Stock market thoughts?

[ja_user]

I’ll bet it works roughly half the time!

That’s optimistic

 

[PaulS]

IBTL

 

[FastEddieB]

It works half of the time, most of the time!

More than that, if you remember the hits and forget the misses!

 

[wsuffa]

Already, less than half the population isn't paying any federal income tax; so how are you going to boost their buying power by cutting their taxes?

Tax credits. Outright redistribution of wealth.

 

[ircphoenix]

Here are my personal beliefs on the economic/taxation front.

Taxation is a necessary evil. Nobody likes them or wants to pay them.

Those with the most can stand heavier taxation than those with the least. Once you account for basic staple items and housing, those at the bottom have less discretionary income than those at the top. If 1000 people want TVs but can't afford them, but I can buy 1000 TVs... those 1000 people will stimulate the economy far more than I can, because I'm not going to buy 1000 TVs. The real job creators, in my humble opinion, are the people who are buying stuff. There's a certain limit at which wealth gets accrued for the sake of wealth itself which doesn't stimulate anything. I don't pretend to know what that limit is, but it definitely exists.

And you're not going to convince me otherwise, just as I don't expect to convince you of otherwise. It is my opinion, and that is worth far less than the time you just spent reading it. You're welcome.


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[Eric Stoltz]

Here are my personal beliefs on the economic/taxation front.

Taxation is a necessary evil. Nobody likes them or wants to pay them.

Those with the most can stand heavier taxation than those with the least. Once you account for basic staple items and housing, those at the bottom have less discretionary income than those at the top. If 1000 people want TVs but can't afford them, but I can buy 1000 TVs... those 1000 people will stimulate the economy far more than I can, because I'm not going to buy 1000 TVs. The real job creators, in my humble opinion, are the people who are buying stuff. There's a certain limit at which wealth gets accrued for the sake of wealth itself which doesn't stimulate anything. I don't pretend to know what that limit is, but it definitely exists.

And you're not going to convince me otherwise, just as I don't expect to convince you of otherwise. It is my opinion, and that is worth far less than the time you just spent reading it. You're welcome.


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I share your opinion. You're not alone

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[ircphoenix]

I share your opinion. You're not alone

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And if you didn't agree, I wouldn't call you names. I'd say that I acknowledge that there's a difference of opinion, and that I still can chat it up without thinking you're a horrible person for not immediately acquiescing to my opinions! I feel like that's a lost art.

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[GRG55]

For the past several years friends of mine in the financial industry have been predicting a crash...

The next crash/depression is coming in two years, per my boss. If anyone would know, its him.

That was what people who were "in the know" said 2 years ago to me.

Bingo! Seems to be an entire industry of doomers predicting the next crash. Crash in the US Dollar. Crash in the bond market. Crash in the stock market. Crash in the real estate market. Crash in precious metals. Seems there's enough doomers out there peddling newletters, doing interviews and publishing crap on the net to create a new cult or three. Seems to have been amplified 1000+ times with the advent of social media, Bubblevision, Presidential Twitters and internet self publishing. The noise habitually drowns out the signal these days.

If you bring up a chart showing the dow, the father you zoom out the scale 1w/1m/6m/1year/2yrs/etc the more you see the overall trend has always been up. Sometimes there are pretty big dips but it always comes back...
...Patience seems to be the name of the game.

Patience and a prudent investment portfolio that is intelligently re-balanced periodically has worked for a very long time. And despite all the nonsense about Japan in the late 1980s and China today, betting against the US economy has never seemed good odds to me.

Will a bear stock market cause used aircraft prices to fall?

As @hindsight2020 points out, airplanes are discretionary expenditures. What correlates to prices for toys are job and income security. At this time unemployment is at record lows, the economy is generating jobs for those people with appropriate skills, and only a material change in job security and the ability to service debt is going to change discretionary income choices. That might be further off than some expect.

 

[ja_user]

The same people trying to call the highs and lows, also pay attention to the big board at the Roulette table.

 

[Clip4]

It’s usually a safe bet to dip your toe when the market forms a double bottom.

Back in the old days that was referred to as a dead cat bounce.

 

[ja_user]

Taxation is Theft

 

[Eric Stoltz]

Taxation is justifiable theft.

