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Old 11-20-2008, 09:42 AM   #41
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I see this all as just another gut check for the way stocks work and have always worked. Our last reminder wasn't all that long ago (00-02').

We've all heard it a million times, but you have to think of stocks providing an approximate return that's higher than other investments over a long period of time. If we could hypothetically see a graph of the S&P through 2038, we'd be able to draw a straight line through the peaks and valleys and it would most likely show a competitive growth rate. But we all know, or show know, that there's gonna be a lot of peaks and troughs on the way there. If you can't live with that reality and fact, you really have no business owning stocks in the first place. Much better to have decided beforehand you can live with ~50% loss of your portfolio, than to actually experience it then sell out. Anyone who didn't already know this could have happened at any point and time was naive at best.

With the stock market at moderate valuations today (viewed historically), it actually could "half" even one more time (meaning S&P 500 at 400) and not be inconsistent with at least one point in the past.
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Old 11-20-2008, 09:47 AM   #42
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I bought BAC and GE yesterday. I believe stock is very cheap now and may become even cheaper. Between my pension and cash on hand, I can weather the storm for another seven years, without having to sell equities or w*rking. So I will continue to take the advice of Jack Bogle, and "stay the course."
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Old 11-20-2008, 09:58 AM   #43
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Mmmmm, amphetamines..... We'll all be skinny!
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Old 11-20-2008, 11:33 AM   #44
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Well many people believe investing in stocks is gambling.

You just wait, desire to be an early retiree will soon be listed as a disorder in the DSM. Aphetamines will be prescribed along with forced labor. Therapy will be ongoing, both individual and group. "Hello may name is Pete and I have a problem"

It's surely coming because somebody will make money on the medical care and scholarly research around it.
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Old 11-20-2008, 10:58 PM   #45
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Well, I just put in an order for more GE at $12. I'm wiped out of cash now in my individual stocks (gambling) fund. I have great faith that in the long run I'll make tons of money (relatively) from buying these great companies when they are dirt cheap. I hope it happens in the next couple of years, though. I'd hate to have to wait 10 years. But I'm holding forever, more than likely.
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Old 11-21-2008, 12:01 AM   #46
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Well, I just put in an order for more GE at $12. I'm wiped out of cash now in my individual stocks (gambling) fund. I have great faith that in the long run I'll make tons of money (relatively) from buying these great companies when they are dirt cheap. I hope it happens in the next couple of years, though. I'd hate to have to wait 10 years. But I'm holding forever, more than likely.
I picked up some BP at $41. Pays 8.2% div and even with the drop in oil prices I'm optimistic that they'll have the cash flow to keep paying. I've thought about some more GE but the whole financial side still gives me the willies. Good luck, I hope it turns out well. I own some at 19.50.
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Old 11-21-2008, 12:52 AM   #47
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I'm retiring next month and decided to get back into the stocks late Monday this week. I've been trading in and out of the market all year and was actually up 4% by end of day Monday. Just doubled my position today 10 minutes before the markets closed. Now I'm 40% in stocks and will add another 20% if the S&P drops below 680.

I received a much larger severance than expected (not paid until early next year), which has increased my appetite for risk. Have no idea where the bottom is, but decided I'm in a perfect position ( pure luck ) to take advantage of the cheap prices. Will be keeping 5-10 years in cash.

I'm sorry for those that are near retirement and have lost a large portion of their savings. With time and perseverance, I expect all will end well.
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Old 11-21-2008, 04:35 AM   #48
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You know capitulation has occurred when you start vomiting from the violent drops on the stock market roller coaster.

Anyone figured out how to get it to stop capitulating?? I am feeling queasy!

Actually... I think we are seeing it now... but it is drawn out. Investors are expecting another shoe to drop (US Auto Industry failure). Plus there is still much fear and loathing about the economic numbers. And on top of that no one knows what the impact of all of those CDS will do if other businesses begin to fail or the NEW at risk JUNK bonds have no buyers.


IMO - to step off now would be the worst thing to do. Ever try getting off of a roller coaster as it is careening down its highest point? Hopefully you do not have money in the stock market you will need for the next 5-10 years.

I am sticking with the plan. Once the volatility settles down, I will rebalance (buy low/sell high). I would like to catch it at the bottom.. but I am not even going to try (I know I will miss). So if i miss the first move and get whipsawed, it does not matter, it is a long-term investment. 5-7 years out from that point I rebalance I am expecting the market to be trending up... [I am willing to take the risk]

This market will certainly test your confidence and nerves. If you want some comfort... look back at the great depression. Here is a thread from Rich on the recovery. Recovery times after the Great Depression
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Old 11-21-2008, 07:43 AM   #49
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Well, I just put in an order for more GE at $12. I'm wiped out of cash now in my individual stocks (gambling) fund. I have great faith that in the long run I'll make tons of money (relatively) from buying these great companies when they are dirt cheap. I hope it happens in the next couple of years, though. I'd hate to have to wait 10 years. But I'm holding forever, more than likely.
I bought some at $30, sold at $25. I feel like a genius.
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Old 11-21-2008, 07:59 AM   #50
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I bought some at $30, sold at $25. I feel like a genius.
Uh...Dawg, I believe the correct term in this situation is you feel like a 'suineg'. It's the same as feeling like a genius, only in reverse.

