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Old 09-23-2015, 06:31 PM   #61
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Bought GM at 27.50 and WNR at 40.50 on Aug. 25th. Both are still up, so far--although GM only slightly.
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Old 09-24-2015, 06:54 AM   #62
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I could just as easily have lost so I would recommend playing like this with no more than you are comfortable trashing.

This is my problem with market timing or any other form of gambling. My level of risk aversion is such that the amount I'm willing to lose isn't enough to make the potential gain very interesting.

I mean, I still buy dips often enough, but it's really band based asset allocation more than market timing.
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Old 09-24-2015, 01:30 PM   #63
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I didn't buy, because I don't think we are at the bottom, yet. Time will tell
I agree. I don't think buying on the dips is going to work very well in this downturn. Market is overvalued, and the Fed has basically run out of bullets (and ideas) on how to keep it afloat. And without Fed manipulation to keep things going, I don't think the economy is strong enough on its own to justify these stock prices (for the most part).

I could be all wrong.......wouldn't be the first time.
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Old 09-24-2015, 01:34 PM   #64
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I just don't see where the money is going to go if it doesn't stay in the market. Bonds just don't even keep up with inflation.
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Old 09-27-2015, 01:28 PM   #65
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Maybe houses again?
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Old 09-27-2015, 03:31 PM   #66
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I agree. I don't think buying on the dips is going to work very well in this downturn. Market is overvalued, and the Fed has basically run out of bullets (and ideas) on how to keep it afloat. And without Fed manipulation to keep things going, I don't think the economy is strong enough on its own to justify these stock prices (for the most part).

I could be all wrong.......wouldn't be the first time.
I don't understand the comment that "the Fed has basically run out of bullets (and ideas) on how to keep it afloat"

As I understand it, the Fed has the ability and power to create money out of thin air in unlimited quantities and inject it into the economy by a variety of methods (even Ben's magic helicopter) the short term interest rate being but one tool in their arsenal. Of course unlimited creation of money may have other impacts (such as extreme inflation) but I think it's way too early to conclude that the Fed is out of either bullets or ideas. But of course, as you said ... I also could be all wrong...and it certainly wouldn't be the first time either
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Old 09-28-2015, 10:23 PM   #67
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I don't understand the comment that "the Fed has basically run out of bullets (and ideas) on how to keep it afloat"



As I understand it, the Fed has the ability and power to create money out of thin air in unlimited quantities and inject it into the economy by a variety of methods (even Ben's magic helicopter) the short term interest rate being but one tool in their arsenal. Of course unlimited creation of money may have other impacts (such as extreme inflation) but I think it's way too early to conclude that the Fed is out of either bullets or ideas. But of course, as you said ... I also could be all wrong...and it certainly wouldn't be the first time either

Injecting more money when rates are at zero is expansionary but doesn't have any upside. It just pushes public money into riskier assets and creates bubbles unnecessarily, thereby increasing risk of a large meltdown.

They are indeed out of bullets.

Fed has three tools.
1) change the discount window rate which affects bank extra reserves holdings
2) change the mandated reserve ration fir banks
3) print money and buy any asset (but they only buy US bonds/bills/notes)

All three tools have basically the same impact to the macro economy.


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Old 09-29-2015, 06:32 AM   #68
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It seems to me that quantitative easing (printing money) may or may not be a positive step and is a bullet that is still in the chamber. The biggest flaw in that tool may be that Congress didn't/wouldn't take advantage of the easing to spend on infrastructure. Without a concerted effort to try a Krugman approach we will never know if it would have worked much better than the wishy washy approach we took.
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Old 09-29-2015, 12:08 PM   #69
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It seems to me that quantitative easing (printing money) may or may not be a positive step and is a bullet that is still in the chamber. The biggest flaw in that tool may be that Congress didn't/wouldn't take advantage of the easing to spend on infrastructure. Without a concerted effort to try a Krugman approach we will never know if it would have worked much better than the wishy washy approach we took.

There is more money in the system than businesses want to borrow, that is why we are at zero. Adding more will just cause problems.

So while yes they do still have bullets, the barrel is pressed against their temples. They would be foolish to pull the trigger without either increasing commercial demand or government borrowing.


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Old 09-29-2015, 08:23 PM   #70
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There is more money in the system than businesses want to borrow, that is why we are at zero. ...
Bingo!

