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Old 07-26-2008, 12:24 PM   #21
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I'm personally not interested in getting into "more defensive positions". I'll lose with those regardless of what does or doesnt materialize in the financial arena. You dont make enough money from them to stay ahead of cost of living changes and enjoy a reasonably nice lifestyle.
...
...
Despite being in the "deaccumulation" phase of life, I'm not in the doom and gloom group. I still look at this situation as a buying opportunity, just a bigger opportunity than I really wanted.
But, some day there will be a major financial disaster. The choice will be between losing a moderate amount in defensive positions, or otherwise losing virtually everything. Too bad I can't tell you when that will happen, so I play a mixture of investments that hopefully eliminate the extremely bad (or extremely good) outcomes.
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Old 07-26-2008, 12:32 PM   #22
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You don't think aliens and psychics might have a huge impact on the economy if they exist?

If psychics end up being real and they tell me to put all my money into some pennystock for a company that is gearing up to sell alien chow exclusively, then you better believe I want in on the ground floor of that!
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Old 07-26-2008, 12:42 PM   #23
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FoA.. thanks! You've explained it!
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Old 07-26-2008, 12:49 PM   #24
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I think it is of utmost importance today to attempt to determine whether this financial crisis (and the current state of the economy) is a small matter and something to be ignored or a very serious concern. The data and news comes in daily.
So go ahead, determine it for yourself. That's what we are all doing.

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When it is discussed there seems to be two camps, one camp simply saying don't worry, be happy, and the other camp is more worried and looking for help in determining how bad things really are.

Personally, the don't worry, be happy, camp is not very helpful. That view may be right in the end, but if not, it could be a very serious to anyone considering ER.
I think you are wrong here. I think what you call the don't worry be happy camp is actually the experienced group of campers saying to the less experienced ones "that sound isn't a bear coming to kill us all. I've heard it before and it's just a couple of racoons trying to steal our M&Ms". I don't know if age is the defining characteristic since I don't know everyone's age, but I know that I and UncleMick and CFB at least are saying that we've all seen things get just as bad or worse in the past, and we're satisfied that our plans will hold up under the current conditions too. If we're wrong, it's only ourselves that will be effected. I personally need a lot more than what I see happening these days before I freak out.

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It would be nice if issues were discussed without taking a stand (or name calling) based on optimist/pessimist bias. Labeling a view based on it being negative, doesn't necessarily make it the wrong view.
I agree on the name calling issue. However, I and I believe many others aren't taking a stand based on optimism. It is based on personal experience. And if the people we are talking to don't listen and ask the same things over and over, it's easy to get a little sarcastic about it.

If you don't want our comments, just put in the something in the title specifying that it's only for whatever you pessimists/gloom and doom/sky is falling/gloom and doom'ers want to call yourselves. I'm not name calling, just looking for a better term. Feel free to self define. I will opt out of those threads as long as you make it clear my opinion isn't wanted.

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Old 07-26-2008, 01:36 PM   #25
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So if one doom and gloom thread out of many dozens of similar doom and gloom threads gets fewer hits than a thread about a different topic that is a welcome respite from nonstop sky-is-falling armageddon talk, it's supposed to be proof that people are sticking their heads in the sand? Is that the thesis here?

Are we supposed to be all financial apocalypse all the time?
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Old 07-26-2008, 01:38 PM   #26
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So if one doom and gloom thread out of many dozens of similar doom and gloom threads gets fewer hits than a thread about a different topic that is a welcome respite from nonstop sky-is-falling armageddon talk, it's supposed to be proof that people are sticking their heads in the sand? Is that the thesis here?
Seems to be. Fits a certain person's ego requirements very nicely.
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Old 07-26-2008, 02:47 PM   #27
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I think you are wrong here. I think what you call the don't worry be happy camp is actually the experienced group of campers saying to the less experienced ones "that sound isn't a bear coming to kill us all. I've heard it before and it's just a couple of racoons trying to steal our M&Ms". I don't know if age is the defining characteristic since I don't know everyone's age, but I know that I and UncleMick and CFB at least are saying that we've all seen things get just as bad or worse in the past, and we're satisfied that our plans will hold up under the current conditions too. If we're wrong, it's only ourselves that will be effected. I personally need a lot more than what I see happening these days before I freak out.
DING DING DING! We have a winner!!!

