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Marvin S
11-05-2008, 06:00 PM
A good measure of are we better off today than we were 4 years ago will be the market. The Dow closed @ 9,525.28, the S & P @ 1,005.25 & the Nasdaq @ 1,780.36 on E Day 2008. Using your crystal ball where do you think the market will be 4 years hence. Remember that prior to the housing meltdown the market sat at 14K+, 1 Year ago.

Marvin S
11-06-2008, 11:51 AM
It's 2 days after the election & the market is still going down. Apparently the people who run the country (meaning those who work & invest) don't have a lot of hope.

Just playing with the calculator shows that if the market were to have gone up 80% from it's close on E Day that would equal 17,163 or a measly 5% per year return over the Dow high 1 year ago.

badbullgator
11-06-2008, 12:02 PM
I think the time up to the election it will be down, but the days following the next election will see an upswing of the market. That is not to say it will keep going down for 4 years, just that in the end it will be lower at the end of BHO's term

Uncle Bill
11-06-2008, 03:19 PM
A good measure of are we better off today than we were 4 years ago will be the market. The Dow closed @ 9,525.28, the S & P @ 1,005.25 & the Nasdaq @ 1,780.36 on E Day 2008. Using your crystal ball where do you think the market will be 4 years hence. Remember that prior to the housing meltdown the market sat at 14K+, 1 Year ago.


Don't believe you can predict with any accuracy...just guess. Like the "scientists" predicting global warming. Like the weathermen 'predicting' 48 hours ago that we'd have a 'chance' of rain and snow, along with strong winds on Wednesday. As we neared yesterday, they suddenly discovered there was a strong blizzard in the offing.

At 10:30 PM I let the dogs out to air. They were just making footprints on the deck. At 6:30 this morning my back door was blocked by a 5' drift. The sliding deck door had 2 1/2' against it. Needed to shovel an opening into the 4' snowbank, so the dogs could get outside.

It's my guess, Marvin, that the Dow will sink below 4K before we have any "real" return to a wannabe bull market. There will be many ups and downs, and sucker shifts along the way, but if the money you have in "the market" is what you will need to live on soon, better be into a program of selling on the peaks, and whittling down your exposure.

If your status is such that selling just means more for the IRS, there are other ways of moving those funds or equities to something with less volitility.

Not saying there won't be 'buying' opportunities. BUT, it's really not an amateurs playing court. Only the saavy that can watch their 'investment' daily should be messing around in this market.

Not sure I wouldn't be investing in several cases of shells, and new guns. Not collector types, just plain vanilla types.

And I'd certainly have a few bags of pre-65 siver coins...dimes, quarters, halves...nothing with numismatic value. Same is true of gold dollars...Maple Leafs, Kuggerands, and US Eagles. Not a good time in my view to be starting into any of the numismatic stuff. That again requires special knowledge, and players that watch what's going on at all times.

FWIW, this is not 'advice'...just suggestions. My license expired long ago. I don't even play a broker on TV. As LVL once admonished me, I should KNOW something before giving advice...and I agree with her. All I KNOW is what I learned working in the industry for about 3 years, and "playing the games" for about 50. And I'll be willing to admit, I've lost more than a couple of small fortunes, but that's another story altogether.

Caveat Emptor...and I do mean that with capital letters.

UB

Arturo
11-06-2008, 04:13 PM
..................... And I'll be willing to admit, I've lost more than a couple of small fortunes, but that's another story altogether.

Caveat Emptor...and I do mean that with capital letters.

UB
That's something else we have in common. I was buying good, but I wasn't bewareing very good! You proly lost more than me but if I think about my losses for more than 5 minutes is a row, I start puking!

P.S. The last 2 days have been kinda hard to take too.:( DOW down another 443 today

Uncle Bill
11-06-2008, 06:13 PM
That's something else we have in common. I was buying good, but I wasn't bewareing very good! You proly lost more than me but if I think about my losses for more than 5 minutes is a row, I start puking!

P.S. The last 2 days have been kinda hard to take too.:( DOW down another 443 today

And I foresee that trend continuing. Of course there will be some that will 'jump' in, and ride a short spike, but the overall curve will continue down for some time. I fear a 1930 type situation, when those poor souls thought the bottom was there, but it turned out to be a sucker bet.

