Archive for the ‘Members’ Corner’ Category

Why we need to act on climate change now (updated)

 

Why we need to act on climate change now (updated)

Interview with Jan Dash, PhD, by Ilene Carrie, Editor at Phil’s Stock World

Updated in the wake of Hurricanes Harvey and Irma on September 13 , 2017.

Jan Dash is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, he devotes a chapter to climate change and its long-term systemic risk. Jan’s Climate Portal provides extensive background and references. In this interview, Jan discusses climate change and how inaction is threatening our future. (Click here for pdf version.)

Ilene: Hi Jan. Thank you for taking the time to share your ideas on global warming. . . I’m looking at a graph, along with the current atmospheric CO 2 level that you and Yan Zhang modeled for the Bloomberg Carbon Clock, which shows just how sharply CO 2 levels have increased mostly in only the last 50 years relative to the last 12 thousand years. And I can see that CO 2 levels are currently about 400 ppm – and that at 450 ppm, the text says we will reach a “danger zone.” What happens when CO 2 levels reach 450 ppm? Why is that level considered the "danger zone?"

 

Screenshot of Bloomberg’s Carbon Clock

 

Jan: If we can limit CO 2 to 450 ppm, it is likely that we can limit the average global temperature increase to around 2 degrees Centigrade or 3.6 degrees Fahrenheit above pre-industrial levels. This is the goal of the Paris Agreement, designed to leave a livable planet to our descendants.

Ilene: Do you think we will be successful?

Jan: With present policies, it does not look like we will achieve that goal. Action must be increased urgently to avoid increasingly severe climate impacts on our grandchildren and their descendants. Solving the climate problem is prerequisite to any long-term solution to the many serious issues facing humanity today. Climate change is actually the outstanding moral, ethical, and survival issue of our time.

We are in a “ danger zone” now. Today’s CO 2 level of around 400


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Advice for Trump on how to avoid a nuclear war

 

Former Mexican President Shows Trump How To Avoid Nuclear War In Hilarious Video

By Carolina Moreno

The former Mexican president sat down with comedy site Super Deluxefor a new video, released Wednesday, in which he gave Trump some tips on how to avoid starting a nuclear war. 

[More here.]





Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book Why Zebras Don't Get Ulcers, Third Edition. Roger writes, "Sapolsky is perhaps my favorite atheist. His research into stress and depression is as beautiful as it is almost terrifying. He somehow manages to put complex biology in a context that is instantly relatable. Personally I put a Creator into the equation but Sapolsky expands my frame of reference and I am very grateful. His book, Why Zebras Don't Get Ulcers, should be required reading for all humans before they launch out into the world like prey on the Savanah.

 





Inside Russia’s Social Media War on America – TIME

 





The Deep State

 

What is "The Deep State"? According to Wikipedia, "The concept of a deep state is that there exists a coordinated effort by career government employees and others to influence state policy without regard for democratically elected leadership." Originally, the term referred to entrenched shadow governments of countries like Turkey and Russia.

Conspiracy theorists and Trump supporters often use "deep state," with conspiratorial undertones, to refer to intelligence officers and government officials who use covert tactics, such as leaking information, to undermine the president (or control the world, depending on the purpose). 

In the article below, David Brin discusses the concept of "deep state" and how the term has been co-opted by Trump and the far-right to malign "every profession in U.S. society that deals in facts and knowledge." 

The Deep State

Courtesy of David BrinContrary Brin

[David Brin is an astrophysicist whose international best-selling novels include The PostmanEarth, and Existence. Dr. Brin serves on advisory boards (e.g. NASA's Innovative and Advanced Concepts program or NIAC) and speaks or consults on a wide range of topics. David Brin's nonfiction book about the information age – The Transparent Society – won the Freedom of Speech Award of the American Library Association.]

"Deep State" is a buzz phrase being used by the confederacy to explain the hostility they face, from every profession in U.S. society that deals in facts and knowledge. Their narrative is that these professions — the same ones that were maligned for decades in right wing media, from science, teaching, economics, skilled labor and journalism to the civil service, law professionals, medical doctors and judges — have colluded to create a truth-bending, Orwellian cabal. And now, note two of the last knowledge castes have been added — members of the Intelligence Community (IC) and the U.S. Military Officer Corps (MOC).  

This Deep State – the story goes – has been responsible for both liberal tyranny and American decline from greatness. (See Is Michael Flynn the first casualty of a “deep state” coup? It’s not unthinkable.) 

Never mind that these are the same professions that empowered the great burst of creativity and invention and entrepreneurial drive that multiplied our wealth a…
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Selling our Telecom position

John Hempton explains why he is selling Telecom. Does anyone have any thoughts on his thesis/broken thesis?

