Michael Camiolo

06:01 pm: Mets game next week?
Anyone up to see a Mets game next week either Monday or Wednesday?

01:07 am: Should I have a late new years resolution to
Drop down to 130?

11:44 pm: I'm right, the WSJ's wrong.
"The global credit crisis and the ensuing economic slump we are now entering have both ultimate and proximate causes. The ultimate cause was the ingrained social behavior of the U.S., the U.K. and many other economies over the past two decades that put instant gratification of consumption over the ability to pay for it. Thrift gave way to borrowing and excessive spending"

Mr. Roche is wrong.

In early-mid 2000, the common consumer was significantly richer than he once was. Historically, a working individual wouldn't have an accurate idea as to how much his pension was worth. Now with 401k's; a 50 year old worker could see they have $250,000 in their retirement fund. Second, thanks to Zillow, they could also see their house is worth $250,000. Now their a 1/2 millionaire... aka RICH!!!!!

So of course they start spending, and stop saving. When you have a 1/2 million in the bank... your RICH!!!

Article

09:06 pm: Another $50 billion gone...
Story link.

Basically, Bernard Madoff ran a giant Ponzi scheme; in which a bunch of individuals, (and some companies, including the Mets) invested with him. Their total loss is thought to be $50 billion. There's probably a bunch of individuals with a significant amount of their assets invested with him.

So as you all save and invest. Diversify. Also, if it seems to good; it probably is.

09:26 am: Damm! I've been to 15 states this year!
And I've still got 4 weeks to go? Think I can make it to NJ and push it to 16?
MA, NY, PA, MD, DE, VA, OH, IN, IL, MO, CO, WY, SD, NE, and MN.

07:51 pm: More financial thoughts
In the past 10 years, we've had quite a few market implosions, from mortgage and internet to the crash caused by Long-Term Capital Management and all the emerging market crashes. It seems like we need better crash planning.

09:20 am: Market measure of risk, Beta
I just posted a question on Facebook, but I'm expanding it here. Beta is the expected return of a stock correlated to the return of the financial market. So stocks with low Beta's outperform the market in down periods, but under perform in up periods. The problem I see is that this is averages. Assuming a graph with individual stock return on the Y axis, and market return on the X.

One stock could have a very constant market return slope, I'll call A. Another (called B) could have sharper tails. Thus A and B could have equal Beta's (due to their equal slopes), but obviously preform different depending on market. This is important because stock A is probably better than stock B.

The only redeeming aspect of B is that it does significantly better than the market during periods of growth. In average periods, or downturns, B does worse. This is really bad, since you don't need as much money during market upturns; but you need more money (and more security) during market downturns).

That's also probably why my cousins decision last year on her daughters gift being a T-bill was better than a share of GE.

01:10 am: The direction he's heading, from Obama's speech
I'm assuming that the contents also serve the purpose of letting America know where he's heading and asking we help him go there. To that end, seeing as I don't know exactly where he's heading, this is my takeaway from his speech. Even though I'm sure you know it, I'm posting it here to share the republican interpretation.
( Read more... )

10:20 am: Buy Low
Quick observation... This is the 'buy low' part of the mantra; "Buy low, sell high".

01:31 pm: Awesome story, but I want to get to the ending.
I have no patience. I hold off watching TV shows (like Hero's, Lost or Enterprise) until they're close to finishing since I can't STAND waiting for the conclusion. Along that vein, I can't wait to see what happens with Wachovia. Will it be bought by Citi, or by Wells Fargo? Will Citi come close to winning in it's demand of $60 billion for interference from Wells Fargo? Heck, I don't even know which jurisdiction this is going to be battled in.

(Oddest fact thus far; Citi got an injunction from an NY State judge. It was later nullified as being out of bounds since the judge issued the injunction in his CT home.

I believe it was instant reply which overturned that order.)

12:14 pm: Mike's investment idea - ADM
I'm considering investing in ADM. ADM main businesses is turning raw foods (corn, soy, wheat) into food products. The reason to invest is that it's at the low end of it's historical P/E range. The word on the street reason it's fallen is the credit crunch is going to harm farmers and lower their production; hence raising input prices (costs) for ADM. My other concern is ADM is heavy in the derivatives market, and if it's counter-party goes under then ADM could lose a lot of money. I've asked their investor relations department for a response, and I'll post their answer.


(P/E Primer - The upfront cost you have to pay divided by the historical profit you would have been entitled to. In this case $18.52 per share and $2.79 in earnings per share. Thus, it's like spending $6.64 cents to get $1 every year. This is a 15% rate of return, provided everything works out perfectly. If things work out poorly and you only get 50 cents every year forever, then the return rate is 7%. If it's really bad and you get -$1 for 2 years followed by $0, then 50 cents forever, it's a 4% return)

To calculate the rate of return, use excel. For ADM; cell A1 = -18.52, cells A2 through A30 = 2.79; and cell b1 = =IRR(a1:a30)

10:48 am: Why their won't be a great depression.
I was reading this article in the NYT (Lesson From a Crisis: When Trust Vanishes, Worry ) and had to comment.

The great depression was primarly due to the inability of individuals to recieve credit. This credit decision was (1930's) based upon local knowledge lost, which barely exists in our current economy. Back then, the banker would know you and your family, giving him insight into your character and if you'd repay. 2000's, your credit score (available to any bank or prosper.com member) gives insight on repayment. 2nd, the need for capital is reduced. Information costs less to exchange now. Marketing costs are far lower with wider reach (craigslist, linkedin) than the 30's (printing fliers, in person networking).