If what you have now riding is worrisome, move it into a less volatile area...may not have a return worth a damn, but if it preserves principle until you can get it out, it's about the only safe haven left.

Talk to your financial advisor, Art. If he is a friend, he can advise something safe you can rollover into. And if it's IRA stuff, you can use some of it to even purchase some metals that to my way of thinking are still the best way to protect against a complete collapse, or a form of depression. Don't think it will come to that, but I'm not betting it won't either.

It's almost as bad as getting into a 'hold-em' game, and your sittin' on a short stack eh?

Good luck,

UB

Marvin S
11-13-2008, 10:10 PM
Well, I got my newsletters & they didn't say much, so I'm going to crystal ball it! A lot of people are in the market whether they realize it or not. Many only through their pension funds. One of the more selfish generations in our society is about to retire & they are restless about having their creature comforts.

The D's want to continue their days in charge, while some of the leadership has designs on a full fledged socialistic slant, that won't win 2 years from now & definitely will move them out in 4. As many are conscious of the market, it is no longer a foreign planet flying over. We came out of the Nifty Fifty, the S & L fiasco, the dot coms, in some manner though I think it will be some time before we see 5K on the Nasdaq. Some may remember when the Japanese were buying all our Golf Courses & Namesake buildings & there was the concern that other countries were going to be telling us what to do.

The freshly minted POTUS (as of January) will signal how he will govern by the appointments made. We should hear a lot by Xmas. The critical appointments are Treasury & the person who will head the commission on reforming the financial industry. If Paul Volcker heads the commission there is a excellent chance we will see recommendations that will further the interests of this nation. It is also conditional on Congress adopting the recommendations. Volcker was the last person to head the Fed that was in tune with sound monetary policy.

I also have a lot of faith in the entrepreneurial spirit of this country. People have tasted the good life & are not willing to go back. They will work extra hard to ensure this nation stays the course & continues to progress. This will only be possible if the government stays out of the way & does not try to manage the economy.

So I'm going with survival for all, the market will be up 80% (17,163) on the next E-day & that's where I'm casting my vote. I hope it does better & I have to pay Buzz & Joe off, that is if they are willing to back their candidate with a little of the green stuff. Over only guys!

YardleyLabs
11-14-2008, 05:36 AM
A good measure of are we better off today than we were 4 years ago will be the market. The Dow closed @ 9,525.28, the S & P @ 1,005.25 & the Nasdaq @ 1,780.36 on E Day 2008. Using your crystal ball where do you think the market will be 4 years hence. Remember that prior to the housing meltdown the market sat at 14K+, 1 Year ago.

Marvin,

If this is a fair measure of economic performance, what does it mean given that the DOW was 10,587.60 when Bush took office, about 10,450 when he was sworn for his second term, and is under 9000 eight years later?

Marvin S
11-14-2008, 08:48 AM
Marvin,

If this is a fair measure of economic performance, what does it mean given that the DOW was 10,587.60 when Bush took office, about 10,450 when he was sworn for his second term, and is under 9000 eight years later?

It was a little over 14K about a year ago.

But Bush will not get high marks for his appointments & their handling of the economy. Though both the Bush administration & McCain tried to rein in the prolific ways of the institutions that have so clearly let us down, & were shot down by the D's who were so clearly benefitting from those actions. I am not sure how hard they tried. Were they to preoccupied with waging the fight against terrorism, as boy Clinton was to occupied with satisfying his personal pleasures & the defense when found out?

I couldn't try to defend anyone who reached for the lollipops in this strange economy. 20 years ago we were looking for property outside WA to move to, the properties were grossly overpriced by any measure. Most owed more on their property than we would have been willing to pay at that time, & this again, was 20 years ago. If we could recognize something wasn't right at that time, why weren't the experts paying attention.

We have a couple of funds that were in FNM & lost considerable. We are glad we found that they were not as fiscally prudent as they claimed before we allocated further resources to them.

I just have considerable faith in entrpreneurial spirit - the desire to maintain a standard that they have set for themselves - but if the perpretrators of this financial fiasco walked the soup lines for awhile it would not bother me in the least, for all the grief they have caused others.

YardleyLabs
11-14-2008, 12:20 PM
It was a little over 14K about a year ago.
....