Selling our Telecom position

Courtesy of John Hempton, Bronte Capital

Several people on twitter and some in person have asked me for an update on my very bullish position on Verizon – especially since the results were not as good as expected last quarter.

I promised I would be forthcoming – but that I wanted to spell it out to our clients first. This is an extract from a client letter.

I want to start with the original bull thesis.

The original thesis

The original thesis came from watching Randall Stephenson (the CEO of AT&T) talk at a Milken Conference in 2012. The original recording is here. The relevant portion of the video starts at about minute 18.

Randall Stevenson tells a story of the iPhone’s introduction. The introduction of smart phones ran the company out of capacity in parts of country. [Apple offered the iPhone exclusively through AT&T in the USA.]

In New York the problems were intense. The complaint in New York was that the iPhone was a great phone so long as you accepted you could not use it as a phone. Jon Stewart mocked the coverage with unusual brutality on the Daily Show (link).

AT&T solved this by more and more capital expenditures. At the time, capex ran at around US$20 billion per annum. AT&T was – other than the government – the single biggest capital spending entity in the US.

Stephenson (speaking in 2012) said that the same problem would recur as usage continued to grow massively. But this time Stephenson argued it is different. He asserted that AT&T would not be able to solve this problem by more capital equipment. Spectrum congestion was inevitable.

He saw this as apocalyptic, but we saw potential pricing power and improving profitability.

We were doing simple arithmetic and getting very large numbers. Most Americans if given a choice between their pay-tv provider and their smart phone would choose the smart phone, but they currently pay more for their pay-TV.

We figured


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How Investors Get Tricked by Yield Products

It the article below, the "high-yield closed fund" that author Eric Newman constructs seems slightly like what a Bernie Madoff Fund might look like, before the investors started asking for their money back. 

How Investors Get Tricked by Yield Products

Courtesy of 

I want to send you over to Eric Newman’s shredding of a popular closed-end fund, which purportedly offers a 20%-plus yield to investors so that you can learn about one of the worst conventions of the investment biz. Eric is the CIO and partner of TFS Capital.

As rates rise (if they rise?) a lot of this type of thing will come back to haunt the investor class and the brokers who’ve been pitching it to people. It’s going to be ugly. You can protect yourself by understanding how the sausage is made.

It’s so good I won’t even excerpt. Just go:

Designing a bizarre Closed-End Fund (TFS Capital)





On the Climate Change Risk Management, the Paris Agreement & the Clean Power Plan

Concerned about global warming? Send your thoughts to the EPA and tell Trump that you support the Clean Power Plan.

Submit your comments, identified by Docket ID No. EPA-HQ-OA-2017-0190 at http://www.regulations.gov

From the U.S. Federal Register website: In accordance with Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” EPA is seeking input on regulations that may be appropriate for repeal, replacement, or modification. Comments must be received on or before May 15, 2017.

(See also Previous comments"TIPS for effective comments." Proposed EPA cuts. Commentary on Trump's dangerous climate Executive Order.)

To learn more about climate change risk management and the Paris Agreement, watch this discussion by Dr. Jan Dash. Jan Dash is author of Quantitative Finance and Risk Management, A Physicist's Approach and over 60 scientific papers. He is also the Managing Editor for the Climate Portal.  

Resources

The Climate Portal has a variety of resources and links for business and climate change. Business, spurred by investors, is waking up to the material risks of climate change. The transition to the huge opportunity of the distributed energy economy is underway. This will mitigate the worst impacts of climate change, if done with all deliberate speed. The future of our grandchildren depends on the success of the renewables transition.  The good news is that the renewables train has left the station. The climate contrarians/deniers may try, but they cannot stop it. Have a look. ~ Jan

Business and Climate Change (main page)

Climate Economics

Carbon Finance 

Non-fossil Renewable Energy 

Articles

News Log

****

Paris Agreement

The Paris Agreement (French: Accord de Paris) is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gases emissions mitigation, adaptation and finance starting in the year 2020. The language of the agreement was negotiated by representatives of 195 countries at the 21st Conference of the Parties of the UNFCCC in…
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Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

Data source: Dept. of Commerce/Bureau of Economic Research (https://www.bea.gov/index.htm)

Total market value of US produced goods and services – $18 Trillion.

GDP measures total US economic activity. Positive numbers indicate expansion; negative numbers indicate contraction, i.e., recession. In the past, there usually have been accelerated expansions coming out of recessions. That has not been the case since the Great Recession. 2% annual GDP growth, plus or minus, appears to be the new normal.