 

[tspear]

Bingo! Seems to be an entire industry of doomers predicting the next crash. Crash in the US Dollar. Crash in the bond market. Crash in the stock market. Crash in the real estate market. Crash in precious metals. Seems there's enough doomers out there peddling newletters, doing interviews and publishing crap on the net to create a new cult or three. Seems to have been amplified 1000+ times with the advent of social media, Bubblevision, Presidential Twitters and internet self publishing. The noise habitually drowns out the signal these days.





Patience and a prudent investment portfolio that is intelligently re-balanced periodically has worked for a very long time. And despite all the nonsense about Japan in the late 1980s and China today, betting against the US economy has never seemed good odds to me.

View attachment 70165



As @hindsight2020 points out, airplanes are discretionary expenditures. What correlates to prices for toys are job and income security. At this time unemployment is at record lows, the economy is generating jobs for those people with appropriate skills, and only a material change in job security and the ability to service debt is going to change discretionary income choices. That might be further off than some expect.

A fair number of economists said we were within a year of a recession in late 2017. From what I recall, a super majority said the tax cut a year ago pushed the recession out 18 months, which matches what most are saying now, slow down in 2019 with a recession in 2020.

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[tspear]

This is the first year I've lost money overall in stocks. Not a lot, but some. My losses used to be limited to individual stocks that I knew were risky, but that I took a chance on anyway. A few of those I bought, sat on for years, and sold at or near basis, only for them to skyrocket after I sold them. Others became worthless while I held them. But this is the first year that even my "safe" stocks lost money.

I'm actually pretty bearish on equities right now. I think the early bumps immediately after the 2016 elections were anticipatory of promised tax cuts and regulatory load-lightening, and the later bumps due to those changes being implemented. But they were exaggerated. Inflation-adjusted real income for most Americans is still pretty stagnant, while costs keep climbing (especially in the areas of health care and education).

Speaking of education, Millennials also face very tough challenges due to heavy student loan burdens, which I tend to blame more on the Higher Education Industry than anything else. Lenders don't set the tuition rates. Schools do: and those costs have spiraled exponentially and way out of proportion to the overall inflation rate over the past two generations. (The fact that the Higher Education Industry is doing its best to make Bachelors degrees worthless for anything other than attending grad school doesn't help matters, either.)

The market consequence is that young adults who in previous generations would be buying all kinds of stuff to set up housekeeping on their own are instead living in their parents' basements and buying nothing. That student loans can take decades to pay off doesn't bode well for consumer spending.

I've set limit orders on most of my stocks and have already sold some. I'm looking at bonds and metals more than equities right now. I also have moved some money to my Money Market account at Sallie Mae. It's presently paying 2.2 percent, which isn't great, but is unquestionably safe and fully liquid.

Rich

Most of the increases in higher Education costs come from two factors only. Healthcare and reductions in state and local spending on higher Education. I have watched the state level spending for colleges decline as a ratio or absolute value every year for decades wherever I lived.
My parents are retired professors, and my brothers father in law was on the board of trustees for a college and a state university. I got to see the numbers first hand.

Tim

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[flyingcheesehead]

My Tesla story...

A while back, my son was starting to show some interest in the stock market. At the same time, he thought the Tesla roadster looked kind of cool. So, putting the two together, I bought him 5 shares of Tesla...at $20 a share. Too bad I'm such a cheap dad!

A friend of my brother's was a real Apple fanboy and kept asking for Apple stock for Christmas and his birthday. This was back when the price was about $16/share, and also about 7 splits ago.

About 10 years ago, he graduated from college, sold most of his accumulated Apple stock and bought a house with cash.

I sure wish I'd bought a share or two back then...

 

[RJM62]

Already, less than half the population isn't paying any federal income tax; so how are you going to boost their buying power by cutting their taxes?

It's actually about 44.4 percent. Of that number, about 40 percent are retirees; so the percentage of people who still work but who pay no income tax is about 26.6 percent.

That's actually a much lower percentage than when the income tax was implemented in 1914, when the tax rate on income under $20,000 / year ($493,048 in today's dollars) was 1 percent; but there was a $3,000.00 personal exemption ($73,957 in today's dollars) and an average annual income of $693.87 (about $16,936.20 in today's dollars). So a person in 1914 would have to earn more than four times the average annual income before they had any federal income tax obligation at all.