I suspect that 14k DOW needs an asterisk next to it just like Barry Bonds' record setting ball. In this case unheard of levels of debt seem to have been the real fuel driving the economy -- sort of the economic equivalent of steroids with most of the same drawbacks.

Marvin S
11-14-2008, 09:53 PM
I suspect that 14k DOW needs an asterisk next to it just like Barry Bonds' record setting ball. In this case unheard of levels of debt seem to have been the real fuel driving the economy -- sort of the economic equivalent of steroids with most of the same drawbacks.

I don't agree. There were a lot of very good companies not affected by the craziness that were showing increased earnings consistently during the runup. Those companies are still doing well. The 14K runup was not caused by any one sector, though the fall was precipitated by a lack of confidence in the regulatory machinery. Like I have said before, Treasury Secretary is important & Volcker's participation & having those recommendations adopted is crucial. If those things don't happen, bullish sentiment is out the window. It has gone from 26% to 40+% in the last month.

Franco
11-20-2008, 02:21 PM
The Dow closed @ 9,525.28, the S & P @ 1,005.25 & the Nasdaq @ 1,780.36 on E Day 2008. Using your crystal ball where do you think the market will be 4 years hence. Remember that prior to the housing meltdown the market sat at 14K+, 1 Year ago.

The Dow is at 7,820 right now a 2,000 point drop since Obama won the election! His image is antibusiness and folks are scared of investing in the market. I wouldn't be surprised if it drops below 6,000. Folks may be taking their gains now so they won't have to pay higher Capital Gains tax when Obama starts his wealth redistribution. That is enough to scare away most investors. I just hope it doesn't harm the return on Annuities! But, I fear it will as more savers invest in Annuities and not the stock market.

Franco
11-20-2008, 02:39 PM
Down to 7,580 in the last 20 minutes.

Investor confidence is nonexistant.

YardleyLabs
11-20-2008, 03:52 PM
Down to 7,580 in the last 20 minutes.

Investor confidence is nonexistant.

Unfortunately, since it has cost me about half of my life savings, I think the collapse of the stock market has everything to do with the economy and nothing to do with the election. The market still hasn't fully absorbed the impact of what will happen to our economy if consumers live within their means. Everyone talks about what can be done to get consumers spending again. The reality is that most consumers can't afford to keep spending and shouldn't.

Marvin S
11-20-2008, 05:03 PM
Down to 7,580 in the last 20 minutes.

Investor confidence is nonexistant.

The sharp move in the last hour smacks of day trading &/or program trading. Some awfully good buys for the brave. There will be a lot of fortunes made to those willing to step up & be smart about their choice of sectors.

Hoosier
11-20-2008, 05:05 PM
The sharp move in the last hour smacks of day trading &/or program trading. Some awfully good buys for the brave. There will be a lot of fortunes made to those willing to step up & be smart about their choice of sectors.

So what do you think about medical devices

Uncle Bill
11-20-2008, 05:09 PM
Some info for those still 'fighting the odds' in the markets. My friend Bill Bonner wrote this bit yesterday. It's hard to not agree with his observations eh?

UB

Yes, dear reader, we are going where no man ever went before ...into the wild.
All around us is virgin territory. No one has ever been here before. But watch out, these virgins are vicious amazons. In this wild place, you can forget living it up. Don’t even think about getting rich. Riches? If you’ve got ’em...hide ’em. Luxury? Who needs it anyway? The best you’ll be able to do is survive. And then, maybe, years from now, we can put our financial lives back together again...and get on with things...

Never before have we seen so much wealth disappear in such a short time. The latest report from MSCI shows the planet’s losses from the sell-off of equities has now reached more than $30 trillion – or more than twice the GDP of the U.S.A.!

And this is just stocks. Reported write-downs, write-offs and credit losses have reached almost a trillion. And losses of housing prices in the United States alone – the only country for which we have reliable figures – has reached about $5 trillion.

Nor have we ever seen such a rapid reaction. In the space of a few months, people have gone from believing that nothing could go wrong to thinking that there’s nothing that won’t go wrong. Where once they thought that free-market capitalism would make them rich...they now believe that the government can save them from getting poor. And where only a year ago they thought the world’s globalized economy would always give them everything they needed “just in time,” they now believe they better keep a few sheckels on hand “just in case.”

