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Re: A 100-year bear market?
Old 10-14-2004, 08:40 PM   #21
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Re: A 100-year bear market?

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Bob_Smith, you and I are both the guy with the camera. We're willing to risk a little lava burn, but we want a piece of the rock. I occasionally ask myself if it's even worth the thrill seeking, but in the meantime, I keep an eye out for steam and ash.
I know what you mean. If I was forced to bet on it, I'd put my money on Bogle's prediction for the next decade. But knowing I don't have a clue has kept me out of serious trouble so far. Unfortunately, I don't have the ability to see steam and ash. I wish I did.
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Re: A 100-year bear market?
Old 10-14-2004, 09:25 PM   #22
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Re: A 100-year bear market?

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Speaking personally, and having no desire to convert anyone, every time I read a thread like this I become happier that I am largely in cash, energy, foreign denominated assets and some gold. Not because of Prechter, who is probably nuts, but because of the fundamental and valuation background, and the psychology of some fairly substantial investors, as is illustrated by the dynamic of this board.
Mikey, I always enjoy your posts. Can you expand on this? What is the psychology/dynamic you're seeing in this thread that concerns you? I'm seeing opinions that are all over the map, but most seem to be the sincere points of view of bright people who simply see things differently. I don't see what you're getting at.
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Re: A 100-year bear market?
Old 10-14-2004, 10:51 PM   #23
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Re: A 100-year bear market?

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Unfortunately, I don't have the ability to see steam and ash. I wish I did.
It's getting hard to miss. Here's some now:

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Re: A 100-year bear market?
Old 10-14-2004, 10:56 PM   #24
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Re: A 100-year bear market?

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Finally, I for one really enjoy hearing differing viewpoints, although I admit growing a little weary when they become dogmatic.

I can't recall hearing you express your POV other than to say "stocks are pricey," ...<snip> My mind is waaay open.
Well, I don't expect anyone to remember my posts, but I also don't think I would enjoy repeating them. Mostly I cite well known academic and quasi-academic studies that are compelling enough for me. I feel that broker talk is meaningless.

As to your point about all the changes that have taken place during the upward revaluation of stocks over the past 22 years, it is my belief that if indeed there have been any meaningful positive changes, they have been more than offset by the very increases in price that we are talking about.

Again, I feel that it is to be expected that various autonomous individuals will have differing viewpoints. Mr. Cutthroat, whom I respect greatly, is comforted by my bearishness. I am comforted by his bullishness, and by what appears to be to be simple denial and rejection of hard evidence on the part of many others.

Although I do not believe that success or failure over any period less than 10 years and probably longer can be attributed to valuation based strategies, it is nonetheless true that my invested assets have increased roughly 80% since Feb, 1999. This is with no additions from earnings (there were none), and after normal living expenses, purchase of a new car, a new roof, and about $5000 worth of dental work. This is not a fabulous return, but considering the environment, it isn't bad either.

Mostly I enjoy posting in and around the area of social psychology because I have a degree in that field and I read extensively in academic social and cognitive psychology. Posting helps me to articulate and refine what I believe to be true about investing.

On contentious and values laden threads like this one I enjoy articulating my position for my own benefit. I don't think my POV will likely change until and if PE10 or Peak PE or other similar measure becomes more to my liking. I have no idea would change the opinions of the bulls. Possibly a falling market? Hope it falls slowly

Someday soon, I may try posting a bullish analysis, just to see how it looks to me and others. I would be interested to see what arguments I could come up with. It is certainly possible that there are good long term bullish arguments. I don't think so, but there may be.

I will state flatly that I believe it would be absolute folly to expect the next 20 years to be anything like the last 20. Were the last 20 anything like the previous 20?

Mikey
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Re: A 100-year bear market?
Old 10-14-2004, 11:15 PM   #25
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Re: A 100-year bear market?

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Throughout the entire Bull market of 1982-2000, I recall folks that were glad that they were not in the stock Market. Especially the day after the 1987 crash, where they were all telling everyone 'That they told them so'. All of this pessimism makes me glad that I continue to stay the course and and continue to bet that the sun will come up tomorrow.

If you are not a market timer, you can just go fishing like me and unclemick
Thanks for your comments, Cut-Throat.

Several points-

Those folks you met during the bull market who were out of stocks were not me. I was in stocks, though not exclusively, and not really in the more speculative areas of the late 90s. It would have been nice to grab some of those huge gains, but it just wasn't consistent with my discipline.

Leading up to the '87 crash I had sold some stock, because I was nervous. But I didn't sell nearly enough. I lost a fair amount of money that day. But by Tuesday or so I had added back all the cash I raised, and took on some margin. I think there is a season for everything, or almost everything.

