Anyone selling? (stocks)

[SanJoaquinSooner]

Dow hits all-time record high! Time to jump in!!!:beguiled:

[jkjsooner]

Dow hits all-time record high! Time to jump in!!!:beguiled:

I find it interesting that people think that all-time high means the market is due for a crash. I'm not saying it isn't in this instance but all-time high should be the norm for a market. Even in an ultra-conservative market that increases at only the rate of inflation we'd be reaching an all-time high all the time.

The fact that these highs are separated by 5-10 years says more about the two bubbles and crashes we've had in the last 15 years than anything else.

Again, not saying the markets aren't prime for a correction. I don't know enough about it to say either way. But I won't use the fact that we hit an all-time high as the ultimate sign that it is. Afterall, short of a global catastrophe some day the DOW will hit 30k and then 100k even if the real value never exceeds today's value.

[cleller]

Yeah, its normal to hit a high, but the last time the Dow was closing in this range it preceded some pretty dramatic events. I guess its just natural to be on the lookout for something similar to come around again. I sure think about it a lot.

If the circumstances were different it might not seem so suspect. If unemployment were lower, the Fed was not so involved, the deficit/spending/tax situations more stable, global picture better it would be easier to look at as just a normal progression.

[SanJoaquinSooner]

I find it interesting that people think that all-time high means the market is due for a crash. I'm not saying it isn't in this instance but all-time high should be the norm for a market. Even in an ultra-conservative market that increases at only the rate of inflation we'd be reaching an all-time high all the time.

The fact that these highs are separated by 5-10 years says more about the two bubbles and crashes we've had in the last 15 years than anything else.

Again, not saying the markets aren't prime for a correction. I don't know enough about it to say either way. But I won't use the fact that we hit an all-time high as the ultimate sign that it is. Afterall, short of a global catastrophe some day the DOW will hit 30k and then 100k even if the real value never exceeds today's value.

If it were based on a 10,000 day moving average, it would look more like that. But day-to-day it never moves in a straight line for every long. That's because there are not only long term investors, but lots of traders. Both fundamentalists and technicians.

And then you got the options, futures thing.

Did you see that show on the history channel about the history of everything.... where they reenacted the first futures market based on tulips in holland. People were buying tulip bulb futures in such a frenzy, the price of the bulbs exceeded their weight in gold. Not that anyone thought the inherent value was that much -- but that the demand for these futures made it likely they could be sold for more next week.

The day of reckoning finally came one day when tulip futures were put up for auction and no one bid. The market crashed and the value of the futures went from more than their weight in gold to zero.

[SanJoaquinSooner]

The South Oval excitement for this market is underwhelming. Most people here must be either perma-bears or taken care of in retirement by Uncle Sam.

[8timechamps]

The South Oval excitement for this market is underwhelming. Most people here must be either perma-bears or taken care of in retirement by Uncle Sam.

Well, you figure there are only 4 of us that regularly post in this thread, so it's hard to gauge the excitement using that control group. I'd say the South Oval is much like real life, in that most people don't really have a clue.

[hawaii 5-0]

I check in once in awhile.

I'd much rather see the market go up than down.

I'm pleased as punch and hope the ride lasts a long while.

5-0

[cleller]

Well, you figure there are only 4 of us that regularly post in this thread, so it's hard to gauge the excitement using that control group. I'd say the South Oval is much like real life, in that most people don't really have a clue.

I'm always a little surprised at how little most folks pay attention to financial markets. I'm not involved in the business in any way but have spent a lot of time learning how the markets operate, and trying to use them to better invest. To me investing is every bit as important as a job, and should be treated that way.

Anyway, I was all wrong a year ago about a correction looming, so now I'm looking for reasons to believe it will be this spring/summer. I read that the VIX is now about as low as in 2007, and some forecasters feeling optimistic that this can continue for awhile.

Others point out that this bull market is historically running longer than average, plus tons of other scary facts. I also find myself feeling more comfortable with the account balances, and discount the possibility of them falling off, another danger sign.

Seems like last week on of the old titans of the game was sounding an alarm, but I can't remember who.

[SanJoaquinSooner]

I'm always a little surprised at how little most folks pay attention to financial markets. I'm not involved in the business in any way but have spent a lot of time learning how the markets operate, and trying to use them to better invest. To me investing is every bit as important as a job, and should be treated that way.

Anyway, I was all wrong a year ago about a correction looming, so now I'm looking for reasons to believe it will be this spring/summer. I read that the VIX is now about as low as in 2007, and some forecasters feeling optimistic that this can continue for awhile.

Others point out that this bull market is historically running longer than average, plus tons of other scary facts. I also find myself feeling more comfortable with the account balances, and discount the possibility of them falling off, another danger sign.

Seems like last week on of the old titans of the game was sounding an alarm, but I can't remember who.

A correction at some point is likely - probably anywhere from 5% to 20% - who knows? - but it would be a surprise if it were based on a new recession. Unless we have a new recession, it is most likely going to bounce back up in short order (months, not years). So I'll ride it out and do my monthly contributions that maybe will catch the lower prices during the correction.

[cleller]

It might have been Jeremy Grantham of GMO Asset Management that caused me to start thinking of woeful days coming. From what I can gather, he's not a permabear, manages a ton of assets, and has a pretty good history of guidance.
His last two outlooks have been depressing. In a nutshell, while the US has averaged 3% growth/year the last 100 years, he's forecasting about 1% for the next 40.
http://www.businessinsider.com/jeremy-grantham-us-growth-forecast-2012-11

Like many, he thinks the Fed's artificial low rate environment has propelled markets along with people simply trying to improve their yield. (you can download his latest report thru a link in this story)

http://www.businessinsider.com/jeremy-grantham-exciting-crashes-2013-2

He sums up his latest report by saying this could all go one for awhile, and markets go up, as people want to believe the best.
This is another couple of articles that I can imagine looking back at, and thinking, "it all seems so obvious now".

[hawaii 5-0]

I'm sure glad I didn't sell every time someone cried "Wolf".

Sure I've taken some lumps along the road, but I'm happy overall. And it could sure be better. Lots of companies are still holding onto their assets.

5-0

[Killerbees]

I look for bears everywhere. lol.

Right now the vol weakness is telling. not scary. just a hmmm kind of feeling.

The fact that US stocks are practically the only thing advancing this week has my finger on the trigger. I have this feeling that I should have cashed in Friday. I did sell a some last week so I only have med exposure. I sold out of BBRY after that big gap up a few days back. Now waiting to get back in. AAPL is more like CRAAPL. out of any sort of etf.

[Killerbees]

I fully concur with not including the social insecurity tax into any retirement planning. If its there then hey, we get to take an extra trip or whatever. If its not then meh.

[SanJoaquinSooner]

I look for bears everywhere. lol.

Right now the vol weakness is telling. not scary. just a hmmm kind of feeling.

The fact that US stocks are practically the only thing advancing this week has my finger on the trigger. I have this feeling that I should have cashed in Friday. I did sell a some last week so I only have med exposure. I sold out of BBRY after that big gap up a few days back. Now waiting to get back in. AAPL is more like CRAAPL. out of any sort of etf.

Are you retiring soon?

[SanJoaquinSooner]

I fully concur with not including the social insecurity tax into any retirement planning. If its there then hey, we get to take an extra trip or whatever. If its not then meh.

If I work until I'm 70 and delay SS payments until then, my projected SS benefit will be $37,440 per year (in today's dollars). And my wife's survivors benefits will allow her to draw that amount assuming I die before her, which is likely since she is 10 years younger. So for us, it's much more that an extra trip. It's a lot of money, especially if she lives to her life expectancy age.

[Killerbees]

Are you retiring soon?

Nope, not sure of your point.


If I work until I'm 70 and delay SS payments until then, my projected SS benefit will be $37,440 per year (in today's dollars). And my wife's survivors benefits will allow her to draw that amount assuming I die before her, which is likely since she is 10 years younger. So for us, it's much more that an extra trip. It's a lot of money, especially if she lives to her life expectancy age.

My point was not how much SS is or will be but instead of rather whether one should depend on it at all. Likely hood is high that I will never collect a dime I have paid in. I am fine with that because its just a tax. Not a benefit I am paying into.

[8timechamps]

I look for bears everywhere. lol.

Right now the vol weakness is telling. not scary. just a hmmm kind of feeling.

The fact that US stocks are practically the only thing advancing this week has my finger on the trigger. I have this feeling that I should have cashed in Friday. I did sell a some last week so I only have med exposure. I sold out of BBRY after that big gap up a few days back. Now waiting to get back in. AAPL is more like CRAAPL. out of any sort of etf.

I got all of my clients out of AAPL earlier in the year. It took a lot of work to convince some folks to sell out, but I finally got everyone out. It only took about two weeks for me to look like a genius (which, is pretty hard for me to do). Now, I'm watching it again...looking for an opportunity to get back in.

I'm really interested in Google too. No exposure for any of my clients, but it's also on my watch list.

I thought really hard about BBRY (RIM) before the new phone came out, but opted to wait. Still not sure of what to think.

[Killerbees]

I thought really hard about BBRY (RIM) before the new phone came out, but opted to wait. Still not sure of what to think.

One thing to keep in mind is that they have they ONLY secure phone os out there. Big corporate buying is gonna be a major factor for them. They found out also it takes about 30 secs to port about 90% or more of the available android apps over to bbry.

I am not rushing out to buy one, I love my android. But business is business.

[8timechamps]

One thing to keep in mind is that they have they ONLY secure phone os out there. Big corporate buying is gonna be a major factor for them. They found out also it takes about 30 secs to port about 90% or more of the available android apps over to bbry.

I am not rushing out to buy one, I love my android. But business is business.

From what I've been able to find, they are a much bigger player in the overseas market, so their popularity here in the US doesn't really reflect their approach to the game. I really like their CEO (Thorsten Heins), so I'm definitely keeping an eye on them.

[sooneron]

Depends, are you overweight in that sector? The analyst I use has a 22.50 target, it's almost there now. Might not be a bad time to trim (if you're overweight energy).

Your guy and my guy were off on that one. Closed at 28... ugh. I sold at 22.40. I still made 32% back in less than 9 months, but ... still... ugh.

[Killerbees]

http://www.zerohedge.com/news/2013-03-30/whos-next-italys-monte-paschi-admits-billions-deposit-outflows

[pphilfran]

Climbing the wall of worry....

[cleller]

There have been so many things coming out of Europe over the last 18 months that I thought might get the ball rolling toward some big downward swing, yet things keep chugging along.

Maybe I'm just paying attention more, and looking for that "confirmation bias" thing.

[SanJoaquinSooner]

Cash is unsafe. Best be in high quality stocks.

[pphilfran]

I don't think cash is unsafe...it does have a low return and a devaluing is definitely a possibility...I damn sure wouldn't be adding to bonds...gold has lost 15-20 over the last 6 months and is trying to hold...so stocks is where money has been flowing....

imo this is a key week for stocks...will it continue to climb the wall of worry or will the piton pull loose and cause a freefall...or something in between?

Needs some good earnings and I think they might not be too bad this quarter...we have lost a lot of disposable income over all income levels, how much is this going to hurt the next couple of quarters?

http://www.dailyfinance.com/2013/04/08/wall-street-week-earnings-season/

The stock market's robust rally was slowing even before Friday's jobs report, but the red flag sent up by the weak payrolls data makes the path to more gains less secure.

