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Re: The market that goes from suck to blow...
Old 03-24-2005, 06:39 AM   #21
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Re: The market that goes from suck to blow...

I'm accumulating, so I try to remind myself that a bear market is good for me right now. But like betting on the No Pass line I try not to cheer too much about it.

I'm starting to notice prices creep up on me...more than my 2.5% annual raise even without counting the gas increase.

If I start worrying I look around at my peers who are in debt up to their eyeballs--and sinking--and realize I'm much better off no matter what happens.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 06:39 AM   #22
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Re: The market that goes from suck to blow...

Quote:

In 1966 I was getting in trouble for pulling the pigtails of our next door neighbor, Joanie Capone. *Later that year I got kicked out of catholic school for persistently kissing another kindergartener...Cynthia something-or-other. *Truth be told, she was the serial kisser, but I took the fall.

Sorry Jarhead...
TH: No problem. Actually, it is a reminder of what happens when an old phart marries a gal 30 years younger than him. He now has some help from drugs to work his problems out in the bedroom, but what in the hell do they talk about?
To get serious for a moment, here's my take on this board, and early retirement.
Greaney (Intersct), left his employment at age 38 with a ----load of stock options, and continued investing those proceeds into the most dynamic tech mkt. anybody on this board will ever see. (Realizing, of course that it only looks easy in retrospect, however the potential was there).
While I agree that the thought of early retirement is good as a "character" builder, and is helpful in not allowing Madison Ave. to take over your life, there are times to get real.
Anybody on this board under the age of 50 has never experienced anything in the stock and bond markets, except having the wind at their backs. (All accomplished with a relatively low inflation rate.)
It is little wonder that twenty somethings, with a family to take care of can get discouraged when their goal is early retirement. (Especially when they tune in to this board, and are bombarded by all the "success" stories.).
INMHO, going forward, (for the twenty somethings), focus on your careers, family life, and living within your means. My guess is that you will have to adjust your "very early" retirement ideas. (If you are counting on the stock and bond markets alone to accomplish this for you).


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Re: The market that goes from suck to blow...
Old 03-24-2005, 07:27 AM   #23
 
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Re: The market that goes from suck to blow...

For all you folks in your 20's and 30's. The great bear market of the last few days is over. The Dow is up 26 points as I write this!
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Re: The market that goes from suck to blow...
Old 03-24-2005, 07:50 AM   #24
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Re: The market that goes from suck to blow...

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He now has some help from drugs to work his problems out in the bedroom, but what in the hell do they talk about?
WHO CARES?!?

Bum - I may have to bring back the bunny. Anyone want a bunny with a paper on reduced DCA prices on its head? Concurrently doing the 'happy dance' because its no longer aimed at a troll?

Buckle up boys and girls, I think this mini-bear goes until September or early October. I did call a March downturn about six months ago...

It'll be good for everybody. Those in the accumulation phase get to buy at lower prices. Those with a good dividend plan and/or a nice cash buffer will worry about the numbers on the screen being a little lower, but it wont hurt them at all. Those who dont have a very good plan for a bear market will get a lesson that doesnt go on for 5-7 years and get to fix whatever they didnt do right in the first place. And its a nice scare for anyone just starting out.

Remember the good words: buy low, sell high. Not the other way around. Or paraphrasing Buffett...down markets are great because we're usually buying, not selling...and who wants to buy when prices are high? Or that great phrase...what a business! When everything goes on sale, everybody runs away!!!

Hang in there babies...
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Re: The market that goes from suck to blow...
Old 03-24-2005, 08:04 AM   #25
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Re: The market that goes from suck to blow...

I guess it's time for an alternate viewpoint.

I think DCA'ing can't be beat for younger investors in the accumulation mode. Buying and holding high stock allocations make sense at that point.

For people at or near FIRE...I dunno. I'm pretty attached to the idea of not losing money. It was too damn difficult to save it. I'm willing to accept somewhat lower (potential) returns in order to sleep well.