That was by design. The income tax had been sold to the people as more of a luxury tax; and in retrospect, I think that was a wise decision. Ideology aside, the bulk of income of those in the higher income levels derives from purchases made by people in the lower income levels. That's not a philosophical or political statement. It's just the way it is. There are more poor, working-class, and middle-class people than there are wealthy people; and collectively, they buy more stuff.

Inasmuch as today's U.S. economy is even more driven by domestic consumption than it was in 1914, purchases by the poor, working-class, and middle-class are quite literally the source of all of our wealth, and therefore of most of the taxes we pay on that wealth. Considered in that way, there's really no one in America who pays no income tax. They just pay it as a percentage of the purchase prices of the stuff they buy rather than directly to Uncle.

That's why I stopped grumbling about the apparent disparity in taxation, and why I no longer believe in a "flat tax" or a "fair tax." The people on the lower end of the socioeconomic spectrum drive the economy by their purchases. That's their contribution. Furthermore, the less they pay in taxes, the more they can spend on stuff; and as a capitalist, that's what I want. I want them to buy the stuff sold by the companies whose shares I own.

Yeah, if the tax system were even more progressive than it is now (or even more so if there were a direct transfer of wealth to the poor by way of a tax credit or guaranteed national income), it would mean that I'd pay more tax. But a lot of it would be tax on money that I wouldn't otherwise have because it would represent profit from purchases that people wouldn't otherwise have made. It's better for me as a shareholder if people use their money to buy stuff than if they use it to pay taxes.

So in summary, as I said earlier, this is one area in which my ideological leanings had to yield to pragmatic considerations. For better or worse, ours is a domestic consumer-driven economy; and therefore, it's in the interest of both the economy in general and shareholders' interests in particular that consumers have as much buying power as possible. If that means that 75 percent of Americans pay no income tax at all directly to Uncle, so be it. I'll pay it for them from my earnings derived from their purchases.

That's not a political or ideological position. It's just enlightened self-interest.

Rich

 

[RJM62]

Most of the increases in higher Education costs come from two factors only. Healthcare and reductions in state and local spending on higher Education. I have watched the state level spending for colleges decline as a ratio or absolute value every year for decades wherever I lived.
My parents are retired professors, and my brothers father in law was on the board of trustees for a college and a state university. I got to see the numbers first hand.

Tim

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I can buy the reductions in government spending, but not the health care costs. Increases in health care costs affect every other business, as well; and no other industry's prices have risen as steeply as those of the Higher Education Industry.

One thing that would help would be moving toward a system like that of the UK, where most professions, including medicine, require only highly-specialized Bachelors degrees. Masters degrees are basically meaningless and are routinely granted to most Bachelors degree holders if they manage to stay out of jail for five years; and Doctorates are optional and are earned mainly by those who want to either teach, do research, or specialize. A Brit with a Bachelor of Medicine degree can practice medicine for the rest of their life without ever setting foot in a grad school, if that's what they want to do.

Unfortunately, the trend in the United States is exactly the opposite. More and more fields that never required college at all now require Bachelors degrees; and many field that used to require only highly-specialized Bachelors degrees (for example, pharmacy) now require Masters degrees or even Doctorates. That shift benefits only the Higher Education Industry, not the students nor society at large.

Rich

 

[Chip Sylverne]

Yup, and I've noticed the biggest changes in durable goods over the past decade. My loaded-to-the-gills '08 Ford F-150 Lariat had a sticker price of $42K back in '08 (bought at $30K during the recession). Same truck exists today (10-yrs later) as a Platinum which has a base sticker price of $54K and can go higher. A $12K increase in price over 10 years for a truck that, outside of a few tech features and newer engine/transmission platform, is almost identical. I wouldn't likely balk too much if the increase was $5K-$6K. So, as a consumer, I can't stomach paying such an exorbitant amount for a truck (could barely stomach the original $30K, but it's proven to be a great truck). So, instead of buying a truck and contributing to the economy I keep my old truck which is nearing the 150K mark. Similar things have happened with other durable goods (washer/dryer/fridge/etc.) Prices have gone up quite a bit, so people have started to keep their sets longer or buy used.

Trucks have been protected by a 25% tariff on imported competition first placed in 1964. Arguably why you can't find a reasonably priced truck anymore. Now add that 25% onto a buttload of imported goods and, well, it ain't gonna help consumption much.