It means the bulls will have to look to earnings for a way to keep the rally going. The S&P 500 hit an all-time closing high on Tuesday, but lately defensive stocks have been leading the charge, and notable growth indexes are slipping.

This rotation has many thinking the long-awaited market correction is nigh. A 3 percent decline in theRussell 2000 index last week seemed to be a confirmation of the trend.

"Momentum I think has been slowing a bit, and it would be interesting to see if this is just a one-session sell-off," Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said about Friday's decline.

In the first quarter, the benchmark's healthcare index added 15.2 percent and utilities gained 11.8 percent, besting the broad S&P 500's 10 percent gain.

The transition into defensive stocks may respond to investors' taking into account the effect of higher payroll taxes this year and the $85 billion in government spending cuts that started to trickle at the beginning of the year.

The shift is "a rotation into sectors less affected by a short-term slowdown in the consumer," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

Earnings Hold the Key

Earnings season starts in earnest this week, with the highlight coming from JPMorgan Chase & Co and Wells Fargo & Co on Friday. Details on Wells Fargo's earnings will be dissected for clues on the health of the housing market.

Overall, S&P 500 earnings are expected to have risen 1.5 percent last quarter, down from a 4.3 percent gain expected at the start of the year, according to Thomson Reuters data.

Investors "are really waiting for the earnings season on balance to disappoint," Zaro said.

Companies have caught up on the lowered expectations, and negative outlooks have been predominant ahead of earnings season. In fact, the negative-to-positive guidance ratio from S&P 500 companies is at its highest since the third quarter of 2001, according to Thomson Reuters data.

At 4.7, the ratio is the sixth-highest among 69 readings dating to 1996.

"Companies understand that since the economy is weak there's no reason to be a hero and give guidance you can't beat," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

F5 Networks was the latest and one of the most dramatic examples of lowered earnings expectations. The network equipment maker partly blamed lower government sales for its profit warning late on Thursday, which erased almost a fifth of its market value on Friday.

In past quarters, revenue beats have taken the focus off the bottom line as investors were expecting the stronger economy to translate into more sales, but that may not be the case this time around.

"At this point earnings are going to be perhaps more important than revenues only because we know Q1 was only a so-so quarter for the economy," Colas said.

"It's not going to be a surprise if revenues are a little bit light. Where we really have to make sure the numbers work is at the earnings level."

Busy Week for the Fed

The Federal Reserve could be this week's wild card. Indications of renewed support for lose monetary policy -- or the slightest hint in the direction of tightening -- have triggered wild moves in the market.

The minutes of the March FOMC meeting are due on Wednesday and market participants will look for insight into the debate regarding the amount and duration of bond purchases the U.S. central bank is executing monthly.

The hawkish argument - a reduction of stimulus - was dented by Friday's job report, so any mention of it in the minutes may not trigger panic. But more than a dozen speeches by various Fed officers this week could stir things up.

The economic reports calendar is light except for consumer data. Retailers are expected to post a 1.9 percent rise in sales for last month, compared with a gain of 2.9 percent in March last year when same-store sales figures are published Thursday.

The Commerce Department posts its own retail sales figures on Friday, followed by the Thomson Reuters/University of Michigan survey of consumers.

[SanJoaquinSooner]

So many doom and gloom bears out there. It's been downright bullish!

[cleller]

So many doom and gloom bears out there. It's been downright bullish!

I truly hope and pray we bears don't get the opportunity to throw this back at you anytime soon.

Ever, really.

I'm not baling out, but do have less in stocks, etfs than I did a couple years ago. Also have stops set to trigger more quickly than I normally would.

[pphilfran]

I keep the same allocations and I don't try to time the market...though I have become more conservative as I have aged...

Rebalance quarterly...

[SanJoaquinSooner]

I truly hope and pray we bears don't get the opportunity to throw this back at you anytime soon.

Ever, really.

I'm not baling out, but do have less in stocks, etfs than I did a couple years ago. Also have stops set to trigger more quickly than I normally would.

Lots of people expect a pullback of 5 to 20 percent between now and september, but I expect it will be a shortlived correction, with the bull market continuing.

[pphilfran]

Gold...there is gold in dem der hills!

[cleller]

I saw this story on Yahoo Finance today, and had one of those "why hadn't I though of that?" moments.

Former FDIC chair Sheila Bair said she thinks the low interest rates are now hurting the economy because they don't provide and incentive to save/invest, and also because because banks would rather find other ways to make money than thru low interest loans.
Either these bankers really are villains, or they just can't catch a break.

http://finance.yahoo.com/blogs/daily-ticker/low-interest-rates-hurting-not-helping-economy-sheila-122600957.html

[cleller]

Gold...there is gold in dem der hills!

Also saw this on gold:

http://www.cnbc.com/id/100643039

Sounds reasonable.

[pphilfran]

Who knows where it will be in the next 6 months but I am guessing down from current levels...

but, as Kramer notes, everyone should own some as a hedge...10% or so of your total portfolio...

Dollar cost average...rebalance quarterly...

[8timechamps]

I saw this story on Yahoo Finance today, and had one of those "why hadn't I though of that?" moments.

Former FDIC chair Sheila Bair said she thinks the low interest rates are now hurting the economy because they don't provide and incentive to save/invest, and also because because banks would rather find other ways to make money than thru low interest loans.
Either these bankers really are villains, or they just can't catch a break.

http://finance.yahoo.com/blogs/daily-ticker/low-interest-rates-hurting-not-helping-economy-sheila-122600957.html

This is almost comical to me. Who'd have thunk that low interest rates would eventually have no effect?! (sarcasm).

Haven't been on in a while (tax season....EVERYONE waited until Monday). Anyway, I've got to go back and read the past couple of pages and catch up with you guys.

[hawaii 5-0]

I recently increased holdings on McDonalds, Proctor & Gamble and Celgene. ......and a little gold when it dipped. I.m still losing some on that one but it'll go back up.

5-0

[SanJoaquinSooner]

I keep the same allocations and I don't try to time the market...though I have become more conservative as I have aged...

Rebalance quarterly...

Phil, I understand the rebalancing principle, but for some reason, everytime I've ever moved shares from one fund to another, I always would have been better off sitting pat.

[pphilfran]

Rebalancing can, actually, will slow down your future profits on some high flyers...but it will also cushion the blow when the same high flyer takes a header....

for the vast majority of people the worst thing they can do is try to time the market or a stock....

Rebalancing on a quarterly basis eliminates the timing aspect...but allows you to take some profit while still keeping you fully invested in in the biggest movers....

Allocate your positions

if I set up my allocations as follows....

10% to precious metals
30% large cap
20% medium and small cap
10% foreign
25% laddered bonds or bond fund
5% money market

With the big run up on gold that 10% gold stake would climb to 20 or 25% of holdings while bonds and cash drop...

So...now you have a more risky portfolio...but rebalancing takes you back to your proper allocation and risk factor...

Spend a lot of time determining your risk tolerance...then decide what you allocations should be to meet that risk tolerance...

Spend even more time finding quality stocks or funds that meet your objectives..

Then rebalance them sum beeches quarterly...

Hell, take 10% of your portfolio and use it as Vegas money...invest it any way your wish and this should satisfy the urge to keep your fingers in the stock pie....

[Killerbees]

http://www.zerohedge.com/news/2013-04-22/only-chart-required-price-us-stocks

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/04/20130422_nyse.jpg

[cleller]

Watching "The Retirement Gamble" on Frontline on PBS. Very good show. Lots about the impact of fees, actively managed funds vs indexes etc. Good spots by Bogle.

Anyone here would enjoy it. Sure it will be available on replay or the website.

[8timechamps]

Watching "The Retirement Gamble" on Frontline on PBS. Very good show. Lots about the impact of fees, actively managed funds vs indexes etc. Good spots by Bogle.

Anyone here would enjoy it. Sure it will be available on replay or the website.

If someone truly wanted to "do it yourself", there are literally hundreds of thousands of options available. From (true) no-load funds to D.R.I.P. accounts, there is no reason a person couldn't do their own investing.

I've had that conversation with every client on my books. I tell them up front that there are resources available everywhere if they want to 'go it alone'. I have found that the folks I want to work with are the kind that have no interest in doing it themselves, and understand that I provide a real service for them.

Investing really isn't for everyone. If you spend the time to educate yourself, and understand how asset allocation, risk tolerance and re-balancing works, you're already ahead of most folks.


On another note, did you guys see the pseudo crash yesterday? Someone hacked the AP Twitter account and posted something about explosions at the white house and that the president had been hurt. The market dropped like a rock, until it was announced that the "tweet" was erroneous.

What worries me is that something like that can happen. I've come to the realization (for several years now) that the majority of the market movers these days are algorithmic trades, I just thought there would be better safeguards in place. Hopefully, a huge lesson was learned.

[SanJoaquinSooner]

If someone truly wanted to "do it yourself", there are literally hundreds of thousands of options available. From (true) no-load funds to D.R.I.P. accounts, there is no reason a person couldn't do their own investing.

I've had that conversation with every client on my books. I tell them up front that there are resources available everywhere if they want to 'go it alone'. I have found that the folks I want to work with are the kind that have no interest in doing it themselves, and understand that I provide a real service for them.

Investing really isn't for everyone. If you spend the time to educate yourself, and understand how asset allocation, risk tolerance and re-balancing works, you're already ahead of most folks.


On another note, did you guys see the pseudo crash yesterday? Someone hacked the AP Twitter account and posted something about explosions at the white house and that the president had been hurt. The market dropped like a rock, until it was announced that the "tweet" was erroneous.

What worries me is that something like that can happen. I've come to the realization (for several years now) that the majority of the market movers these days are algorithmic trades, I just thought there would be better safeguards in place. Hopefully, a huge lesson was learned.

I saw that... the algorithms involve reading key words in headlines.... with certain combinations leading to sell.

but if some guys around here had constructed the algorithms, it would have led to buy.

http://blogs.e-rockford.com/applesauce/files/2013/04/fake-ap-alertr.jpg

[SanJoaquinSooner]

For a single period - be it 1 yr, 3 yr, 5 yr, 10 yr or 20 yr - so much depends on the market at the beginning and end of the period, that it really doesn't give much insight into average performance. One needs to look at many, many periods.

Since 1926, a portfolio of S&P 500* stocks has not lost money in any 20-year period, while averaging gains of 10.8%/year, while a portfolio of bonds has had an average gain of 4%/year. In fact, stocks have not lost money over any of those 20 year periods, even when adjusted for inflation.

http://allfinancialmatters.com/wp-content/uploads/2013/01/SP-500-Rolling-Period-Returns-2013-Edition.pdf

Note that the very best twenty year period spanned from Jimmy Carter's last year in office to Bill Clinton's next-to-the-last (1980 to 1999). The message there is to invest when things are really in the $hitter and sell when everybody's partying like it's 1999.



*prior to 1957 it was the S&P 90.

[SanJoaquinSooner]

Hey, you guys who bought Apple when it dipped below 400 are geniuses!

[cleller]

Gotta jump in before this gets bumped off the front page. Its May....

Really, I've been wanting to mention something about bond funds. Everyone's been warning about the eventual uptick in interest rates that never seems to develop, and its effect on bonds. If unemployment continues to drop, I guess that a raise is more likely. Its seems like Bernanke has even stated an unemployment number he'd wait for to raise rates.

