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Old 08-06-2018, 11:02 AM  
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What has to say say can be helpful as long as you have an IPS and a clear understanding of what you want. If you are a trader, then his is a high risk input.
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Old 08-06-2018, 03:16 PM  
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Originally Posted by Running_Man View Post
Framing that one rant as Jim Cramer being prescient is ludicrous, this is a reframing of one day's Jim Cramer of what he actually believed as is the idea that CNBC somehow should know what is going to happen in the market and should be explaining that to it's viewers. Obviously Stewart also knows nothing of what CNBC was reporting, throughout the entire period, CNBC had people on that were optimistic and people on that were very pessimistic and the entire case and what would happen was laid out multiple times. People actively chose to ignore the negative calls. Cramer was saying Bear Stearns was a good stock throughout the banking debacle and said don't sell Bear Stearns the day before it went belly up. It eventually was sold for $10 which was 75% lower than the price on the day he stated it and later defended this (see second video) as "I was right when I said keep your money in Bear"


He pushed GE throughout the entire episode right up to 2017@ 22, when he finally admitted it was the worst investing mistake of his life and sold.

The overriding view was also home here, if you were negative in 2007 the overwhelming response was so negative- not to the market but to any poster that it was an unbelievable chorus of jeers from these boards. The top posters on this site in 2007 in August were posting that the banks were historically CHEAP and should be bought. One of my favorite posts of all times is when a poster here wrote in early October 2007 as the stock market was making a new high, about stocks, I only wish I had more money so I could invest more! The infamous WHEEEH!!!! thread To which I responded, "that is when tops are created, when people who want to buy have no more money to buy". That comment was heavily criticized and resulted in several public "you are now ignored" for your negative comments.

People do not want to admit any more that market go up and down, oh they'll state as much but if they actually go down, then public outcry is someone is to blame and should be imprisoned. In general the mantra of stocks go up in the long run, means the majority of people will invest in a diverse basket of stocks that should consistently go up in price to adequately fund the retirement of all investors in the market. Anything that impedes that should mean prison for someone......
This also is how I remember the boards prior to the meltdown. I think it is the same today. When stocks are historically overvalued-for a simple metric, price to sales- people will usually get on the bandwagon. "Stay the course, how will you know wqen to get back in, etc." Even when it is obvious that things are very optimistically valued, it is hard to face taxes and other costs of selling out. And, one is never sure what will happen. Equity and bond markets have been overvalued for a long time now. When you sell you may feel stupid, at least for a while.

Ha
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Old 08-06-2018, 04:06 PM  
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Originally Posted by haha View Post
This also is how I remember the boards prior to the meltdown. I think it is the same today. When stocks are historically overvalued-for a simple metric, price to sales- people will usually get on the bandwagon. "Stay the course, how will you know wqen to get back in, etc." Even when it is obvious that things are very optimistically valued, it is hard to face taxes and other costs of selling out. And, one is never sure what will happen. Equity and bond markets have been overvalued for a long time now. When you sell you may feel stupid, at least for a while.

Ha
You have posted this before. Are you doing anything different this time? Selling and paying taxes?
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Old 08-06-2018, 08:51 PM  
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Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”
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Old 08-06-2018, 10:42 PM  
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My indication that something was wrong was way before that. I had come home from Germany in 2004-5 to CA and was told by my neighbors they had sold their house and bought another one in the next neighborhood over for ~$500K. They had sold their house for ~$300K. He was in construction and she worked in a clinic office of some sort. They did not make large amounts of money. I then decided to refi my house to a ten year loan. The mortgage brokers were falling all over themselves to get me that loan. The notarist came to my house (?) to sign the refit paperwork. First question she asked was how much I was taking out for cash. I said 'Huh?' She said many people took the equity out and bought vacations and cars....I said why would I buy a depreciating asset with a loan on an appreciating asset? I then asked her how many ten year loans she had signed that year....one...mine. I asked how many 15 year loans she had signed...three.

Flash forward to 2007-2008 - I'm on a train and talking with a fellow commuter. She was going through a foreclosure on her house. She had bought a low rate to balloon type mortgage. Essentially, she should not have been given a loan to purchase a house. At the same time, I put my house on the market. We met with the agent and figured out the peak had been reached and the prices were starting to fall. We priced the house along that negative slope and sold it in a week. One year later the house was worth $100K less...about what I had bought it for 8 years earlier.

I remember thinking my neighbor was crazy...but it was CA, and people are crazy especially about real estate. Nevertheless, I realized that loans were being given out willy nilly and that the 0 down, low interest rate and balloon in 3-5 years was not a good idea unless you were *very* disciplined.

Luckily, by that time I had the LBYM habits and was "long on tuna fish and toilet paper" and tried my best to have no debt, even my mortgage. It is amazing how when you train your mind to think that way, you don't even venture into the crazy stuff....and you wonder how people do manage to live like my neighbors and that fellow train commuter. Mindset is such a huge part of this FIRE goal.
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Old 08-06-2018, 11:30 PM  
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Originally Posted by Markola View Post
Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”
The market is high now, and will go higher until it crashes.

Bear Stearns' trouble was leaking out to the media in mid 2007 or earlier, but the market kept on rising until early Oct 2007. My own portfolio peaked out in late Oct 2007. So, I thought these were bankers' and houseflippers' trouble, and would not affect me and my stocks.

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My indication that something was wrong was way before that...
I knew it was wrong, very wrong. I wished I had kept a copy of a Money Magazine issue (I had some frequent miles that were expiring, and had to exchange them for magazines), which featured a woman in an article as a heroine. She bought homes to flip, and was owning a dozen homes or so and was in the process of closing on more. It looked like the banks required little collateral to approve the loan. It was insane.

