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Old 03-02-2009, 06:00 PM   #21
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That's a scary article!

Riding it down to zero. My portfolio at the peak was worth less than some of you have lost in a month, who am I to whine? I was sad when my retirement accounts hit $100k again heading the wrong way, though.
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Old 03-02-2009, 06:22 PM   #22
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The Ventures, Wipe Out. Thanks Gpond.

Dug out my the record from the pile. Properly ogled the blond with gold bikini on the cover, now playing the album.
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Old 03-02-2009, 06:22 PM   #23
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Am I willing to accept that my investments will lose 90% value?

No, I'm not, but then, I don't believe the market was as significantly over-valued in September 2008 as it was in September 1929. I also believe the financial instruments in September 2008 were far more complex than in 1929, and that the impact of global trade was (is) far more extensive now than in the past -- in terms of the impact we have on each other.

The exchange of information in 2009 is far greater than in 1929, fueling panic and idle speculation that also taps into our emotions.

After every depression (recession, slowdown, minor aberration, distraction, great hiccup, or whatever you would like to call it), there has been a rally in the stock market. I won't suggest one needs to be fully invested to see the benefits of positive growth in the markets, but one does need to believe that the businesses that provide jobs, create new products/services/technologies, and pay taxes have some intrinsic value to the economy.

The US is 25% of the world's gross domestic product (in 2008), and one of our states is the eighth largest economy in the world (in 2008). Winston Churchill said, "When America sneezes, the world gets a cold." The US was the the center of the 1929 depression and it's lack of financial controls (then and now) have caused everyone in the world to suffer a cold. But just because the world has a cold doesn't mean each country is in teh exact same state of health -- some are healing faster than others (unfortunately, it's not us -- but Canada's economy is more stable right now, as an example).

When comparing 2009 to 1929, one needs to consider something other than the financial technical analysis. The period after 1929 to 1941 was one where there was significant technical development: from grainy motion pictures with subtitles to talking motion pictures, exploration of the world using new technology (the airplane), a great flowering of literature, spreading of culture using the airwaves (radio), increasing movement between the states (Henry Ford's automated assembly line). None of that was dependent on measuring the daily gyrations of the Dow Jones Industrials. All of it, however, was based on people trying to earn a living.

So is it different this time? Nope -- same song, second verse.

-- Rita
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Old 03-02-2009, 06:22 PM   #24
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Lordy....CFB, where are you? Come back please!
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Old 03-02-2009, 06:26 PM   #25
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Lordy....CFB, where are you?
I think he's hassenpfeffer...with bacon.
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Old 03-02-2009, 06:27 PM   #26
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You guys have nothing to worry about. Before it gets anywhere close to zero, the smart money will be back in.
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Old 03-02-2009, 06:29 PM   #27
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You guys have nothing to worry about. Before it gets anywhere close to zero, the smart money will be back in.
Hmmm, so what does that makes us?
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Old 03-02-2009, 06:33 PM   #28
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If you think the market will be substantially higher in 5-7 years and can afford greater portfolio losses in the meantime, you should leave your money where it is, and if possible, prepare to increase your equity exposure as prices fall. That's my plan. As equity prices decline I'm buying.

Michael
Pretty much describes me too. I am still buying although I have let our AA swing from 25 to 35%+ bonds without rebalancing. I am in it for the long term, but I am still working so I can keep working if need be. If I was retired now without pensions and/or healthcare - I don't think I could stomach this. And about 2/3rd of those retired here have pensions (many COLA'd) and some healthcare too. A completely different question for those folks...
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Old 03-02-2009, 06:36 PM   #29
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Hmmm, so what does that makes us?
We're B+ students.
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Old 03-02-2009, 06:36 PM   #30
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I've gone tharn, for those of you familiar with Watership Down. Deer-in-the-headlights frozen. I'm not rebalancing, not looking at buying equities cheap, not even changing what I'm buying in my last month of accumulation.

Sometimes doing nothing is the best thing to do. Right now I'm just hoping it's less stupid than anything else.

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Old 03-02-2009, 06:38 PM   #31
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But what if this really is the second great depression ? Are you willing to lose 90%?

Dow Jones decline rate mimics Great Depression | Business Tech - CNET News
A line on a chart is just about the only thing in common with the í29 depression.

The political, economic and monetary leadership around the world has made clear their purpose and commitment to stabilize the global financial system and vitalize the economies. They will have different levels of success, depending largely on their domestic political process and current economic well-being. That is, how much resource they have to dedicate and how well they make decisions.

IMHO, the country with the greatest probability of a positive outcome is the US.