I plan to adjust my equity allocation from time to time, depending on my perception of market valuation. There is a good chance I will be wrong at some critical points and miss some gains. That's OK. I don't need to die with a big portfolio. I just want to manage my risk. Note that I'm not talking about radical changes like going to 100% cash, and not about short term trading. I'm just not able to invest like the three monkeys.

This approach is not so different from an infrequent mechanical re-balancing method...except that it introduces a degree of thinking into the process. (I know, how egotistical) My long term goal remains 50% equities, just not right now

I know this will offend some Boggle heads, so...

Disclaimer! RADMT (= Risk Averse Dirty Market Timer)
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Re: The market that goes from suck to blow...
Old 03-24-2005, 08:34 AM   #26
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Re: The market that goes from suck to blow...

I'm a dirty market timer too! And I like it

But remember...you only lose money if you sell when things are down.

If we're not in year 4 or 5 of a long term bear market and you're forced to sell and take a loss in order to pay the bills, you need a different strategy.

Holders of high income asset classes should be able to pay the biils from their regular dividend checks (right Unclemick?); holders of high equity/low income classes in large amounts should have a cash buffer sufficient to handle at least a 3 year downturn.

Downturns also bring about another nice side benefit, if the downturn is long and hard enough...converting IRA's to Roths. So that when you hit 59.5 you get to be ticked at the govt for one more thing as they've implemented a flat sales tax to replace the income tax
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Re: The market that goes from suck to blow...
Old 03-24-2005, 08:45 AM   #27
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Re: The market that goes from suck to blow...

Suggestion:

If you expect (or fear) a long term flat market, then consider buying stock in companies with good dividends and a history of increasing their dividends. If you reinvest the dividends (at flat or falling prices) you will still eke out some gains and when the markets eventually take off again you will be holding alot of shares with a low cost basis.

Grumpy
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Re: The market that goes from suck to blow...
Old 03-24-2005, 08:51 AM   #28
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Re: The market that goes from suck to blow...

Ah yes

A nice 5000-6000 point drop in the Dow plus a long interest jump of 4% or so would restore the glint of greed in my eyes.

Then - the current yield wouldn't be bad either. Plus it would provide seasoning/education for people interested in stock/bond investing.

I suspect more of a sideways muddle for a while as rates slowly grind up. Of course, I've been wrong many times before.

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Re: The market that goes from suck to blow...
Old 03-24-2005, 09:23 AM   #29
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Re: The market that goes from suck to blow...

Quote:
I suspect more of a sideways muddle for a while as rates slowly grind up. Of course, I've been wrong many times before.
You're in good company along with John Mauldin having that belief, unclemick.

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Re: The market that goes from suck to blow...
Old 03-24-2005, 10:11 AM   #30
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Re: The market that goes from suck to blow...

My husband reads John Mauldin. Who is this guy?
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Re: The market that goes from suck to blow...
Old 03-24-2005, 10:53 AM   #31
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Re: The market that goes from suck to blow...

Quote:
Greaney (Intersct), left his employment at age 38 with a ----load of stock options, and continued investing those proceeds into the most dynamic tech mkt. anybody on this board will ever see. (Realizing, of course that it only looks easy in retrospect, however the potential was there).
While I agree that the thought of early retirement is good as a "character" builder, and is helpful in not allowing Madison Ave. to take over your life, there are times to get real.
Anybody on this board under the age of 50 has never experienced anything in the stock and bond markets, except having the wind at their backs. (All accomplished with a relatively low inflation rate.)
It is little wonder that twenty somethings, with a family to take care of can get discouraged when their goal is early retirement. (Especially when they tune in to this board, and are bombarded by all the "success" stories.).
INMHO, going forward, (for the twenty somethings), focus on your careers, family life, and living within your means. My guess is that you will have to adjust your "very early" retirement ideas. (If you are counting on the stock and bond markets alone to accomplish this for you).
Great words. It's been a few months, but my dreams of retiring at 45 fell off a cliff when I forecast my portfolio based on 3%-6% real returns. And I thought I was doing well for my age. I'll be a lucky man if I can retire at 50, and I occasionally wonder if I can do it by 55.

