The MacDougal Post: Caveat Emptor

April 9, 2015

Caveat Emptor

Having apprenticed under professionals managing portfolios before, during, and after the Great Depression, MacDougal still carries their perspective: his investment-grade universe includes only common stocks of powerhouse corporations with squeaky clean financials that, in the worst of times, will improve their domination by feeding on the carcasses of competitors caught chasing growth instead of survivability. Last time we looked, there were substantially fewer than 100 investment-grade securities around.

Exxon Mobil is one of those names. So is Royal Dutch Shell. And the oil patch may well be entering one of those times. The recent Royal Dutch merger offer triggered a slew of media pieces appropriately looking to Exxon to start bottom feeding soon. What fascinates MacDougal, however, are some of the other names coming across his screen. Typically, Wall Street sucks investors into a growth-is-everything viewpoint, ignoring the lessons of 1929, and they're at it once again. The absence of balance sheet analysis here is difficult to excuse.

Royal Dutch Shell and Exxon have the financial muscle to better themselves substantially in the current environment, particularly if industry weakness continues for a while. Elsewhere, you may want to ask the same question MacDougal has been screaming all over the office the last couple of days. What on earth makes these a$$&@!&$ think that outfit is going to even be around?

Inside the Scam

Short-sellers flood markets with bogus shares, involving buyers in bookkeeping transactions, not stock, and not telling them about it. Wall Street helps hide the fraud with Madoff accounting, even letting shorts pay dividends as part of this scam, duping investors into believing they get real dividends paid by the company they thought they invested in.

Worse, short-selling, in effect, adds these phony shares to the actual total number reported in company financial statements, which goes into the various earnings per share (EPS) calculations, essential components of the critical metric universally used to value common stocks, the price/earnings ratio (P/E). In a selling frenzy, EPS can be cut from, say, $4.00 to $0.40 or $0.04 or whatever, by the immense volume of fake shares these pretend investors are drubbing the real ones with at point of purchase.

Every reference made to P/E as a calculable metric is a lie. Our stock market is gamed by short-side racketeers, rendering equity investment in this country a massive securities fraud. Their humongous swindle purloins much of our savings during every market downdraft.

Odds are the SEC staff belongs in jail. Gangland racketeering is more than enabled by the complicity of our regulatory hotshots. Mob stooges inside that agency have spearheaded these cons for generations, flat out lying to us all those years.

Surely, the SEC's remarkable contention that short-sellers borrow their shares from you and me is, in its downright absurdity, the nadir of arrogance and criminal obfuscation.

That's why we're never asked to go along with it.

Site Exclusives

As our young readers know, any loser who steals mommy and daddy's savings is a stupid ninny.

Wall Street hires the biggest dumbbells in the world. That's because God hates stealers, and the nincompoops don't even know it.

Keep an eye on bad men like hedge fund managers, bank CEOs and proprietary traders right here in The MacDougal Post. Incorrigible dingbats like Mucus Poole-Knightly, Pockets MulGoon, and Lewie the Dip, just to name a few of the head cases found on the site, are contracted to appear here exclusively.

You won't find that kind of financial coverage anywhere else in cyberspace.

Check in with us regularly to find out what's really going on with your money, if there's any left. And when it's all gone, take a shower whenever you can and drop in on us from the local public library.

The MacDougal Post

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April 9, 2015

Caveat Emptor

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