Quote:
And if the people we are talking to don't listen and ask the same things over and over, it's easy to get a little sarcastic about it.
DING DING DING! You may choose any prize from the top shelf!

Its not simply enough that my current financial plan would have weathered any of the financial crises the US has faced, but that when people lost their shirts in 2001, I retired with more money than I had in 2000 and kept adding.

The simple fact is if you buy dollars for 70c because people are afraid of them, and sell them when they're worth $1.30 because everyone has lost their minds, dont put all your eggs in one basket, dont take on too much or too little risk, and be able to weather a few bad years...YOU'LL BE FINE! If something happens to make you un-fine, almost everyone else will be far more un-fine than you are.

You dont have to outrun the bear, just the other guys that will taste just as good.

I just cant take the persistent doom and gloom scenarios cobbled together from web sites and blogs, however much truth may be in them, coupled with the actionable items to go buy beeever cheeese or write your congressman for help.

I hadnt seen "rockon's" comments since he's been on my ignore list, but since they've been quoted, let me see if I can clue you in without upsetting you about being called a name.

Financially, you're ridiculously naive. Further you come off less like someone interested in discussing the issues and more like someone that wants to poke the ant hill with a stick just to see what happens. None of the naivete or issues with approach seems to prevent you from airing your ill thought out ideas or solutions. Over and over and over. More experienced people explain the problems with your proposals, yet those explanations dont seem to seep in.

Then there are the flip flops. One day you're poking the ant hill about inflation being 12%. The next you're suggesting an annuity that allegedly pays 6% (when it doesnt) fits the bill as a solution to ones financial worries.

Hmm, someone that pushes hot button issues and self contradicts within 24 hours?

So please dont play the victim thats being persecuted by the ER.borg collective.
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Old 07-26-2008, 06:01 PM   #28
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I am absolutely a proud member of the "Don't Worry, Be Happy Club." Being senior myself, I see a lot of seniors. I have yet to meet one who is losing a home or eating cat food. Most just grumble about the market being down but they believe that it will come back. Of course you wouldn't know it, if you relied entirely on the media's daily dose of "How bad it is out there." Good grief, this country has come through much worse. Here, try this:

BTW: Have y'all seen the Billy and Akaisha latest essay? It addresses some of the issues in this thread.

I Ain't Buyin' It

I ain't buying it either..
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Old 07-26-2008, 06:28 PM   #29
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all this and that really shows how experience colors perception and how perception acts upon outlook.

nords has a totally different experience with his nephew as an army ranger than my friends with no military experience have with their kid as a ranger. a so-called alien abductee has a totally different experience than i might have under likely the very same set of circumstances. optimists and pessimists see the same half glass but both describe the very same thing in such different terms that to listen to them separately you wouldn't know they were talking about the same thing.

listen, without prejudice to most any argument, study almost any religion, look objectively at most all walks of life, and likely you will find the same thing.
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Old 07-26-2008, 06:29 PM   #30
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I worry about the economy and the national debt but I try not to dwell on it . I lost my husband , my son & my brother within eight years. Nothing the economy could do would affect me more than that . So bring it on !
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Old 07-26-2008, 06:30 PM   #31
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Originally Posted by RockOn View Post
I think it is of utmost importance today to attempt to determine whether this financial crisis (and the current state of the economy) is a small matter and something to be ignored or a very serious concern. The data and news comes in daily.

When it is discussed there seems to be two camps, one camp simply saying don't worry, be happy, and the other camp is more worried and looking for help in determining how bad things really are.

Personally, the don't worry, be happy, camp is not very helpful. That view may be right in the end, but if not, it could be a very serious to anyone considering ER.

It would be nice if issues were discussed without taking a stand (or name calling) based on optimist/pessimist bias. Labeling a view based on it being negative, doesn't necessarily make it the wrong view.

