Monthly Archives: September 2014

ali-who?

In case you missed it, a foreign company nobody had ever heard of until recently staged a gigantic IPO this past week. But lost in all the hype and hoopla was a much more important development here at home: the beginning of the end of the US real estate slump.

New-home sales in the U.S. surged in August to the highest level in more than six years, a sign that the housing recovery is making progress.

Purchases of new houses jumped 18 percent to a 504,000 annualized pace, the strongest since May 2008 and surpassing the highest forecast in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The one-month increase was the biggest since January 1992.

The oldest adage in the investment game is, of course, “Buy low, sell high.” The second-oldest is, “Don’t fight the Fed.” And with the August housing numbers, the Federal Reserve’s monomaniacal six-year campaign to reconstruct the real estate sector from the ashes of the subprime catastrophe is finally starting to show results. At the same time, the stocks of major homebuilders like Pulte, KB Home and DR Horton are all down YTD.

Hear that knocking? That’s a little visitor named opportunity.

Continue reading


majoring in mismanagement

I glanced at a recent issue of the Stanford alumni magazine the other day. It featured an interview with former school president Gerhard Casper and an excerpt from his book on “addressing the challenges of higher education.” The piece was underwhelming, to put it mildly. There was the usual pabulum about school rankings, measuring outcomes, and fostering diversity. But there wasn’t a single word about the biggest problem facing higher education today:

It costs too damn much!

Our nation’s universities, public and private, have crushed an entire generation with debt. All told, young adults owe more than a trillion dollars in student loans. That’s a huge drag on our economic growth. And where is all that borrowed money going (besides the Wall Street banks that underwrite many of the loans)? It’s propping up one of the most backwards and wasteful industries in the world: academia.

Continue reading


the bell tolls for dendreon (and nobody listens)

Astronomers constantly scan the night sky for supernovas so that they can observe and study how stars die. It’s a fascinating process. Right now, a very large corporate supernova has begun and it is just as fascinating–and educational. Unfortunately, I was forced to cover my short position in the dying company because my prime broker now charges me an exorbitant “negative rebate” to short stocks. But I’m still watching from a distance.

Continue reading


pro-growth liberalism

(A quick note on the blog: you can now subscribe to receive new posts by email. If you’d like to do so, just enter your address in the form on the right side of the page and then complete two more simple steps to confirm your subscription. Okay, now back to our regularly scheduled program …)

As a registered Republican, I’ve always felt that the private sector does a better job creating jobs than government.  But not all right wing policies promote growth.  Some limit growth.  Two come to mind immediately: the blind opposition to government-funded healthcare and the opposition to raising the minimum wage, or at least allowing it to keep pace with inflation.

Continue reading