Regarding the sun, I too expect it to come up. I must confess that I fail to see the significance of this observation.

I too like fishing, but I also like investing actively. And besides, I believe you are quite a bit richer than I. You may be able to lose a fair amount of money and not be threatened in your current lifestyle. Not true of me. Although I could cut back, as others have said, I really would just prefer to not lose the money in the first place.

I have an asymmetrical utility function. Large losses would harm my well being quite a bit more than large gains would help it. Add to this the fact that I don't think there will be any large long term gains from this level, and my correct course is clear.

Mikey
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Re: A 100-year bear market?
Old 10-15-2004, 01:01 AM   #26
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Re: A 100-year bear market?

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It's getting hard to miss. * Here's some now:

Well, that's my point. The deficit was bad in 1992 also, was projected to get worse, and had been growing for several years. And I can recall hearing (repeatedly) in the early 90s that those who missed out on the market gains in the 80s were out of luck; that it would be all downhill from there. And that was conventional wisdom at the time, as I recall. If I had paid attention to what many viewed to be steam and ash then, I'd still be working. On the other hand, there are some very cogent arguments on the other side. I just don't think it's possible to know, so I sit on the fence with a relatively low stock allocation despite my strong bias toward optimism. What does make very good sense to me is this:

http://www.vanguard.com/bogle_site/sp20030605.html
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Re: A 100-year bear market?
Old 10-15-2004, 05:25 AM   #27
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Re: A 100-year bear market?

Wab

Your link is one I reread often.

Ben Graham and then Bogle.

De Gaul and the Norwegian widow ride on!
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Re: A 100-year bear market?
Old 10-15-2004, 07:09 AM   #28
 
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Re: A 100-year bear market?

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Again, I feel that it is to be expected that various autonomous individuals will have differing viewpoints. Mr. Cutthroat, whom I respect greatly, is comforted by my bearishness. I am comforted by his bullishness, and by what appears to be to be simple denial and rejection of hard evidence on the part of many others.
Mikey,

Actually I more an agnostic like Bob Smith. My emotions tell me that I am a bear. Because I can see the hard evidence like everyone else here sees.

If I were letting my emotions control my investing, I would also be out of stocks right now. Then I would have to decide where to put the money and I'd have no friggin idea

Being familar with psychology, you probably have heard that it takes 7 positives to overcome 1 negative. That is why as investors we are more likely to believe in bear markets than bull markets.

I have looked myself in the mirror and have admitted that when it comes to investment descisions, that I am my worst enemy. So I have commited to a plan that forces me to be in the stock market when I don't want to be. I can still still survive a depression style meltdown, as long as I don't sell on the way down.

The investment world does not look to great right now and it does look like prosperity is coming to an end. Of course I thought that in 1976 during the Arab Oil Embargo, in 1987 during the Market Crash, Again in 91 and 92 during the recession etc. etc.

So I have no clue what is going to happen and luckily with my personal investment plan, I don't have to. I also see the varied opinions all over this forum, as well as financial experts in the industry that are a lot smarter than myself.

But when I see a someone make a predication like a 100 year bear market, Dow below 400 - It says more about the predictor than the prediction.
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Re: A 100-year bear market?
Old 10-15-2004, 08:21 AM   #29
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Re: A 100-year bear market?

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Well, that's my point. The deficit was bad in 1992 also, was projected to get worse, and had been growing for several years. And I can recall hearing (repeatedly) in the early 90s that those who missed out on the market gains in the 80s were out of luck; that it would be all downhill from there. And that was conventional wisdom at the time, as I recall.
Oh, I agree with you. Deficits are not something to be worried about in the short-term. In fact, deficit spending has pulled us out of some of the worst spots we've been in.

That's one of the reasons I think we're not in too bad shape for the next few years. Deficit spending, low taxes, loose monetary policy, high productivity, etc are all good signs -- for the short term.

Unfortunately, we've got a confluence of short-term factors, long-term demographic trends, and record imbalances that I've never seen before in our history. That makes me a mid/long-term bear.
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Re: A 100-year bear market?
Old 10-15-2004, 04:39 PM   #30
 
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Re: A 100-year bear market?

1. Do you have a benchmark/indicator (Dow, S&P, NASDAQ) or others that would guide you to adjust your porfolio accordingly?
2. As retirees (I'm ER), do you rely most on a) dividends b) equity appreciation c) bond income d) others?


[/quote]

Apology for being pesky but does anyone want to take a stab at the questions above?
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Re: A 100-year bear market?
Old 10-15-2004, 05:08 PM   #31
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Re: A 100-year bear market?