The GDP and change in GDP are "lagging" indicators meaning they tells us where we have been. Where the economy is headed falls to GDP forecasts which are regularly issued from various sources.

B. Consumer Price Index (CPI)

The CPI is used to measure inflation. The CPI measures changes in the prices paid by urban consumers for representative basket of goods and services. Latest report on the last 12 months gave a CPI reading of +2.5%. The Federal Reserve uses a different inflation measure, Personal Consumption Expenditures (PCE). CPI is based on a survey of what households are buying; PCE is based on surveys of what businesses are selling. Both measures break out "headline" and "core" numbers. Core numbers strip out housing and energy which tend to be more volatile month to month.

Source: Bureau of Labor Statistics- US Dept. of Labor https://www.bls.gov/

C. 10-Year Treasury Note

The Ten Year Treasury is often used as…
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Bombing – Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democrats are about as supportive of the strikes as they were under Obama, with 38 percent backing them in 2013 and 37 percent agreeing with them now, according to the Washington Post. Now 86 percent of Republican voters back the strikes, compared with the just 22 percent who did so in 2013.

This is a pretty stunning difference. Democratic views stayed solidly negative regardless of who was president. But Republican approval rates skyrocketed from 22 percent to 86 percent when Trump became president. This despite the fact that Bashar al-Assad's use of chemical weapons was more extensive in 2013 than it was this year…  more >

I mean WTF – because you have a GOP president, strikes are now OK. Liberals a bit more consistent there.

***

SJL, "WTF" is a common (but not highly regarded) form of philosophical reasoning. Instead of looking at the outcome of an action, or examining whether the act itself is right or wrong, this less logical approach considers whether the actor is a republican or a democrat to determine whether the act is right or wrong. ~ Ilene





 
 
 

Zero Hedge

Realtors Urge Fed To Stop Hiking As Existing Home Sales Slump Most Since 2014

Courtesy of ZeroHedge. View original post here.

Despite a modestly better than expected 1.4% MoM rise (after September's 3.4% slump), existing home sales slumped 5.1% year-over-year - the biggest drop since 2014.

A blip higher in SAAR...

Regionally, The West is suffering the most...

  • Existing-home sales in the Northeast increased 1.5% to an annual rate of...



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Phil's Favorites

A Frightful Fall for FAANG Investors

 

A Frightful Fall for FAANG Investors

By , Statista 

Things went from bad to worse for FAANG shareholders on Monday, as share prices of Facebook, Amazon, Apple, Netflix and Google dropped by another 4 to 6 percent in what shapes up to be a terrible fall for America’s tech heavyweights. 

Since the beginning of September, every one of the FAANG group has suffered significant losses in market cap, with Amazon hit particularly hard. After the-commerce giant bri...



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Kimble Charting Solutions

Tech Wreck Most Likely Gets Started Here!

Courtesy of Chris Kimble.

This chart looks at the Nasdaq Composite Index (IXIC) over the past 38-years. It has spent the majority inside of the past 25-years inside of rising channel (1).

The Long-term Trend in this index remains up, despite the softness of late.

The rally off the bottom of the channel that started in 2009, hit the top of the channel in September, as monthly momentum reached levels last seen in 2000. The price and momentum decline over the past 7-weeks has both testing 9-year rising support at (2).

...



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Insider Scoop

20 Stocks Moving In Wednesday's Pre-Market Session

Courtesy of Benzinga.

Gainers
  • Foot Locker, Inc. (NYSE: FL) rose 15.4 percent to $53.15 in pre-market trading after the company reported stronger-than-expected earnings for its third quarter on Tuesday.
  • Ability Inc. (NASDAQ: ABIL) rose 14.2 percent to $3.22 in pre-market trading after the company announced plans to acquire a company that licences Ultimate Interception for $1 million in Ability stock plus warrants.
  • Qudian Inc. (NYSE: QD) rose 11.4 percent to $4.79 in pre-market trading...


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Chart School

Weekly Market Recap Nov 18, 2018

Courtesy of Blain.

A rough Monday sunk chances for a positive week on the indexes as the choppy action continues.   As we mentioned in last week’s recap while some technical indicators improved, solid markets show lower volatility than what we are currently seeing.  This week will be interesting because there is usually a positive bias Thanksgiving week as many professional traders are off for the week!  Not much news worthy this week – some fears around oil, Brexit, China trade, etc etc – mostly technical conditions continue to be weak.

Macro headwinds, including trade tensions, rising interest rates, a stronger dollar, and slowing growth abroad have also helped to trigger a pivot towards negative sentiment in the market. “This is where peak earnings growth comes in,” Essaye said, argui...



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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>