I recently read a story about target date funds, and what a rise in interest rates could do to them, if the "target" date is drawing near. Target funds are intended to be so hands off that something like that could creep up and surprise you. It reminded me that I had a little bit in such a fund thru my old deferred comp that is now getting more bond heavy. Thinking of swapping that out.

I also wonder about municipals. Most of what I read says to hang on to them. Agree?

[pphilfran]

I have never been big on bonds but do have money in some bond funds...rising interest rates are inevitable so I would only hold short term

[cleller]

The "interest rates will rise" chorus has been going so strong lately I've been tempted to put something in an inverse bond ETF, like TBF.

Seems like a sure bet interest rates will rise, but we've been hearing that for 3 years.

[SanJoaquinSooner]

Interesting to think about the title of this thread. There is a shortage of stock sellers which is why we're in a roaring bull market.

I know Cramer is hard for some of you to watch, but he had a great 10 minute explanation yesterday why the price of stocks keeps going up.

The anatomy of a bull market:


http://video.cnbc.com/gallery/?play=1&video=3000166662

[8timechamps]

Interesting to think about the title of this thread. There is a shortage of stock sellers which is why we're in a roaring bull market.

I know Cramer is hard for some of you to watch, but he had a great 10 minute explanation yesterday why the price of stocks keeps going up.

The anatomy of a bull market:


http://video.cnbc.com/gallery/?play=1&video=3000166662

Kramer is one of the very few on-air personalities that I can watch. He gets a little out there sometimes, but overall, he's got pretty good insight.

[cleller]

This could be interesting to watch. Fed mapping an end to stimulus.

http://www.marketwatch.com/story/fed-maps-exit-from-stimulus-2013-05-10-191031815?link=MW_story_popular

Weaning the markets of stimulus. Is this going to be like weaning an addict of heroin? What's the recovery rate on that?

[8timechamps]

This could be interesting to watch. Fed mapping an end to stimulus.

http://www.marketwatch.com/story/fed-maps-exit-from-stimulus-2013-05-10-191031815?link=MW_story_popular

Weaning the markets of stimulus. Is this going to be like weaning an addict of heroin? What's the recovery rate on that?

I've had a growing feeling that when the fed makes the call, Wall Street is going to react like an addict in withdrawal. I hope I'm wrong, but I don't think I am.

[cleller]

Our beloved thread is in danger I think. Market apathy? Pretty telling.

I've seen a few interesting bits on Seeking Alpha lately, thought of posting, then decided "why bother?".

Today I've got an actual question. Bill Gross the "bond king" of Pimco has mentioned again that he thinks the bond bull market is over, and to get ready for a world of 2-3% bond returns. I'm sure he's trying to temper expectations.

It seems to me like dividend stocks are luring former bond holders looking for yield now. Good investments in themselves, but a little risky to substitute for bonds. What I wonder is where do you look for yield these days if you're not happy with bond returns?

I think "floating rate" funds are good, but have not gotten much into foreign bonds. MLPs have been popular, but I don't fully understand the tax situation with those.

[C&CDean]

I don't have a ****ing clue what y'all are on about, but I just visited a financial advisor Monday (a Dave Ramsey local provider) and put some spare change into the market - for the first time in my 55 years. I'm gonna give them a shot and see how they do. I guess the money is being split 4 ways with 25% being invested in 4 different "markets?" High risk, International, and a couple others. We'll see...

[8timechamps]

Our beloved thread is in danger I think. Market apathy? Pretty telling.

I've seen a few interesting bits on Seeking Alpha lately, thought of posting, then decided "why bother?".

Today I've got an actual question. Bill Gross the "bond king" of Pimco has mentioned again that he thinks the bond bull market is over, and to get ready for a world of 2-3% bond returns. I'm sure he's trying to temper expectations.

It seems to me like dividend stocks are luring former bond holders looking for yield now. Good investments in themselves, but a little risky to substitute for bonds. What I wonder is where do you look for yield these days if you're not happy with bond returns?

I think "floating rate" funds are good, but have not gotten much into foreign bonds. MLPs have been popular, but I don't fully understand the tax situation with those.

Gross is certainly knowledgeable, but I've thought on more than one occasion he made comments to drive dollars to his products. I think it's funny when anyone refers to the bond market as "bullish" or "bull run".

Unfortunately, there is no great alternative for bonds (if you're trying to manage allocation), there's always higher yielding stocks, but you have to temper yourself to the reality of the fluctuation (something you don't have with bonds). VRPs and Closed End Funds are about the best alternative I've had to bonds, but there's still risk there.

I try to stay away from foreign bonds at all costs. Honestly, I don't understand a lot of the terms, and they vary from country to country. If I were interested in foreign bonds, I'd have to invest on advice of a foreign bond expert...which I certainly am not.

[8timechamps]

I don't have a ****ing clue what y'all are on about, but I just visited a financial advisor Monday (a Dave Ramsey local provider) and put some spare change into the market - for the first time in my 55 years. I'm gonna give them a shot and see how they do. I guess the money is being split 4 ways with 25% being invested in 4 different "markets?" High risk, International, and a couple others. We'll see...

Just remember to be patient. If you're not sure that you'll like your adviser, give him a year and follow up at least quarterly. He should be able to at least match the respective market returns for each investment. Sounds like he put you in a diversified portfolio, so that's a good start.

[hawaii 5-0]

The Dow dropped 240 today. Opportunities............

5-0

[pphilfran]

Still climbing the wall of worry...fed monetary policy will continue to give it upside...though the market is a little skittish about when the fed starts to slow stimulus....

[cleller]

I don't have a ****ing clue what y'all are on about, but I just visited a financial advisor Monday (a Dave Ramsey local provider) and put some spare change into the market - for the first time in my 55 years. .


Well, if there is any more sure sign of tumult ahead, I can't imagine it. Like a raft in a torpedo attack.

[hawaii 5-0]

Took some profits yesterday (ABT) and bought more shares in another quality stock (GE).

5-0

[SanJoaquinSooner]

Well, if there is any more sure sign of tumult ahead, I can't imagine it. Like a raft in a torpedo attack.

I was thinking the same thing. Dean jumping in is bearish indicator. Sell all stocks!!! Just like then the shoe shine guy gave Joe Kennedy a stock tip -- he knew it was time to get out!!!

Just kidding ....

I'm all in and have been since the early 90s. If we get a correction this summer I just keep buying more each month but at lower prices. Looking back, it is clear I have really good returns from investing during the corrections.

Sounds like Dean's advisor has him well diversified so he should be good for the long haul. And I agree with 8time, gotta be patient and not panic on corrections. That is how people lose money.

[C&CDean]

I was thinking the same thing. Dean jumping in is bearish indicator. Sell all stocks!!! Just like then the shoe shine guy gave Joe Kennedy a stock tip -- he knew it was time to get out!!!

Just kidding ....

I'm all in and have been since the early 90s. If we get a correction this summer I just keep buying more each month but at lower prices. Looking back, it is clear I have really good returns from investing during the corrections.

Sounds like Dean's advisor has him well diversified so he should be good for the long haul. And I agree with 8time, gotta be patient and not panic on corrections. That is how people lose money.

He gave me a questionaire asking all kinds of stuff about how long I plan to leave the money alone, would I panic if it lost money the first year, etc. I told him it's just some money left over from a savings plan I did when I worked that was only making about 1.3% over the past couple years and I don't want to take it out since I'm stuck in the 33% tax bracket.

I told him I didn't plan on really retiring until I was 60 (4 1/2 years from now) and that I plan to be debt free and pretty much rich by then as well. Of course being a Dave Ramsey recommended company he counseled me to not put another dime into investments until all the bills were payed first. Then start doing 15% and put that into tax up front Roth IRAs.

[8timechamps]

He gave me a questionaire asking all kinds of stuff about how long I plan to leave the money alone, would I panic if it lost money the first year, etc. I told him it's just some money left over from a savings plan I did when I worked that was only making about 1.3% over the past couple years and I don't want to take it out since I'm stuck in the 33% tax bracket.

I told him I didn't plan on really retiring until I was 60 (4 1/2 years from now) and that I plan to be debt free and pretty much rich by then as well. Of course being a Dave Ramsey recommended company he counseled me to not put another dime into investments until all the bills were payed first. Then start doing 15% and put that into tax up front Roth IRAs.

Sounds like good, sound advice. Did he put you in mutual finds? If so, are you on a fee plan (annual charge for a percentage of your invested money) or just shares of the funds?

[cleller]

Just the other day I read some guy thinking that the trouble in Japan could spread:

http://finance.yahoo.com/news/asian-shares-fall-dollar-pressured-031622369.html

[C&CDean]

Sounds like good, sound advice. Did he put you in mutual finds? If so, are you on a fee plan (annual charge for a percentage of your invested money) or just shares of the funds?

Up-front one-time 5% fee on the amount I gave him. No annual/percentage/etc.

[Lott's Bandana]

Roth IRAs

That made me laugh.

[C&CDean]

Roth IRAs

That made me laugh.

Not as much as me. Trust me. BTW, it's the ONLY place I'll be putting future investments in. Taxes up front on the deposit amount, then no tax on my interest income. ****in' A. That Roth is one hell of a guy.

[cleller]

Not as much as me. Trust me. BTW, it's the ONLY place I'll be putting future investments in. Taxes up front on the deposit amount, then no tax on my interest income. ****in' A. That Roth is one hell of a guy.

Every 19 year old should open one, and think about it whenever they get ready to shell out $30 for a bad movie.

[Lott's Bandana]

Every 19 year old should open one, and think about it whenever they get ready to shell out $30 for a bad movie.


The old formula to get the kiddos saving was, $2000 per year for 9 years at 10% interest, then stop. Millionaire at 59.

The interest doesn't apply quite the same anymore, sadly, but the concept is still teh same.

[olevetonahill]

The old formula to get the kiddos saving was, $2000 per year for 9 years at 10% interest, then stop. Millionaire at 59.

The interest doesn't apply quite the same anymore, sadly, but the concept is still teh same.

At what age did they start?

[pphilfran]

I heard it something like this....10% interest in both cases

Vet, starting at 21, saves 2000 for ten years and never saves other dime....

midtowner party hardy through his 20's and never saved a dime until he turned 31 when he stars saving 3 grand a year....

At age 65 Vet has nearly a 100k more in his account...at age 75 vet has nearly 200k more in his account...

disclaimer: I used midtowner in the example since that would tend to keep vet focused...

[cleller]

I convinced my daughter to open a Roth around 2007-2008. She put just about all of her life's savings in the thing. After the crash, it was hard for me to even bring the matter up, but she was very non-fazed about the deal. Since then, she's been so busy with school, grad school, marriage, I don't think she's been able to put anything into it, which is probably a failure on my part. Just a little bit every year to make it a habit would be good.

[olevetonahill]

I heard it something like this....10% interest in both cases

Vet, starting at 21, saves 2000 for ten years and never saves other dime....

midtowner party hardy through his 20's and never saved a dime until he turned 31 when he stars saving 3 grand a year....

At age 65 Vet has nearly a 100k more in his account...at age 75 vet has nearly 200k more in his account...

disclaimer:
I used matlock in the example since that would tend to keep vet focused...

FIFY AND I bout spewed my beer every where.

[8timechamps]

I convinced my daughter to open a Roth around 2007-2008. She put just about all of her life's savings in the thing. After the crash, it was hard for me to even bring the matter up, but she was very non-fazed about the deal. Since then, she's been so busy with school, grad school, marriage, I don't think she's been able to put anything into it, which is probably a failure on my part. Just a little bit every year to make it a habit would be good.

