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Thread: One man's view on the 'stock market'.

  1. #1
    Senior Member Uncle Bill's Avatar
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    Default One man's view on the 'stock market'.

    Which I'm inclined to believe. As Sinatra sang..."Riding high in April, shot down in May"...I doubt it will take that long, but whatever. Hope you that play this thing have accrued enough to survive the upcoming inflation.

    UB

    Down the Rabbit Hole…
    Bizarro Market Hits 14,000


    By Rodney Johnson, Editor, Survive & Prosper


    There is a story line in the Superman comic strip where the superhero passes into an alternate universe. In the new realm everything is opposite of what would be normal. Ugly is prized and bad acts are rewarded.

    In this new place Superman struggles because everything he knows seems to be backward. Eventually, he figures out how to work within the system and then returns to his own place, where things are back to “normal.”

    Now it’s our turn.

    Welcome to the Bizarro Stock Market.

    Falling earnings? Yep.
    Weak economic growth? More like negative.
    Ugly employment? Got it.
    Fear and pessimism? All over the place.
    Stock market on a tear to new highs? Right on!

    Oh, and there is one more teeny-weeny aspect to this economy and market we need to mention…


    Got a central bank plunking out $85 billion a month on top of $2 Trillion already in the last 4 years? Why, yes we do, thank you very much.

    To hear everyone talking on TV and the radio since the market broke 14,000 last Friday you could easily assume the surge is due to positive economics. Durable goods shot higher, we’re told.

    Well, they moved up by 1.4%. Not quite a moonshot.

    More jobs were created though... but really slightly less than we need to keep up with population growth (which explains why unemployment ticked higher even though there was some job creation).

    Earnings have grown, and they are typically a backbone for the markets, right?

    Well, yes, earnings are positive… but the rate of growth fell from double digits to low single digits and overwhelmingly guidance has been lower.
    The real factor – the only factor driving the markets higher – is that all the newly created money must go somewhere.

    It is not being lent, creating new debt in the U.S. economy. It’s not being put to use hiring people. Instead, these bucks are sitting on the books of really big banks (think mega, too-big-to-fail, gotta-be-bailed-out-again banks), who then use the excess capital to build trading positions where they buy… stocks.

    The game is great as long as money is cheap and interest rates are low. So these institutions are making a very rational decision. As long as cheap money and low rates abound they’ll keep piling into risk assets like equities.

    When the economy posts puny numbers like weak employment and low or even negative GDP growth, the banksters know one thing: the Fed will keep its foot on the gas, and that will make their equity investments go even higher.

    So here we sit as individual investors and taxpayers, watching this Bizarro Market where bad news pushes markets up. We all know that this can’t go on forever.

    Printing money is theft. It’s stealing from all who have accumulated savings.
    Artificially low interest rates are another form of theft. They take from fixed-income investors and depositors what they would have otherwise received in income.

    Only, when you push the population too far they will revolt. They cannot take too much more of higher prices for food, energy and healthcare while their savings and paychecks dwindle.

    But where and when is too much? $2.5 trillion? $4 trillion? We don’t know. The only thing we are sure of is that it was not $1 trillion in new money… or even $2 trillion.

    We the people have not demanded an end… yet.

    We will though, because it is all of us as consumers and taxpayers that are paying the price of the money printing while the banksters reap the profit. The same banksters we bailed out, mind you.

    Until we demand an end to this, expect the markets to keep their upward bias.

    The good news is that we don’t think the status quo will last very long. Judging by consumer indices, the average guy is already very pessimistic about the future. When enough people figure out it’s the Fed causing us such pain, there will be a call to account.
    When this happens, the Emperor of the Market will be seen to have no clothes and will come crashing back down to earth.


    Rodney
    When the one you love becomes a memory, that memory becomes a treasure.

  2. #2
    Senior Member Tom. P.'s Avatar
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    Its really a scary situation and just a matter of time before SHTF! But Im sure the headline is already written
    Its Bush's fault! And the sheep will concur!

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    Senior Member Mike W.'s Avatar
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    Usually written by people who have been negative for the past 6,000 Dow points. Explaining why there are right even though they have missed a massive move off of a text book climactic bottom.

    Just sayin'....

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    UB - regardless pf what this guy who makes his money from a newsletter says - Had a portion of the $160K that was your contribution & your employers to SS been invested in the SM along with T Bills at whatever rate they were over the years you would now be sitting on a nest egg approaching $2Mil or more. Pretty sad when you think about it .
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    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

  5. #5
    Senior Member Uncle Bill's Avatar
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    BTW, Marvin...can you explain why what was supposed to be a "savings account" for employees, albeit a 'forced' savings account set up by the Dems under FDR, who never had any faith in the American people to set aside for their own retirement. Not saying he was totally wrong, after watching the myriad of fools that are voting for this current regime, commonly referred to as the 'low information crowd'. My question is, why is that "savings" account called Social Security, now always being referred to as an "entitlement"? Medicare I understand, but not SS.

