Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
I knew we hit the top ...
Old 06-07-2007, 07:19 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2002
Posts: 1,322
I knew we hit the top ...

... when I saw this forum
__________________

__________________
FinallyRetired is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-07-2007, 07:21 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,199
I think you forgot the link again, Soon.
__________________

__________________
TromboneAl is offline   Reply With Quote
Old 06-07-2007, 10:40 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Aug 2002
Posts: 1,322
Quote:
Originally Posted by TromboneAl View Post
I think you forgot the link again, Soon.
No, I meant this forum, the stock picking forum.
__________________
FinallyRetired is offline   Reply With Quote
Old 06-07-2007, 11:32 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
That's funny!
__________________
Sam is offline   Reply With Quote
Old 06-08-2007, 08:17 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Good point.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 06-08-2007, 08:46 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Meh, nothing new. Market goes up, market goes down. There is money to be made in both cases. Since I was up about 30% since mid-january, I can't say it was a huge shock to see a correction. Justwish I had sold a touch more before the downleg started.

What is actually surprising this time is that the bond market has taken it in the butt at the same time as the stock market got hit. Pretty unusual, I would say.

As in just about all the past corrections, a few well chosen purchases when everyone is panicking will almost certainly prove to be very profitable.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 06-08-2007, 08:53 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Aug 2002
Posts: 1,322
Quote:
Originally Posted by brewer12345 View Post
As in just about all the past corrections, a few well chosen purchases when everyone is panicking will almost certainly prove to be very profitable.
I agree. I no longer invest in individual stocks, but have dry powder that I'll pour into my balanced funds if we get a significant downleg. We're due for one but, then, we've been due for one for a few years now. When was the last time the S&P had a 10% or more correction? If I'm not mistaken I think it was back when the tech bubble burst.
__________________
FinallyRetired is offline   Reply With Quote
Old 06-08-2007, 10:06 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
I have enough dry powder to do some heavy damage to a small country.
__________________
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.
cute fuzzy bunny is offline   Reply With Quote
Old 06-08-2007, 12:25 PM   #9
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Quote:
Originally Posted by cute fuzzy bunny View Post
I have enough dry powder to do some heavy damage to a small country.
Speaking of powder kegs, how's the house sale going?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 06-08-2007, 12:38 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Painting is almost done. Carpet starts tuesday or wednesday next week. Up for sale by friday, i'd imagine.

Then we'll see how it goes. Should show better than anything else in the same value range, given its got all new paint, carpet and appliances.
__________________
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.
cute fuzzy bunny is offline   Reply With Quote
Old 06-08-2007, 02:43 PM   #11
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Quote:
Originally Posted by cute fuzzy bunny View Post
I have enough dry powder to do some heavy damage to a small country.

atchway ethay alktay aboutway ethay ydray owderpay, ethay
atriotpay actway isway atchingway ouyay!
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Old 06-08-2007, 04:26 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Shoot I had to use the pig latin to english translation page on that one.

Which by the way, the atriotpay folks also probably have engaged...

Imagine if a major terror plot was put upon us and it turned out that all of their communications slipped by the feds because they used pig latin. That'd make our WWII usage of Navajo seem paltry in comparison.
__________________
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.
cute fuzzy bunny is offline   Reply With Quote
Old 06-08-2007, 05:16 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,625
Quote:
Originally Posted by SoonToRetire View Post
I agree. I no longer invest in individual stocks, but have dry powder that I'll pour into my balanced funds if we get a significant downleg. We're due for one but, then, we've been due for one for a few years now. When was the last time the S&P had a 10% or more correction? If I'm not mistaken I think it was back when the tech bubble burst.
Every other equity category had a more than 10% correction last year from May to June. SPY, MDY, IWM, EFA, EEM were down 8%, 12%, 14%, 16%, and 26%, respectively.

SPY was down more than 10% in the first 3 months of 2003.
__________________
LOL! is offline   Reply With Quote
Old 06-08-2007, 05:26 PM   #14
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Quote:
Originally Posted by cute fuzzy bunny View Post
Shoot I had to use the pig latin to english translation page on that one.

Which by the way, the atriotpay folks also probably have engaged...