And just look at the bonds! A few months ago, investors stretched for yields. Now, it’s safety they reach for. They dump corporate bonds for fear they may be “toxic,” and grab U.S. Treasury debt with both hands. Investors now seem to have an unqualified trust in the full faith and credit of the world’s largest debtor. Yields on 91-day T-bills have fallen to 0.11% – scarcely a tenth of one percent!

Yes, dear reader, the “Great Unwind”...the “Big Bust”...the “Great De-leveraging” – call it what you want; we’ve never seen anything like it.

China’s stock market had managed an 18% rebound...following the announcement of its half-trillion dollar bailout plan. But yesterday, Chinese stocks were collapsing again.

The latest news from America tells us that housing prices are still going down in 4 out of 5 cities. Homebuilders’ wives are hiding the shotguns and pouring out the whiskey; their husbands’ confidence has never been lower, according to this morning’s news report.

Big towns...little towns...in the sophisticated cities and out in bumpkin country, the story is the same. The Wall Street Journal tells us that the “fall in crop prices” is putting an end to the boom in the boonies.
U.S. producer prices fell 2.8% in October – the most they’ve ever fallen. And the Big Three automakers say that if they don’t get some help soon, the results will be “catastrophic.”


Not only is the bust unlike anything we’ve ever seen before...so is the planet-wide effort to stop it. All over the globe, the feds are going ‘into the wild’ with extraordinary measures. They’re mobilizing troops to fight the crisis in the boardrooms. They’ll fight it in the stock markets. They’ll fight it at home – with house-to-house combat to stop foreclosures and defaults. They’ll fight it abroad – the U.S. government is even loaning money to foreign governments! They’ll fight it with loans and giveaways. They’ll fight it with fiscal policy. They’ll fight it with monetary policy. They’ll fight it with every weapon available to them – including the printing press.
And they will lose.

*** To give you an idea of the wild measures undertaken by the feds, we look at what is happening at the world’s leading bank – the U.S. Federal Reserve.

The short form of how the Fed operates is this: it holds a certain amount of securities in its vault; this is the cornerstone capital – or monetary base – of the whole banking structure. How does it get this capital? It buys it, creating the money to pay for it as necessary. Naturally, the Fed doesn’t want to create too much money or the inflation rate would get out of control and economists would point their fingers accusingly. But now, people fear dandruff more than inflation. So, the Fed has gone wild.

From the day of its founding in 1913 to September 24, 2008 the Fed’s assets – the aforementioned cornerstone capital for the US financial system – grew to $1 trillion. By November 14, 2008 the amount had grown to over $2 trillion. And in a speech in Texas, the head of the Dallas branch of the Fed said he expected the total to reach $3 trillion by year-end.
For the moment, this explosion of monetary inflation is hardly noticed. Asset deflation has the headlines. People worry about having too few dollars, not about having too many.

Comes the news this morning that U.S. business chiefs are asking the up-coming Obama administration for another $500 billion ‘stimulus’ program. They’ll get it. And much more. Trillions worth.

Trying to stimulate the economy with easier credit in the early 2000s, Alan Greenspan overdid it. He gave the world the credit it wanted, and created the biggest bubble in human history.
Now that bubble is collapsing and his successor – Ben Bernanke – is confronted with a new problem. Now it is cash that people want – income to pay their debts! Bernanke will give them what they want. And, most likely, he will overdo it too.

Marvin S
11-20-2008, 05:25 PM
So what do you think about medical devices

I own some - but don't let that be a recommend. It really depends.

Marvin S
11-20-2008, 05:31 PM
Some info for those still 'fighting the odds' in the markets.

Thanks, UB - Just placed a limit order today for a preferred - so I guess that makes me one of those. But I am selectively going to participate & see what happens.

Hoosier
11-20-2008, 06:09 PM
I own some - but don't let that be a recommend. It really depends.


Medtronic closed at 31.20 yesterday that seems like close to the bottom to me. But I have about 20,000 shares at around $46.00 and some in the low $50s. Lost on those , but I was thinking about jumping in again with it around 30. I do get a discount on some of what we buy. I am a little scared though

Marvin S
11-20-2008, 06:17 PM
Medtronic closed at 31.20 yesterday that seems like close to the bottom to me. But I have about 20,000 shares at around $46.00 and some in the low $50s. Lost on those , but I was thinking about jumping in again with it around 30. I do get a discount on some of what we buy. I am a little scared though

We own STJ - similar - my basis is about $7 per share, if it goes there I will buy more. I would have concern about reimbursements with Daschle as H&HS Secretary & the agenda of the Obama administration. Both stocks get considerable reimbursements from the government because of their product lines.

