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Old 08-26-2010, 03:04 PM   #221
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This is how I see it also, although I have been willing to go to the top of the 25% bracket with Roth Conversions. It is only recently that I have qualified, so I got a late start in doing these conversions. That may have been caused by years of reasonable markets supplying healthy realized capital gains.

But if we continue with very low interest rates and somewhat unsettled markets I may discover that it would have been better to leave my money in the TIRA.

Still, if markets suck there will be opportunities for intermediate term trading, and being able to do this tax free (in a Roth) might be worth a lot. IMO this can't really be modeled, it depends too much on unknowns. But some of you with more deterministic outlooks may illustrate otherwise.

On the market forecasting front, there is something other than Hindenburgs to look at, although it is only a straw in the wind. Prem Watsa, CEO of Canadian insurer Fairfax Financial has been called a Canadian Buffett. He has bought options hedging almost the entire Fairfax equity portfolio, and he has also bought options going long on deflation- ie. if (mostly US) CPI falls, he makes money.

I am a child of inflation. I have always had a money interest, and I can remember my entire life since the late '40s involving inflation. I thought that a democracy could not produce deflation. But given Japan's example, I am no longer convinced of this. It may be that the US is different from Japan in this regard, but we thought the US could not experience widespread housing deflation, and that turned out to be wrong. Previously I thought that if voters liked some thing, and politicians liked the same thing, we would get that thing. No longer so sure about this.

Prem Watsa may be wrong, but he is no idiot and he does not like to waste money as he owns a big hunk of Fairfax. He did buy these options earlier when they were cheaper since there was little defation consciousness around.

I can't link the piece because I gave up my WSJ sub and I now read at or through the library.

Ha
You can still read online up to 5 articles for free. Google the title - Firm Makes Bold Bet on Falling Prices - then follow the link to the online WSJ article. Same for Barrons.
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Old 08-26-2010, 06:53 PM   #222
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Yeah, let's talk about food, which is a lot more fun than about the market these days.

Thanks. I should make a point to remember to visit this site. Someone posted something like this in the past, but I keep forgetting.

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I was surprised at how reasonable the food prices are in Florida . After taking the title to my car dealer we stopped at our local place which is a Seafood restaurant that always has specials ( It's always packed ) . We both had shrimp smaller portion dinners and I had two glasses of wine and Gary had a rum & diet coke . The bill was $20.00 .
That's really inexpensive! Still, we do not want to brave the heat here to go out to eat, even at that price.

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One of our indulgences is a Sunday lunch after church...
I can understand that. It is about the company more than the food.

And having family in town, parents and siblings, means that we often take turns inviting each other, and host big sit-down dinner parties. And my daughter, ever since she moved out to an apartment, has been inviting us over for dinner once a week. In fact, we are leaving home for her dinner soon. She used to eat out all the time, but has now turned into a good cook and wants to have occasions to cook.
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Old 09-24-2010, 09:51 AM   #223
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The 50 day moving average crossed below the 200 day moving average. Then go back on the chart to see what happened in the past when that happened.
Stocks go up 9% during the next month? Seems like a great buy signal.
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Old 09-30-2010, 09:23 PM   #224
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I knew it was a good month but didn't realize the historical proportions compared to previous Septembers until I saw some headlines today. Nice.
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Old 09-30-2010, 09:34 PM   #225
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Guys, I'm going to step out on a limb here and say that the beginning of September was a great point to be long on the market.
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Old 09-30-2010, 09:52 PM   #226
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I originally posted this under "Vanguard: one in three chance of double dip "

As of Wednesday - Dex's T-Theory friend is looking at a down-turn sometime aro. October 11-18, and then a fall-off towards the end of the year.

T Theory

Guess we'll see.....
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Old 09-30-2010, 11:19 PM   #227
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Guys, I'm going to step out on a limb here and say that the beginning of September was a great point to be long on the market.
That is a very safe bet, as long as you stop measuring now.

For a longer time, not so clear.

We end with a word about momentum. This month was the best September for the market since 1939, when the Dow was up 11.1%. Yet, the market dropped 30% by June 1940 and 41% by April 1942. The September 1939 top was not reached again until June 1949, almost ten years later. The market was also up 9.7% in March 2000, before dropping more than 50% over the next 2 years. Momentum can and sometimes does turn on a dime, particularly when not supported by fundamentals.

Read more: http://www.businessinsider.com/the-market-is-on-shaky-ground-and-severely-overextended-2010-9?utm_source=feedburner&utm_medium=feed&utm_campai gn=Feed%3A+TheMoneyGame+%28The+Money+Game%29&utm_c ontent=My+Yahoo#ixzz114rIwIvA

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Old 10-01-2010, 05:13 AM   #228
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If one can strip emotions out of it.... which is difficult to do, it comes down to (realistic) goals in light of the risk.