    The funds for SS were put in there by employees/employers...except us self employed that paid the full amount. Of course I'm supposed to be entitled to that savings account, albeit handed out at the rate the gubmint decides. It's just that the term 'entitlement' has come to be understood in the same thinking as welfare or food stamps, and it's not even in the ballpark. But as long as the low-info ingnorants are fed that pap by the MSP, it will never be considered as a savings account, forced or not.

    UB
    When the one you love becomes a memory, that memory becomes a treasure.

  6. #6
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    Quote Originally Posted by Marvin S View Post
    UB - regardless pf what this guy who makes his money from a newsletter says - Had a portion of the $160K that was your contribution & your employers to SS been invested in the SM along with T Bills at whatever rate they were over the years you would now be sitting on a nest egg approaching $2Mil or more. Pretty sad when you think about it .
    Really.....How many years to make $160,000 into $2,000,000? At what level of risk? Seems like you could also end up with $0 as well. But...I'm no expert.-Paul
    there's no good reason to fatten up a retriever.

  7. #7
    Senior Member road kill's Avatar
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    Quote Originally Posted by paul young View Post
    Really.....How many years to make $160,000 into $2,000,000? At what level of risk? Seems like you could also end up with $0 as well. But...I'm no expert.-Paul
    And many did exactly that!!

    Especially those invested in real estate!
    Stan b & Elvis

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    Quote Originally Posted by paul young View Post
    Really.....How many years to make $160,000 into $2,000,000? At what level of risk? Seems like you could also end up with $0 as well. But...I'm no expert.-Paul
    Paul, I have an idea how old UB is - taking the contributions made in his behalf by himself & his employer (in his case, himself), figuring it at the max contribution - allowing a portion up to 1/3 in stocks & 2/3rd's in T-bills, subtracting that portion going for survivors insurance which would be a small amount, that's what one would have. I would also allow folks to have up to 5 or 10% precious metals in that mix. UB has done well with AU. One would be taking market level risks in order to obtain that. I know from experience that works. The only ones who normally end up with nothing are those who do not diversify & place too many eggs in one basket.

    I'm not sure you are old enough to remember the nifty 50 but there have been similar fads. During the internet boom & subsequent bust our portfolio contained none of those stocks that folks were talking about. When the gamblers had a portfolio worth less than 25% of their original investment, which by the way has not returned, they had to alter their life styles. I belonged to a stock club that owned Cisco, I asked the guy who was touting the bejesus out of it - if a company has 3,000 employees & 2 bil in revenues & merges it's way to 30,000 employees & 20 bil in revenues - what changed? the revenue/employee is constant - That's how using just a little common sense can avoid a disaster. The only internet stock I wish I would have bought was INTL, many splits ago, but there have been other more mundane stocks that have done as well. I could give you a somewhat extensive list of those .

    BTW Paul - our portfolio grew 12-15% a year with a corresponding income benefit during the internet bust years - Every citizen should be allowed to do that. Our sons have seen the benefits of a disciplined approach to investing & all would like to be able to invest for themselves in their SS. Even the one who is a staunch union believer & former president of his union .
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    Everyone's friend is No One's friend

    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

  9. #9
    Senior Member Buzz's Avatar
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    Quote Originally Posted by paul young View Post

    Really.....How many years to make $160,000 into $2,000,000? At what level of risk? Seems like you could also end up with $0 as well. But...I'm no expert.-Paul
    There is a huge difference between having a principle of $160k to grow over 35 or 40 years and contributing that $160k throughout that timeline. I really hope I can impress on my daughter the importance of forgoing new cars and such as a young adult and getting some principle accumulated early... Think I'll run some numbers... My calculus teacher did it for the class of 18 year olds I sat in. Hope everyone was paying attention that day.
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

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  10. #10
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    Quote Originally Posted by Buzz View Post
    There is a huge difference between having a principle of $160k to grow over 35 or 40 years and contributing that $160k throughout that timeline. I really hope I can impress on my daughter the importance of forgoing new cars and such as a young adult and getting some principle accumulated early... Think I'll run some numbers... My calculus teacher did it for the class of 18 year olds I sat in. Hope everyone was paying attention that day.


    I know it took me QUITE a few years of saving to amass $160k. When I started working full time after graduating college I was only making $175/week, which actually wasn't that bad back then. That has gradually increased over the course of my career as I took on more responsibility and accumulated experience at my job. If I had that sum to invest 35 years ago, I could probably retire tomorrow.-Paul
    there's no good reason to fatten up a retriever.

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