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Market Is Wild! Thank Goodness for AA
Old 03-15-2011, 07:05 AM   #1
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Market Is Wild! Thank Goodness for AA

Guys and Gals, Mates and Roos,

We are in for a wild ride today. I am so glad I am 60 stock /40 cash split. I was waiting for treasuries to hit 6-7% before pilling in. Anyway any significant selloff I will be taking advantage of over the coming weeks. By significant I mean 15-20% off current prices. At those levels I will move closer to my age based split between stocks/bonds/cash.

Get your plane sick bags ready.
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Old 03-15-2011, 08:18 AM   #2
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I still have roughly 70% in CD's and cash...and only about 30% in the market (both equities and bonds).
Hard to know if this is an over reaction...or with Japan being the 3rd largest economy something that will roil the markets for a while.
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Old 03-15-2011, 08:22 AM   #3
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DOW futures down close to 250 this morning. Kind of sucks. But with everything happening in Japan, not surprising.
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Old 03-15-2011, 08:24 AM   #4
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Yes it is going to be a wild day. Wouldn't be surprised if some value hunters come into the market not long after the open and we move off the lows. I'm at 50% stocks, 15% bonds/commodities and 35% cash.

Think I might wade in this am and add to a few positions.
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Old 03-15-2011, 10:07 AM   #5
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Think I might wade in this am and add to a few positions.
I waded out. For now.

Just don't like what I am "reading between the lines".....with the 3rd largest economy in the world.
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Old 03-15-2011, 10:25 AM   #6
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so much for having to rebalance. My 60/40 had crept toward 65/35...the last week or so has taken care of that issue!
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Old 03-15-2011, 10:40 AM   #7
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Yes it is going to be a wild day. Wouldn't be surprised if some value hunters come into the market not long after the open and we move off the lows. I'm at 50% stocks, 15% bonds/commodities and 35% cash.

Think I might wade in this am and add to a few positions.
Somehow, I don't think of bonds and commodities as asset classes that i would lump togethe like that.

Is there an interesting story here?
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Old 03-15-2011, 10:53 AM   #8
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Jim,

Lumped together for simplicity sake. Mostly bonds in the 15% but do keep some commodity ETF's (about 3% as of today)to help offset inflation concerns. Would like to have a much higher bond % and lower cash but am concerned that interest rates are going to rise at some point and bond funds/etf's will get whacked.

Guess I will sit on the bulk of the cash for now.

I did wade in (not jump) this am and will continue to do so on pullbacks like the one today. Fear is my friend.
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Old 03-15-2011, 12:41 PM   #9
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So is there a big sale going on today in the market or maybe more in the next few weeks.
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Old 03-15-2011, 12:48 PM   #10
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Double dip recession anyone? Middle East unrest, oil prices, now Japan....maybe the huge companies haven't been dumb to keep so much cash on hand.
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Old 03-15-2011, 04:54 PM   #11
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Double dip recession anyone? Middle East unrest, oil prices, now Japan....maybe the huge companies haven't been dumb to keep so much cash on hand.
Don't forget the impending Rapture.

Seriously, hark back to the Katrina disaster. People initially sold everything terrified of the shock to the US economy. In actuality, the loss of New Orleans while sad was at most a blip on the national economy. The rebuilding efforts were stimulatory, in fact. The mess in Japan will likely have a similar impact on the global economy, with some stimulus effect over the medium term.

Some individual firms will do quite well (anyone with steam coal for sale on the seaborne market, for example).
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Old 03-15-2011, 05:02 PM   #12
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Don't forget the impending Rapture.

Seriously, hark back to the Katrina disaster. People initially sold everything terrified of the shock to the US economy. In actuality, the loss of New Orleans while sad was at most a blip on the national economy. The rebuilding efforts were stimulatory, in fact. The mess in Japan will likely have a similar impact on the global economy, with some stimulus effect over the medium term.

Some individual firms will do quite well (anyone with steam coal for sale on the seaborne market, for example).
Certainly hope you're right and even if a recession heads back our way, we'll stay the course just like in 2007/2008. 60/40 AA and continue to DCA since we're both still w^rking.
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Old 03-15-2011, 05:17 PM   #13
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Don't forget the impending Rapture.

Seriously, hark back to the Katrina disaster. People initially sold everything terrified of the shock to the US economy. In actuality, the loss of New Orleans while sad was at most a blip on the national economy. The rebuilding efforts were stimulatory, in fact. The mess in Japan will likely have a similar impact on the global economy, with some stimulus effect over the medium term.
I tend to agree, but losing a big hunk of electrical generation in Japan, a lot of temporary production loss and an unknown amount of long term loss is in a totally different category from one smallish city which economically speaking could be summarized as a port. And it did not take long to have the port humming once more.

There is another difference, and this argues for a rapid rebound in Japan. The Japanese will impress us all with their orderly and effecient and untiring rebuilding, though there may be some graft skimmed along the way.

I would say that Japanese companies are probably a better bet than the Japanese economy as whole, long term. It will be interesting to watch.

Ha
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Old 03-15-2011, 05:25 PM   #14
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Ha, note that I specifically compared NO's effect on the US economy to the Japanese quake's effect on the world economy (not the Japanese economy). Frankly, the Japanese economy has been the sick man of Asia for my adult life and I don't really know what this disaster will do to it. I'd hazard a guess that there will be short term pain followed by massively stimulatory rebuilding, but its anyone's guess.

Personally, I was hoping for a crash today in the ADRs of Fuji Heavy Industries (maker of Subarus), but it did not happen. The wall of liquidity is out there, at least for now.
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Old 03-15-2011, 05:54 PM   #15
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Double dip recession anyone? Middle East unrest, oil prices, now Japan....maybe the huge companies haven't been dumb to keep so much cash on hand.
Companies can't predict earthquakes nor other natural disasters. They're gonna happen its just a matter of when.
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Old 03-16-2011, 09:23 PM   #16
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I've positioned my money in places I'm comfortable with for a long time. Right or wrong I sleep good. However, this situation in Japan is very discouraging. I think the nuclear incident now unfolding may well wipe out the memory of the tsunami. It seems we deal with natural disasters as they come. Man made disasters are a whole different ball game.
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