The real indicator of the direction of the stock market is the bond market. Short rates are about equal to long(er) rates, meaning the 2and 5 year. Flat yield curve. So bankers are going to be taking loan money off the table. It's been said the stock market is the tail of the dog. The bond market is the dog.

 

[JOhnH]

Already, less than half the population isn't paying any federal income tax; so how are you going to boost their buying power by cutting their taxes?

The people that bought my veterinary practice 3 years ago benefited from the tax cuts so much that they gave all of their employees a mid year raise PLUS a bonus. Plus, they now employ 2 more people than the practice did when I sold it.

 

[tspear]

I can buy the reductions in government spending, but not the health care costs. Increases in health care costs affect every other business, as well; and no other industry's prices have risen as steeply as those of the Higher Education Industry.

One thing that would help would be moving toward a system like that of the UK, where most professions, including medicine, require only highly-specialized Bachelors degrees. Masters degrees are basically meaningless and are routinely granted to most Bachelors degree holders if they manage to stay out of jail for five years; and Doctorates are optional and are earned mainly by those who want to either teach, do research, or specialize. A Brit with a Bachelor of Medicine degree can practice medicine for the rest of their life without ever setting foot in a grad school, if that's what they want to do.

Unfortunately, the trend in the United States is exactly the opposite. More and more fields that never required college at all now require Bachelors degrees; and many field that used to require only highly-specialized Bachelors degrees (for example, pharmacy) now require Masters degrees or even Doctorates. That shift benefits only the Higher Education Industry, not the students nor society at large.

Rich

The healthcare costs have a disproportionate effect because of a few factors.
1. The average age of staff is increasing faster than the general population.
2. The staff to "customers" is higher than almost any other industry. Staff is the largest cost center, by far.
3. Most universities are self insured, point 1 therefore has a disproportionate effect.

Tim

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[wsuffa]

It's actually about 44.4 percent. Of that number, about 40 percent are retirees; so the percentage of people who still work but who pay no income tax is about 26.6 percent.

That's actually a much lower percentage than when the income tax was implemented in 1914, when the tax rate on income under $20,000 / year ($493,048 in today's dollars) was 1 percent; but there was a $3,000.00 personal exemption ($73,957 in today's dollars) and an average annual income of $693.87 (about $16,936.20 in today's dollars). So a person in 1914 would have to earn more than four times the average annual income before they had any federal income tax obligation at all.

That was by design. The income tax had been sold to the people as more of a luxury tax; and in retrospect, I think that was a wise decision. Ideology aside, the bulk of income of those in the higher income levels derives from purchases made by people in the lower income levels. That's not a philosophical or political statement. It's just the way it is. There are more poor, working-class, and middle-class people than there are wealthy people; and collectively, they buy more stuff.

Inasmuch as today's U.S. economy is even more driven by domestic consumption than it was in 1914, purchases by the poor, working-class, and middle-class are quite literally the source of all of our wealth, and therefore of most of the taxes we pay on that wealth. Considered in that way, there's really no one in America who pays no income tax. They just pay it as a percentage of the purchase prices of the stuff they buy rather than directly to Uncle.

That's why I stopped grumbling about the apparent disparity in taxation, and why I no longer believe in a "flat tax" or a "fair tax." The people on the lower end of the socioeconomic spectrum drive the economy by their purchases. That's their contribution. Furthermore, the less they pay in taxes, the more they can spend on stuff; and as a capitalist, that's what I want. I want them to buy the stuff sold by the companies whose shares I own.

Yeah, if the tax system were even more progressive than it is now (or even more so if there were a direct transfer of wealth to the poor by way of a tax credit or guaranteed national income), it would mean that I'd pay more tax. But a lot of it would be tax on money that I wouldn't otherwise have because it would represent profit from purchases that people wouldn't otherwise have made. It's better for me as a shareholder if people use their money to buy stuff than if they use it to pay taxes.

So in summary, as I said earlier, this is one area in which my ideological leanings had to yield to pragmatic considerations. For better or worse, ours is a domestic consumer-driven economy; and therefore, it's in the interest of both the economy in general and shareholders' interests in particular that consumers have as much buying power as possible. If that means that 75 percent of Americans pay no income tax at all directly to Uncle, so be it. I'll pay it for them from my earnings derived from their purchases.

