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Old 10-10-2008, 08:47 AM   #41
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I agree. Everybody off the board today! Take a walk, mow the grass, wash the dog, whatever. Quit sitting around freaking out. And turn off the TV! Signing off, see you later tonight or tomorrow. Taking a mental health day.
Even though I'm a passenger I can't stop watching the train wreck...
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Old 10-10-2008, 08:49 AM   #42
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Even though I'm a passenger I can't stop watching the train wreck...
It is oddly fascinating, isn't it? I am stating to wonder at what point i will seriously start to worry. Hasn't happened yet, but it would be foolish to say it won't.
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Old 10-10-2008, 08:51 AM   #43
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This may be one of the best indicators yet. When the "buy and hold" types throw in the towel.
I'm emotionally close to this point if intellectually far away.

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Old 10-10-2008, 08:53 AM   #44
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When even Berkshire Hathaway is down 20% in less than 30 minutes, you have to wonder. Either this is the beginning of the worst economy since the early thirties or it's the buying opportunity of a lifetime. I am going to guess the latter.
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Old 10-10-2008, 08:56 AM   #45
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From whence came that opinion? Hearken! Methinks ye should hearken to other forms of English.

Lo and behold, others gather to agree!!

Hence, varlet, do not tarry, but flee, fleee, fleeeee!!!!

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(and it IS nice out here in the Northeast - a walk would not be amiss...)
It is absolutely gorgeous in New Orleans - - sunny, slightly cool, and no oppressive humidity at the moment. I have been working on the yard, or perhaps I should say I have been puttering about in the yard doing a few things here and there, between posts. Later on Frank will take me to lunch since we both have today off, so I'll get away for a while.
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Old 10-10-2008, 08:58 AM   #46
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When even Berkshire Hathaway is down 20% in less than 30 minutes, you have to wonder. Either this is the beginning of the worst economy since the early thirties or it's one of the buying opportunity of a lifetime. I am going to guess the latter.
BK has a lot of businesses that will suffer a lot in a recession

Buffet also made some commodity related investments in the last few years and those are being crushed
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Old 10-10-2008, 09:02 AM   #47
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Time to go walk the dog since I have the day off...
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Old 10-10-2008, 09:04 AM   #48
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I've become glued to the financial web sites, I need an intervention. I'm trying to scrape together some extra cash to throw into the market. It's really weird to keep going, "Dang, it's really hit bottom now and I only have x $ to throw in....oops, nevermind" over and over.
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Old 10-10-2008, 09:11 AM   #49
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BK has a lot of businesses that will suffer a lot in a recession

Buffet also made some commodity related investments in the last few years and those are being crushed
Even the wisest amongst us is not immune. On days like this I can sit back and think, "Damn, at least I'm not losing as much money as Buffett is today."
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Old 10-10-2008, 09:17 AM   #50
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I've become glued to the financial web sites, I need an intervention. I'm trying to scrape together some extra cash to throw into the market. It's really weird to keep going, "Dang, it's really hit bottom now and I only have x $ to throw in....oops, nevermind" over and over.
Anybody have handy Warren Buffett's old quote along the lines of 'an oversexed teenager in a Cathouse' relative to buying opportunities in the 73/74 Bear market?

Still looking and trying to scrap up spare cash - I think the needle has bent on my greed meter. I haven't a clue as to what to buy - but with everything seemingly on sale, I have this overwhelming urge to buy something.

I hope nobody has unplugged the computers rebalancing my balanced index fund.

heh heh heh -
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Old 10-10-2008, 09:20 AM   #51
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I agree. Everybody off the board today! Take a walk, mow the grass, wash the dog, whatever. Quit sitting around freaking out. And turn off the TV! Signing off, see you later tonight or tomorrow. Taking a mental health day.
Harley, you are a wise man! Enjoy your day.

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Old 10-10-2008, 09:25 AM   #52
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If you do have any cash, do what I'm doing, buy an index fund, like Vinix, tracks s and p, go mown lawn, then when your up 10 or 15 percent, dump it, you just made a profit. The market, IMHO, is correctly priced right now, but those whose emotions turn from fear into greed will be back buying.

The market in the past decade or so made no sense since companies grow at average as the population and economy grow. However, if much is based on consumer credit and grows too fast, the whole house of cards will crash.

But not to worry, the cards will be picked up, so pretty safe bet to buy and index, Russell, s and p, whatever, and just do as I mentioned.

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Old 10-10-2008, 09:29 AM   #53
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They're forecasting a disastrous day today. Hope Cramer is ready to sell when we jump up 400 points. I haven't seen the media get it right yet.
On the way to the Houston group dinner with Nords, one radio financial guy said there would be a big rally starting next week and that we should sell into it. On the way home, another financial host said there would soon be a big rally and we should sell into it. I guess great minds think alike.

All of them were bulls a month ago but they deny it now. They've all been bears since late 2007. I must have missed those programs were they said the other programs were really rebroadcasted from 2003.
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Old 10-10-2008, 09:49 AM   #54
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An interesting analysis from Morningstar's Pat Dorsey

Morningstar Video

Once again, its the hedge funds that are screwing us!! Hopefully, enough people will get burned that they will no longer have such a large impact on the market.
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Old 10-10-2008, 10:14 AM   #55
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Isn't that a little extreme? What made you decide to do this right now?

