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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (57127)	4/23/1999 7:46:00 PM
From: re3	Read Replies (1) \| Respond to of 132070

Michael, have you ever thought or did you actually write an investment newsletter for $...its sure nice of you to 'give away' your expertise here though... Howard

To: Knighty Tin who wrote (57127)	4/24/1999 1:55:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

To All, Barron's review. Led by my brilliant letter to The Mailbag <g>, a pretty good if somewhat thin issue. 1. Alan Abelson takes a very funny shot at we internet punters, especially somebody called Big Dog. He also quotes Chuck Clough who mentions that the bull market is being led by excess capital investment into an economy that already has too much capacity. In other words, what took down Asia. A nice chart of M3 growth. 2. In Reviews, a nice squib on the ending of the pooled accounting scam for mergers. "Banks on The Run" picks on some of my overpriced favorites, Chase and Citigroup. 3. The title of "Fannies' Foes" cockled the warms of my heart, though I thought the article left a lot to be desired. They noted political threats to FNM, but didn't mention their leveraged balance sheet, their lower credit assets (except vaguely in passing), the lower spreads, the fact that the last quarter stank the house out given the leverage, etc. 4. An interview with a couple of clueless NYC portfolio managers. The bull market is here forever. 5. In "Market Watch," the first two commentators poke fun at anyone who does not believe #4 above. Sad crap. The Turnaround Letter makes some sense about internut convertibles. 6. The Mailbag had another letter about options. I agree with half of the writer's thesis. The options pricing models developed by the academics do not work in today's market. However, I disagree with the other part, that they were brilliant in their day. Wrong! They were always stupid and never worked. One of the few good things about being old is that I remember all the folks who went belly up using this crap. The most notable academic failure, and one they never mention today, was the concept of neutral overwrite hedging. In that scam, you sold more calls on a stock as it went up, based upon the volatility of the underlying issue, and were guaranteed that you made money in any market environment. Sounded good, except the academics forgot two vital facts in their assumptions: discontinuous pricing and position limits. This was very similar to doubling up on red when you lose in roulette. The crap they put out was always dumb, dumb, dumb. 7. The Trader suckered into the IBM earnings fantasy. So did Abelson. I am disappointed that Barron's did not do any homework at all on this one. In The Trader, they mentioned how IBM was able to make money in both direct and channel sales while Compaq couldn't. Uh, once again, Compaq made money on PCs last quarter. IBM lost money. Is that that hard to understand? <g> MB