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This joking I believe is itself indicative of trouble brewing. The dominant posters, for better or worse, feel that all questions have been answered. So if anyone raises a question outside of that box, he is either attacked (as in you know who) or it is joked away.
Wow...I wish I had some idea...any idea at all...as to where you're coming from with this.

My statement was a one-liner at WAB joking about another thread. No more, no less.

I dont feel at all that all the questions have been answered, or even asked.

As far as "you know who", if you sincerely think the attacks on him have ANYTHING AT ALL to do with his supposed 'viewpoints', then you've missed the point entirely.

Perhaps a sense of humor transplant is all thats needed...
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Re: A 100-year bear market?
Old 10-15-2004, 05:30 PM   #32
 
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Re: A 100-year bear market?

I'll tell you what folks, if you lose your sense of humor
then all is lost. Truly!

John Galt
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Re: A 100-year bear market?
Old 10-15-2004, 05:45 PM   #33
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Re: A 100-year bear market?

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1. Do you have a benchmark/indicator (Dow, S&P, NASDAQ) or others that would guide you to adjust your porfolio accordingly?
2. As retirees (I'm ER), do you rely most on a) dividends b) *equity appreciation c) bond income d) others?Apology for being pesky but does anyone want to take a stab at the questions above?
JAX,

Regarding #1 - I have a policy that I intend to follow throughout retirement - stick with a set allocation and re-balance annually. But I leave open the possibility that stock prices will collapse significantly, and I will allow myself to increase my stock allocation if that occurs. I don't have any preset strike level on any of the indices, but I'm open to as much as a 50-60% stock allocation depending on the circumstances at the time. It would have to be significant to move me, however, since re-balancing would already force me to buy into the storm.

Regarding #2 - I plan to withdraw roughly 2% - 3.5% of the initial balance annually with raises per the cost of living. I expect that both of the above (dividends and price appreciation) will come into play in providing that, but dividends will likely drive my financial future. I'm not quite a Norwegian widow, but unclemick keeps moving me in that direction.
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Re: A 100-year bear market?
Old 10-15-2004, 10:04 PM   #34
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Re: A 100-year bear market?

If the market P/E fell below 10, dividend yields rose above 5%, inflation stayed around 3%, we started running a trade surplus, and we started indexing social security to the average lifespan, I'd consider raising my stock allocation to 80% or so.

All of those conditions used to be considered pretty normal, but now they sound like utter fantasy. What a world!
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Re: A 100-year bear market?
Old 10-16-2004, 04:27 AM   #35
 
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Re: A 100-year bear market?

If wishes were horses then beggars would ride.

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Re: A 100-year bear market?
Old 10-16-2004, 12:23 PM   #36
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Re: A 100-year bear market?

Jax,

I am without expertise in this area, so I can't address your question. But you would get more responses to it if you posted it in its own thread, probably in "Investment Strategies."

Maybe you've already done that and, if so, my OOPS.

Welcome!

Anne
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Re: A 100-year bear market?
Old 10-17-2004, 01:15 PM   #37
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Re: A 100-year bear market?

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Mikey, I always enjoy your posts. Can you expand on this? What is the psychology/dynamic you're seeing in this thread that concerns you? I'm seeing opinions that are all over the map, but most seem to be the sincere points of view of bright people who simply see things differently. I don't see what you're getting at.
Bob, thank you for your comment and question. I also enjoy and look forward to what you write. While I don't want to ignore your request, this has not been one of my best received posts, so in the interest of not becoming a board pariah, I think I would prefer not to try to say more about this.

It's pretty soft anyway, and very easy to shoot down

Mikey

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Re: A 100-year bear market?
Old 10-17-2004, 02:09 PM   #38
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Re: A 100-year bear market?

Well Mikey - my 'dividend stock ladders' took a ribbing here - JWR cranked some numbers and dividend related strategy's are a minority thread over at NFB.

DRIP's still don't get no respect.

Due to the breakup at NFB, I read Raddr's work researching commodities with active interest.

I have a 10% interest in a Patented non-working gold mine in Colorado.

Have been a gun owner since 1996 and still voted for McGovern.

And ala Buffett - have a mild interest in reading some of the posted stuff about Everbank's foreign denominated CD's.

Thinking/ researching outside the box - is not the same as acting (still basically a Boglehead).

Remember this - Louisiana has a lot of boats but not many kayaks. I am still interested - in kayaks!
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Re: A 100-year bear market?
Old 10-17-2004, 06:44 PM   #39
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Re: A 100-year bear market?

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Bob, thank you for your comment and question. I also enjoy and look forward to what you write. While I don't want to ignore your request, *this has not been one of my best received posts, so in the interest of not becoming a board pariah, I think I would prefer not to try to say more about this.

It's pretty soft anyway, and very easy to shoot down

Mikey
Thanks Mikey.
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