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Re: The sky is falling, the sky is falling
Old 08-09-2005, 11:01 AM   #21
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Re: The sky is falling, the sky is falling

"Medius tutissimus ibis You will go safest in the middle course." page 325 - 4th ed The Intelligent Investor.

Ben Graham - May 1958.

Circa - the time of the great line crossing - average div yield of the S&P fell below bond interest rates.
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 11:43 AM   #22
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Re: The sky is falling, the sky is falling

Whenever I start to get a little nervous about the market all I need to do is read some of Unclemick's posts and I feel better.

Unclemick,

You have a very calming approach to the market environment and as a newbie investor I really appreciate it.

LL
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 12:01 PM   #23
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by LL
Whenever I start to get a little nervous about the market all I need to do is read some of Unclemick's posts and I feel better.*

Unclemick,

You have a very calming approach to the market environment and as a newbie investor I really appreciate it.

LL
I hope you are still calm after unclemicks uncle,* Alan G. raises interest rates a few more times
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 12:02 PM   #24
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
The middle, balanced road is always the correct one.
--Greg*
Well Greg, you aren't much of a bear. Come on man, the middle of the road is for roadkill!

Ha
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 02:23 PM   #25
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by HaHa
. . . Come on man, the middle of the road is for roadkill!

Ha
Now that's a quote I can make use of.
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 02:30 PM   #26
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by HaHa
Well Greg, you aren't much of a bear. Come on man, the middle of the road is for roadkill!

Ha
I think he is just trying not to scare me with his bearishness.
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 03:44 PM   #27
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Re: The sky is falling, the sky is falling

Buying Real Estate Thoughts

"Medius tutissimus ibis You will go safest in the middle course." page 325 - 4th ed The Intelligent Investor.

When I first started investing in RE I told the DW that this was like our bond portfolio portion of asset allocation. This idea worked well for me during a rising market environment. In fact, we had significant, steady gains in this portion, and when we sold the original money had ‘compounded’ nicely.

Now I believe we’re in a bubble housing market. IMO.

I disagree with Allen Greenspan and believe he has manipulated this market: A few weeks back he said that we were NOT in a general housing bubble. He did say there were some bubble areas. This bothered me. So he doesn’t think we are in a bubble market but does think there is a bunch of foam out there? And to top it off, he implies that there are plenty of spaces between the bubbles (rural RE anyone?).

This encourages those speculators who are enraptured by ‘the greed’ to continue the hunt, much like the tech bubble of 1995-2000 enraptured newbies into investing in tech stocks, overweighting their portfolios near the top of the market. We know how that last one ended.

In a world of relativity, it is easy to look at a property and say “You know, that’s a pretty good value compared to all the other properties I’ve looked at” or “If this market keeps going up the way it has in the past, then we’ll make tons of money.” It is also easy to rationalize the importance of your property selection skills. (Just ask Uncle Mick about his well known skills at picking individual stocks—this-he admits-is not where he made his big money.) By talking in foam language, ‘I never pop a bubble I’ve made Greenspan’ leaves open the door for speculators to continue the hunt. In a world of absolutes, housing is overpriced, unless you ‘see’ that incomes will also perpetually rise too—and pretty quickly. Right now many speculators can barely afford the properties they are purchasing. What’s going to happen when the non-speculators arrive to do the last buy?

In a world of relative absolutes (hey, this is MY goofy story), when the crash happens it drags everyone and everything down with it, just as the tech dump of 2000-2002 affected not only tech stocks but also all other stocks—and even the unemployment rate. To my mind, the next crash won’t be just a contained housing crash but, possibly, a full blown debt crash. As the Boy Scouts say “Be Prepared.” Debt is the modern, American form of slavery. If the housing bubble pops, the construction industry and the financial industry will hurt. The down part of the cycle will purge the excesses—and then some—as it always does. Uncle Mick and I will be there: we like to make our money the old fashioned way, buy low-sell high and collect dividends and interest in between. We don’t hurry time in a frantic effort, we enjoy it. I suspect.

Balance and moderation are good. Not having too many of your assets packed away into RE is good. Not having it all leveraged up to the edge of your ability to pay is better.

Uncle Mick, did I read your mind?

--Greg
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 03:51 PM   #28
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by HaHa
Well Greg, you aren't much of a bear. Come on man, the middle of the road is for roadkill!