Fire N Ice
11-20-2008, 06:22 PM
Day traders are the biggest problem the markets have. People treating money no differently than a craps player in Las Vegas. The commercialization like the baby trading stock online and the dude saying "I just bought stock in Shanghai, thats China" is ignoramous. The advent of the internet and real time observation of the movement of the markets has allowed people with no knowledge whatsoever of true long term investment strategy to treat the market as a get rich quick scheme, and for my part I could care less if all these people lost and got out. The perfect storm for the market to rebuild itself devoid of these people powered by sound investment towards long sustained slow steady growth.

Jim Pickering
11-20-2008, 06:59 PM
I suspect that 14k DOW needs an asterisk next to it just like Barry Bonds' record setting ball. In this case unheard of levels of debt seem to have been the real fuel driving the economy -- sort of the economic equivalent of steroids with most of the same drawbacks.

As much as I hate to disagree with Marvin given his investment expertise, you hit he nail squarely on the head. Out economy has been kept afloat on the back of the residential industry with cheap and easy credit.

Way back post WWII the propensity to save in this country was 10%. That is collectively US citizens saved 10% of their take home pay. The propensity to save had declined to 6% by 1960 had stayed about that level until the 1980s. The propensity to save went negative in the 1990s and was at one point -4%. That is collectively US citizens spent 4% more than their take home pay. The government then changed the method of calculation savings by counting payments on home mortgage as savings which brought the propensity to save back up to 0.4%.

It is difficult for me to understand how any one can argue this point before the financial crisis and certainly now.

A credit economy eventually has to fail; there is no other possible outcome. When employment is full or nearly so, people are positive and willing to take on credit especially when the credit is cheap and easy to get. However, there is a point when collectively the burden of servicing that debt becomes prohibitive. Collectively we simply cannot continue to borrow from Peter to pay Paul. When the borrowing slows the upward pressure on assets slackens then starts to decline.

Did anyone catch the unemployment stats released today? The economy does not get better with unemployment going up.

The first asset class to decline was residential real estate, then stocks now commercial real estate and fixed income assets. Once the snowball starts rolling down hill it will only pick up momentum. We have been in a recession for some months and now entered a period of deflation. Did any one notice that crude oil futures closed today below $50 / barrel. Wasn’t crude bumping $150 just a few months back? Other commodities have also cratered; Platinum, Copper, Silver, Wheat, Corn, Soybeans, Cotton have all declined 50% to 60% over the past few months.

I have expected the 7,500 – 8,000 level to hold for the stock market as measured by the DJIA. The average bounced off 7592 in 2002 and 7843 in 1998 so there is certainly support here. If this level does hole I would not be surprised to see a bear market rally back to the 10,500 – 11,000 range before the bottom falls out. However, the longer it stays at this level the greater the chances that the level will not hold. If the average closes much below 7500 I would not want to be in the way.

The really scary part today was the Treasury market. T-bills were trading today at 0.3% annual yield. The yields on T-Notes and even 30 year T-Bonds are falling like a ton of bricks. There are several interpretations out there, but this certainly looks like the big money boys have given up on finding the next hot sector in stocks or anything else and are looking for a safe place to park their money in spite of no return.

This mess is just getting cranked up. The private sector has maxed out on debt. The commercial sector has also maxed out given that the private sector spending makes the commercial sector go. And let’s not forget that the government national debt doubled during the Bush administration to $11 Trillion.

YardleyLabs
11-20-2008, 07:09 PM
Jim,

Great post. I wish I were less depressed....

Marvin S
11-20-2008, 07:58 PM
As much as I hate to disagree with Marvin given his investment expertise,

Why, when you post that statement do I get the feeling :razz:? But hey, I'm just stating an uneducated opinion based on what I see & have seen. It's worth what it cost you. Individuals actually do make money going against the grain, I believe they are called contrarians &/or bottom feeders.