That's not a political or ideological position. It's just enlightened self-interest.

Rich

A couple of points and I'll leave it.

1) given our current retirement system, with 401Ks and the like, a lot of the income in retirement is subject to taxation. So working or not has little bearing on the tax equation. Outside of the 401K (and similar) plans, there's still tax on investment income. So that part of the discussion is more complex than your statistics allude to. But that's statistics for you...
2) IMHO, the real issue is wealth disparity, not income. Income taxation is a poor proxy for wealth inequity because portions of wealth holdings go untaxed until they are sold for capital gain. Even cranking up income tax to 100% of income for wealth folks won't change that. All income tax does is slow the accumulation of wealth. If one is wealthy and owns a $50 million dollar ranch, the only tax on the ranch will be state/local property tax. That $50 million remains out of circulation and does little to help either the economy or folks other than the ranch hands. One would be taxed on the income generated by the wealth - capital gains or dividends - but could still live quite well on wealth without generating any income (and I submit that the self-interest of such a person would be to spend as little as possible in order to stretch out the wealth).
3) income tax on capital gains and dividends are a different matter. Without capital, companies would not exist and not grow, meaning that they couldn't employ folks (who would generate income and boost the economy). At the same time, tax on dividends and gains distorts business behavior (I knew of one family-owned company that wouldn't sell a break-even division because they would have to pay substantial gains tax, so they kept the group alive by cutting staff each year to keep it slightly above break even but also saving the tax from a sale - it was eventually sold under a tax-deferred structure, but not before hundreds lost their jobs and most of the workforce became replaced by lower income folks).

 

[SkyDog58]

More than that, if you remember the hits and forget the misses!

A well known gambler's technique.

 

[SkyHog]

Look at the DJIA over the last 100 years. See the big dips in the late 20s. Then see the big dips in the 50s.

At that time, the sky was falling. But if you played the long game then, you’d have a TON more wealth earned by letting the Economy come back to you.

 

[Lachlan]

Look at the DJIA over the last 100 years. See the big dips in the late 20s. Then see the big dips in the 50s.

At that time, the sky was falling. But if you played the long game then, you’d have a TON more wealth earned by letting the Economy come back to you.

So if the sky is falling, do you dive and head for clear air or turn into it and try to outclimb it?

 

[SkyHog]

So if the sky is falling, do you dive and head for clear air or turn into it and try to outclimb it?

In this case you buy buy buy as it gets cheaper.

Then, slow down the buying as it goes back up

 

[JOhnH]

In this case you buy buy buy as it gets cheaper.

Then, slow down the buying as it goes back up

Correct, assuming you have a lot of liquid assets lying around that have not been appreciating. Or that you have a substantial current income stream.

 

[Rcmutz]

How about those of us that retired a few years ago? We pull money out of the stock market to cover expenses (like 100ll and hangar fees). That money that we pull out will never bounce back, and we are not putting more in.

Fortunately, I have ridden the market for years during the ups and down, (mostly ups) and am living off of profits. If I had sold during those many scares we have had, I would be worse off. So I am hanging in there through this latest downswing. I just hope it doesn't swing down too much more. I might have to sell the Bo.

Same boat. Dollar cost averaged on the buy, doing the same on the sell.

 

[Crashnburn]

Certainly no better at all. A double bottom bounce is a commonly known indicator that a bullish trend is forming. Two re-tests of key support levels with a move higher is a positive sign. As I said in the first post, it doesn’t always work, as does any other market indicator, but it’s a fairly safe time to at least dip your toe in the water.

I agree about the double bottom. I wasn't looking for a double bottom to buy, I was looking for my indicators to say buy. The buy signal just happened to coincide with the second bottom.

I used to watch Wall Street Week with Louis Rukeyser (RIP). On of his guests had the theory that whenever the market started getting frothy, it was about ready to change direction. I've found that to be true, but I don't time the market any more. And, a double bottom is the beginning of the frothy stage.

I look at the 30 day trailing returns for all my funds, and for the ones that are underweight, I put the money into the fund that did the worst in the previous month. I guess that makes me a value investor, if not a contrarian.

