I met Mr. Giang in the park across from my hotel. He was a very amiable old guy and we spent a half hour chatting. He had to leave, but
The rally in the “cloud” and in the online space isn’t just good for Wall Street investment bankers, it’s also getting more and more businesses and individuals to give up
Against all probability, a device that purports to use cold fusion to generate vast amounts of power has been verified by a panel of independent scientists. The research paper, which
Futures are up around a half percent thanks to the $4.75-$5.75 Billion of stock market pumping (stock juice) hitting the tape Monday courtesy of QE infinity… Pomo for the rest
I met Mr. Giang in the park across from my hotel. He was a very amiable old guy and we spent a half hour chatting. He had to leave, but wondered if I’d meet him back here the next day so he could introduce me to his niece and we could all have a “nice conversation.” I warily agreed. It would turn out to be one of the weirdest experiences I’ve ever had.
That night I met up with with fellow travel bloggers, Dave and Colin, and we spent the night drinking cheap beer and Vietnamese whiskey. Dave and I were comparing events of the day and he mentioned how he’d been befriended by a local who took him home for dinner to meet his sister who was a nurse and was about to move to New Zealand.
After a friendly dinner and chit chat, he’d been told a story about their sick grandmother and had give them $10 US to help with medical costs. He suspected that it was a scam, but had got a good meal and a taxi ride out of the deal so he wasn’t too worried about the money. I told him about my appointment to meet Mr. Giang tomorrow at 3:00. Dave laughed and said “I wonder if his grandmother is sick, too?”
Mr. Giang met me at the park as agreed and brought his cousin (whose name I forget) along. She was in her late thirties and was very interested in learning more about the US. As we crossed the park, I saw Dave sitting on a bench reading. He laughed and waved — his bus left at 7:00 and he was killing time.
I thought we were just going to meet for coffee, but they flagged down a taxi, explaining that they wanted to treat me to a real meal and introduce me to their family. I didn’t really want to go, but hated to be rude, so I went along. Traffic was heavy and the taxi took a good fifteen minutes to reach their house. I was, of course, completely lost.
The rally in the “cloud” and in the online space isn’t just good for Wall Street investment bankers, it’s also getting more and more businesses and individuals to give up their right to privacy. Is this the result of random chaos theory or is this centrally planned to take away our rights?
Long story short, new media has brought the voice of protest to the national stage. Freedom of speech has kept the internet free and open. Could this change in the future? The spying controversy shows why moving all of the U.S. economy online has consequences, like corporate espionage.
How can we trust these contractors with our data when our businesses may be in competition? These are all issues that small businesses must face when deciding to “go digital.”
“When training beats education, civilization dies” — C.S. Lewis
Against all probability, a device that purports to use cold fusion to generate vast amounts of power has been verified by a panel of independent scientists. The research paper, which hasn’t yet undergone peer review, seems to confirm both the existence of cold fusion, and its potency: The cold fusion device being tested has roughly 10,000 times the energy density and 1,000 times the power density of gasoline. Even allowing for a massively conservative margin of error, the scientists say that the cold fusion device they tested is 10 times more powerful than gasoline — which is currently the best fuel readily available to mankind.
The device being tested, which is called the Energy Catalyzer (E-Cat for short), was created by Andrea Rossi. Rossi has been claiming for the past two years that he had finally cracked cold fusion, but much to the chagrin of the scientific community he hasn’t allowed anyone to independently analyze the device — until now. While it sounds like the scientists had a fairly free rein while testing the E-Cat, we should stress that they still don’t know exactly what’s going on inside the sealed steel cylinder reactor. Still, the seven scientists, all from good European universities, obviously felt confident enough with their findings to publish the research paper.
