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Re: Another Bear Market Looming?
Old 07-13-2006, 01:33 PM   #41
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Re: Another Bear Market Looming?

I know I made it through the crash just fine with a 60/40 stock to bond ratio. Sure I lost however it wasnt that bad over the long run. To me its just common sense you learned as a kid. Never put all your eggs in one basket. That holds true today.
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Re: Another Bear Market Looming?
Old 07-13-2006, 01:34 PM   #42
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Re: Another Bear Market Looming?

Quote:
Originally Posted by Cut-Throat
To get the kind of losses that you described ($850K to $65K) does not even sound like investing. Might as well play roulette at Vegas.

Buying dips on bargain.
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Re: Another Bear Market Looming?
Old 07-13-2006, 01:35 PM   #43
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Re: Another Bear Market Looming?

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Originally Posted by IHateCNBC
Buying dips on bargain.*
Well if you stick with one asset class ya I mean theres a chance you can get hammered. But then we all know you are not supposed to do that ...
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Re: Another Bear Market Looming?
Old 07-13-2006, 01:37 PM   #44
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Re: Another Bear Market Looming?

Quote:
Originally Posted by Cut-Throat
To get the kind of losses that you described ($850K to $65K) does not even sound like investing. Might as well play roulette at Vegas.
I knew a guy who suffered very similar losses in 2000-2002. If I remember his allocation correctly, he was heavily invested in certain "carefully chosen" technology stocks. He theorized that since he was in the IT field and spent a lot of time looking at individual stocks, he could do a good job of picking winners and losers. And it did work for him all through the 1990s, but then he was wiped out by the dotcom crash.

Luckily, he wasn't ER'd, but still it was not a fun position to find oneself in. He has made worse mistakes since
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Re: Another Bear Market Looming?
Old 07-13-2006, 01:38 PM   #45
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Re: Another Bear Market Looming?

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I have to disagree
... there is no requirement to do so, but you certainly may if you so wish.
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Re: Another Bear Market Looming?
Old 07-13-2006, 01:57 PM   #46
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Re: Another Bear Market Looming?

Quote:
Originally Posted by Cut-Throat
To get the kind of losses that you described ($850K to $65K) does not even sound like investing. Might as well play roulette at Vegas.
Example of confusing gambling and investing:

I was working in the Silicon Valley during the 2000-2002 period and knew people that lost hundreds of thousands of dollars because they exercised Incentive Stock Options and held the stock hoping to qualify for long term capital gains.* The stock plummeted and they were stuck with HUGE tax liabilities that cleaned them out.* Some are still paying off the debt.
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Re: Another Bear Market Looming?
Old 07-13-2006, 02:01 PM   #47
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Re: Another Bear Market Looming?

Hmmmm

Back when I was a young turd instead of an old phart circa 1973-4 we had an 'interesting' market dip. Even though I was widely diversified AND working - it still was not high on my fun list of the good old days.

Now my used 1967 Jaguar E coupe repainted in Burgundy red metalflake - that's a fond memory.

Even with diversification Mr Market gives tests from time to time.

Here's to DeGaul and the Norwegian widow. Toss in a pssst Wellesley for luck.

heh heh heh heh heh heh heh heh
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Re: Another Bear Market Looming?
Old 07-13-2006, 02:06 PM   #48
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Re: Another Bear Market Looming?

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Originally Posted by d
... there is no requirement to do so, but you certainly may if you so wish.
That's mighty kind of you to allow me to do so.
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Re: Another Bear Market Looming?
Old 07-13-2006, 03:10 PM   #49
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Re: Another Bear Market Looming?

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That's mighty kind of you to allow me to do so.
.. but of course; it's the least i could do, and i would expect no less of you should i wish to disagree*
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Re: Another Bear Market Looming?
Old 07-13-2006, 03:26 PM   #50
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Re: Another Bear Market Looming?

Quote:
Originally Posted by IHateCNBC
Would be interesting if we were in 2000 if everyone here would be touting being diversified.

Not trying to start anything but being diversified was not the mindset in 1999.

Now we are being diversified experts.
In 1996- 2000 I was dumping lots of money into savings but hadn't studied allocation practices and the like. DW and I used an advisor who put us in a fairly diversified set of load funds. We may have be able to do better with indexes and the like if we had been interested enough to study the subject but I have to say our advisor kept us from blowing it big time. In 1999 I was bemoaning the fact that we didn't have more invested in the tech sector especially Broadvision and the like. She cautioned us that we were doing fine and diversity would serve us well in a downturn. Like everyone else, we lost a bundle but nothing to compare to friends who were heavy in tech.
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Re: Another Bear Market Looming?
Old 07-13-2006, 03:38 PM   #51
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Re: Another Bear Market Looming?

Quote:
Originally Posted by donheff
In 1996- 2000 I was dumping lots of money into savings but hadn't studied allocation practices and the like.
I wonder how many people here did follow some "smart" asset allocation model 10 years ago.* * Maybe it's just the places I hang out, but it almost seems like "asset allocation, index funds, and dividends" is simply the new mantra that replaced "cash is trash, and the trend is your friend."