But that's okay.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 11:09 AM   #32
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Re: The market that goes from suck to blow...

SOUP,
There are other ways,the mutual fund industry is based on one underlying theme."You are a sheep,to dumb to know,buy n hold,oh and heres my management fee."Equity indexes have VERY seasonal patterns,by being long during these specific times that are statisticly proven,you can easily get a years worth of gains with a minimum of 1/2 the risk(in terms of time).The safest option is to be flat the rest of the year,more risk would be short,but theres really no need imo.
these seasonal patterns are established by the very same people who are telling you to buy and hold,that includes bogle.Buy n hold helps THEM manage money,less so you.Its fine for the retired here who invested in the '80's or earlier and rode the biggest bull market so far in human history,and can sit back on there laurels,and theyve deserved it.but show be one buy n holder who started in 2000 and is at a minimum back to break even with this farce.Soup,google up Sy Harding,iF this tweeks your interest,wait till early sept before getting a trial subscription,youll understand by mid to late october why:-).You could even just devote a % of portfolio to test the waters,prove it for yourself.
Im sure im stepping on toes here ,but thats not my intent(well ok maybe it is a bit).But there are better ways to manage risk,buy n hold is not risk management.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 11:23 AM   #33
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Re: The market that goes from suck to blow...

Ouch ak4195. Don't hold back, tell us what you really think.

I'm not fond of others calling me dumb or sheep, but I often justify--at least to myself--that I'm better off buying and holding index funds since I'm not sharp enough to outplay nearly everyone else in the market.

As far as seasonally proven cycles, there are definitely at least a few sharp people out there. Does their buying and selling power not counteract the sheep cycles?

Quote:
by being long during these specific times that are statisticly proven,you can easily get a years worth of gains with a minimum of 1/2 the risk(in terms of time).
"Lies, damn lies and statistics." Pretty much sums up my view on them. But just for grins, do you have a link?

Quote:
but show be one buy n holder who started in 2000 and is at a minimum back to break even with this farce.
Beter even than having been in cash! Assuming you buy the same stuff I buy. Now whether the money was better spent or invested could be an interesting discussion.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 11:29 AM   #34
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Re: The market that goes from suck to blow...

Anyone for a sheep with a pancake or two on its head?

BAAAAAAAAAAAAA!!!!!!!!!!
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 12:07 PM   #35
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Re: The market that goes from suck to blow...

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Ah yes

A nice 5000-6000 point drop in the Dow plus a long interest jump of 4% or so would restore the glint of greed in my eyes.

Then - the current yield wouldn't be bad either. Plus it would provide seasoning/education for people interested in stock/bond investing.

I suspect more of a sideways muddle for a while as rates slowly grind up. Of course, I've been wrong many times before.
Unclemick: How would a drop to 5,000 in the Dow be a good thing for you. As I understand it, you are basically a buy and holder. If we dropped to that level, I would imagine you would have a large loss in your portfolio. Where is the new money coming from to follow through with being able to exploit this situation.?
I could understand it if you were on the sidelines with a s---pot full of cash, but in your situation it is puzzling.


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Re: The market that goes from suck to blow...
Old 03-24-2005, 01:05 PM   #36
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Re: The market that goes from suck to blow...

After the little 1987 blip, I switched 401k from 50/50 stocks/fixed to 100% stocks and held thru 1992. My big mistake (in hindsight) was Lifestrategy mod a quasi 60/40 - but I expected to do a 72t - which wasn't needed as it turned out.

Now that I'm not working I might slowly edge my 60/40 postion toward 80/20 depending on yield on both sides.

