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Time to Pay the Piper

Wall Street Journal Letter to the Editor Submission

US GDP Growth is only 2.4%, not 3.9%

The press is reporting today that the US achieved GDP growth of 3.9% in the 3rd quarter.  However, on a year-over-year basis, GDP growth was only 2.4%.  3.9% is the sequential growth from Q2 to Q3.  No company reports results this way.  Why does the US government?  Sequential reporting is subject to government statisticians seasoning their stew

Corporate Tyranny in the Land of the Free and the Home of the Brave

In this speech from 1936, Roosevelt explains that political equality is of little use unless there is equality of opportunity in the marketplace. Franklin D. Roosevelt: Acceptance Speech for the Renomination for the Presidency, Philadelphia, Pa.

High-Frequency Trading: Beneficial but Probably Illegal

After an extensive review of high-frequency trading, Michael Lewis claims in his book “Flash Boys” that stock markets are rigged.  Many are therefore asking whether the average retail investor, already gun-shy from the financial crisis, should simply stay away from the stock market.  High-frequency traders claim that they have helped the small investor by improving liquidi

Gold

Diamond Head Financial does not own gold and particularly gold miners.

Egypt’s Military: Not Your Typical Army Thugs

Behzad Yaghmaian argues that Egypt’s military must not remove the democratically elected despot Morsi from power lest the country face dire consequences (The Price of Terminating Democracy in Egypt, WSJ, June 8, 2013).  The Egyptian military, however, is not just any tin-pot dictator in a raw grab for power.  This is not Latin America after all.  This is the

Spend and tax has proved a disaster

Originally published on November 7, 2012 in the Financial Times

Preferred Equity: The Missing Link

David Einhorn’s proposal for Apple to issue preferred shares to existing shareholders, paying the dividends with excess cash on the balance sheet, could have enriched corporate financing alternatives to the same degree that Michael Milken single-handedly created the junk bond universe.  Einhorn’s idea was a radically simple solution to a profound problem:  stubbornly under

Investing Is Predicting The Future

Whether we like it or not, investing in the stock market is an attempt to predict the future.  If our predictions are correct, we make money.  If they are not correct, we lose money. 

Methods of predicting the future

Buy This Correction

Since 2008, stock market corrections have been rooted in existential crises for the world economy.  That is not the case today.  This is a plain vanilla correction after a rapid run-up in prices.  Buy this correction.

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