Roth IRAs are awesome. The only "down" side is the amount that can be contributed annually. Wish it were more.

[Lott's Bandana]

At what age did they start?

I used to teach this to Midshipmen at our NROTC program. I used 21 as a starting point.

Again, 10% is hard to reach, and I'm no mathsmaticspersonage, but it probably works pretty well at 18 years at 5%? I'm not sure if its linear or not, the point is...start young!

[SanJoaquinSooner]

The Roth IRA is the greatest financial invention ever for the common working man/woman. No taxes on earnings, even for the beneficiaries if you die.

I started with an IRA back in 1994 and put all contributions into Contrafund, managed by Will Danoff. Converted to Roth when it started. I read lots of stuff in order to decide where to invest and I was most impressed with this liberal arts (history) major from Harvard who then earned an MBA from Penn.

I think the 10 year annualized total return through March 31, 2013 is 10.89%



Here are the annual total returns for each year:

2003 27.95%
2004 15.07%
2005 16.23%
2006 11.54%
2007 19.78%
2008 -37.16%
2009 29.23%
2010 16.93%
2011 -0.14%
2012 16.26%
2013 (ytd) 13.37%


About 8 years ago I decided it might be smart to diversify, so I started splitting contributions into Fidelity International Discovery. Its return has been good, but not as good as Contrafund. Its 10 year annualized total return is 9.63%. got about 15% of my Roth in it.

With dollar cost averaging, the return is even better, because you are buying more shares when it is cheaper. The real key is not to panic when the market drops big time, like it did in 2008 and early 2009. Those shares I bought during those months have more than doubled in value in just 5 years.

[hawaii 5-0]

The old formula to get the kiddos saving was, $2000 per year for 9 years at 10% interest, then stop. Millionaire at 59.

The interest doesn't apply quite the same anymore, sadly, but the concept is still teh same.


That's fer sure.

Luckily I just cashed out a 25 year bond at 15% interest.

Ah, the good ol' days....... I wished I had started earlier.

Drank Coca Cola for years and years (I saw I wasn't the only one) and finally started buying stock in KO.

5-0

[8timechamps]

Up-front one-time 5% fee on the amount I gave him. No annual/percentage/etc.

Not to get too complicated, but there are 3 main "types" of mutual fund shares:

A Shares - The broker receives a one time fee (typically about 5% of the initial investment), then no fees after (ever).
B Shares - The broker receives a one time fee at the time the shareholder sells the shares (again, typically about 5%)
C Shares - The broker receives a fee annually (about 1%).

I simplified that a lot, but you get the general idea. There are Pros and Cons to each share class, but A & C are typically the most beneficial to the investor. Sounds like he put you in A shares (which I consider the best). No matter how big the fund grows (and hopefully, it grows BIG), you'll never have to pay another fee.

There are also "No Load" funds out there. There's nothing wrong with "No Load" funds, as long as the person investing in them realized there is no such thing as a "free" investment. The fund companies just use a different way of charging their management fee, so it appears on the surface that it's free. But, it's not.

[SanJoaquinSooner]

Not to get too complicated, but there are 3 main "types" of mutual fund shares:

A Shares - The broker receives a one time fee (typically about 5% of the initial investment), then no fees after (ever).
B Shares - The broker receives a one time fee at the time the shareholder sells the shares (again, typically about 5%)
C Shares - The broker receives a fee annually (about 1%).

I simplified that a lot, but you get the general idea. There are Pros and Cons to each share class, but A & C are typically the most beneficial to the investor. Sounds like he put you in A shares (which I consider the best). No matter how big the fund grows (and hopefully, it grows BIG), you'll never have to pay another fee.

There are also "No Load" funds out there. There's nothing wrong with "No Load" funds, as long as the person investing in them realized there is no such thing as a "free" investment. The fund companies just use a different way of charging their management fee, so it appears on the surface that it's free. But, it's not.

But Class A shares - like no load funds - still have annual expense ratios that are subtracted, correct?

[8timechamps]

But Class A shares - like no load funds - still have annual expense ratios that are subtracted, correct?

Yep. They all do, but no fees are paid out to the broker. It's kind of a technicality, but a good selling point if you're the broker :).

[hawaii 5-0]

Back in the day I had very good luck with American Century Ultra. Used to be 20th Century Ultra.

Janus 20 was another winner. Don't know how it's doing now.

And Magellen. Wow, that was back then, the old Peter Finch days.

I had about 8 or so to cover the spectrum but it was weighed on Growth.

Mutuals got my house down payment in '96. Since then, 2010 the critter's all mine.

5-0

[pphilfran]

Back in the day I had very good luck with American Century Ultra. Used to be 20th Century Ultra.

Janus 20 was another winner. Don't know how it's doing now.

And Magellen. Wow, that was back then, the old Peter Finch days.

I had about 8 or so to cover the spectrum but it was weighed on Growth.

Mutuals got my house down payment in '96. Since then, 2010 the critter's all mine.

5-0

Ultra doubled one year...heavy into biotech and had a huge holding in Amgen...Janus 20 was similar just that they only invested in 20 stocks at a time...I was in both prior to the big run ups...also owned Financial (now Invesco) Industrial Income fund....it rocked....Montgomery Emerging markets and it was a turd...

[8timechamps]

Back in the day I had very good luck with American Century Ultra. Used to be 20th Century Ultra.

Janus 20 was another winner. Don't know how it's doing now.

And Magellen. Wow, that was back then, the old Peter Finch days.

I had about 8 or so to cover the spectrum but it was weighed on Growth.

Mutuals got my house down payment in '96. Since then, 2010 the critter's all mine.

5-0

Janus 20 & Magellan were two of the big time funds I used in the late 90's. Both really well managed during that period. I haven't used either in over a decade.

[pphilfran]

Janus 20 & Magellan were two of the big time funds I used in the late 90's. Both really well managed during that period. I haven't used either in over a decade.

They got too big....plus they lost Craig and Lynch...Ultra was run by committee....

[8timechamps]

They got too big....plus they lost Craig and Lynch...Ultra was run by committee....

Yes and yes.

Of course, during the time they were returning stellar results, just about everyone else was too. That was a good time.

[cleller]

Why does it seem like in those days some managers could really beat the averages, but today you never expect anyone to beat the averages? At least not more than a year or two.

Rose colored hindsight?

[8timechamps]

Why does it seem like in those days some managers could really beat the averages, but today you never expect anyone to beat the averages? At least not more than a year or two.

Rose colored hindsight?

A little 20/20 hindsight, and a little "they were just that good". They were also in a very different environment than the one we have today. It's a lot easier to take big risks, or bet big on companies when the downside isn't really down.

[hawaii 5-0]

Despite the 200 point drop today Google went over the $900 mark.

Oh, If I coulda afforded more than 5 shares when it was $500.

5-0

[diverdog]

Janus 20 & Magellan were two of the big time funds I used in the late 90's. Both really well managed during that period. I haven't used either in over a decade.

Magellan was almost an index fund since it owned so many stocks. Janus was a great company until it was sold. The next owners promptly loaded Janus Twenty, Janus Venture Fund and I believe Janus Olympia Fund with the same ten core holdings. Stocks like Enron, Worldcom and Lucent. People who owned those funds ( me) got obliterated.

[cleller]

One of my old favorites was Robert Sanborn of The Oakmard Fund, remember him. He was big-time, then suddenly disappeared. Oakmark still has a couple very good managers, (Bill Nygren especially) and does well. I've held on to Equity and Income for many years. Not flashy, but it did not get clobbered in 2008, either.

Anyway, turns out Sanborn was axed for refusing to buy into the tech sector in 2000, and seems to have soured on mutual fund management. He seems to be very old guard, refusing to ride waves:

http://news.medill.northwestern.edu/chicago/news.aspx?id=147315

[cleller]

I wonder if I may be hitting some of the stops I had set on ETFs today?

[pphilfran]

Where is the money going?

It looks like most world markets are getting the hammer over the last week or so...

Precious metals in the crapper...

Bonds? Are people buying bonds at this rate with rising rates staring us in the face?

Cash? You are more than likely losing money vs inflation....

[cleller]

^^ That's the question, where to go? My completely amateur guess is that those with nerve will buy more stocks as this plays out. Those with less nerve will wait in cash, and look for some better yields on individual bonds, maybe.

Feels like a summer sell off, but not panicky to me, but who knows.

[sheepdogs]

Where is the money going?

It looks like most world markets are getting the hammer over the last week or so...

Precious metals in the crapper...

Bonds? Are people buying bonds at this rate with rising rates staring us in the face?

Cash? You are more than likely losing money vs inflation....

Foreigners are seeing their currency lose value relative to the dollar as world equity markets are taking a beating. Given this, they can make a good deal of money by purchasing U.S. denominated interest bearing securities.

[SanJoaquinSooner]

^^ That's the question, where to go? My completely amateur guess is that those with nerve will buy more stocks as this plays out. Those with less nerve will wait in cash, and look for some better yields on individual bonds, maybe.

Feels like a summer sell off, but not panicky to me, but who knows.

A 5 to 20 percent correction is probably overdue and ultimately healthy for the market. Everyone was expecting it in May so of course it didn't come.

[OUmillenium]

So, good time to buy?

[cleller]

I'm waiting for the first frost.

[olevetonahill]

I aint no whiz kid on this stuff, But back on 6 - 4 -13 I bot a 100K of Carnival Cruise line stock. It has made me over a 10% returns to date

Everytime I want to take the Profit it drops a Bit, then I say Ill wait see if it moves back up and it goes a Tad higher each time . To date Its earned me
370,000 in just 5 weeks er so.

[cleller]

Anyone still monitoring?

Now my question is:

When will the FOMC actually announce an interest rate increase? And how will the markets respond?

I guess I'm reaching for the straw that breaks the camel's back.

[8timechamps]

Anyone still monitoring?

Now my question is:

When will the FOMC actually announce an interest rate increase? And how will the markets respond?

I guess I'm reaching for the straw that breaks the camel's back.

Not sure when the next announcement will be. Bernanke didn't help anyone with his comments last month (about possibly taking the foot off the gas "in the next few" announcements). I've always hated that kind of veiled talk from the fed. Typically, it only serves to spook the markets.

It's really hard to say how the markets will react to a change in interest rates, but I don't think it would be overly favorable. The fed has backed themselves into a corner, and it's going to be really hard to find a way out without the markets getting hit.

[SanJoaquinSooner]

I aint no whiz kid on this stuff, But back on 6 - 4 -13 I bot a 100K of Carnival Cruise line stock. It has made me over a 10% returns to date

Everytime I want to take the Profit it drops a Bit, then I say Ill wait see if it moves back up and it goes a Tad higher each time . To date Its earned me
370,000 in just 5 weeks er so.

you bought 100K shares, or you bought shares for a total price of 100K?

[SanJoaquinSooner]

I think you guys who predicted Facebook stock will fall to zero in 5 years might have been too bearish.

Apparently they are figuring out how to make money off mobile.

[olevetonahill]

you bought 100K shares, or you bought shares for a total price of 100K?

100k Shares. still aint sold , It keeps going up a little bit each day
I bot at 32.36 and its now at 36.91

[cleller]

Not sure when the next announcement will be. Bernanke didn't help anyone with his comments last month (about possibly taking the foot off the gas "in the next few" announcements). I've always hated that kind of veiled talk from the fed. Typically, it only serves to spook the markets.

