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Old 10-01-2011, 02:03 PM   #21
Recycles dryer sheets
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Old 10-01-2011, 02:10 PM   #22
Recycles dryer sheets
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And this one makes me feel kind of cheated. I never got higher than optimism this time around.
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Old 10-01-2011, 02:25 PM   #23
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I beg to differ. Looking at the last 5 recessions as called by the NBER: 12/07, 3/01, 7/90, 7/81, 1/80, the S&P at the beginning and end of the month, and the S&P 3 and 6 months later, it is lower in 9 of those 10 moments.
My bad. I probably need to adjust my medications. Less tonic, more...

I just re-checked. The S&P 500 establishes a trough before the END of the recession, where the recession is declared by the NBER. D'oh!

http://web-xp2a-pws.ntrs.com/content...t/dd010708.pdf

That still makes it a pretty reasonable leading indicator. Beats waiting months for the 'Yeah, the revised updated GDP was negative back there', or the timely declaration from the NBER a year later.

My personal SWAG is that if we are in a recession now, Mr. Market is busily putting in the low here plus or minus a few weeks. Am I trying to time it?, Oh, heck no! I know better than to trust some doofus analyst like myself. I make a point to always ignore my timing advice, because I could be wrong, and it just takes one goof to turn market timing into a losing game.
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Old 10-01-2011, 02:59 PM   #24
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My rose colored glasses came off months ago. I see no green shoots in the global economy and only a lawn that is getting browner by the day. My port went into the red this week for first time this year and I'm about 60% cash. Now I am hearing CEOs are projecting more layoffs ahead, what a disaster for young and old alike.
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Old 10-01-2011, 03:22 PM   #25
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Less tonic, more...
Ahhh, yes.
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I just re-checked. The S&P 500 establishes a trough before the END of the recession, where the recession is declared by the NBER.
That sounds more like it.

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That still makes it a pretty reasonable leading indicator. Beats waiting months for the 'Yeah, the revised updated GDP was negative back there', or the timely declaration from the NBER a year later.

My personal SWAG is that if we are in a recession now, Mr. Market is busily putting in the low here plus or minus a few weeks. Am I trying to time it?, Oh, heck no! I know better than to trust some doofus analyst like myself. I make a point to always ignore my timing advice, because I could be wrong, and it just takes one goof to turn market timing into a losing game.
We could be in for a decade or two of economic disaster, perhaps the end of the US way of life, the decline of the west, or even (gasp) the demise of capitalism as we know it. A new ice age is possible. Certainly the EU will cease and everyone there will revert to their prehistoric way of life.

Or, things will turn back up like they have every time in the past. A little more slowly, perhaps. Whatta I know?
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Old 10-01-2011, 03:46 PM   #26
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My rose colored glasses came off months ago. I see no green shoots in the global economy and only a lawn that is getting browner by the day.
That's the kind of talk I like to hear. When prospects seem dim, it lowers stock prices for us optimists.
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Old 10-01-2011, 03:59 PM   #27
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That's the kind of talk I like to hear. When prospects seem dim, it lowers stock prices for us optimists.
Yep, and I have some dry powder at the ready
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Old 10-01-2011, 05:15 PM   #28
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I have felt the same way since 2001, and this is why I have always stayed away from the stock market.
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My rose colored glasses came off months ago.
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Old 10-01-2011, 10:55 PM   #29
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Wow. Real estate bubble in the making...
Exactly!

Unfortunately you can not time RE bubbles or any Mania. I got out of the markets in 2000 and went into RE in NYC. Bought in 2001 doubled my money ( 1 tax free) by 2004 and cashed out of the USA altogether. Much to my chagrin my properties continued to appreciate by another 6 figures until 2006.

I convinced my DW to go into RE in Lima in 2005 as the rental yields were the second highest in the world. I knew in my head prices would rise but did not know by how much and what period of time. I prefer to look at RE as a a dividend paying stock and am not to focused on appreciation (happy with inflation rates).

The condo's were built in 2006.

DW net returns looked like this:
2006= 29%
2007= 29%
2008= 25%
2009= 19%
2010= 16%
2011= 14% after a major renovation (depreciating cost over 5 years).

In the mean time the price DW can sell for represents a 300% gain minus some taxes.

I have recalculated my net returns based on appreciated value.

2006=10.79%
2007=10.79%
2008= 9.29%
2009= 7.08%
2010= 5.84%
2011= 5.24%

DW has several choices.
1. This could be a bubble forming and holding may result in a paper loss in the future which may or may not be offset by rental yield(dividends).
2. 10 year bond yields are 5.8% but incur currency risk. (strong Dollar)
3. CD's yield 8-10.5% (3 year) have currency and credit risk (similar to a municipal bond).
4. Hold a 50% percent Mortgage (10% for 10 years) default risk.

I thought my headaches were over when I got rid of all my assets and no longer paid taxes, but noooo,life keeps sucking you back in!
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