What are you trying to accomplish? Huge gains on an uncertain run up or preservation of capital so FIRE income is secured?

No right thinking person can know the direction of the market... at best it is a guess based on inadequate information.


I am in the stock market. But you can bet your bottom dollar that I have locked in my income for FIRE!

Do I want to make a buck? Sure! Do I want to keep working because I guessed wrong or made a bad investment decision? H3LL NO!

Those of you that think you are sure of how things will play out... well, guess what will happen?

As always; Some of you will be big losers and some will win. Which will you be?

Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.


What is your goal? If it is all in... IMO you better have a long-time horizon before you need your money, because it may not turn out as you hope... (hope... because you certainly do not know)!
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Old 10-01-2010, 07:20 AM   #229
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That is a very safe bet, as long as you stop measuring now.
Um, yeah. But the justification given for getting out in late August was a short-term technical indicator of 200 day and 50 day moving averages. So if you're judging the effectiveness of the indicator, it failed. And pretty miserably at that, considering that the S&P had its best September in 70 years.

But I'm sure all of the other technical mumbo-jumbo will work out much better in the future.
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Old 10-01-2010, 07:53 AM   #230
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Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.

Same here.
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Old 10-01-2010, 08:09 AM   #231
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Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.
Same here.
All well and good, but... inflation?

-ERD50
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Old 10-01-2010, 09:55 AM   #232
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Well, I have to hand it to you dex, you hit that low point with remarkable precision!

AllCash.jpg
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Old 10-01-2010, 10:15 AM   #233
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All well and good, but... inflation?
Too bad we don't live on cruise vacations or big screen TVs, because then we wouldn't have to worry about it for a while...
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Old 10-01-2010, 10:46 AM   #234
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The lesson I take away from this is that none of us can predict the future with any great degree of accuracy. It is easy to become fearful and it's just as easy to get greedy. I have no idea what the future holds so I will continue to keep a portfolio with a mix of equities and fixed income and try to keep it balanced while ensuring I have several years of "guaranteed" monies.
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Old 10-01-2010, 11:04 AM   #235
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ECRI says the odds of falling back into recession are 1 in 2. Vanguard says 1 in 3. Neither of these are Chicken Little's or permabears and both are more often right than wrong.

Folks should'nt have money in equities if they can't afford a sudden and deep decline. While I have not followed those that took their equity allocations down I also don't criticize them for doing so and think their sharing that on this thread is positive.
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Old 10-01-2010, 11:31 AM   #236
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ECRI says the odds of falling back into recession are 1 in 2. Vanguard says 1 in 3. Neither of these are Chicken Little's or permabears and both are more often right than wrong.
I would agree. On an anecdotal level I don't know many people (who have to work for a living, anyway) who is feeling confident enough about their job security and income security to start cranking up spending on stuff they don't need. As long as that mentality is widespread, the feeling that we need to cut back on discretionary stuff in case we lose our jobs becomes more of a self-fulfilling prophecy.
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Old 10-01-2010, 12:00 PM   #237
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I give Dex credit for saying what he was doing when he did it and why. I appreciate that far more than the people who come here and say months after the fact that they sold at the near term high or bought at the near term low. Even if that is all true, you don't get many who are willing to say they bought at the high and sold at the low. I thank Dex for taking a risk before a tough audience.
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Old 10-01-2010, 12:03 PM   #238
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I give Dex credit for saying what he was doing when he did it and why. I appreciate that far more than the people who come here and say months after the fact that they sold at the near term high or bought at the near term low. Even if that is all true, you don't get many who are willing to say they bought at the high and sold at the low. I thank Dex for taking a risk before a tough audience.
Agreed. Rubbing someone's nose into a decision to go into cash before a market rally is really not much different than the "I told you so" bears who went to cash while rubbing the buy and holder's nose in it during the 2008-09 crash.

And if we didn't appreciate that, I don't know why we'd think turning the tables is any more acceptable.
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Old 10-01-2010, 12:14 PM   #239
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I guess if T-Al hadn't put the smiley-thang in, and if the timing weren't quite so amazing, and if dex hadn't already proven that he's eager to engage in the to-and-fro of the board, and if dex's arguments in favor of market timing weren't so adamant, then maybe I'd take exception to T-Al's comment.

Anyway, dex may get the last laugh when the timescale of that chart has a chance to expand a bit, and he'll get to recall T-Al's post with glee.
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Old 10-01-2010, 12:27 PM   #240
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I give dex high marks for courage and certainly hold his actions far above the after-the-fact "I told you so" types. However, I think anyone who posts here about their attempt to time the market should expect criticism or praise once the results of their gamble strategy plays out. Simple human nature.
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