It's really hard to say how the markets will react to a change in interest rates, but I don't think it would be overly favorable. The fed has backed themselves into a corner, and it's going to be really hard to find a way out without the markets getting hit.

The whole thing is very interesting to me, as an amateur, trying to understand. I always figured there would be a point where everything took a fall of some sort.

The more it plays out, the more it looks like Bernanke may be able to slowly back away without the house of cards falling. He was able to force people back into the market, and take away anything to compete with it. Now he slowly lets off the gas. With no other investments looking attractive, and US companies starting to buy back stock, pay dividends, etc, people still want to stay with it.

[SanJoaquinSooner]

100k Shares. still aint sold , It keeps going up a little bit each day
I bot at 32.36 and its now at 36.91

Looks like you'll be able to afford that train ticket to California.

[olevetonahill]

Looks like you'll be able to afford that train ticket to California.

Heh. Ya need to go to the Hideout and sign up on the "Stock Trader" Its all Play money. But its interesting :dog:

[SanJoaquinSooner]

Heh. Ya need to go to the Hideout and sign up on the "Stock Trader" Its all Play money. But its interesting :dog:

Well, too bad, it was a smart investment -- investing in Carnival after a public relations nightmare.

Same thing happened after 9-11. The airline stocks plunged and some smart investors loaded up and made a fortune.

[olevetonahill]

Well, too bad, it was a smart investment -- investing in Carnival after a public relations nightmare.

Same thing happened after 9-11. The airline stocks plunged and some smart investors loaded up and made a fortune.


I wish I had had the Money to Play all my hunches over the years. Id Make Gates look like a Pauper.

[8timechamps]

I think you guys who predicted Facebook stock will fall to zero in 5 years might have been too bearish.

Apparently they are figuring out how to make money off mobile.

I'll admit, they have done a much better job than I thought they would do. I was one that thought it was a falling money trap. Still, there is nothing about the stock/company that leads me to believe it's going to become a high flyer. If I had bought in on the initial IPO, about the only thing I would have right now is heartburn. I will concede that it's looking better than I though.

I'll watch it, but as I said, at this point, there is nothing to draw me in.

[8timechamps]

The whole thing is very interesting to me, as an amateur, trying to understand. I always figured there would be a point where everything took a fall of some sort.

The more it plays out, the more it looks like Bernanke may be able to slowly back away without the house of cards falling. He was able to force people back into the market, and take away anything to compete with it. Now he slowly lets off the gas. With no other investments looking attractive, and US companies starting to buy back stock, pay dividends, etc, people still want to stay with it.

I'm not so quick to pat Bernanke on the back. You hit the nail on the head when you mentioned there being no other attractive investments to draw money from the market. He's walking a tight rope without a net, and one wrong move could send the markets off the wire. In my over 25 years of being in the business, this environment is the hardest to read that I have ever encountered.

[SanJoaquinSooner]

Roll baby roll!

[8timechamps]

Things are rolling well right now, that's for sure.

If there is one stock that I have the biggest position in (both clients and my personal portfolio), it's McKesson Health (MCK). Pretty close to a 52 week high, but there's been some recent turbulence with their board of directors/CEO. It took a small hit this week, but appears to be back on track. I think this company continues to roll the competition in their space, and health care is always a good bet.

On another note, I saw that Kramer was really high on CBS, pointing to the NFL as a big driver in gains going forward. I steer clear of networks, but he made some good points. My biggest concern with CBS (as it relates to the NFL) is the coming of Fox 1. I think Fox is throwing the kitchen sink at their new endeavor, and they already have a nice contract in place with the NFL. I'd wait to see how that plays out in the next 12 months before making to big of a move with CBS.

[cleller]

I'm not so quick to pat Bernanke on the back. You hit the nail on the head when you mentioned there being no other attractive investments to draw money from the market. He's walking a tight rope without a net, and one wrong move could send the markets off the wire. In my over 25 years of being in the business, this environment is the hardest to read that I have ever encountered.


I'm trying to seeing the big BIG picture, I guess. Yep, it sucks to be anyone that tried to slog it out in CDs, but at least the stock and bond markets came thru in one piece, and there were no soup lines and grapes of wrath. Looking at it that way, plus walking the political minefield, I have to give Ben credit.

Greenspan was a hero during his reign, while Ben has been part Rodney Dangerfield-part Cheshire Cat. It will be interesting to see their write-ups in the history books. Both will be studied deeply, I'm sure.

I have no idea how to read all this. I was operating under the idea that the market would drop before the economy caught up. Didn't seem to happen. Now, I'm kind of amazed that the bull market is getting statistically overlong, in duration terms. Who'd have thought?

Sir John Templeton:
"Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Where are we currently in that quote? Optimism has been here for a while, for sure. Not sure about euphoria, but this is odd summer behavior.

[SanJoaquinSooner]

I'm trying to seeing the big BIG picture, I guess. Yep, it sucks to be anyone that tried to slog it out in CDs, but at least the stock and bond markets came thru in one piece, and there were no soup lines and grapes of wrath. Looking at it that way, plus walking the political minefield, I have to give Ben credit.

Greenspan was a hero during his reign, while Ben has been part Rodney Dangerfield-part Cheshire Cat. It will be interesting to see their write-ups in the history books. Both will be studied deeply, I'm sure.

I have no idea how to read all this. I was operating under the idea that the market would drop before the economy caught up. Didn't seem to happen. Now, I'm kind of amazed that the bull market is getting statistically overlong, in duration terms. Who'd have thought?

Sir John Templeton:
"Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Where are we currently in that quote? Optimism has been here for a while, for sure. Not sure about euphoria, but this is odd summer behavior.

I'd argue we're still in the skepticism stage. Joe public, with the exception of Dean, is not participating in the equity markets. And it seems as if there are still lots of financial folks who are skeptics too. This is the most hated bull market ever.

[cleller]

I'd argue we're still in the skepticism stage. Joe public, with the exception of Dean, is not participating in the equity markets. And it seems as if there are still lots of financial folks who are skeptics too. This is the most hated bull market ever.

With this one, I can remember that in Aug 2009, a writer in the WSJ proclaimed, "The Bear Market is Officially Over".

I was skeptical. Waited until about Jan to add more into stocks. For the next two years, most of the articles I ran across were along the lines of "we think this can last awhile...". I'd call that optimism, because more money was still going into bonds than stocks.
By Spring of 2012, people were getting comfortable, (so I started to get uncomfortable) inflows started to pick up. By fall 2012, I started seeing LOTS of stories that people were upset they'd missed the rally and were getting into the market. By 2013, investors were "back with a vengence". Look at this graph, astounding:

http://money.cnn.com/2013/04/12/investing/stocks-rally-inflow/index.html

That kind of cash coming in is bound to push the markets up, but is also the type thing that makes me think euphoria is creeping in.Still, the quote about euphoria is only one (smart, learned) man's opinion; some bull markets have carried on much longer than this one.

[pphilfran]

http://www.aaii.com/sentimentsurvey
AAii Sentiment survey shows bullish, but down almost 10% over the last week....

[pphilfran]

Has anyone else gone through the American Association of Individual Investor stock buying methodology?

Back in the 90's I learned a hell of a lot about various ways to looks at stock valuations...I used it for about a year as a supplement to my normal methods....at $30 bucks a year it is a bargain...

No one that frequents this thread will probably gain much for the program...the ones that could use it don't frequent the thread....

[pphilfran]

I'm trying to seeing the big BIG picture, I guess. Yep, it sucks to be anyone that tried to slog it out in CDs, but at least the stock and bond markets came thru in one piece, and there were no soup lines and grapes of wrath. Looking at it that way, plus walking the political minefield, I have to give Ben credit.

Greenspan was a hero during his reign, while Ben has been part Rodney Dangerfield-part Cheshire Cat. It will be interesting to see their write-ups in the history books. Both will be studied deeply, I'm sure.

I have no idea how to read all this. I was operating under the idea that the market would drop before the economy caught up. Didn't seem to happen. Now, I'm kind of amazed that the bull market is getting statistically overlong, in duration terms. Who'd have thought?

Sir John Templeton:
"Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Where are we currently in that quote? Optimism has been here for a while, for sure. Not sure about euphoria, but this is odd summer behavior.

I think we are moving out of skepticism into optimism...

[pphilfran]

I am a contrarian investor....

The more bullish the sentiment indicator- the less upside for stocks...

When everybody and their dog, including the Wal Mart cashier, is moving money into the market then all or most of the money is already invested....nothing on the sidelines to support the market over tough times....

When everybody is bearish and out of the market we will have a ton of money on the sidelines getting diddly squat in interest or dividend....

My best contrarian buy was Merck...when Clinton took office it was something like $28 (split adjusted) a share...Hillary led the charge to reform healthcare and by 1994 the drug stocks dropped by half..Merck went to down to $15....I started buying at $20 and bought all the way down to the bottom...my cost basis was right at $16....

I could buy Merck directly from the company with basically no fees...but I had to have 5 shares issued in my name...my broker (rarely used) told me I was nuts to be buying Merck..."Everybody is selling!"...but he did get me 5 shares...

The whole Clinton plan fell through and I rode that bull until the start of 2000...I could see the bubble building...I sold of 90% of the holding at a 75 avg....a steady 5 bagger in 6 years...I knew I was going to make a killing...

[SanJoaquinSooner]

I am a contrarian investor....

The more bullish the sentiment indicator- the less upside for stocks...

When everybody and their dog, including the Wal Mart cashier, is moving money into the market then all or most of the money is already invested....nothing on the sidelines to support the market over tough times....

When everybody is bearish and out of the market we will have a ton of money on the sidelines getting diddly squat in interest or dividend....

My best contrarian buy was Merck...when Clinton took office it was something like $28 (split adjusted) a share...Hillary led the charge to reform healthcare and by 1994 the drug stocks dropped by half..Merck went to down to $15....I started buying at $20 and bought all the way down to the bottom...my cost basis was right at $16....

I could buy Merck directly from the company with basically no fees...but I had to have 5 shares issued in my name...my broker (rarely used) told me I was nuts to be buying Merck..."Everybody is selling!"...but he did get me 5 shares...

The whole Clinton plan fell through and I rode that bull until the start of 2000...I could see the bubble building...I sold of 90% of the holding at a 75 avg....a steady 5 bagger in 6 years...I knew I was going to make a killing...

that was a nice play.

[Killerbees]

I dunno but for now the trend is up. What worries me is the weak volume. And guys like these (below) saying they are selling everything that isnt nailed down. Not saying things are going to collapse quickly, or that you should panic sell everything. These guys are on a whole other level but its often very profitable to follow their money.


Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.


Fortress, the first publicly traded buyout firm in the U.S., is preparing holdings for public offerings while struggling to find attractive new deals, Wesley Edens, who runs Fortress’s $14.3 billion private-equity business, said on a conference call with investors yesterday. That environment extends to credit and distressed investments, said Pete Briger.


"It’s almost biblical: there is a time to reap and there’s a time to sow,” Apollo’s Black said at a conference in April. “We think it’s a fabulous environment to be selling. We’re selling everything that’s not nailed down in our portfolio.”

Black’s New York-based firm, which oversees assets worth $114 billion, generated $14 billion in proceeds from the sale of holdings between the first quarter of 2012 and the first quarter this year.