So for me, ladelfina, keep it up. I find your posts to be interesting and thought provoking even if I do not always agree .
1948 - IN THE RAIN!(sad enough?) Rural Route 9, SW Washington the Norwegian was there by the mailboxes as the school bus let us off waiting for her dividend checks.

Now you can sign up for auto deposit even for many individual company dividends. AND Union Pacific sends stockholders a free calender every year. Other mileage may vary.

So should I say Pssst - dividends instead of you know the er W word?

It don't get much better than this(unless the Saint's make the playoffs this year). Greater Kansas City is just ducky.

BUT - give me the French problem - aka the old story of the overseas French pensioner being paid in fickle francs. I.E. Zap the Norwegian widow to Norway spending in local currency and earning divs in dollars.

Different story. Then you get out the books and work the problem.

heh heh heh - Hey 2000-2003 roller coaster was chewy. This one so far not as bad - yet?
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Old 07-26-2008, 08:30 PM   #32
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Boglehead meeting today... everyone was asked what you're doing w/r/t the bear market. 20+ people, all age groups but most near or at retirement. Everyone staying the course or searching couch cushions to come up with as much money as possible to get into the market.

This delusion has spread far.
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Old 07-26-2008, 09:41 PM   #33
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1948 - IN THE RAIN!(sad enough?) Rural Route 9, SW Washington the Norwegian was there by the mailboxes as the school bus let us off waiting for her dividend checks.

Now you can sign up for auto deposit even for many individual company dividends. AND Union Pacific sends stockholders a free calender every year. Other mileage may vary.

So should I say Pssst - dividends instead of you know the er W word?

It don't get much better than this(unless the Saint's make the playoffs this year). Greater Kansas City is just ducky.

BUT - give me the French problem - aka the old story of the overseas French pensioner being paid in fickle francs. I.E. Zap the Norwegian widow to Norway spending in local currency and earning divs in dollars.

Different story. Then you get out the books and work the problem.

heh heh heh - Hey 2000-2003 roller coaster was chewy. This one so far not as bad - yet?
Amen, brother.
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Old 07-26-2008, 10:36 PM   #34
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DING DING DING! We have a winner!!!



DING DING DING! You may choose any prize from the top shelf!

Its not simply enough that my current financial plan would have weathered any of the financial crises the US has faced, but that when people lost their shirts in 2001, I retired with more money than I had in 2000 and kept adding.

The simple fact is if you buy dollars for 70c because people are afraid of them, and sell them when they're worth $1.30 because everyone has lost their minds, dont put all your eggs in one basket, dont take on too much or too little risk, and be able to weather a few bad years...YOU'LL BE FINE! If something happens to make you un-fine, almost everyone else will be far more un-fine than you are.

You dont have to outrun the bear, just the other guys that will taste just as good.

I just cant take the persistent doom and gloom scenarios cobbled together from web sites and blogs, however much truth may be in them, coupled with the actionable items to go buy beeever cheeese or write your congressman for help.

I hadnt seen "rockon's" comments since he's been on my ignore list, but since they've been quoted, let me see if I can clue you in without upsetting you about being called a name.

Financially, you're ridiculously naive. Further you come off less like someone interested in discussing the issues and more like someone that wants to poke the ant hill with a stick just to see what happens. None of the naivete or issues with approach seems to prevent you from airing your ill thought out ideas or solutions. Over and over and over. More experienced people explain the problems with your proposals, yet those explanations dont seem to seep in.

Then there are the flip flops. One day you're poking the ant hill about inflation being 12%. The next you're suggesting an annuity that allegedly pays 6% (when it doesnt) fits the bill as a solution to ones financial worries.

Hmm, someone that pushes hot button issues and self contradicts within 24 hours?

So please dont play the victim thats being persecuted by the ER.borg collective.
Rather than respond in my usual bad manner, why don't you lay out for us exactly how experts like you do the following:

"The simple fact is if you buy dollars for 70c because people are afraid of them, and sell them when they're worth $1.30 because everyone has lost their minds, dont put all your eggs in one basket, dont take on too much or too little risk, and be able to weather a few bad years...YOU'LL BE FINE!"