I recall just after the 2000 bubble popping, Bob Brinker addressed this on his radio show. He explained that industry increased capacity in the late 90's to meet demand during the bubble. Now, with lower demand, the last thing they need to do is borrow money to expand.

That is exactly what I saw in my industry. Heck, we were selling off stuff we bought a year or two ago (maybe even stuff we recently bought and hadn't installed/used yet) for maybe 10-20 cents on the dollar. No one else needed it either, they expanded just like we did. We needed cash flow, not equipment.

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Old 09-29-2015, 08:39 PM   #71
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Bingo!

I recall just after the 2000 bubble popping, Bob Brinker addressed this on his radio show. He explained that industry increased capacity in the late 90's to meet demand during the bubble. Now, with lower demand, the last thing they need to do is borrow money to expand.

That is exactly what I saw in my industry. Heck, we were selling off stuff we bought a year or two ago (maybe even stuff we recently bought and hadn't installed/used yet) for maybe 10-20 cents on the dollar. No one else needed it either, they expanded just like we did. We needed cash flow, not equipment.

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Kinda like what's going on in the oilfield right now.
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Old 09-29-2015, 08:54 PM   #72
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And why is there an oversupply problem?

I may be getting philosophical here, but perhaps the world is getting saturated with "stuff". We do not really need bigger houses, larger SUVs with V12 engines. Nor can we eat and drink more. How much fancier TVs, tablets, or smartphones do we really need? A generic desktop PC already packs nearly 100-1000x the power of a supercomputer that was the pride of a national research lab like Lawrence Livermore back in the mid 80s. All that computing power just for email and surfing the Web.

So, Europe distills wine to make alcohol to burn in cars, while in the US some dairy farms recently dumped milk into pits because they overproduced.

Not the entire world is this fat and happy, of course. But the poor people in Burma or the sub-Saharan countries who can use more of the "stuff" have no way of paying for it.
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Old 09-29-2015, 09:36 PM   #73
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And why is there an oversupply problem?

I may be getting philosophical here, but perhaps the world is getting saturated with "stuff". We do not really need bigger houses, larger SUVs with V12 engines. Nor can we eat and drink more......Not the entire world is this fat and happy, of course. But the poor people in Burma or the sub-Saharan countries who can use more of the "stuff" have no way of paying for it.
Keynes described this as the "solving of the economic problem" - technology ending man's struggle for subsistence. In 1930 he predicted the world we live in today - technological unemployment, not enough jobs to go around, a world of abundance of consumer goods (true for many but not all) in the developed nations. I have this essay printed out and I read it now and then. I think it helps to counteract all the ads I'm exposed to on a daily basis.
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Old 09-29-2015, 11:38 PM   #74
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Thanks for the paper.

Keynes was talking of the abundance of goods due to improved production back in 1930, almost a century ago. Hah! And he did not live to see the supermarkets we have today, where food is abundant and so cheap (if you know how to shop).

So, how do we spend so much money? I guess it may become a moral obligation for the people who have money to spend, to keep money in circulation, so that others can have jobs. If they don't spend, the government may have to find a way to take it away, to redistribute that wealth.

I think my personal obligation to spend is somewhere between 3 and 4%WR.
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Old 10-02-2015, 01:50 AM   #75
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Still sitting on "cash" waiting for the bottom. Nibbled a bit at 3 stocks. 2 of the 3 are down marginally but pay 4% divvies. Probably will get serious when we return from Italy at end of October.
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Old 10-28-2015, 04:59 PM   #76
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How come no one thanked me for pointing out the bottom more than two months ago (post #1)? You've all made millions since, the least you could do...
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Old 10-28-2015, 05:24 PM   #77
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LOL!

My Quicken display is looking a lot happier these days.

Maybe everyone decided Oct 15 was the "all clear" - just the calendar date.
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Old 10-28-2015, 05:28 PM   #78
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I continued to make my monthly buys. It helped to have a discount, at least I hope it continues to be one.
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Old 10-28-2015, 08:03 PM   #79
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I missed the first dip but was able to buy exactly at the 2nd dip. I used 1/2 of my "excess emergency money" to do the purchasing. I bought total stock market (Fidelity's version). Those shares are up around 8% now

This was my first go at creating a capital investment plan during pull backs and it seemed to work very nicely. Excited to see what happens the next go around when my system is turned back on.
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Old 10-28-2015, 09:09 PM   #80
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I moved some of my cash into equities on 09/28.
Up 6.43% for the year so not to bad.
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