Gongol.com Archives: May 2012
Brian Gongol

May 22, 2012

Business and Finance Possibly the single most ridiculous stock analysis ever
A Forbes contributor analyzes stock purchases made by Warren Buffett, but uses so-called "technical analysis". Technical analysis, plain and simple, is bunk. Hogwash. Bullhockey. It's the use of stock charts, looking at past results, to predict future results. Can people make money doing it? Sure. Just like they could make money flipping a coin or shaking a Magic 8 Ball. ■ The only reason to buy a stock is that one thinks he or she will get more in return from the purchase than he or she gives up. Further refined, one should also seek to be getting more in return for putting up that capital (i.e., buying the stock with cash) than one could obtain by investing in what is called a "riskless" asset, like a US Treasury Bill. ■ The only sane way to evaluate whether such a return is likely is to make a calculation of intrinsic value -- determining three things: What the company's net assets are worth today, what the company can be conservatively estimated to produce in net earnings over a reasonable time period (usually ten years), and how much that is worth per share of stock. If by that test a stock's price is higher than its intrinsic value, then it's not a good investment. ■ Technical analysis is nothing more than a wager on the sanity, insanity, and moods of millions of other people. The same people who get whipped up over voting on "American Idol" and buying hipster glasses. Using technical analysis to pass comment or judgment on investments -- especially those made by the world's most famous fundamental-analysis investor -- is just plain ridiculous.

Computers and the Internet Microsoft opens So.cl to the general public
So.cl looks a great deal like Google Plus (though, suspiciously, it doesn't always want to show up on the Mozilla Firefox browser). It's supposedly geared more towards encouraging collaborative research by folks like college students than towards getting people to share minute-by-minute updates on their experiences in the fast-food line, like other social-networking sites. Worth dipping a toe in the water? Maybe.

The United States of America China's central bank has unique direct access to lending to the US Treasury
The opportunities to lend aren't going away anytime soon: The Congressional Budget Office says that if we go ahead with higher taxes and spending cuts in the start of 2013, we could go right into a new recession. No politician wants to preside over one of those, so undoubtedly we'll find that the Federal spending leviathan will continue to borrow from China to spend in the USA.

Business and Finance "Risks are large and tilted clearly to the downside."
That's what the IMF says about the UK's economy thanks to trouble in the Euro zone, and the risks back and forth among them. The US should care because the UK is our #6 trading partner overall (year-to-date), and our fifth-biggest importer. If they stop buying, that means we stop selling.

Aviation News Airport lines for the Olympics could be four hours long
Which, in and of itself, creates a whole new type of security hazard. It's one risk to let people through and onto planes unscreened or poorly-screened. It's another to have large groups of people queued up in long lines, waiting to go through security checkpoints.

Business and Finance A surprising number of people seem to have seen through the Facebook stock bubble

Humor and Good News "[R]oyalty is a confidence trick and that requires confidence"
David Mitchell's column takes a paragraph or two to get rolling, but the payoff later is worth it. His best line: "What seems unpleasantly vulgar in a tycoon is appropriately headstrong in a king."

The United States of America Handicapping the race for Treasury Secretary 2013
Timothy Geithner says he expects to leave the job, even if President Obama wins a second term in office, so there will likely be a new Treasury Secretary next year, one way or another.

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