Blackstone, also based in New York, took advantage of the rising markets to sell shares in three companies -- General Growth Properties Inc., Nielsen Holdings NV and PBF Energy Inc. -- and take three public, including SeaWorld Entertainment Inc. (SEAS), in the last quarter alone. The firm, run by CEO Steve Schwarzman and James, last month reported second-quarter economic net income of $703 million, more than triple its year-earlier profit.

“With credit markets hot and equities strong, this is a better time for selling assets than for buying,” James said on call with media on July 18. “Activity levels seem to be shifting from the U.S., which has been our focus over the last couple of years, to Europe, where there’s more distress, and Asia and emerging markets, where liquidity issues are arising.”

Hmmm...might start thinking about allocating some more money (next year) into Europe and Asia, looking for bargains.

By the way....ZLTQ, x2 in three months (i sold the other day). Dunno what made it pop so quick like it did but I auto sell anything that moves like that anyways. If it has legs I will get back in. Hoping it falls back fairly quickly to 6 where it gapped open at.

[cleller]

The emerging markets thing has sounded interesting to me for the last couple months. For at least a year all I've read is "more bad news from emerging markets", so it sounds like the proverbial "blood in the streets" scenario there. I'll probably wait a little more. If there is any correction here, it will probably drag them down further, too.

[pphilfran]

The emerging markets thing has sounded interesting to me for the last couple months. For at least a year all I've read is "more bad news from emerging markets", so it sounds like the proverbial "blood in the streets" scenario there. I'll probably wait a little more. If there is any correction here, it will probably drag them down further, too.

**** them emerging markets.... :)

I was the biggest emerging markets bull for nearly two decades....I never made ****...

I have 10% in them and I ain't adding to that allocation....

[SanJoaquinSooner]

Bull argument:

We were in a 13 year trading range. We are early in a secular bull market. We'll have corrections along the way, but the long term trend is bullish.

[8timechamps]

**** them emerging markets.... :)

I was the biggest emerging markets bull for nearly two decades....I never made ****...

I have 10% in them and I ain't adding to that allocation....

My word of advice is if anyone is looking to invest in emerging markets, you better know your stuff. I'm not talking about reading up on a couple of countries via the internet, I mean you better damn sure know every detail about the company and how they interact with local government.

For most people, investing in an emerging market mutual fund is about as far as they should go.

[olevetonahill]

My word of advice is if anyone is looking to invest in emerging markets, you better know your stuff. I'm not talking about reading up on a couple of countries via the internet, I mean you better damn sure know every detail about the company and how they interact with local government.

For most people, investing in an emerging market mutual fund is about as far as they should go.

Bro. How should a person who has NEVER invested a thing go about gettin started?

Im talkin SMALL like maybe 100 er 200 a Month?

[8timechamps]

Bro. How should a person who has NEVER invested a thing go about gettin started?

Im talkin SMALL like maybe 100 er 200 a Month?

Anyone starting small should go with mutual funds. Trying to get rich buying individual stocks is tough business, and ends up badly for most folks.

I do some community sessions occasionally (basic planning seminars for lower income folks). I've partnered up with a local Wells Fargo guy, and he's willing to open accounts for anyone. I know a lot of times he advises folks to start with a savings account, add money, then once they have enough to invest open an investment account.

Folks can also check out the various no-load mutual funds. I honestly don't know the minimums on those anymore, but they're a good place to start.

If a person can't get the idea of buying individual stocks out of their head, there's always companies that offer direct purchase and DRIP (dividend re-investment programs). But again, I'd steer clear of that early on.

[cleller]

For most people, investing in an emerging market mutual fund is about as far as they should go.


Bro. How should a person who has NEVER invested a thing go about gettin started?

Im talkin SMALL like maybe 100 er 200 a Month?

[QUOTE=8timechamps;3714471]



Oh yeah. I haven't even really researched anything yet, but something along the lines of EEM or IEMG, the Emerging Mkt ETFs from IShares. That second one has a very low expense ratio.

Not sure what the minimums are on those. (For Vet) Exchange Traded Funds, are much like mutual funds, but often have lower fees. You buy them thru a brokerage account like TD Ameritade, E-Trade, etc, just about like you'd buy a stock. The fund, though usually owns a basket of stocks, geared toward a specif area. Some just follow the Dow Jones average, the S&P average, or something like health care, technology, foreign countries. There's one for just about anything you could imagine, and be willing to invest in.

[pphilfran]

Nice few months for Apple...$500

[BieberFever]

WOW, not a single post in this forum since 2pm? Who runs this place

[SanJoaquinSooner]

WOW, not a single post in this forum since 2pm? Who runs this place

They're all busy beatin off to pics of Selena Gomez.

[BieberFever]

wonder if they need a hand..

[olevetonahill]

wonder if they need a hand..

If yer a Hot chick you can reach over here and Help me.

[8timechamps]

Rough week.

Even with the economy moving (slowly) there have been a high number of missed earnings (specifically in the retail industry), so I see some buying opportunities there as I still think retail has some steam left in it.

[8timechamps]

Nice few months for Apple...$500

No kidding.

It even had a nice little kick today. It's been a long time since they really shook the marketplace with anything, and there are some rumors that a "smartwatch" and the long anticipated "smartTV" are close to reality. Their annual iPhone reveal is about a month away, so that'll be interesting.

[olevetonahill]

wonder if they need a hand..

Ima still waitin on the HAND job.

[cleller]

These situations kinda drive me nuts. Should you wisely dollar average while it falls, or try to out-think (time) the market?

Of course, I'll fall into the old trap and wait a while longer. I worry a bunch of rich guys might decide they've made some good money, and are ready to cash out.

I did go ahead a plop just a little in a "rising dollar" ETF after reading the dollar should rise when the Fed finally stops QE.

[SanJoaquinSooner]

I have a large contribution going into my retirement account Monday or Tuesday, for extra work I did this summer.

I was hoping I would get lucky and a summer correction would hit at the same time. We're down just a couple percent from the highs .... better than nothing I guess.

[8timechamps]

These situations kinda drive me nuts. Should you wisely dollar average while it falls, or try to out-think (time) the market?

Of course, I'll fall into the old trap and wait a while longer. I worry a bunch of rich guys might decide they've made some good money, and are ready to cash out.

I did go ahead a plop just a little in a "rising dollar" ETF after reading the dollar should rise when the Fed finally stops QE.

Depends on when you plan to use the money. There's a real chance that there is more correction in the coming weeks, but I always see that as a buying opportunity. Waiting is not necessarily a bad thing, as long as you're not trying to time it.

Good move on the ETF. I've moved some of my personal money to the sidelines and I'm looking at treasuries. They are (slowly) on the rise, but I still am not sure what will happen when QE is over. I put the cash in VRPs for the time being, but that's got my allocation out of whack, so I won't wait too terribly long before pulling the trigger one way or the other.

Just remember, the "rich guys" (i.e. Buffet) don't move the markets. It's the fund managers you have to pay attention to, they're the market movers.

[8timechamps]

I have a large contribution going into my retirement account Monday or Tuesday, for extra work I did this summer.

I was hoping I would get lucky and a summer correction would hit at the same time. We're down just a couple percent from the highs .... better than nothing I guess.

Not a huge dip, but like you said; it's better than nothing!

[cleller]

Think the Fed will either start tapering off on the bond buying this fall, or wait to the first of the year? This claims it will help predict:

http://finance.yahoo.com/news/youll-know-wednesday-whether-not-120007730.html

For no reason in particular, my guess is they won't start it in Sept. Its been going on so long, what's a few more months? Plus, so many bad things happen in the fall.

Yet, if Bernanke is leaving this winter, he may want to start it before leaving. Then no one can say he ducked out when the going got tougher, since Ben is such a history buff.

[Killerbees]

AAPL looks good on the long term trend. Perfect fib retrace bottom. Starting 5th wave. Looks like 800+. Unless of course the market crashes first.

I dunno what the market overall is gonna do of course but I won't be surprised if we have further move downward before it starts to make a run for the high. Lots of support converging at 1580 to 1570 range, if it goes below that then I am worried. Don't really see it getting that low but I wouldn't bet on it not.

[hawaii 5-0]

I'm glad I got some more APPLsauce when it dipped below 400.

My best one lately has been LinkedIn (LNKD). More than doubled since I bought it.

I'm finally seeing my Facebook IPO venture about to come back. They can't all be winners. I just don't want all to be losers. Facebook was just a 'fun' investment anyway. No major exposure.

Lately I'm been buying more Coca Cola, Proctor & Gamble, General Mills and Nike. Just stuff that I know won't take big hits.

5-0

[8timechamps]

Think the Fed will either start tapering off on the bond buying this fall, or wait to the first of the year? This claims it will help predict:

http://finance.yahoo.com/news/youll-know-wednesday-whether-not-120007730.html

For no reason in particular, my guess is they won't start it in Sept. Its been going on so long, what's a few more months? Plus, so many bad things happen in the fall.

Yet, if Bernanke is leaving this winter, he may want to start it before leaving. Then no one can say he ducked out when the going got tougher, since Ben is such a history buff.

I'm not sure they even know when they'll cut it off. What I do believe is that the market will be hesitant to do anything until the fed makes a call one way or another.

Volume has been pretty light all around.

[8timechamps]

I'm glad I got some more APPLsauce when it dipped below 400.

My best one lately has been LinkedIn (LNKD). More than doubled since I bought it.

I'm finally seeing my Facebook IPO venture about to come back. They can't all be winners. I just don't want all to be losers. Facebook was just a 'fun' investment anyway. No major exposure.

Lately I'm been buying more Coca Cola, Proctor & Gamble, General Mills and Nike. Just stuff that I know won't take big hits.

5-0

I sold a very significant position in APPL (for myself and all but one of my clients) right when it hit $700. I looked like a hero, even though I was just profit taking. But hey, if they think I'm good, then that's good. :)

Seriously though, I put profits into Google (which wasn't much of a risk aversion technique) for myself and about half my clients. Now, I'm in a position with Google that I felt like I was with Apple when it hit $700. I'm not sure if I want to stay with it, or opportunity hunt.

Retail is a great place to look right now. It's been beaten up recently, but overall is an industry that will move forward.

I missed the LinkedIn boat, but that has been a good one. I stayed away from Facebook altogether, but it is starting to look like it may work out. One thing I noticed is that Facebook has really stepped up their advertising. Now, there are even ads in the home feed. I'm sure that was something the board saw as an opportunity to increase the bottom line, and it appears to be working.

[hawaii 5-0]

Seriously though, I put profits into Google (which wasn't much of a risk aversion technique) for myself and about half my clients. Now, I'm in a position with Google that I felt like I was with Apple when it hit $700. I'm not sure if I want to stay with it, or opportunity hunt.




I'm kinda embarrassed to admit I only own 5 (count 'em) shares of Google. At the time it just seemed too much and that was at around $450 per share. I guess some earnings are better than none.

5-0

[cleller]

So swamis, buying dip, or the start of something more drawn out? I didn't think the Syria thing was a legit threat, just talk.

Still not much in the mood for buying, want the tapering and interest rate picture to clear up.

8Timer, if you see this, do you have much of an opinion of Charles Biderman and Trim Tabs? I guess he's a regular on CNBC. I confess I put a small amount in the Float Shrink fund, despite its semi-high fees, a while back. I generally gravitate toward indexes, but you gotta have a few vices.

[pphilfran]

Don't fight the fed....

[8timechamps]

So swamis, buying dip, or the start of something more drawn out? I didn't think the Syria thing was a legit threat, just talk.