An article on Wall St at that time on the housing bubble opened with this statement "It will end in tears".

Again, I never thought it would affect me and my "innocent" stocks. I owned no bank stocks, nor home builder stocks. But I had plenty of raw material stocks. Good thing I unloaded most of them in late 2008, or I would get hurt even worse. Only lost 37% of my stash.
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Old 08-07-2018, 04:10 AM  
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Originally Posted by deserat View Post
Flash forward to 2007-2008 - I'm on a train and talking with a fellow commuter. She was going through a foreclosure on her house. She had bought a low rate to balloon type mortgage. Essentially, she should not have been given a loan to purchase a house. At the same time, I put my house on the market. We met with the agent and figured out the peak had been reached and the prices were starting to fall. We priced the house along that negative slope and sold it in a week. One year later the house was worth $100K less...about what I had bought it for 8 years earlier.

And today the house is worth $500k more.
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Old 08-07-2018, 07:18 PM  
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Originally Posted by Dawg52 View Post
You have posted this before. Are you doing anything different this time? Selling and paying taxes?
I have a few mlps, and to sell these is to really pay tax, including some ordinary income tax.I am hoping for some sort of tax favored takeout, but at this time I am not sure what that might be. If this doesn't happen I will have these in my estate unless laws or the businesses change markedly. On the plus side, the quarterly payouts are pretty good. I am selling some other issues as they become long term. But overall, I hate to sell stable companies that I have held for a long time and pay even the long term capital gains tax on fairly big gains, though nothing like Apple or Amazon. I do intend to figure as closely as I can what my tax might be on these sales under the new law.

Ha
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Old 08-09-2018, 07:17 PM  
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No disrepect to the OP, but I lost all respect for that idiot when I saw him suggesting shoppers go to best buy, pump the salespeople for information on whatever product they were interested in, then order it on amazon.

!@#$ him & all those who would be low enough to do something like that.

*Not a Best Buy employee & hold no shares*
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Old 08-09-2018, 07:44 PM  
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No disrepect to the OP, but I lost all respect for that idiot when I saw him suggesting shoppers go to best buy, pump the salespeople for information on whatever product they were interested in, then order it on amazon.

!@#$ him & all those who would be low enough to do something like that.

*Not a Best Buy employee & hold no shares*
The funny thing is that the product at Best Buy is likely to be the newest version and less expensive. Amazon is likely to have an old version and charge more. I buy very little at Amazon because I can do better at other places.
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Old 08-11-2018, 12:57 PM  
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I enjoyed that Cramer-rant!
"He has no idea what it's like out there!"
"We have Armageddon !"
"7 million people will lose their homes!"
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Old 08-11-2018, 01:07 PM  
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I enjoyed that Cramer-rant!
"He has no idea what it's like out there!"
"We have Armageddon !"
"7 million people will lose their homes!"
Wasn’t too far off on that last prediction:
Quote:
RealtyTrac data indicates 7.3 million consumers lost their homes between 2007 and 2014. The vast majority experienced foreclosure — 5.4 million.
from https://bobsullivan.net/restless/7-m...-to-buy-again/
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Old 08-11-2018, 01:19 PM  
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Originally Posted by Markola View Post
Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”
Almost by definition one cannot know where he is in "the cycle". What can be known is where a given valuation metric is relative to various past cycles, or relative to some averaged idealization of past cycles.

Even assuming that one is in a cycle contains a judgment. Elroy Dimson has many examples of when what might have been assumed to be a half cycle was never completed, usually due to war or revolution or other unanticipated change. Another way to have a cycle left uncompleted is for the portfolio owner to die. Markets may be (mostly incorrectly) assumed to be perpetual, but no one assumes that his own life is.

Recently what has worked very well is trend following. Other ideas, not so much

Ha
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Old 08-14-2018, 05:46 PM  
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Originally Posted by audreyh1 View Post
Just ran across this from CNBC yesterday. Cramer - love him or hate him. I remember catching Cramer's rant back on August 3 in 2007, and boy was he right on the money. This would have been right before the resignation of the Bear Stearns CEO. The Federal Reserve was not paying attention to the unfolding financial crisis - they did not get it at the time. When they finally realized how bad it really was - well, there was a whole lot of pain.

Since then, a few other have tried to emulate Cramer's "rant" by getting all worked up over various things, but this was really a one and only time for Cramer - going beyond his usual emotionality. And I'm glad he did it. He shocked and offended a lot of people at the time, and many tried to blow it off as an overreaction during the coming months, but I believe he was completely vindicated as the financial system seriously unraveled in 2008.

The transcript is missing a lot of context however. Without knowing the big headlines at the time it's hard to get a feel for the context.

From CNBC:
11 years later: Cramer's 'They know nothing!' rant — Here's the complete transcript

Jim Cramer sounded off on the Federal Reserve for not anticipating the coming financial crisis 10 years ago today.

Read more: https://www.cnbc.com/2018/08/03/11-y...hing-rant.html
I bailed out of the market in early 2006. It was clear that almost everyone was drinking the Kool-Aid, so I don't blame any particular entity. [MOD EDIT]
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Old Today, 07:58 AM  
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Noticed it by finding that all the investors in the PMI mortgage insurance companies were bailing large. Tried to say something at the time (trading blogs were just starting) but most investors are "long" only and didn't want to hear it. Virtually all the PMI insurance companies went to zero.
Can't remember if Cramer was before or after that but a wealthy friend bot a bunch of those CDO's and they too went to zero ... sold in blocks of 100K ouch! Tried to warn him to no avail... he doesn't speak to me now, like it was my fault?
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