I am curious but not meaning to be critical - - believe me, I think most of us are pretty freaked right now. What effect will this have on your ER income and your ability to live a lifestyle reasonably close to that to which you are accustomed? What was "the last straw"?
Hey, I thought I should do my part in trying to help us find a bottom.
Obviously, announcing my intention had no effect on the market, but it was worth a shot. It worked as well as government plan but was much cheaper. sorry for scarying people but I am in until the market reaches negative terrority.

I am primarily an income investor not really buy and hold. I got rid of most of my BAC stock before they cut dividends. On the other I actually had two stocks raise dividends (KMP, and MGG) in the last couple of day, coupled with GE intention to maintain its dividend, I think my income is relatively secure. The recession is clearly going to have an impact on the ability of most of my stocks to raise dividends. Still my income needs are covered by interest and dividends. At this point even Intel is yielding 3.6% several times more than the so called safety of Government bonds.

Now, I'd be lying if I said the last couple of weeks haven't been bothering my, but I'm almost as bothered by my lack of cash as the absurd panic selling. I've finished reading 600 of the 900 pages of Buffett's book, he made most of his money during times of panic. I know the guy is buying right now, and it is now my biggest holding so I'll let Warren pick up some bargains for me.
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Old 10-10-2008, 10:28 AM   #56
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I can't call a bottom I just took a knife through the throat


Buy..buy ...buy


I sound like Jim Cramer....but he is on a ledge so you can't hear him scream.
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Old 10-10-2008, 10:33 AM   #57
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Hey, I thought I should do my part in trying to help us find a bottom.
Obviously, announcing my intention had no effect on the market, but it was worth a shot. It worked as well as government plan but was much cheaper. sorry for scarying people but I am in until the market reaches negative terrority.

I am primarily an income investor not really buy and hold. I got rid of most of my BAC stock before they cut dividends. On the other I actually had two stocks raise dividends (KMP, and MGG) in the last couple of day, coupled with GE intention to maintain its dividend, I think my income is relatively secure. The recession is clearly going to have an impact on the ability of most of my stocks to raise dividends. Still my income needs are covered by interest and dividends. At this point even Intel is yielding 3.6% several times more than the so called safety of Government bonds.

Now, I'd be lying if I said the last couple of weeks haven't been bothering my, but I'm almost as bothered by my lack of cash as the absurd panic selling. I've finished reading 600 of the 900 pages of Buffett's book, he made most of his money during times of panic. I know the guy is buying right now, and it is now my biggest holding so I'll let Warren pick up some bargains for me.
OH.... OK! Thanks. Sounds like you are set. Love those dividends!
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Old 10-10-2008, 11:31 AM   #58
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Originally Posted by laurence View Post
I've become glued to the financial web sites, I need an intervention. I'm trying to scrape together some extra cash to throw into the market. It's really weird to keep going, "Dang, it's really hit bottom now and I only have x $ to throw in....oops, nevermind" over and over.
I called my Fidelity guy yesterday. I asked if his clients were selling. He said some. I said I was bummed that I am down to a minmum level of cash. He said, there is always margin you know.

Ha
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Old 10-10-2008, 12:33 PM   #59
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Haha.. that is funny!

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[FIRE'd@51] The reserves belong to the banks, not the Fed. The banks are not paying the Fed to hold the reserves. That would be an example of negative interest rates.

Let me try to make this simple for you,
The reserves don't belong to the banks.. the reserves themselves are borrowed:



The larger banking system is insolvent.. they don't have any reserves. The Fed GIVES them the reserve, initially asked a low rate of interest, and is now instead paying them to keep the money. From the POV of the Fed that sounds like negative interest to me.

Now where the Fed gets ITS money is not so simple.. some from the gov., some from banks, and some from other activities. It's a privately-held corporation.. but (from what I understand) historically most profits have been turned over to the Treasury, its share price is fixed and, were it to dissolve, the US gov. would take over its excess capital:

Money and the Fed: Myth and Reality

I believe the Federal Reserve got injections of Treasury bills or else it, too, would be considered bankrupt. Since the system is no longer free-standing but relies on taxpayer injections.. I'd say we are paying banks negative interest to hold -not THEIR money, as before- but what is increasingly taxpayer money.


Quote:
By October 1st Wrightson ICAP, a money-market research firm, reckoned the Fed had just $158 billion of unencumbered Treasuries left (see chart).

The Treasury has helped the Fed out by issuing additional debt exclusively for its use. This helps soak up the excess reserves created by the Fed’s numerous loan programmes, which has caused its balance-sheet to balloon to $1.2 trillion. But the Treasury has congressional limits on how much debt it may issue. In search of a permanent way round the problem, the Fed has asked Congress to let it pay interest on bank reserves. It could then expand its balance-sheet indefinitely without driving the fed funds rate to zero; a bank will not lend out excess reserves at 0.25% if it can earn 1.75% at the Fed. The new bill would raise the debt ceiling and permit the Fed to pay interest on reserves immediately.


The Fed’s balance-sheet is under strain | Plan B | The Economist

Now.. how long can this go on?
It's public debt being issued to sustain private debtors and their whole food chain of private debt.
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