Still not much in the mood for buying, want the tapering and interest rate picture to clear up.

8Timer, if you see this, do you have much of an opinion of Charles Biderman and Trim Tabs? I guess he's a regular on CNBC. I confess I put a small amount in the Float Shrink fund, despite its semi-high fees, a while back. I generally gravitate toward indexes, but you gotta have a few vices.

I've always liked Biderman, although I've never used his TTFS. I don't see anything that would alarm me, or convince me to sell if I were in it. You pretty much know what the goal of the fund is, and you can measure the performance pretty easily. One thing I will say about Birderman is that he does tend to be a little bit of a "predictor", and I know that's attractive, but just be aware that he can be a little aggressive when he's timing his moves.

Right now, I think the whole Syria thing is having more affect on the market than the fed, but that (the fed) is still firmly on the mind of investors. The longer this Syria business is strung out, the harder it's going to be for the market to gain any traction. I also think that's not lost on the fed, and it could be enough to keep them at "status quo" for the time being.

Either way, I don't think we're looking at a massive pull back right now.

[8timechamps]

Surprise! The fed postpones.

On a better note, my favorite stock this year, McKesson (MCK) has been on a tear. Started the year at $97, closed today close to $132. I think there's still room left in it, and the first quarter of next year looks really good.

Anyone having success with anything?

[SanJoaquinSooner]

Surprise! The fed postpones.

On a better note, my favorite stock this year, McKesson (MCK) has been on a tear. Started the year at $97, closed today close to $132. I think there's still room left in it, and the first quarter of next year looks really good.

Anyone having success with anything?


everything I own has done well this year, except of a couple of thou I have in inflation-linked bonds. Just treaded water there.

[SanJoaquinSooner]

For Philfran and other re-balancers ....

Suppose your intended allocation is 70% stocks and 30% bonds. And this year stocks have boomed so that your portfolio is now disproportionally stocks.

Do you sell stocks now and buy bonds?

Conventional wisdom says bonds won't do very well with impending rising interest rates.

[8timechamps]

For Philfran and other re-balancers ....

Suppose your intended allocation is 70% stocks and 30% bonds. And this year stocks have boomed so that your portfolio is now disproportionally stocks.

Do you sell stocks now and buy bonds?

Conventional wisdom says bonds won't do very well with impending rising interest rates.

If you're holding true to you allocation, then yes, you need to re-allocate.

Remember, the first rule of investing (especially when it comes to re-balancing), is don't try to guess what the markets (in this case the bond market) will do. The philosophy is that the asset allocation is what drives returns, so don't get caught up in the individual asset classes.

[Skysooner]

Does anyone here trade foreign currency? I took 2 years training on a demo account and have been live about 6 months. Never had so much fun.

[8timechamps]

What's happening folks? Anyone having great success/bitter failure?

I decided to sell to open some May put contracts on MCK today. Strike price is at $125 (with a nice $6.80 bid). I'm bullish on the stock anyway, so I figure the worst that happens is I acquire more at about $118.

I should probably write more option contracts, but it's a very hard sell to most investors.

[pphilfran]

If you're holding true to you allocation, then yes, you need to re-allocate.

Remember, the first rule of investing (especially when it comes to re-balancing), is don't try to guess what the markets (in this case the bond market) will do. The philosophy is that the asset allocation is what drives returns, so don't get caught up in the individual asset classes.

This

[pphilfran]

What's happening folks? Anyone having great success/bitter failure?

I decided to sell to open some May put contracts on MCK today. Strike price is at $125 (with a nice $6.80 bid). I'm bullish on the stock anyway, so I figure the worst that happens is I acquire more at about $118.

I should probably write more option contracts, but it's a very hard sell to most investors.
I am laying low

[8timechamps]

I am laying low

Real low. Haven't seen you in a while.

Hope things are good your way.

[hawaii 5-0]

I'm with pphilfan. Laying low.

I wanna see how the deficit battle affects the Stock market.

Got some kala (cash) ready for the right time.

5-0

[pphilfran]

Randy Martin newsletter....he always has an interesting take and is reasonably accurate....I don't have any money with the guy but he still sends me a quarterly update...

Hello, everyone. Hope you are well and at peace this early fall. This summer I vacationed in beautiful, cool, peaceful Maine and loved it. As always, I am following markets and staying on top of our rapidly-changing investment landscape.
The purpose of this newsletter is to generate discussion and questions about this exciting subject in which we all have an interest. Societal and market trends have major implications for the investments we all make. Also, it puts in your hand a great tool to forward to your friends and relatives. If a friend is forwarding this to you and you want your own copy, just email me – your email address stays with me. It’s an honor to do business with all of you.
Warm regards, Randy Sept. 27, 2013


Stocks have always moved roughly together around the world. Japan in the 1990s was an exception as its stocks collapsed while the rest of the world enjoyed a bull market. In this newsletter, we often use the S&P500 as a proxy for global stocks because it is 80% of US market capitalization, the US is the world’s largest market at 30% of global market cap, and our American readers relate well to it.

Stocks disconnected from fundamentals months ago. Markets overshoot. Amateur investors felt the allure of easy profits and bought high in 2011-13 after the fabulous rally from the March 6, 2009 S&P500 bottom at 666, when we were buying Asian stocks as they sank. The Sept. 18, 2013 record-high S&P500 close at 1,726 may turn out to be the ultimate top before the third, final leg down of the long-term bear market that began March 2000. The decline will extend the US’s current deflationary economic winter in the synchronized global downturn we have fully anticipated. It will complete the inevitable cleansing of:

• stock market excesses of March 2000, October 2007, and today;
• belief in residential real estate as an investment. Housing entered a bear market after its 2005-06 bubble top and has recently rallied into a near bubble; and
• Treasury bond, Federal Reserve, state/local government, and other debt excesses. Unprecedented fiscal and monetary “stimuli” are anti-growth. Real GDP growth is the slowest of any expansion since 1948 and was a paltry 1.6% in the four quarters through 13q2, even less than the 1.8% of the 2000s. The US has no easy way out of high/rising debt and faces a difficult choice. Austerity is coming either way: (1) politicians cut spending to stop debt growing more rapidly than GDP, an unlikely move that would bring a deep recession or (2) the bond market stops buying Treasuries about 2015-17 (estimate subject to revision) bringing big spending cuts.

Many investors accept that, on current trends, a fiscal crisis is inevitable but expect its arrival way out in the 2030s. They are concerned about their kids but the crowd has never gotten it right and their own lives will be altered in the coming unsettled period that will not be good for stocks or bonds.

Jim Rogers’ excellent 2013 Street Smarts agrees on page 138. Discussing US debt, he says: “Sometime in this decade the whole system is going to collapse.” That would be by the end of 2019, in just 6.3 years – at the latest.

The 10-year Treasury interest rate is 2.7%, up from its 1.4% low in July 2012. A rise to about 5% would signal that the US has entered a classic debt spiral. The inability to sell new Treasury bonds would then likely arrive within two years because the average maturity of Treasury debt is just 5 years. The market would cut excess federal spending by about 30% to equal revenues.

“Inflating our way out” is no solution. Argentina and Weimar Germany suffered. You can’t inflate your way out of short-term debt – rates rise with inflation. Money printing has never led to prosperity, always to difficult times, and the world has never experienced coordinated money printing on the current scale. The Bank of England, European Central Bank, Bank of Japan, and Federal Reserve are printing “unlimited” amounts. The Fed recently said it will scale back but its $85b a month bond buying continues. The US economy is like a drunk on a binge – the more alcohol consumed, the worse the hangover.

[pphilfran]

Is it time to buy/ I am guessing when the debt limit resolution is reached the market will react positively...

And the limit will get resolved...

[diverdog]

Randy Martin newsletter....he always has an interesting take and is reasonably accurate....I don't have any money with the guy but he still sends me a quarterly update...

Hello, everyone. Hope you are well and at peace this early fall. This summer I vacationed in beautiful, cool, peaceful Maine and loved it. As always, I am following markets and staying on top of our rapidly-changing investment landscape.
The purpose of this newsletter is to generate discussion and questions about this exciting subject in which we all have an interest. Societal and market trends have major implications for the investments we all make. Also, it puts in your hand a great tool to forward to your friends and relatives. If a friend is forwarding this to you and you want your own copy, just email me – your email address stays with me. It’s an honor to do business with all of you.
Warm regards, Randy Sept. 27, 2013


Stocks have always moved roughly together around the world. Japan in the 1990s was an exception as its stocks collapsed while the rest of the world enjoyed a bull market. In this newsletter, we often use the S&P500 as a proxy for global stocks because it is 80% of US market capitalization, the US is the world’s largest market at 30% of global market cap, and our American readers relate well to it.

Stocks disconnected from fundamentals months ago. Markets overshoot. Amateur investors felt the allure of easy profits and bought high in 2011-13 after the fabulous rally from the March 6, 2009 S&P500 bottom at 666, when we were buying Asian stocks as they sank. The Sept. 18, 2013 record-high S&P500 close at 1,726 may turn out to be the ultimate top before the third, final leg down of the long-term bear market that began March 2000. The decline will extend the US’s current deflationary economic winter in the synchronized global downturn we have fully anticipated. It will complete the inevitable cleansing of:

• stock market excesses of March 2000, October 2007, and today;
• belief in residential real estate as an investment. Housing entered a bear market after its 2005-06 bubble top and has recently rallied into a near bubble; and
• Treasury bond, Federal Reserve, state/local government, and other debt excesses. Unprecedented fiscal and monetary “stimuli” are anti-growth. Real GDP growth is the slowest of any expansion since 1948 and was a paltry 1.6% in the four quarters through 13q2, even less than the 1.8% of the 2000s. The US has no easy way out of high/rising debt and faces a difficult choice. Austerity is coming either way: (1) politicians cut spending to stop debt growing more rapidly than GDP, an unlikely move that would bring a deep recession or (2) the bond market stops buying Treasuries about 2015-17 (estimate subject to revision) bringing big spending cuts.

Many investors accept that, on current trends, a fiscal crisis is inevitable but expect its arrival way out in the 2030s. They are concerned about their kids but the crowd has never gotten it right and their own lives will be altered in the coming unsettled period that will not be good for stocks or bonds.

Jim Rogers’ excellent 2013 Street Smarts agrees on page 138. Discussing US debt, he says: “Sometime in this decade the whole system is going to collapse.” That would be by the end of 2019, in just 6.3 years – at the latest.

The 10-year Treasury interest rate is 2.7%, up from its 1.4% low in July 2012. A rise to about 5% would signal that the US has entered a classic debt spiral. The inability to sell new Treasury bonds would then likely arrive within two years because the average maturity of Treasury debt is just 5 years. The market would cut excess federal spending by about 30% to equal revenues.

“Inflating our way out” is no solution. Argentina and Weimar Germany suffered. You can’t inflate your way out of short-term debt – rates rise with inflation. Money printing has never led to prosperity, always to difficult times, and the world has never experienced coordinated money printing on the current scale. The Bank of England, European Central Bank, Bank of Japan, and Federal Reserve are printing “unlimited” amounts. The Fed recently said it will scale back but its $85b a month bond buying continues. The US economy is like a drunk on a binge – the more alcohol consumed, the worse the hangover.

Did I turn you on to Randy? We were suppose to meet up in Maine but I ended up climbing a mountain instead. He stays about 5 miles from where I go in Maine. We correspond sometimes and we both have interest in France and Maine.