We are net importers. That means less pain for manufacturers that must reduce output.
It also means greater opportunity for local manufacturers to step in when demand picks up again.

We have a political process that is open, transparent and subject to scrutiny. With all its shortcomings, it is still better than most of the rest of the democratic world. We can and are reacting.

We have the institutions and the very bright people needed to develop and analyze policy alternatives, then implement them.

We definitely have the resources.

A major depression is possible, but I would definitely bet that the leadership around the world are going to get their way. There may be more pain to come, a high price to pay, and the recovery may be slow, but I would not bet against these folks.




Quote:
I'm pretty close to capitulation . This reminds me of being in a casino and thinking you'll get some of your losses back but you rarely do . So for me it's almost time to get out until sanity returns. I know some people have said they'll ride it down to zero but at what point do you say enough is enough .
Enough is enough when you canít afford to lose any more. Investing in equities is not betting. You are buying ownership. If you believe the companies in which you invest will survive, persevere and grow, you will have a positive return on your investment.
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Old 03-02-2009, 06:45 PM   #32
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I'll be riding this to zero. And DCA'ing all the way down.

Of course by virtue of me admitting that it means I don't really think we are getting to zero.
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Enough is enough
Old 03-02-2009, 06:47 PM   #33
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Enough is enough

I have not been here awhile, because who can think of ER now? I am actually glad to have my job!

But the markets are not going to zero. That would mean that every company out there is worthless (WalMart, GE, Costco, IBM, whatever).
The only question is whether this is a V or a U or an L. Japan has pretty much been an L (fast down and then flat). I keep thinking the down is over and we will start to see the up, but who knows?

As some of the other posters have mentioned, there have been bad times before, and they ended. Is it really so different now? I call this a reverse bubble. Eventually it will burst and we will change direction (just like an upward bubble). I think it is like a hitter in baseball. You never are really as good as you are during a hot streak or as bad as you are during a cold one. Let's hope so.
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Old 03-02-2009, 07:19 PM   #34
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To answer Moemg question, I'm prepared to go to zero. I can't see riding it from 14k to where it is now and bailing.
Yeah, what he said!

Audrey
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Old 03-02-2009, 07:22 PM   #35
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Enough is Enough. I got out today. I just can not see anything in the next few months to turn this around. I may be wrong. If I am I will be back in, but this time feels different. Time will tell.

Lyle
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Old 03-02-2009, 07:34 PM   #36
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Old 03-02-2009, 08:00 PM   #37
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I am still 100% equities, and plan to stay that way. Dividends - which provide all of my retirement income - are up and seem safe unless the economy gets much worse. Earnings are up - not for every stock I own, but the composite is. Overall, I am not too worried at this point. If a couple of dividends are cut, I can cut spending to match, but at this point I do not expect to.
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Hello from Tarma, Peru
Old 03-02-2009, 08:11 PM   #38
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Hello from Tarma, Peru

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Welcome Scott. Good job to only lose 20%!

Are you missionaries? Tell us a little about your environment?

Ha
Hi Ha,

Thanks for asking. Thanks for the welcome, but I was a frequent contributor leading up to my departure from the US last October. Don't know why my number of posts got reset to zero.

Yes, my wife and I are missionaries. We live in the town of Tarma, at 10,016 feet above sea level, almost due west of Lima. We live in a relatively large (rented) home, about the only home in the high Andes with hot running water. The rent is $400/mo, which is extremely high for this town, but the home is fully furnished. Food here is so cheap I keep telling my wife that to a first approximation, it's free. (20 lb of potatoes for US$0.33; 8-10 fresh rolls for US$0.33; etc.) Also, we can take a mototaxi from one end of town to the other for US$0.50. My wife says we need to stay here until the stock market gets back up. We shall see.

Scott
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Old 03-02-2009, 08:15 PM   #39
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I started at 50/50 AA in 2007. Chicken feathers...bluck Bluck BLUCK.
AA migrated on its own to 45/55 due to 2008 mess.
I just actively did a very minor exchange (didya hear the Psst...Wellesley siren go off?) to intentionally position myself at 40/60 for all of 2009 and most probably for all of 2010. Now I let the soup simmer.
It's not timing. I like to call it proactive damage control.
Other than that, I'm in for the long haul. I must love pain.
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Old 03-02-2009, 08:26 PM   #40
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Hi Ha,

Thanks for asking. Thanks for the welcome, but I was a frequent contributor leading up to my departure from the US last October. Don't know why my number of posts got reset to zero.

Yes, my wife and I are missionaries. We live in the town of Tarma, at 10,016 feet above sea level, almost due west of Lima.

Welcome again , My sister is a nun and her order has convents in Lima .
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