Since it is all so easy for you, just tell me exactly where I should have my money on Monday morning. Not a bunch of generalizations that cannot be tracked, but exactly what my positions should be. Let's assume I have $2Million, am ER'd and need to withdraw 4% and am 55 years old. You will ruin the rest of my life (and possibly my kids lives also) if I run out of money before I die, so no pressure there.

I'd like some of those easy 14% returns you've told us about. This time it will have to be future returns though, as we will be watching live. I'll be waiting for your reply, don't let me down now.

Any Beaver Cheese spreads looking especially cheap out there?


P.S.
"To put this into perspective, the four-quarter trailing EPS figure in the 2001 recession hit a trough of around $38; in the 1991 recession, the trough was just over $18. That means that we are not talking about Armageddon [projecting $45 earnings], but rather offering up some analysis highlighting the risks to the outlook. We will bottom at levels much higher than the troughs in the past; that is the good news. The not-so-good news is that the level of the S&P 500 in the past that tended to coincide with $45 earnings was right around the 1,000 mark; and if we were to slap on a typical trough multiple of 10-12x on that earnings stream, then ... well, you do the calculation."

Quote from David Rosenberg, the North American Economist at Merrill Lynch. You see, who do I trust, CFB or maybe someone who has a title that sounds like he might know something. By the way, since you are so good at figuring stuff out, did you do the calculation?
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Old 07-26-2008, 11:20 PM   #35
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Rather than respond in my usual bad manner, why don't you lay out for us exactly how experts like you do the following:

"The simple fact is if you buy dollars for 70c because people are afraid of them, and sell them when they're worth $1.30 because everyone has lost their minds, dont put all your eggs in one basket, dont take on too much or too little risk, and be able to weather a few bad years...YOU'LL BE FINE!"

Since it is all so easy for you, just tell me exactly where I should have my money on Monday morning. Not a bunch of generalizations that cannot be tracked, but exactly what my positions should be. Let's assume I have $2Million, am ER'd and need to withdraw 4% and am 55 years old. You will ruin the rest of my life (and possibly my kids lives also) if I run out of money before I die, so no pressure there.

I'd like some of those easy 14% returns you've told us about. This time it will have to be future returns though, as we will be watching live. I'll be waiting for your reply, don't let me down now.

Any Beaver Cheese spreads looking especially cheap out there?


P.S.
"To put this into perspective, the four-quarter trailing EPS figure in the 2001 recession hit a trough of around $38; in the 1991 recession, the trough was just over $18. That means that we are not talking about Armageddon [projecting $45 earnings], but rather offering up some analysis highlighting the risks to the outlook. We will bottom at levels much higher than the troughs in the past; that is the good news. The not-so-good news is that the level of the S&P 500 in the past that tended to coincide with $45 earnings was right around the 1,000 mark; and if we were to slap on a typical trough multiple of 10-12x on that earnings stream, then ... well, you do the calculation."

Quote from David Rosenberg, the North American Economist at Merrill Lynch. You see, who do I trust, CFB (a rabbit) or maybe someone who has a title that sounds like he might know something. By the way, since you are so good at figuring stuff out, did you do the calculation?
Sorry but I had to quote myself (maybe it doesn't work that way) just so CFB cannot say he didn't see my response. Those wonderful ignore (country club) buttons.
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Old 07-27-2008, 12:09 AM   #36
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Since it is all so easy for you, just tell me exactly where I should have my money on Monday morning. Not a bunch of generalizations that cannot be tracked, but exactly what my positions should be. Let's assume I have $2Million, am ER'd and need to withdraw 4% and am 55 years old. You will ruin the rest of my life (and possibly my kids lives also) if I run out of money before I die, so no pressure there.
Why don't you do what almost everyone else does and figure it out for yourself?

What gives you the right to demand that everyone do your research or underwrite your risks? If you don't want the responsibility, keep your job. It isn't so bad really.

Life is to be lived, risks are to be guessed at and accepted or declined, but above all do it with at least a hint of aplomb.