As for what’s happening inside the cold fusion reactor, Andrea Rossi and his colleague Sergio Focardi have previously said their device works by infusing hydrogen into nickel, transmuting the nickel into copper and releasing a large amount of heat. While Rossi hasn’t provided much in the way of details — he’s a very secretive man, it seems — we can infer some knowledge from NASA’s own research into cold fusion. Basically, hydrogen ions (single protons) are sucked into a nickel lattice (pictured right); the nickel’s electrons are forced into the hydrogen to produce neutrons; the nickel nuclei absorb these neutrons; the neutrons are stripped of their electrons to become protons; and thus the nickel goes up in atomic number from 28 to 29, becoming copper.
This process, like the “conventional” fusion of hydrogen atoms into helium, produces a lot of heat. (See: 500MW from half a gram of hydrogen: The hunt for fusion power heats up.) The main difference, though, is that the cold fusion process (also known as LENR, or low energy nuclear reaction) produces very slow moving neutrons which don’t create ionizing radiation or radioactive waste. Real fusion, on the other hand, produces fast neutrons that decimate everything in their path. In short, LENR is fairly safe — safe enough that NASA dreams of one day putting a cold fusion reactor in every home, car, and plane. Nickel and hydrogen, incidentally, are much cheaper and cleaner fuels than gasoline.
As far as we can tell, the main barrier to cold fusion — as with normal fusion — is producing more energy than you put in. In NASA’s tests, it takes a lot more energy to fuse the nickel and hydrogen than is produced by the reaction. Rossi, it would seem, has discovered a secret sauce that significantly reduces the amount of energy required to start the reaction. As for what the secret sauce is, no one knows — in the research paper, the independent scientists simply refer to it as “unknown additives.” All told, the E-Cat seems to have a power density of 4.4×105 W/kg, and an energy density of 5.1×107 Wh/kg.
If Rossi and Focardi’s cold fusion technology turns out to be real — if the E-Cat really has 10,000 times the energy density and 1,000 times the power density of gasoline — then the world will change, very, very quickly. Stay tuned; we’ll let you know when — or if — the E-Cat passes peer review.
Futures are up around a half percent thanks to the $4.75-$5.75 Billion of stock market pumping (stock juice) hitting the tape Monday courtesy of QE infinity… Pomo for the rest of the week is much lighter. Expect them to sell the rip, though most traders will not be buying any dips from their Hampton getaways. All in all, QE works until it doesn’t — trade accordingly…
Because my pops did a great imitation of this, and because the NSA don’t need no stinking badges …
Are you ready for the next stock-market crash of the century? The Hindenburg Omen was spotted by eagle eyes on April 15th. It was confirmed by a sighting on May 29th. That gives us 40 days approximately before the market takes a plunge (apparently). That’s enough to spark fears on the market that we are in for a shaky time, but are those fears really justified and will the market plunge as the Hindenburg Omen predicts?
The Hindenburg is a technical analysis pattern that predicts highs and lows of the stock market based upon Norman G. Fosback’s High Low Logic Index (HLLI). It was invented by Jim Miekka in 1995. It’s used as a way of predicting big turndowns.
The Hindenburg has to meet four criteria and it is calculated using Wall Street Journal figures daily.
1. The sum of new 52-week highs and the sum of new 52-week lows must be equal or greater to 2.8% of the sum of NYSE issues advancing or declining on any given day.
2. NYSE must be greater in terms of value than it was 50 days beforehand.
3. The McClellan Oscillator (money entering and leaving the market) must be negative on that day also (in other words, below zero equals a bearish market).
4. The 52-week highs must not be more than twice the 52-week lows (but the opposite does not hold).
The two sightings mean that the Hindenburg Omen has met the criteria.
There’s no point in my telling you that the market is not a science. The Hindenburg Omen tries to turn it into probability. But zero probability doesn’t exist as a zero. If it were zero, then it would be impossible. Zero improbability in Bayesian terms is just the measurement of probability as an indicator of confidence and belief in the market. You can predict as much as you like until the prediction doesn’t work. It’s human nature to want to try to find out before what will happen actually happens, but that we all know is impossible to do down to a T.
But, the last time the Hindenburg Omen caused nose-twitchy reactions and people running for the white-rabbit feet or other such lucky amulets fearing a drop in the market there was great talk of the Federal Reserve and fretting over their policies. That was back in August 2010 and it was Ben Bernanke’s QE statement that saved the day (maybe).
