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Old 06-13-2010, 12:34 PM   #21
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Incidentally, I've noticed life is much nicer since I stopped watching MSNBC

So true! When the meltdown hit, my SO insisted on watching every possible financial show he could find - MSNBC, CNBC, you name it. I got sucked into it, and ended up literally feeling sick to my stomach most of the time (although I managed to not do anything rash with my portfolio). When the recovery started and things started returning to normal, I told him that I would no longer watch those shows, and that whenever the next inevitable market downturn started, I didn't want to hear the dirty details. If he wants to watch them, fine, but I would leave the room.

And that is exactly what I've done for the past month or two and I feel SO much better this time around.
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Old 06-13-2010, 12:37 PM   #22
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If your "gut" is telling you to get onto the sidelines, what it's really telling you is that your AA was wrong for you in the first place.
+1
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Old 06-13-2010, 12:38 PM   #23
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I was running some errands today and was listening to a personal finance program on a station when this topic came up. Mainly, the caller said, there's too much information, too many experts. The host of the program agreed. Called it too much noise.

He later made the analogy of trader vs investor like that of water surfer vs traveler. The trader is like the surfer, caring for each wave to avoid a crash. The investor is like the traveler who doesn't care about each wave, but only the tide. The moral was that as investors not start acting like the trader or surfer or else it would make us crash. I guess it's just another way of saying if you are in for the long term, to not focus on daily events. I enjoyed listening to the analogy anyhow.
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Old 06-13-2010, 01:58 PM   #24
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Ironically lots of people saw it coming but didn't believe the results would be so bad.

Even the guys who predicted the mortgage implosion realized that their bets were only going to pay off if AIG and Goldman Sachs had the money to pay up. The shorts could've let their investments go even higher, but they were scrambling to sell off their positions before their counterparties went bankrupt.

There are lots of good books covering the past couple of years, but Michael Lewis' "The Big Short" describes the epiphany that swept through the major investment houses just as things started to unravel. What I learned is from reading it is that I only would've seen it coming if I'd been part of the industry, and that the prediction was irrelevant-- a good asset allocation can get through the worst of it.

I've also learned not to go with my "gut"! One of our biggest strengths of getting through the last couple years has been an AA plan that helped us figure out when to rebalance instead of agonizing over a bunch of entrails. If your "gut" is telling you to get onto the sidelines, what it's really telling you is that your AA was wrong for you in the first place.
In my opinion this is an excellent post, one of the best posts I have seen to date on this board. I particularly like the last paragraph and the last sentence of the previous paragraph which I have put in bold. It has been said so many times, and in so many ways, but this paragraph really drives the point home. If people would just read and heed this section I suspect the level of angst on the board would decline dramatically.
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Old 06-14-2010, 12:38 AM   #25
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I find that now, when I watch or read financial information from the experts, I tend to discard most of it. All I can think is that we just went through the most significant financial event since the great depression and ,arguably, no one saw it coming. (I know the permabears, did but a stopped clock...). They all knew everything, then it hit and they all went scrambling - now they again are all knowing.

My feeling - I'm as smart or smarter than most of them and I know that I don't know much. It's hard to take anything they say seriously, at least for me.

How about you?

I saw the dot com bubble, the housing bubble and the brief oil bubble, all before they collapsed... Probably it is because I am cynic/realist. What I didn't expect was how much damage the housing bubble would cause. I had figured that it would only hurt the REITs, which I had intentionally avoided. I had no idea it would clobber the bankers so hard. I greatly overestimated the risk management of the financial industry and I will never do that again.

I have lived most of my life during a time when stocks were very overpriced. I think many stocks are fairly priced right now and am buying as much as I can, selectively. My gut feeling is that the recent "flash crash" was the last straw for the majority of, baby boomer and gen x, retail investors. I think stocks will stay fairly priced for many years. That is my hope at least. I am focused on buying stocks for dividend growth. So, if share price stays flat for the next decade that would be fantastic.

Having said that, I am paranoid about the current stock prices. I have never seen them reasonably priced before and I feel like I need to "get while the getting is good." I have cut my expenses and postponed buying things that I really want. So, that I can put as much money as I can in now. I would like to think that many retail investors are so demoralised by now that they will not get back in and drive prices up. However, I can't take the chance. The "animal spirits" are hard to kill off.
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Old 06-14-2010, 06:50 AM   #26
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If your "gut" is telling you to get onto the sidelines, what it's really telling you is that your AA was wrong for you in the first place.

Great post....... and I'm the one sitting on the sidelines!
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Old 06-14-2010, 07:53 AM   #27
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I dollar cost average in every payday (which explains why the market goes up on the 15th and 30th), I'm betting 5+ years from now stocks will be up, even if they only return to their previous highs, that's 40% higher than today, I'd actually like to see it drop a bit more.
CNBC can be entertaining, I was watching it when the dow fell 1000pts, talk about being dazed and confused :-)
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Old 06-14-2010, 11:48 AM   #28
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...If your "gut" is telling you to get onto the sidelines, what it's really telling you is that your AA was wrong for you in the first place.
And many investors have learned that lesson in the past decade, usually the hard way, and with little thanks to their financial advisors.
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Old 06-14-2010, 12:16 PM   #29
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And many investors have learned that lesson in the past decade, usually the hard way, and with little thanks to their financial advisors.
You would be flat-out amazed at how many people "become" conservative investors when the market tanks, but "become" euphoric aggressive investors when the market's going up a lot........
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Old 06-14-2010, 02:26 PM   #30
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So you have succumbed to sheep mode. That's too bad.

For a take on the article from folks who are not confused, check out this link:
Bogleheads :: View topic - What do you think about this article by Paul B Farrell?
This Boglehead link reminds me why I steer well clear of Bogleheads. The guy posted a link, and he gets lectured that "the name Paul Farrell is not sufficient inducement to get tme to click on the link."

Oh, aren't you precious and important, your poor little finger is all clicked out.


Ha
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Old 06-15-2010, 11:20 AM   #31
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...The guy posted a link, and he gets lectured that "the name Paul Farrell is not sufficient inducement to get tme to click on the link."

Oh, aren't you precious and important, your poor little finger is all clicked out.


Ha
I think every link needs a quick synopsys of what it contains. This will increase the likelihood of a click through. Otherwise, all that clicking can be a time-waster.
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Old 06-15-2010, 11:47 AM   #32
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I think every link needs a quick synopsys of what it contains. This will increase the likelihood of a click through. Otherwise, all that clicking can be a time-waster.
Yeah, and that would prevent any hi-jacking from happening.
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Old 06-15-2010, 04:15 PM   #33
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This Boglehead link reminds me why I steer well clear of Bogleheads. The guy posted a link, and he gets lectured that "the name Paul Farrell is not sufficient inducement to get tme to click on the link."

Oh, aren't you precious and important, your poor little finger is all clicked out.


Ha
Ha - its in the rules for posting. No naked links, give a quick summary or quote to give readers an idea of what the linked article contains.

DD
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Old 06-16-2010, 01:17 AM   #34
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Ha - its in the rules for posting. No naked links, give a quick summary or quote to give readers an idea of what the linked article contains.
One way or another, posters favoring naked links end up on a lot of "Ignore Poster" lists, and not just on this board.
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