And finally, I'd suggest that personal loan models (for items like car loans) need to be changed. Credit score gives insight into a persons character, ie if they'll try to pay you back. There needs to be an employment component. A loan to a school teacher (with lots of tenure) is much safer than a loan to a factory employee (with similar tenure); as the teachers layoff risk is lower.

In summary, credit can reasonably be obtained from a far wider variety of sources; and business start up costs are lower (marketing, transportation of information). Thus, there may be a recession, but there won't be a great depression.

09:05 am: Yes, opinion articles are biased and illogical...
but this illogical?
http://www.latimes.com/news/opinion/la-ed-bankruptcy25-2008sep25,0,7389621.story

"The dearth of White House leadership {regarding the $700 billion bailout plan} may explain John McCain's announcement Wednesday that he was suspending his presidential campaign and heading back to Washington. But as appealing as his call for a bipartisan solution may be, we'd rather see McCain continue to stump for votes than inject himself into the negotiations between the administration and congressional leaders -- a self-serving move apparently designed in part to give Republican members of Congress political cover to vote for the bailout. We hope McCain and Barack Obama will campaign vigorously and debate Friday, as scheduled."

Hold on. Is the LA times seriously saying campaigning for president is less/not self serving, compared to doing his job as a senator/representative of the people of Arizona? WTF? No wonder why I never read their paper.

09:05 pm: Need Pirates autographs?
Cause their staying at my hotel this week! One of them is 2 doors down (saw their bags being placed inside).

So cool!

01:21 pm: Quote of the day
"The duty of the honorable man is to fight in the cause of the right, and perhaps the forces of light will edge out the forces of darkness."

Newsweek: Jun 28, 2008

Tags: quote

01:43 am: The gah, I'm pathetic post
On Tuesday I found a wallet in my hotel. It had cash, a Best Buy Gift card and identifying info in it. Consequently, I returned it to the front desk, since I knew they could contact the person.

Now, why the header?

This year, I've found 2 wallets, and one set of keys. I've also only been on one date.

I don't know anyone who could possibly have a worse dates to found items ratio.

Yes, it's mostly my fault since I don't have a home... and since I don't spend enough time looking... but still! A 3 to 1 ratio... gah... I'm pathetic. And the really sad part is I don't think the ratio will improve until September, when I figure out what city I'm living in next year.

11:20 am: Second Amendment is upheld
Breaking news....

The Supreme Court ruled that DC's handgun ban went to far in limiting the ownership of firearms by individuals.

Cool. It's the right call, since DC had passed a law stating that people couldn't have a handgun in their home. I'm a bit surprised on how close the ruling was, 5-4, but was extremely surprised by a comment in the dissent.

"Justice John Paul Stevens asserted that the majority “would have us believe that over 200 years ago, the framers made a choice to limit the tools available to elected officials wishing to regulate civilian uses of weapons.” Joining him were Justices David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer."

Duh! Over 200 years ago the British were trying to legally prevent people from owning arms to aid in their self defense and the overthrow of the British. So yes, the framers specifically wanted to limit the tools available to elected officials wishing to regulate civilian uses of weapons.

Now, I agree there is a case to be made that we no longer need guns for self protection, but this is a job for the legislative branch. Why the heck doesn't the liberal Supreme's back off and let the legislative branch do it's job.

04:30 pm: United, you are the bane of my existance.
I've flown on United a couple times this year and each time I've had problems. I figured it couldn't always be bad; and hoped that I could fly standby early Sunday, rather than take my flight at 5 (which gets me to the hotel at 10 pm).

No-Go. Not only was I unable to fly stand-by, but my ORD (aka Chicago O'hare) leg was listed as delayed. If I don't make it to STL by my scheduled time, United will be batting a 25% ontime arrival rate for my trips this year.

03:34 am: Wow, this is some pretty good frraud.
I recently sold my car on Craigslist. I got a bunch of people offering to by my car by mailing me a check and arranging to have their shipping company pick it up. They would send a check for $2k or $3k more then the cost of the item, and ask that you mail them back the difference. The check takes a long while to bounce, so you send them the cash when you think it's cleared, only to find out later (after you've already mailed them the cash difference) it hadn't. I chatted with some of them, since I wanted them to waste their time on me. One actually Fed-Ex'ed me a check. Yea, I wasted their money, and got to see what a fraudulent check looks like.



As you can see, it's sent to BOA, and even the company has a legit address. Of course it's a fraudulent company, which you can see when you Google the address or company name "Blueset, LLC" which has no web presence. Of course if I hadn't known it was fake, I probably would have cashed it and opened my self up to all sorts of problems.

12:37 pm: dumb doctors question
I was reading Eyes Bloodshot, Doctors Vent Their Discontent in the NY Times, and I'm a little confused. Why aren't the doctors pushing back against the HMO's harder?

For example, “On top of all that, there are all the colonoscopies and mammograms you have to arrange, and all the time on the phone getting preauthorizations. Then you have to track the patient down. And none of it is reimbursed.”

Why does the doctor spend time on the phone getting preauthorizations if it's not reimbursed? They should be pushing that responsibility onto the HMO or patient. From a doctors standpoint, this would make them a lot happier. It would also make their life easier, and make sure doctors continue to recommend to their friends that being a doctor is a good job.

And from a logistical standpoint, there's only a small benefit from having the doctor schedule and arrange the preauthorizations, since the doctors have the inside track as to which places are good, but the HMO's also have some of that knowledge aggregated.

Yes, I know patients will hate that; but they should be pushing back at their HMO's for being so restrictive. Right now the patient doesn't know how time consuming a task this is, and once they understand, they can start to look for a better/friendlier HMO.

Well, that's my vent of smart people (doctors) acting in a stupid matter. They're not fixing the problem, they're just dealing with the effects.