[pphilfran]

Did I turn you on to Randy? We were suppose to meet up in Maine but I ended up climbing a mountain instead. He stays about 5 miles from where I go in Maine. We correspond sometimes and we both have interest in France and Maine.

Nope....A guy named Kenny sent me the initial report....I have been getting them for a couple of years...I always enjoy his newsletters....

[diverdog]

Nope....A guy named Kenny sent me the initial report....I have been getting them for a couple of years...I always enjoy his newsletters....

Thanks. I remember sending them to a bunch of SI posters. He has really helped me.

[8timechamps]

Is it time to buy/ I am guessing when the debt limit resolution is reached the market will react positively...

And the limit will get resolved...

Agreed.

[SanJoaquinSooner]

Randy Martin newsletter....he always has an interesting take and is reasonably accurate....I don't have any money with the guy but he still sends me a quarterly update...

Hello, everyone. Hope you are well and at peace this early fall. This summer I vacationed in beautiful, cool, peaceful Maine and loved it. As always, I am following markets and staying on top of our rapidly-changing investment landscape.
The purpose of this newsletter is to generate discussion and questions about this exciting subject in which we all have an interest. Societal and market trends have major implications for the investments we all make. Also, it puts in your hand a great tool to forward to your friends and relatives. If a friend is forwarding this to you and you want your own copy, just email me – your email address stays with me. It’s an honor to do business with all of you.
Warm regards, Randy Sept. 27, 2013


Stocks have always moved roughly together around the world. Japan in the 1990s was an exception as its stocks collapsed while the rest of the world enjoyed a bull market. In this newsletter, we often use the S&P500 as a proxy for global stocks because it is 80% of US market capitalization, the US is the world’s largest market at 30% of global market cap, and our American readers relate well to it.

Stocks disconnected from fundamentals months ago. Markets overshoot. Amateur investors felt the allure of easy profits and bought high in 2011-13 after the fabulous rally from the March 6, 2009 S&P500 bottom at 666, when we were buying Asian stocks as they sank. The Sept. 18, 2013 record-high S&P500 close at 1,726 may turn out to be the ultimate top before the third, final leg down of the long-term bear market that began March 2000. The decline will extend the US’s current deflationary economic winter in the synchronized global downturn we have fully anticipated. It will complete the inevitable cleansing of:

• stock market excesses of March 2000, October 2007, and today;
• belief in residential real estate as an investment. Housing entered a bear market after its 2005-06 bubble top and has recently rallied into a near bubble; and
• Treasury bond, Federal Reserve, state/local government, and other debt excesses. Unprecedented fiscal and monetary “stimuli” are anti-growth. Real GDP growth is the slowest of any expansion since 1948 and was a paltry 1.6% in the four quarters through 13q2, even less than the 1.8% of the 2000s. The US has no easy way out of high/rising debt and faces a difficult choice. Austerity is coming either way: (1) politicians cut spending to stop debt growing more rapidly than GDP, an unlikely move that would bring a deep recession or (2) the bond market stops buying Treasuries about 2015-17 (estimate subject to revision) bringing big spending cuts.

Many investors accept that, on current trends, a fiscal crisis is inevitable but expect its arrival way out in the 2030s. They are concerned about their kids but the crowd has never gotten it right and their own lives will be altered in the coming unsettled period that will not be good for stocks or bonds.

Jim Rogers’ excellent 2013 Street Smarts agrees on page 138. Discussing US debt, he says: “Sometime in this decade the whole system is going to collapse.” That would be by the end of 2019, in just 6.3 years – at the latest.

The 10-year Treasury interest rate is 2.7%, up from its 1.4% low in July 2012. A rise to about 5% would signal that the US has entered a classic debt spiral. The inability to sell new Treasury bonds would then likely arrive within two years because the average maturity of Treasury debt is just 5 years. The market would cut excess federal spending by about 30% to equal revenues.

“Inflating our way out” is no solution. Argentina and Weimar Germany suffered. You can’t inflate your way out of short-term debt – rates rise with inflation. Money printing has never led to prosperity, always to difficult times, and the world has never experienced coordinated money printing on the current scale. The Bank of England, European Central Bank, Bank of Japan, and Federal Reserve are printing “unlimited” amounts. The Fed recently said it will scale back but its $85b a month bond buying continues. The US economy is like a drunk on a binge – the more alcohol consumed, the worse the hangover.


There have been lots of financial gurus who made a call and nailed it - such as Joseph Granville called the huge drop
in the market (20% in a single day) in 1987. It made him Babe Ruth famous for a few years, but he tried calling major market corrections many times over and was wrong every other time.

Same can be said for Meredith Whitney, who called the 2008 "crash" but missed big calls since, such as her call on 100s of billions lost on defaults of municipal bonds within 12 months (back in 2010). But she's kinda famous for being sexy good looking too, so many of us don't mind that she's wrong.

Lots of examples like this.

So here we have Jim Rogers (not sexy good looking) , who became mega-rich by calling a boom in international markets back in 1980, is now predicting the stone ages for the financial world, and that farmers will be the kings while the rest of us will be paupers. Make sure you buy the farm well before 2020.

[cleller]

We bought some land here in Oklahoma in 1999. (built a house and moved out about 4 years ago) At that time farmland prices had been pretty stable and low for over 25 years. Since 1999 farmland has about tripled in value around here.

Drives me crazy wishing I had put every penny in cash I had into land. I still feel like it would be a stable investment, but bargains are sure hard to find.

With good farmland shooting from $2000 to $10,000 per acre in the last decade in the farm belt of Iowa, its only makes sense that it would go up in Oklahoma, too. I've read that younger farmers are getting pushed out up there, and are trying to find land in Kansas these days.

I guess with a lot of work Oklahoma land could be fair farmland, but imagine here the value is up more for the beef industry. We've got some cow/calf pairs, but to make any money you've really got to dedicate yourself to it.

One side-question: has the drop in the big insurers been overdone? I had an old favorite, ProAssurance (PRA) that hit a trailing stop and sold over the summer. Its now 20% off its highs.

[pphilfran]

There have been lots of financial gurus who made a call and nailed it - such as Joseph Granville called the huge drop
in the market (20% in a single day) in 1987. It made him Babe Ruth famous for a few years, but he tried calling major market corrections many times over and was wrong every other time.

Same can be said for Meredith Whitney, who called the 2008 "crash" but missed big calls since, such as her call on 100s of billions lost on defaults of municipal bonds within 12 months (back in 2010). But she's kinda famous for being sexy good looking too, so many of us don't mind that she's wrong.

Lots of examples like this.

So here we have Jim Rogers (not sexy good looking) , who became mega-rich by calling a boom in international markets back in 1980, is now predicting the stone ages for the financial world, and that farmers will be the kings while the rest of us will be paupers. Make sure you buy the farm well before 2020.

Mr. Bow Tie...he made his initial fortune with Soros and the Quantum Fund...the fund was up over 4000% in ten years...not too shabby...

He and some chick with a long pony tail road BMW motorcycles around the world...they road across or around every continent other than Antarctica....It was an amazing trip, nearly two years...he wrote a book about the trip, Investment Biker, it is pretty dry but gave a good take on a lot of issues....he was bullish on China...very bullish...when he was coming up South America he found out the guy running his finances was screwing him to death....he ended up finishing the trip....

[SanJoaquinSooner]

Mr. Bow Tie...he made his initial fortune with Soros and the Quantum Fund...the fund was up over 4000% in ten years...not too shabby...

He and some chick with a long pony tail road BMW motorcycles around the world...they road across or around every continent other than Antarctica....It was an amazing trip, nearly two years...he wrote a book about the trip, Investment Biker, it is pretty dry but gave a good take on a lot of issues....he was bullish on China...very bullish...when he was coming up South America he found out the guy running his finances was screwing him to death....he ended up finishing the trip....

That's it. He made so much money with the international fund, he can afford to be wrong for the rest of his life.

[cleller]

Yet when you watch Jim Rogers, he sounds so convincing, that's what gives me pause.

He is so into all this Myanmmar (however you spell Burma now) investment stuff, I perk my ears everytime I hear anything about it. The articles he did driving around the world in some behemoth SUV for Money magazine 15-20 years ago were interesting, would like to see how his predictions played out.

[hawaii 5-0]

Watching Google today? Up over 100 points, pushing $1000 per share.

Wowsers !!



(Edit) When the market closed Google finished at $ 1,011. 122 points in one day.


5-0

[SanJoaquinSooner]

Watching Google today? Up over 100 points, pushing $1000 per share.

Wowsers !!



(Edit) When the market closed Google finished at $ 1,011. 122 points in one day.


5-0

That's splains why my Fidelity Contrafund jumped 1.72% today. Google is its number one holding.

I'll be able to pay my son's tuition next quarter.

[8timechamps]

That's splains why my Fidelity Contrafund jumped 1.72% today. Google is its number one holding.

I'll be able to pay my son's tuition next quarter.

I didn't realize they had such a big position in Google. It's their top holding, by far.

[SanJoaquinSooner]

"This is a secular bull that has at least another 10, 15 years to run."


-- Ralph Acampora

[8timechamps]

Wrote a bunch of option contracts today, including several for Google. Since I missed out on the actual stock, I'm going to try and make some of it up this way.

Still having success in McKesson (both in my positions and options), but starting to look elsewhere, simply because I'm not sure how long they will continue this run.

[I Am Right]

Nope still buying

[hawaii 5-0]

McKesson up $7 today.

Sweet.


5-0

[8timechamps]

McKesson up $7 today.

Sweet.


5-0

Just finished reading a report that projected a 12%-15% growth in the next 12 months. The way the stock has moved, I'm having difficulty seeing it continue to move at the same pace, but then I look at their marketplace and there is NOBODY that does what they do, in the manner they do it. They are pretty amazing.

[cleller]

The way this market keeps chugging along makes me afraid to stop for a shoe shine.

[SanJoaquinSooner]

The way this market keeps chugging along makes me afraid to stop for a shoe shine.

it's a Teflon bull market for now. It kept going up even when Dean bought stocks.

[SanJoaquinSooner]

IPO twitter @ $26/share. Any guesses on the 12 month high and low over the next year?

[hawaii 5-0]

I'm terrible at predictions of that sort but I predict it will go up.

5-0

[SanJoaquinSooner]

I'm terrible at predictions of that sort but I predict it will go up.

5-0

I don't expect it to have the extremes of Facebook, which opened at 38, dropped to 18 a few months later, it a high a 54 about 15 months later, and is now at 49.

I'll guess twitter will range between 20 and 36.

[hawaii 5-0]

Last I looked it was $45 - $47 and it's still not even selling yet.

I'll be more prudent this time and let the smoke clear.

It took quite awhile to make a profit from the Facebook IPO frenzy.

Google on the other hand took off and never looked back.

Meanwhile alot of other stocks are down and a good chance to buy.

5-0

[hawaii 5-0]

OK, I broke down and bought some at $48.

We'll see.......

5-0

[SanJoaquinSooner]

I was already wrong at t = 0 days on the market!

[hawaii 5-0]

I refuse to put much $$$ in the more volatile stacks. I just don't need the stress.

They're what I call my 'fun stocks' Fun-sized. More are high tech or medical research type stuff. Looking for the 'next big thing' or a cure for cancer, heart disease or diabetes.

5-0

[SanJoaquinSooner]

Year-end melt-up, here we come

[hawaii 5-0]

Dips = Buying Opportunities.

5-0