The Fed has stopped raising rates, which had been putting downward pressure on the stock market, and while we have down days, the lows are getting higher, as are the highs. I don't see a recession as long as long term rates are higher than short-term rates, and a reversed rate curve, while necessary for a recession, are not sufficient. Even in a recession, I keep investing, as I feel the companies are still viable and profitable, and I can get their shares at fire sale prices.

Stock certificates aren't even paper, anymore. They are represented by ones and zeros on a computer, and I hope, several backups. They actually mean you are part owner of a company (or shareholder, if you will).

When a person doesn't pay income tax, he has no direct skin in the game as far as increasing tax rates. He wants the rich to pay their fair share, but doesn't realize the richer you are the more you are already paying. When tax rates become confiscatory, the economy collapses. Many countries have foundered once their tax rate exceeded 50%. European economies are slightly better than being on life support, where the US economy is vibrant at 21%.

 

[FastEddieB]

And, a double bottom is the beginning of the frothy stage.

Except when it’s not, right?

 

[bflynn]

A friend of my brother's was a real Apple fanboy and kept asking for Apple stock for Christmas and his birthday. This was back when the price was about $16/share, and also about 7 splits ago.

About 10 years ago, he graduated from college, sold most of his accumulated Apple stock and bought a house with cash.

Yup. Back in 98/99 when Stephen Jobs took over again, one of the first things he did was clean up the inventory on the books. Apple was carrying every computer they never sold at the original retail value....so, in 1998, they valued a 1982 vintage Apple ][ at $2000, etc. Result was a huge book loss and the stock crashed to $8. I tried really hard to convince my buddy to sell at least some of his Lucent stock at 85 and get into apple at 8. If my math is right, $8500 / 100 shares of Lucent would have been ~1000 shares of Apple then, and 56,000 shares today worth about $10,000,000. Instead, he held all the Lucent stock and wound up selling it to his brother at $4 a share.

I had that one wired, but I was too poor to do anything about it myself. But then again, I wasn't so sure about it that I was willing to drop money into it. $10 back then was a tough sell.

 

[Sundancer]

I agree about the double bottom. I wasn't looking for a double bottom to buy, I was looking for my indicators to say buy. The buy signal just happened to coincide with the second bottom.

I used to watch Wall Street Week with Louis Rukeyser (RIP). On of his guests had the theory that whenever the market started getting frothy, it was about ready to change direction. I've found that to be true, but I don't time the market any more. And, a double bottom is the beginning of the frothy stage.

I look at the 30 day trailing returns for all my funds, and for the ones that are underweight, I put the money into the fund that did the worst in the previous month. I guess that makes me a value investor, if not a contrarian.

The Fed has stopped raising rates, which had been putting downward pressure on the stock market, and while we have down days, the lows are getting higher, as are the highs. I don't see a recession as long as long term rates are higher than short-term rates, and a reversed rate curve, while necessary for a recession, are not sufficient. Even in a recession, I keep investing, as I feel the companies are still viable and profitable, and I can get their shares at fire sale prices.

Stock certificates aren't even paper, anymore. They are represented by ones and zeros on a computer, and I hope, several backups. They actually mean you are part owner of a company (or shareholder, if you will).

When a person doesn't pay income tax, he has no direct skin in the game as far as increasing tax rates. He wants the rich to pay their fair share, but doesn't realize the richer you are the more you are already paying. When tax rates become confiscatory, the economy collapses. Many countries have foundered once their tax rate exceeded 50%. European economies are slightly better than being on life support, where the US economy is vibrant at 21%.

A while back the EU, roughly equal to the US economy, had 1/3 the venture captial available, compared to the US. And tax rates as high as 70%. They've rolled those back a bit, to some good effect. Most western gov'ts don't have revenue oroblems - they have spending problems. . .

 

[t3chiman]

... he held all the Lucent stock and wound up selling it to his brother at $4 a share.

Lots of Lucent employees were true believers, and held stock in their employer as a matter of pride. Nice when the company is on top of the world, and you have a few thousand shares. In the post-telco crash, such people were impoverished. In a web site that keeps track of such things, historicalstockinfo.com, Lucent stock price is shown as bottoming out in September 2002 at 0.76 per share. Can you imagine?