Did I ever mention I'm a charter member of Asnem?
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Old 11-21-2008, 08:12 AM   #51
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This market will certainly test your confidence and nerves. If you want some comfort... look back at the great depression. Here is a thread from Rich on the recovery. Recovery times after the Great Depression
Or to feel uncomfortable, read this article:

http://www.nytimes.com/2008/11/21/op...on&oref=slogin

"How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating."

This is not a political piece. It simply points out, for instance, the parallel (1932/2008) of a discredited current administration and an incoming admin with no authority at loggerheads creating a no-action situation.
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Old 11-21-2008, 08:23 AM   #52
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Uh...Dawg, I believe the correct term in this situation is you feel like a 'suineg'. It's the same as feeling like a genius, only in reverse.

Did I ever mention I'm a charter member of Asnem?
Sad thing is, best trade I made all year.
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Old 11-21-2008, 08:42 AM   #53
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This is not a political piece. It simply points out, for instance, the parallel (1932/2008) of a discredited current administration and an incoming admin with no authority at loggerheads creating a no-action situation.
There are considerably more differences than parallels in the two time periods. This article makes then and now comparisons to production, unemployment, personal savings, stock market declines, homes lost to foreclosures, deflation severity, global trade, government intervention, and safety nets (FDIC, SS, etc.). While nothing is impossible, what we are experiencing today makes it highly unlikely we'll see another depression - in spite of what the news media is telling us.

Nasty recession? Yes.

25% unemployment and soup kitchens the number one growth industry? I wouldn't bet on it.
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Old 11-21-2008, 08:53 AM   #54
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Originally Posted by chinaco View Post
You know capitulation has occurred when you start vomiting from the violent drops on the stock market roller coaster.

Anyone figured out how to get it to stop capitulating?? I am feeling queasy!

Actually... I think we are seeing it now... but it is drawn out. Investors are expecting another shoe to drop (US Auto Industry failure). Plus there is still much fear and loathing about the economic numbers. And on top of that no one knows what the impact of all of those CDS will do if other businesses begin to fail or the NEW at risk JUNK bonds have no buyers.


IMO - to step off now would be the worst thing to do. Ever try getting off of a roller coaster as it is careening down its highest point? Hopefully you do not have money in the stock market you will need for the next 5-10 years.

I am sticking with the plan. Once the volatility settles down, I will rebalance (buy low/sell high). I would like to catch it at the bottom.. but I am not even going to try (I know I will miss). So if i miss the first move and get whipsawed, it does not matter, it is a long-term investment. 5-7 years out from that point I rebalance I am expecting the market to be trending up... [I am willing to take the risk]

This market will certainly test your confidence and nerves. If you want some comfort... look back at the great depression. Here is a thread from Rich on the recovery. Recovery times after the Great Depression
Unfortunately, Ive said this exact same thing at least 4 times and each time ive been wrong. Whose to say its not wrong again ands the market doesnt drop another 20% in the next week?
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Old 11-21-2008, 08:57 AM   #55
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There are considerably more differences than parallels in the two time periods...
Actually, my point was that you can have whatever you want -- comfort or distress. It all depends on your personal image of the future. (See my signature line) I was merely being the Devil's Advocate.

Krugman did win a Nobel Prize in Economics a month or so ago, by the way.
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Old 11-21-2008, 09:09 AM   #56
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Actually, my point was that you can have whatever you want -- comfort or distress.
No question which of the two I prefer...

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Krugman did win a Nobel Prize in Economics a month or so ago, by the way.
And Yasser Arafat won the Nobel Peace Prize. But hey, nobody's right 100% of the time.
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Old 11-21-2008, 09:19 AM   #57
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And Yasser Arafat won the Nobel Peace Prize. But hey, nobody's right 100% of the time.
Good response... I concede. (But just to get the last word in -- nor wrong 100% of the time.)
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Old 11-21-2008, 12:38 PM   #58
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Or to feel uncomfortable, read this article:

http://www.nytimes.com/2008/11/21/op...on&oref=slogin

"How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating."

This is not a political piece. It simply points out, for instance, the parallel (1932/2008) of a discredited current administration and an incoming admin with no authority at loggerheads creating a no-action situation.
Is there any way someone could persuade Dubya to RE?
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Old 11-21-2008, 12:49 PM   #59
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I wish I had more money to invest. There are some solid companies out there that have taken a beating. As it is, I'm loading up my 401k with TSM.

I did close one trading account. I had a total ROI of about 25% over 4 years. Not bad but a far cry from where it was in early September.
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Old 11-21-2008, 12:53 PM   #60
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Unfortunately it seems to me that we all finally get it that the president has a limited effect on the economy and business, and the enthusiastic bounce that previous elections and inaugurations caused imho may not materialize this time.

So it doesn't matter if Bush were to leave office early (which would be a disaster imho in perception, and of course he won't, why would he? Did any other president other than Nixon voluntarily leave office early?).
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