So, what else has changed in the last few years?

The global markets are much more interconnected than they have been in the past (just look at the influx of foreign capital into the US), and we're no longer in a falling interest rate environment (the last one lasted 20 years).

Anybody besides me who thinks these last two differences have made "smart" asset allocation much less smart?* * I think we'll see much higher correlations among asset classes in the coming years.
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Re: Another Bear Market Looming?
Old 07-13-2006, 03:44 PM   #52
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Re: Another Bear Market Looming?

What'll the new mantra be?
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Re: Another Bear Market Looming?
Old 07-13-2006, 03:50 PM   #53
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Re: Another Bear Market Looming?

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Originally Posted by TromboneAl
What'll the new mantra be?
If the bears are right, it'll be "Brother, can you spare a dime million bucks?"* (updated for inflation)

Actually, I think we're about due for another "collectibles!" investing paradigm.* *I'm putting my money into antique computers.
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:11 PM   #54
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Re: Another Bear Market Looming?

Quote:
Originally Posted by wab
I wonder how many people here did follow some "smart" asset allocation model 10 years ago. Maybe it's just the places I hang out, but it almost seems like "asset allocation, index funds, and dividends" is simply the new mantra that replaced "cash is trash, and the trend is your friend."

So, what else has changed in the last few years?

The global markets are much more interconnected than they have been in the past (just look at the influx of foreign capital into the US), and we're no longer in a falling interest rate environment (the last one lasted 20 years).

Anybody besides me who thinks these last two differences have made "smart" asset allocation much less smart? I think we'll see much higher correlations among asset classes in the coming years.
Careful Mr Wab, I will report you for promulgating non-PC thoughts.

Ha
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:11 PM   #55
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Re: Another Bear Market Looming?

Is all this a bit extreme? The market is down what . . . a couple of percent YTD? The previous three years it had been up 23+%, 10% and 5% -- which is not much of a bubble.

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Re: Another Bear Market Looming?
Old 07-13-2006, 04:24 PM   #56
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Re: Another Bear Market Looming?

Quote:
Originally Posted by HaHa
Careful Mr Wab, I will report you for promulgating non-PC thoughts.
Quote:
Originally Posted by wab
Actually, I think we're about due for another "collectibles!" investing paradigm. I'm putting my money into antique computers.
I'd say wab's thoughts are rather PC.
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:25 PM   #57
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Re: Another Bear Market Looming?

How about the 70's and 80's - had a different label then.

Physical gold/pm stock, foriegn stock, foreign bonds, U.S. stock, U.S. bonds, land/R.E., - probably missing a few.

Collectibles had their day - the classics: guns, gems, stamps and the more exotic ala scotch, wine, art, cars, et al.

The name Harry Browne stcks in my mind.

I don't remember hearing MPT, asset correlation - but I sure remember some weird diversification schemes.

Used my freeze dryed food for backpacking - have a few gold, platinum, silver coins left in the old safe deposit box. And 10% interest in a non working CO patented mine. Also owned a lot of er ah - pssst Wellesley back then - which helped.

heh heh heh heh heh heh - I hear Chinese Panda's(the coins) are hot now among certain folks.

heh heh heh heh
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:31 PM   #58
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Re: Another Bear Market Looming?

Quote:
Originally Posted by rodmail
Is all this a bit extreme?* The market is down what . . . a couple of percent YTD?* The previous three years it had been up 23+%, 10% and 5% -- which is not much of a bubble.
The bear case isn't that the recent bull created a bubble, it's a combination of:

1) The last market bubble (2000 peak) was reinflated by the fed (and the prez via deficit spending), so it never had a chance to fully deflate.

2) In the meantime, the fed has created the largest asset bubble ever in the housing market (and foreign central banks did the same thing world-wide), which will *painfully* deflate

3) And we've created a GIANT debt burden due to the deficit spending

4) And we've got the largest trade deficit ever

5) And we've got a demographic bulge that's about to pass through the social security and medicare pipeline

6) And maybe we've got an oil crisis as well

So, the stock market isn't correcting for a price bubble as much as it'll be correcting for reduced future earnings (if the bears are right).

The bull case is basically:

1) Stocks always go up in the long term (which is only true if GDP grows long-term as well)

2) The economy is currently strong

3) Corporations have been hoarding cash, so there's a potentially large economic stimulus that hasn't been used yet

4) The fed might start lowering rates again

5) USA! USA! USA!
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:33 PM   #59
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Re: Another Bear Market Looming?

Everythings going on sale! Run away!!!!

Everythings getting marked up! BUY! BUY!
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Re: Another Bear Market Looming?
Old 07-13-2006, 04:41 PM   #60
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Re: Another Bear Market Looming?

Quote:
Originally Posted by unclemick2
Collectibles had their day - the classics: guns, gems, stamps and the more exotic ala scotch, wine, art, cars, et al.
Would't Persian rugs belong somewhere on that list? I think they were touted as inflation shelters back in the 70s (?)* 8)
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