10 Monday AM Reads

Welcome back to the show. start it right with our Brooklyn sourced, morning train reads:

• Stock investors haven’t been this bearish in 15 years (Marketwatch)
• How A Little Lab In West Virginia Caught Volkswagen’s Big Cheat (NPRsee also The Study That Started the Volkswagen Scandal (CityLab)
• The Rich Are Different. They’re Better Investors. (Bloomberg View)
• How to Win in Wall Street: by a Successful Operator (Irrelevant Investor)
• The Trick to Making Better Forecasts (WSJ)

Continues here


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What's been said:

Discussions found on the web:
  1. Herman Frank commented on Sep 28

    Some days ago you wrote that “Tesla will be an automotive disruptor” with its speed-option on the models they produce. Your colleagues at Bloomberg wrote that the Cabinet Chief of Chancellor Merkel came to the same conclusion and has thrown down the gauntlet to the German car manufacturers. After Porsche’s (gorgious-) “Mission E”-car this can only mean “heavy guns are placed in position to take on Tesla”.

    • Winchupuata commented on Sep 28

      The Porsche Mission E is indeed gorgeous, but even more “gorgier” for me is the Porsche AG 918 Spyder e-Hybrid

  2. b_thunder commented on Sep 28

    Record bearishness? So why do mutual funds have record low levels of cash? Where are the redemptions? People say one thing, but their behavior is 180 degrees opposite.

    I have a simple theory: lots of investors have realized long ago that this market’s been inflated by the Central Banks and government borrowings. They realize that it may get really ugly really fast. But they’ve also been conditioned to buy the dips (that’s in addition to other factors such as going against the herd means career risk.) And so they say they’re bearish, while almost fully invested. Unfortunately when a few of them do decide to sell, everything will follow and there will be a stampede to get out.

  3. rd commented on Sep 28

    I am completely baffled by the good news of stock market investors being the most bearish since early 2000. Unless my history tome is erroneous, that bearish reading was the harbinger of one of the worst market bears of all time with the NASDAQ doing a fabulous impersonation of the Dow Jones from 1929-32.

    So it appears this sentiment indicator is telling us that either the bottom is in or we are about to start another great bear market. This is very useful information to me as an investor.

  4. rd commented on Sep 28

    Re: The rich are different

    I think the writers miss a huge point that becoming rich is very different from staying rich. I think they also misunderestimate the importance of the Greenspan-Bernanke-Yellen Put.

    People usually become rich because they are completely undiversified, bet big on or two big things, worked their butts off, exhibited skill in that undiversified area, and also exhibited skill on capitalizing on luck (many people turn away from luck because capitalizing on it is a risk in itself).

    Once they become rich, then keeping it is a completely different game. Many studies have shown that many fortunes are largely frittered away within three generations. The graph of the amount of equities owned by the wealthy is fascinating. It is clear that the real “wealth effect” engendered by the Federal Reserve Put over the past 20 years has been in the halls of the rich. It also exposes them to a lot of downside compared to what they had before. We see lots of stories of wealth inequality, but perhaps that wealth is actually more ephemeral than we thought. The last two bear markets have largely been arrested by the Fed stepping in aggressively, the last one with unparalleled actions, to push asset valuations back up. This graph shows that a prolonged period of depressed valuations (like the 1930s-40s and 1980s) would cause significant damage to the wealthy. While many would survive reasonably well, probably some would be sufficiently over-extended with debt etc. that their lifestyles could be seriously impaired. So if the Fed were to be unable to sustain todays’ elevated valuations, the most impacted people may very well turn out to be the wealthy unlike the previous couple of generations.

    BTW – I support a strong inheritance tax. Within reason, the people who made the money have the right to spend it. However, just winning a genetic lottery should not be viewed the same as creating an entire industry like oil, railroads, technology etc. At the very least, an inheritance tax should capture unpaid capital gains instead of just stepping up the cost-basis for a future generation. Beyond a certain amount of money (say $$5-10 M per person so they can live in comfort if they wish or provide capital seed money), I think the next generation should be able to earn most of their money “The old-fashioned way…they earn it” to re-purpose the old Smith Barney commercials. The skillful ones will have a head-start – the not so skillful or hard-working will just fade into the background where they belong.

    • willid3 commented on Sep 28

      to get rich also means that you have to also be lucky, as just being a workaholic wont do it. and the real purpose of the inheritance tax was because we didnt want to become England. where we become locked into economic strata where only the wealthy have any chance of doing any thing. well we seem to working on becoming England

  5. VennData commented on Sep 28

    ​”..Boehner unloaded against conservatives long outraged that even with control of both houses of Congress, Republicans have not succeeded on key agenda items, such as repealing President Barack Obama’s health care law and striking taxpayer funding from Planned Parenthood. He refused to back down from calling one of the tea party-styled leaders, presidential candidate and Sen. Ted Cruz, a “jackass…”​


    ​Gosh I guess it was Obama’s fault for not reaching across the aisle. ROFL!​

  6. rd commented on Sep 28

    Why you get different gas mileage than you are supposed to:

    My personal experience is that I can usually achieve or exceed the stated highway gas mileage by using cruise control as long as there isn’t a significant headwind or lots of hills (although the hills don’t seem to be a significant issue with the hybrid I bought recently). City gas mileage seems to be primarily impacted by how I accelerate from standing starts for both regular cars and the hybrid – less pressure on the gas pedal means better mileage.

  7. VennData commented on Sep 28

    Donald Trump: Low-income people will file a one-page form with the IRS that says, ‘I win’


    ​What about Paul Ryan and the Club for Growth wanting to “expand the base?”​

    No wonder the establishment Republicans hate him. They won’t be able to duplicate Ronald Reagan’s tax cuts on the wealthy while raising taxes on the working people and small businesses.

  8. Jojo commented on Sep 28

    Sep 28, 2015
    33 Million Americans Still Don’t Have Health Insurance
    Here’s who they are.

    By Anna Maria Barry-Jester and Ben Casselman

    Nearly 9 million people gained insurance last year, a win for “Obamacare” as the president’s signature health care law expanded Medicaid and opened health insurance exchanges. And yet, 33 million Americans, 10.4 percent of the U.S. population, still went without health insurance for the entirety of 2014. Millions more were uninsured for at least part of the year.1 New data released this month shows they were disproportionately poor, black and Hispanic; 4.5 million of them were children.

    It isn’t a surprise that some Americans still don’t have health insurance. Despite aiming to insure “everybody” in the U.S., the Affordable Care Act (ACA) left significant gaps in coverage, and decisions made by the law’s opponents have denied benefits to millions of people it was designed to help. But the new numbers reveal that most of the uninsured last year were people who should have been able to access insurance under the law. That presents a major challenge for President Obama in the final years of his term, but also an opportunity: Millions of Americans qualify for coverage but, for whatever combination of reasons, haven’t yet signed up.



    • VennData commented on Sep 28

      An unequivocal success. More people will sign up if trends continue.

      I am proud of our nation and I am an ACA user. Very happy with it.

  9. VennData commented on Sep 28

    Poll: Climate change and conservatives

    “…But according to the pollsters, conservative voters not only believe that humans are contributing to climate change — 56% of self-described Republicans said this is true — but they are essentially open to investing in clean energy, provided they don’t have to think about the politics of the issue…”


    ROFL. They want policy changes to happen by magic…

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