 

[FastEddieB]

Yup. Back in 98/99 when Stephen Jobs took over again, one of the first things he did was clean up the inventory on the books. Apple was carrying every computer they never sold at the original retail value....so, in 1998, they valued a 1982 vintage Apple ][ at $2000, etc. Result was a huge book loss and the stock crashed to $8. I tried really hard to convince my buddy to sell at least some of his Lucent stock at 85 and get into apple at 8.

I took a flyer and bought some Apple back then. Though I’ve taken some profits over the years, my remaining shares have a basis of under $2/share. Apple been beddy, beddy good to me!

 

[JOhnH]

I read an article a little while back where Ron Paul was once again calling for a stock market crash worse than the Great Depression. I never have given his predictions much credence though.

But lately, I am wondering what is happening. My stock broker says the economy is still strong and if we sell now, we will be breaking the cardinal rule selling high.

But he said that a few weeks and a few months ago and I watch as my portfolio drops precipitously. I'm hanging in there because I agree with him that there is no real economic reason for this drop, and I hate to sell low, but . . .

What are you financial geniuses doing?

I started this thread about a year ago.
I took my stock broker's advice and held on. Even though my portfolio is my main source of income, it is substantially higher than it was a year ago. And we haven't lowered our spending or curtailed our flying. At this rate, I will die with too damn much money.

The moral of the story is to not pay attention to the doomsayers in the media. Listen to someone you trust, but make your own decisions.

 

[RyanB]

At this rate, I will die with too damn much money.

Count your blessings, that’s a good problem to have.

 

[Doc Holliday]

A well known gambler's technique.

I'm your huckleberry.......

 

[bobmrg]

Anyone giving you a prediction with a time table is either a fool or trying to sell you something. Much of the financial services industry is based upon the notion that investing is complicated and requires extensive research, it isn't and it doesn't.

The market will go up, and it will go down. We know that as a fact. 60% of the time it is up. You do the math.

IF you knew when to get out (you don't), you'd also need know when you get back in? But if you did like most people you'd just sit on the sideline with a pile of cash and lose out on years of return, cash eaten away by inflation and worry about when to get back in...

Rebalance to your (preferably written down) Asset Allocation only if necessary, and check back in a year.

You da man, ja_user. Investors should never react to the news of the day.

Bob Gardner

 

[NealRomeoGolf]

Listen to someone you trust, but make your own decisions.

At this point, for me, those are the same people.

 

[JOhnH]

At this point, for me, those are the same people.

They were the same people for me too, especially when it came to investing, for decades. But I have found that a (good) full time adviser is worth WAY more than their fees.

 

[LongRoadBob]

Nobody knows.
I’ve been bamboozled by my bank, where I specifically said I wanted investments that were almost as solid as a savings account, and that yes I understood that meant the returns would be smaller, and they led me into not one but TWO different investments that were risky as hell and I lost much in one, and all in the other.
Turned out they were OBVIOUSLY risky, almost disasters waiting to happen. In the one case the bank itself had invested in the same and were ahead of me in getting back some of the money. I took it up with the Norwegian regulation section, but they always side with the investment banks.

What worries me is that I think the stock buybacks many, many companies are doing, and that depend on low loan interest rates, inflation of worth, etc, is heading for a huge loss if and when interest rates go up again.
It feels like a house of cards to me. I’m not a savvy investor, but when most here have money in funds, the thing that stops me is that there is a delay between when (if) you decide to get out, to when you get to know the price you got. I kept thinking I was missing some key point, because IF there was a crash, you would want to get out very fast if you even saw it coming slightly ahead of the rest, but the delay is in days. Here when you say sell, you won’t know the price until the day or even two after. A lot can happen in that long a time.

Sometimes I think it would be better (than following the ups and downs) to take a chunk of money, fly to Vegas, put it all in red or black on the roulette wheel, one spin, and just go back home win or lose. You can get the whole years results in a day.

I’m not built for the market. Obviously.

If I got back in, I would want just a simple S&P index fund, but one that did not have hidden fees, etc. which eat away at the bottom line. The banks offer all kinds of funds, and sell it on the idea you can juggle and switch at will between them, but all the while they are raking fees of of it. Also it gets complicated with the tax situation here, and I’m still required and do have to file my taxes with the US as well, still a US citizen. Between the two tax systems, nobody here can tell me the bottom line. Here they only know the Norwegian taxes, and how it taxes capital gains, etc.