Heyer Capital, LLC

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The following are the basic data points from the PostCrescent.com article about the Outagamie County Airport “making itself competitive.”

• Airport revenues growing at 1% per annum.

•  Airport’s expenses are growing at 8%-11%  per annum. (Do the math…)
•  Airport borrows $3 million in bonds to become its own refueling monopoly. (I’ll add, after putting the regulatory squeeze on competition with an ’06 Ordinance.)

Reporter concludes the article, and I quote: “The purchase has no direct impact on county taxpayers because the airport generates its own revenues.

I needed a good laugh this morning.

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Written by heyercapital

August 23, 2010 at 7:06 am

Be wary of distribution days in a young rally

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The June 2010 rally attempt began June 8, at Point A (see below), as the market indexes undercut the prior low price, but closed higher.  At Point B, June 15, the market gave a Follow Through Day on the 6th day of a rally attempt, which historically bodes well.  (A Follow Through Day is thought of as a confirmation that the correction has ended and a new rally has begun. The Investor’s Business Daily reports that a Follow Through Day on Day 4-7 of the rally attempt is usually a strong signal.)

At Point C, June 21, the market made a strong advance during the day, but retreated and closed lower.  That reversal was quickly followed in three of the four next trading sessions by distribution days of lower closes on volume that is higher than the prior day.  Therefore yesterday’s 268 pt drubbing of the DJIA (and 3% loss in the Nasdaq) cannot be too surprising.

We are in a correction. The plan from this point is to wait for the next eventual and inevitable Follow Through Day signal.

Be wary of quick distribution days after a rally begins

Written by heyercapital

June 30, 2010 at 10:14 am

Can We Get Ahead by Picking Each Other’s Pockets?

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Here is an excellent post from the Mises.org crew.  As a further enticement, here are the mini-headlines with in the post:

C + I + G = Baloney

Victims of a Failed Economic Theory

Government Spending Is a Parasite on the Private Economy

Or, in a paragraph:

The key fallacy embedded in Keynesian economics and the GNP equation is the idea that government spending adds to an economy’s health. In reality, the opposite is true: government spending subtracts from an economy’s health. The real economy is the private economy — there is no other. Government spending must come out of the private economy.

Written by heyercapital

June 29, 2010 at 11:34 am

Abiding the follow-through-day

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We are in a correction. Hopefully you lightened the load with my April 27 post about Greece and knowing where the exits are.  (Be sure to subscribe to my RSS feed with your browser to stay on point with my outlooks.)  But what about deciding when getting back in?

Recognize how the market puts in a bottom. As the correction unfolds, the indexes will make new low after new low interspersed with intraday or daily gains. (The market never moves in a straight line in either direction.)  On a chart, where it’s easier for me notice such things,  a major index will undercut the prior low price of the leg down. Yesterday, May 25, that occurred when the S&P 500 moved below the low of the May 6 “Flash Crash.”  (See Point A.)

An undercut resets the waiting period for a follow through day
Yesterday is “Day 1” of the rally attempt. It seems overly simplistic to say that “just not going lower” means a rally attempt is underway, but that’s exactly it.
Now we wait for the Follow Through Day to come on Day 4 or later of the rally attempt. The 25th + 4 days gives us Friday as the soonest we can trust a Follow Through Day.
FAILURE?
If the market indexes breech the lows of the 25th, then that particular rally attempt is kaput.  Each new low begins the rally count again until either the low is taken out again, or we receive a Follow Through Day.   Be sure to click on the tag of this post to see my other explanations of the Follow Through Days.

Written by heyercapital

May 26, 2010 at 9:06 am

Greece is the word

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I remember last Thanksgiving talking with the family back in Iowa about the Greece debt situation. It had just started to bubble to people’s attention, but at that point it wasn’t a “problem.”  It was just a reminder that we weren’t out of the woods yet in terms of unwinding the credit excesses around the world.

Today, finally, the equity markets are acting as if they are tangentially aware of Greece. (In the world of investing, equity takes a hit before creditors.  Therefore if the creditors are nervous, shouldn’t the shareholders be too?)  The rating agencies cut Greece’s sovereign debt to ‘junk’ (below investment grade) and downgraded Portugal. Who’s next?  Spain? Ireland? Italy?  The list goes on…  California? Municipalities?  Pension funds?  Is there a reason Germans are starting to check the serial number prefix on their Euro currency bills before accepting them as a tender?

Action plan:

1) Always invest knowing where the exits are.

2) Understand the Austrian Business Cycle Theory. (Start with Mises.org.)

3) Accept the fact that we’ve been through credit deflations before. They are not cured by new legislation. In fact, meddling always makes them worse and extends and exacerbates the pain.

Written by heyercapital

April 27, 2010 at 11:04 am

more “boom and bust” cycles coming

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Here’s a quick video from my buddy Aaron Task interviewing Lakshman Achuthan, on why buy and hold is dead.  There are more more “boom and bust” cycles coming.  Those of us who adhere to the Austrian, free market school of economics, understand this as well.

He addresses the symptoms that as more debt is piled on the economy, the subsequent economic recoveries get weaker and weaker from the debt load.  It’s not a “Bush” or “Obama” political management issue.  It’s a decades long trend, that doesn’t end well once we enter debt saturation.

Written by heyercapital

March 29, 2010 at 10:01 am

Auto-anthropogenic economic asphixiation

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Basic physics show that the atmospheric mechanism describing how “greenhouse” gases are thought to warm the earth is flat out wrong. Period. Physically Impossible. Do not pass ‘go’ and do not collect billions in taxes.

http://arxiv.org/PS_cache/arxiv/pdf/0707/0707.1161v4.pdf

Written by heyercapital

March 6, 2010 at 4:53 pm