Ha
NO. As of today I'm a politician trying to get all of you over to the dark side. That requires lies, half truths, and Greenspanisms--at the minimum. Wait, maybe that is roadkill.

--Greg
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 03:56 PM   #29
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Re: The sky is falling, the sky is falling

Yep

Except - that I was young once - hormonally - like individual stocks - I have had to learn the limits of my RE skill the hard way early on - Spotted Owls on Oregon timberland and a 10% interest in a non working Colorado gold mine are two things from the sixties and seventies - I'd prefer NOT to discuss in detail.
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 05:09 PM   #30
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by unclemick2
Yep

Except - that I was young once - hormonally - like individual stocks - I have had to learn the limits of my RE skill the hard way early on - Spotted Owls on Oregon timberland and a 10% interest in a non working Colorado gold mine are two things from the sixties and seventies - I'd prefer NOT to discuss in detail.
I now owe you an interesting hormone story and Laurence a bull semen story. Some day um . . . soon. . . hehehehe!

--Greg
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 08:17 PM   #31
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by unclemick2
?Who - don't recognize the names.
Mick, I think it is a great fund and I agree with the middle of the road approach, though I do keep a few krugerrands around for semtimental reasons.

Vanguard Balanced Index VBINX

Morningstar Category Morningstar Rating
Moderate Allocation 4 stars
NAV (08-09-05) Day Change
$19.70 $0.08
Total Assets($mil) Expense Ratio %
7,752 0.20
Front Load % Deferred Load %
None None
Yield % (TTM) Min Investment
2.62 $3,000
Manager Start Date
Gregory Davis 04-22-05
Michael Perre 04-22-05
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 09:05 PM   #32
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Re: The sky is falling, the sky is falling

Hey - how about that.

I have a tendency not to check managers of index funds - them being indexes and all that.

Although - I should after reading Bernstein's stuff on tracking error.

Skill in execution and all that rot.
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Re: The sky is falling, the sky is falling
Old 08-09-2005, 09:14 PM   #33
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Re: The sky is falling, the sky is falling

Unclemick, I recall back in my working days (that's soooo much fun to say) there was a financial planner that "all the guys" at work used to manage their portfolios. The guy even made house calls. I have always managed my own affairs but everyone was raving about how good this guy was so thought I would at least talk to him.

First meeting he recommended a fund for some of my semi-short term savings (college fund for the kids). Talked about the great track record of the fund and its manager. Did a little research on my own and found the fund manager had jumped ship a month earlier.

Reconfirmed my conviction that no one cares more about my money than me.

REW

EDIT: And as far as I know, all my peers that used this planner are still working...
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Re: The sky is falling, the sky is falling
Old 08-10-2005, 07:57 AM   #34
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by HaHa
Well Greg, you aren't much of a bear. Come on man, the middle of the road is for roadkill!

Ha
You're right. I'm a moderate bear. This is because I'm not sure yet whether we are going to have anihilation due to hyper-inflation or anihilation due to deflationary depression . Or something in between. If you know, please tell me? An extreme inflationary bear, would have a portfolio and backyard filled largely with PM shares and such stuff; an extreme deflationary bear would have cash and "safe" bonds. Both would have "safe" hideouts. I'm content with sticking my head under the bed or wearing my tinfoil hat when emotionally distressed. That's my middle course.


The really scary middle of the road stuff, for me, is all the indexers, right in the middle of the herd, who tweak Vanguard Funds for an extra 1/2 percent/yr. When all these thirty somethings with too much leveraged investment RE get crunched in a liquidity squeeze, guess where they're going to find the mortgage payments? Maybe their 401K retirement funds filled with . . . index funds.

I feel much safer in the middle of the road than in the middle of a herd. IMO

--Greg
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Re: The sky is falling, the sky is falling
Old 08-10-2005, 08:17 AM   #35
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Re: The sky is falling, the sky is falling

If there is going to be a sky falling, I hope it would hurry up and get here already. Now some are saying the housing bubble is hissing out no crash. I would rather see a crash than this soft landing stuff. Why draw it out? I want it to go Kaboom Get it over and done with I say. I am sick of waiting for this crash. I read that book "The Great Depression of 1990". It made perfect sense then. It makes perfect sense now. It will probably make perfect sense in 15 years.