The same thing is going on now on the jittery market, with the fear that the US Federal Reserve’s pulling the plugs on bond-buying programs on the market will lead to a decline. But, can we really believe in the hocus-pocus, waving of the magic wand business that the Hindenburg Omen will come true? I could list a thousand omens that we should be wary of (according to some). But, I’m weary of living in the pseudo Middle Ages. It’s not the prediction of the Hindenburg that is going to trip the market up and make it fall flat on its face. If that happens, it will be down to something else.
The Dow Jones 17 months out of the last 20. That’s the longest steam ahead since 1951. Shouldn’t we be looking at other indicators rather than one that tries to predict the future? A 17-month rise is bound to come to an end at some time. If the unemployment figures released on Friday are better than expected, that could mean the Federal Reserve might take some drastic decisions. It’s that which might be worrying the market rather than the Hindenburg Omen.
To a certain extent it works, but if it worked every time, we wouldn’t be playing the market and we wouldn’t be sitting here surrounded by recession in the world at the moment. We would be living it up. The Hindenburg Omen is nothing more than a zeppelin of the past, which is not likely to work at all.
Although having said that, it has only got the market wrong twice out of all (and that’s a total of 8%) 25 sightings. But, it failed to spot the mild declines. Anything can work if we believe in it. We can arrange the data in any way we want to make it fit in with the requirements. Mild Hindenburg, strong Hindenburg, no Hindenburg. So you decide. It comes to something when we start trying to predict the market with a German commercial passenger-carrying airship. By the way, its crash remained a mystery for seventy-odd years until someone came along and gave the right explanation.
Well, after leaving the WSOP and the cash games at ARIA behind to hang out with family in New Mexico, I decided to play a little $100 buy in tournament in Albuquerque last night. Things were going pretty well, after I flopped a set of sevens when the other guy had Ace King on a Queen, King, Seven flop. There were no flush draws to worry about and I wasn’t too worried about Jack Ten being in there because of all of the pre flop raises. The first to act loose aggressive guy bet $700 and the guy with Ace King raised to $1700. I raised it to $5,000 with the best hand. In retrospect, I should have probably just called and tried to put him all in on the turn or the river. Lately, I have been a bit gun shy after running into some hard core cold decks in Vegas (I had pocket Aces at South Point, for example, flopped top set and still lost to Ace King who hit a runner runner straight!). So, my game has been a bit off lately.
So, fast forward to an hour or so later, I am sitting on $30,000 in chips (10K was the starting stack) and feeling pretty good about things. I get Queen Jack suited one off of the button and thought to myself, “you need to go all in or fold here” and instead of listening to my gut, I bet $4,000. The big blind went all in for $8,000 and I had to call because I was getting three to one on my money. He flips over King Ten off-suit and of course hits his ten. That cost me almost a third of my stack… Lesson learned: don’t play Queen Jack, Queen Nine, Queen Ten, King Jack, or King Queen for a third or all of your stack unless you are sure nobody will call and unless you shove all in that late in a tournament. These hands are okay on the button if you are just trying to steal blinds. Loose aggressive players will call you with Ace Rag, however, which makes these middle face card hands a very bad bet in tournament poker. I need the nuts!
Finally, I went bust when I shoved my Ace Seven off into Pocket Kings. Bad move, but when you are under ten big blinds you have to gamble a bit. I’m not as mad at myself for that hand as I was the times I misplayed Queen Nine suited and Queen Jack suited… I’m way to experienced to be betting on these “sooooooted” face cards. They are fools gold indeed.
In any event, I finished 11th out of around 35 players which is unacceptable to me. I need to start playing with more discipline and more guts when I have the nuts. It’s okay to let people draw to a flush when I have a straight — you have to get full value for your strongest hands, and last night I failed to make that goal a reality.