Ha
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Old 07-27-2008, 12:34 AM   #37
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Why don't you do what almost everyone else does and figure it out for yourself?

What gives you the right to demand that everyone do your research or underwrite your risks? If you don't want the responsibility, keep your job. It isn't so bad really.

Life is to be lived, risks are to be guessed at and accepted or declined, but above all do it with at least a hint of aplomb.

Ha
I do try to figure it out for myself. The dilema is the future is not like the past and as David Rosenberg points out, there really are risks. There is no such thing as certainty. I see risk as a thing that is real, if the SP500 went to 450 or 540 as he says is at least possible, risk would appear in a new light. I'm not predicting that, so don't pin it on me though. I'm too ridiculously naive to think that was possible, you'll have to ask Merrill Lynch where they found that.

I just thought that since CFB has claim to the only holy grail that actually will work forever, he could lay it out for us. It wasn't long ago he was saying 14% has been a piece of cake for "those in the know". I thought, since I am ridiculously naive, I could benefit from some of that expert advice.

I know Uncle Mick...... pssst Wellesly
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Old 07-27-2008, 12:36 AM   #38
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Why don't you do what almost everyone else does and figure it out for yourself?

What gives you the right to demand that everyone do your research or underwrite your risks? If you don't want the responsibility, keep your job. It isn't so bad really.

Life is to be lived, risks are to be guessed at and accepted or declined, but above all do it with at least a hint of aplomb.

Ha
(To borrow from above) DING! DING! DING! Amen brother!

I had a friend who insisted I read a book called, "The creature from Jekyll Island". He was SO into the conspiracy theories and the world markets being used to run the people into the ground etc. Essentially it says the Fed and World Bank are a conspiracy to tax us through inflation, fiat money, etc.

I said, "Great, let's assume it's all true - what am I supposed to do? What is his advice?"

"....well, don't carry bad debt, LBYM, diversify......"

The right thing to do is always the right thing to do. If you LBYM, invest your money in low cost index funds covering the whole market, and don't carry debt, no matter what the future holds you will be better off than your neighbor. If the whole country collapses into anarchy, well, better have you gun loaded.

EDIT: In fact, I would say the "why me worry?" attitude of board members shows just how well that advice works! DW and I were discussing tonight how nice it is not to have the worries our neighbors have.
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Old 07-27-2008, 12:58 AM   #39
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The right thing to do is always the right thing to do. If you LBYM, invest your money in low cost index funds covering the whole market, and don't carry debt, no matter what the future holds you will be better off than your neighbor. If the whole country collapses into anarchy, well, better have you gun loaded.

EDIT: In fact, I would say the "why me worry?" attitude of board members shows just how well that advice works! DW and I were discussing tonight how nice it is not to have the worries our neighbors have.
I agree 100% except for the "invest" part.

There is debate on that point, it is not universally accepted except maybe here. As an illustration, your neighbor might be in FDIC insured CD's making 5% while the stock index funds take a fall like the Japan market did, down 80% and still down 65% after 18 years. If that were to happen as you retired the neighbors could easily be better off than you and there was no anarchy and nobody needed a gun. (Even if you are very diversified you most likely would still have a annualized loss over a 18 year period ).
But not to say you are wrong, investing is just very complicated for the totally naive. Not to be taken lightly IMO.
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Old 07-27-2008, 01:10 AM   #40
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/

I agree 100% except for the "invest" part.

There is debate on that point, it is not universally accepted except maybe here. As an illustration, your neighbor might be in FDIC insured CD's making 5% while the stock index funds take a fall like the Japan market did, down 80% and still down 65% after 18 years. If that were to happen as you retired the neighbors could easily be better off than you and there was no anarchy and nobody needed a gun. (Even if you are very diversified you most likely would still have a annualized loss over a 18 year period ).
But not to say you are wrong, investing is just very complicated for the totally naive. Not to be taken lightly IMO.
If someone was solely invested in the Japanese market, they weren't diversified, were they? I think most people here understand what's entailed in the term "total market".

Education is critical, but getting back to the OP, the point is when you ARE educated and not naive, you can be pretty casual about these periodic calamities.
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