The question becomes what to do while waiting. Sit on the sidelines or be exposed. I say no exposure no risk, no pain, but no gain. Yes America will be punished for its evil ways but probably not today.*

If you are expecting a crash how are you preparing? HaHa has said he has cash and puts. Worry is good if you do something about it but if not there is no point. Going the middle way is ok but what would you do otherwise? If the answer is the same thing, there is no point in worrying. Set and forget.

CHP sorry. Will walk dog, pass out and be punished by the beer god in the morning.*

Cheers
Mike
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Re: The sky is falling, the sky is falling
Old 08-10-2005, 08:28 AM   #36
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Re: The sky is falling, the sky is falling

I like these dooms day discussions, and my first read in the morning with a cup of coffee is dailyreckoning.com so I get lots of bear vibes!
If I felt that a crash situation was near I would probably look at what asset classes I think would be hit the hardest and find replacements. US large/mid cap replacement would probably be something like the Hussman fund HSGFX - not a 100% bear fund, but with good protection.
Cheers!
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Re: The sky is falling, the sky is falling
Old 08-10-2005, 08:35 AM   #37
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Re: The sky is falling, the sky is falling

While some say the fact that most sectors have benefited from this run up is a warning sign, here's a smart guy who says the broad advance is good for you.

From Don Dion:
In fact, from a technical standpoint, the recent rally appears broader and deeper than previous rallies, i.e. the upward trend is not relying solely on the buying of a handful of narrow constituencies, but rather has broad participation. This has implications for the sustainability of this particular rally as well. According to the market breadth theory, if more stocks are advancing than declining over a period of time (daily, weekly, or monthly), the indicator is positive, which denotes bullishness and the potential for a continuation of the upward trend. The recent breadth and price breakouts for the S&P 500, therefore, suggest higher prices in the near future. So unless the fairy tale is given a rude dose of reality, these dog days might still have legs yet.
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Re: The sky is falling, the sky is falling
Old 08-10-2005, 06:49 PM   #38
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by JPatrick
While some say the fact that most sectors have benefited from this run up is a warning sign, here's a smart guy who says the broad advance is good for you.
From Don Dion:
So unless the fairy tale is given a rude dose of reality, these dog days might still have legs yet.
Well, if that is the bull case I don't think I have anything to worry about.*

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Re: The sky is falling, the sky is falling
Old 08-10-2005, 06:54 PM   #39
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by mikew
If you are expecting a crash how are you preparing? HaHa has said he has cash and puts. Worry is good if you do something about it but if not there is no point. Going the middle way is ok but what would you do otherwise? If the answer is the same thing, there is no point in worrying. Set and forget.

CHP sorry. Will walk dog, pass out and be punished by the beer god in the morning.*
Honestly Mike, you write better under the influence than I do stone sober. Excellent point. All this only matters if one is prepared to act on his conclusions. (Act differently from the base case.)

As a clarification, I also hold some stocks. Other than energy, they are a relatively small allocation. And energy formerly was small, but has grown larger recently.*


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Re: The sky is falling, the sky is falling
Old 08-10-2005, 07:54 PM   #40
 
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Re: The sky is falling, the sky is falling

Quote:
Originally Posted by mikew
If there is going to be a sky falling, I hope it would hurry up and get here already. Now some are saying the housing bubble is hissing out no crash. I would rather see a crash than this soft landing stuff. Why draw it out? I want it to go Kaboom Get it over and done with I say. I am sick of waiting for this crash. I read that book "The Great Depression of 1990". It made perfect sense then. It makes perfect sense now. It will probably make perfect sense in 15 years.

The question becomes what to do while waiting. Sit on the sidelines or be exposed. I say no exposure no risk, no pain, but no gain. Yes America will be punished for its evil ways but probably not today.*

If you are expecting a crash how are you preparing? HaHa has said he has cash and puts. Worry is good if you do something about it but if not there is no point. Going the middle way is ok but what would you do otherwise? If the answer is the same thing, there is no point in worrying. Set and forget.

CHP sorry. Will walk dog, pass out and be punished by the beer god in the morning.*

Cheers
Mike

Whenever I read something like this, it reminds me of the old saying:

"More money has been lost waiting for the correction, than the actual correction itself."
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