheme and b) less purely a Euro index (though that's still it's number-one component by a long shot, at a little under half).

I doubt using one or the other or even rolling your own from trade or transaction weights much changes the technical picture . Or maybe it does; I'm not a technician. What I do know is a bad index when I see one.