If someone gives me a working crystal ball - I *would sit in Target - Income and move up the series scale as conditions warrant.

On paper I will be 'less rich' but with a better income stream and prospects.

In the end - I will probably do nothing - except maybe lower stock as I age. The RMD thing is getting closer - 9 years.
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Re: The market that goes from suck to blow...
Old 03-24-2005, 01:15 PM   #37
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Re: The market that goes from suck to blow...

I am not sure what will happen in the market, but I am pretty sure what will happen on this board if stocks don't continue up, or muddle, or do TH'd Mini-Bear, but instead they do the big old Papa-Bear that they sometimes do so well.

Ladies and Gents, the shite will be so far into the fan that you won't be able to see the walls around here.

Saying a bear market wouldn't bother you much is like saying you wouldn't be too upset if your wife is having an affair. "It could bring us closer together..." Just wait till you catch that dirty #@-+% in the act!

Same with a big bear. You feel like somebody hit you in the stomach, hard. It's hard to concentrate on work. You aren't near as horny as you used to be.

This is not something to blithely sail into if you have any feeling that at least the worst of it can be avoided.

Right now, I have in cash and short notes about as much as I had total assets roughly 6 years ago. But I will still feel awful if I see a big loss in the equities that I do hold. You want the other guys stocks to go down, so you can buy them cheap. What good does it do you if your stocks go down? Unless you have so few that it is immaterial.

My equities are supposedly in uncorrelated sectors-energy & oil service, gold, foreign and domestic tobacco and consumer products companies- in close to equal amounts except less in gold.

Still, the last few days everything went down. Greenspan says we should worry about inflation, raises rates a paltry 1/4 %, and still gold and energy stocks go in the toilet.

We may all be about to get a lesson in past non-correlations vs. future correlations!

Hey, just my 2 cents!

Mikey
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Re: The market that goes from suck to blow...
Old 03-24-2005, 01:25 PM   #38
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Re: The market that goes from suck to blow...

Sigh!

Dividends and interest are real money - Mr Market is just plain old market fluctuation.

Of course your right Mikey - talks cheap - stiff upper lip and steady on (to mask frayed nerves) - might be harder to come by - but the market doesn't ask for my vote - and low cost balanced index has exceeded my string of victories and defeats in personal forays by a wide margin over thirty years.

My hat is off to all of you heh, heh - 'dirty market timers'

"You are a better man than I am Gunga Din."
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Re: The market that goes from suck to blow...
Old 03-24-2005, 02:00 PM   #39
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Re: The market that goes from suck to blow...

Quote:
Sigh!
Dividends and interest are real money - Mr Market is just plain old market fluctuation.
UncleMick, I agree wtih what you are saying in the quote above. But just sticking to the dividend topic, and my own current situation, I bought UST at an average yield between and 9 and 10%, about 5 years ago.
Dividends have increased roughly 25-30% since then- but the stock price has almost tripled. Would I rather hold, and get my 4% dividend increasing about 5% a year, or would I rather sell and see if Mr Market doesn't again get the tobacco willies? Or some other fainting spell?

I know I would not buy any of my tobacco stocks at their current quotes. Should I perhaps let someone who wants them more have them?

So for me, at least, even the presence of apparantly secure dividends doesn't necessarily make the case for holding.

I respect your point of view, and I realize it comes form experience. Thanks for your comments.

Mikey
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Re: The market that goes from suck to blow...
Old 03-24-2005, 02:34 PM   #40
 
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Re: The market that goes from suck to blow...

Quote:
Saying a bear market wouldn't bother you much is like saying you wouldn't be too upset if your wife is having an affair. "It could bring us closer together..." Just wait till you catch that dirty #@-+% in the act!

Same with a big bear. You feel like somebody hit you in the stomach, hard. It's hard to concentrate on work. You aren't near as horny as you used to be.
This stuff is easy. I've got so many people around me coming down with cancer lately, that they wish they had this stuff to worry about.
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