Posts From Max Moore

Max Moore
Max Moore recently graduated with a degree in finance and is (anxiously) awaiting the results of the CFA level one exam. Max primarily trades options but also has strong interests in stocks, fixed income, commodities, and macroeconomics. He is looking to start a career in asset management. Max enjoyed a successful 14-year national-level swimming career and is passionate about helping others achieve their goals. While at school in Calgary, Alberta he tutored futures and options, and advanced financial management courses. Max’s investment approach primarily uses options to take advantage of broad macroeconomic trends.
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U.S. Sovereign Debt Producing Less and Less GDP

Perhaps one of the most overlooked realities in the market is the law of diminishing returns. I ascribe it being overlooked to the boiling frog problem. To highlight this reality I thought I’d take a look at one of the more illustrious cases I could find: that of U.S. sovereign debt. In essence I’ve asked the question “How much of a bang is U.S. real GDP getting for other people’s

Normal Distribution Indicators Anything But Normal

After the financial crisis, it became clear to many investors that markets were far from being normally distributed. Tools like VaR and other risk management tools relying on a normal distribution should have been jettisoned from financial practice, or at least downgraded in importance. However, even after the financial crisis, firms continue to rely on normal distribution indicators. I think the primary reason they do is because of the number

Gold Bugs and Bulls: Keep an Eye on the Gold to Oil Ratio

When it comes to discussing gold, nothing irritates me so much as when people conflate gold bulls with gold bugs. While they are certainly not mutually exclusive, they are not equivalent. Adding to the frustration, there is a third type of person who has implied that gold bugs would rather invest in gold than in business. Warren Buffet, who I greatly admire, is one of the better-known culprits, citing Berkshire

Corporate Profit Margins: A Different Take

One of the more useful (and apparently underused) tools I’ve stumbled on in macroeconomic analysis is the Kalecki Profit equation for evaluating corporate profit margins. It’s frequently joked about that Eastern Europe has its own version of everything (tv shows, cars, etc…); sure enough, they had their own Keynes. Michael Kalecki was a Polish economist who discovered (and was not the only one to do so, although he is regarded

Blackberry BBRY Valuation: A Contrarian Take

By Max Moore     BlackBerry (BBRY) has been one of the most controversial stocks in the past two quarters.  As of April 15th, 2013, short interest on the stock was at 174,340,145 shares, or about 33.2% of outstanding shares (including TSX shorts). For context, as of the same date, short interest in JCP is 25.6% and the short interest in HLF is about 30.6%. Considering the mobile device landscape, it may

Top 10 Finance Books All Investors Should Read

By Max Moore     Many of the books that have impacted the way I perceive the world and make decisions have come from the reading lists of others, so I thought I would share my top 10 finance books. Although many of the books and essays on my top ten reading list do not specifically address finance related topics, in my view they address critical aspects of the marketplace. Most importantly,

Low Interest Rates Like a GIC in the Face

By Max Moore      Once in a while, I’ll poke fun at my Dad and his computer literacy skills. I look up to him and respect him as a businessman, father and mentor, but I just can’t resist poking a little fun at ‘Gen X’ when he asks me how to copy and paste. But, recently, he (and his sister) got back me. After clearing out some old Moore family storage

A Roadmap for Responsible Government Spending

By Max Moore I recently started reading Santayana’s Curse by Sean Corrigan (of Diapason Commodities). In a few words, the book recounts various monetary pursuits over a long period of economic history and highlights how our ignorance of these instructive parallels has lead to the seemingly incurable laxity in public finance promoted by modern Keynesian thought. And it is this notion that further underscores the concerns of many about government spending.

European CDS Rates and Implied Credit Ratings

By Max Moore A while back, I did a term project examining the sustainability of Japanese sovereign debt. The ultimate goal of the project was to estimate the effect of a sovereign downgrade on credit default swap (CDS) spreads. In the process, I wound up building a rudimentary CDS pricing model to derive a 5-year default rate, given an assumed recovery rate, risk-free rate and the current market CDS spread.