Until next time…
Check Out This Article From 2011 — Small Caps are Now More Overvalued Than Ever Before: Short IWM/$RUT Soon
April 18, 2011
More comments this morning on valuation issues, something we spoke of last week. Again, just as in 1999 – when a central banker goes bonkers in flooding the system with liquidity, historic valuation tends to be thrown out the window as so many more dollars chased a relatively fixed amount of stock. That said, small caps (as represented by the Russell 2000) are now at record forward P/E ratios, and at their largest premium over large caps in a generation. For those newer to the market, small(er) caps have been the horse to ride since the bubble burst in 2000; each year a bevy of fund manager show up on CNBC saying “this is the year of the large cap” – and wrong yet again.
The market’s smallest stocks are commanding the largest premiums—and some of their biggest fans are becoming alarmed. The Russell 2000 Index (NYSE:IWM), which comprises about 2,000 stocks with small market capitalizations, is within about 2% of a record closing high. It is a milestone that it looks destined to reach well before larger peers such as the Dow Jones Industrial Average and the Standard & Poor’s (NYSE:SPY) 500-stock index, which are off their record highs by 13% and 16%, respectively.
Small companies now command the widest premium over large-cap stocks in at least a generation, based on the ratio of price to earnings. Small caps, which typically have a market value of about $2 billion or less, often do better than large-cap stocks in the first stages of a recovery. With valuations so high, some are girding for a period of underperformance by the Russell 2000.
That P/E ratio is about 1.3 times the P/E of the market’s largest 200 companies as measured by Russell Indexes, according to Lori Calvasina, director of small-cap equity strategy at Credit Suisse (NYSE:CS), the highest since at least 1979, when her data begin.
The valuation gap has approached this level only twice before, in 1983 and 2007. After both instances, small-cap stocks vastly underperformed their larger brethren, Ms. Calvasina says.
Wait for it…..
“We’re on borrowed time,” she says. “We are transitioning into a new phase of leadership in which large will outperform small.“
The rally from the March 2009 bottom has seen the Russell 2000 (NYSE:IWM) rise 143%, topping the Dow’s 89% gain and the S&P’s 95% rise.
Small caps largely outpaced bigger companies in revenue growth in the past few quarters, Mr. DeSanctis says. They also slashed costs by 10.7% during the downturn of 2008 and 2009, according to Mr. Singh, which compares with 3.2% among S&P 500 companies.
Smaller companies have also benefited disproportionately from the Federal Reserve’s moves to pump liquidity into the financial system. The added cash has helped buoy all risky assets—and small caps are considered among the most risky in the stock market.
The Russell 2000 is more heavily weighted toward consumer discretionary stocks than the S&P 500 (NYSE:SPY) and less exposed to energy stocks. If oil continues to rise, that may mean the Russell 2000 lags behind.
This is a guest post written by Trader Mark who runs the blog Fund My Mutual Fund.
WDAY — Insanely overvalued cloud stock with no asset or earnings to mention.
CRM — As discussed here for a year now, CRM is a bubble waiting to pop. Cozy relations with the NSA and US officials aside, Salesforce looks to be a disaster waiting to happen. As an aside, who wants to do business with cloud data storage companies that turn your info over to the government and to private contractors (which may actually be company rivals). The cloud sounds great, but it looks more and more like a tool for data mining and corporate espionage more than anything else. I will say this, for cold calling there really is no rival to Salesforce — I love being able to get a phone number and email address for any company officer I need to bother.
TSLA — Sorry bulls, even I (an admitted environmentalist) can see the writing on the wall for this all too loved go-go momentum stock. Like the others on this list, Tesla has no earnings or book value to mention. Just losses. So, I’ll re-examine if they manage to actually earn money and free cash flow over a full year period. Unfortunately, this may turn out to be another Fisker.
IWM and QQQ — Overvalued index funds to short as a hedge.
CONN — Rising accounts receivables and subprime lending for TV sets: seems like a decent time to short the stock after the run from $5 to $55. Is the growth real, or just a con?
AMZN — Great company just overvalued
Disclosure: author is short these equities