Imagine if a major terror plot was put upon us and it turned out that all of their communications slipped by the feds because they used pig latin. That'd make our WWII usage of Navajo seem paltry in comparison.
do ya think they're that sophisticated?

and i'm not a total geek, i used the translator too...
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Old 06-09-2007, 08:26 AM   #15
Recycles dryer sheets
 
Join Date: May 2007
Posts: 290
Come to think of it, a bond picking forum would be more useful to me at this point, since it seems like that is where all my new money is going these days. (Which is also probably a market top signal, heh.)
__________________
bpp3 is offline   Reply With Quote
Old 06-09-2007, 09:23 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by bpp3 View Post
Come to think of it, a bond picking forum would be more useful to me at this point, since it seems like that is where all my new money is going these days. (Which is also probably a market top signal, heh.)
That's a tough one, simply becausethe bond market is not nearly as liquid and open to retail investors as the equity market is. Unless you are buying treasuries at auction or agencies and munis at issue, the brokers screwing you frictional costs on corporate trades generally eat up much of the potential return. If you are willing to buy beaten down stuff and junk, you may be able to do OK, but you have to be able to do credit analysis.

If you buy stuff other than treasuries/agencies/munis at issue, I would suggest confining yourself to NYSE-listed bonds and stuff that trades on an exchange like a stock.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 06-10-2007, 01:20 AM   #17
Recycles dryer sheets
 
Join Date: May 2007
Posts: 290
Quote:
Originally Posted by brewer12345 View Post
That's a tough one, simply becausethe bond market is not nearly as liquid and open to retail investors as the equity market is. Unless you are buying treasuries at auction or agencies and munis at issue, the brokers screwing you frictional costs on corporate trades generally eat up much of the potential return. If you are willing to buy beaten down stuff and junk, you may be able to do OK, but you have to be able to do credit analysis.

If you buy stuff other than treasuries/agencies/munis at issue, I would suggest confining yourself to NYSE-listed bonds and stuff that trades on an exchange like a stock.
What I have available locally is mostly sovereigns (US, France, Germany, Australia, NZ, Canada...), but not at auction. The bult-in markup from the broker for a bond purchased from inventory tends to run around 1%, which for, say, a 5-year holding period comes to roughly an effective expense ratio of 0.2% (more for shorter, less for longer, obviously). This doesn't seem too bad to me, so I have been buying them, but is there anything I may be overlooking here?

Other than that, there is mostly stuff from World Bank and similar entities (Asian Development Bank, State Bank of Bavaria, etc. -- all AAA entities), denominated in various currencies, which can be acquired at issue. Higher yield than the comparable sovereign, but of course somewhat higher risk, presumably. Any opinion on these? I have gone for a couple of these in the past when a sovereign of the desired currency/maturity has not been available.

One thing I stay away from is "step-up" bonds or bonds with complicated maturation rules (the currency of maturation depending on exchange rate movements, e.g.). They look to me like invitations to get skinned. I also avoid corporates, on the principle that there is probably too much equity risk built into them, of which I have already enough via the stock market.
__________________
bpp3 is offline   Reply With Quote
Old 06-10-2007, 11:17 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by bpp3 View Post
What I have available locally is mostly sovereigns (US, France, Germany, Australia, NZ, Canada...), but not at auction. The bult-in markup from the broker for a bond purchased from inventory tends to run around 1%, which for, say, a 5-year holding period comes to roughly an effective expense ratio of 0.2% (more for shorter, less for longer, obviously). This doesn't seem too bad to me, so I have been buying them, but is there anything I may be overlooking here?

Other than that, there is mostly stuff from World Bank and similar entities (Asian Development Bank, State Bank of Bavaria, etc. -- all AAA entities), denominated in various currencies, which can be acquired at issue. Higher yield than the comparable sovereign, but of course somewhat higher risk, presumably. Any opinion on these? I have gone for a couple of these in the past when a sovereign of the desired currency/maturity has not been available.

One thing I stay away from is "step-up" bonds or bonds with complicated maturation rules (the currency of maturation depending on exchange rate movements, e.g.). They look to me like invitations to get skinned. I also avoid corporates, on the principle that there is probably too much equity risk built into them, of which I have already enough via the stock market.
Seems like a reasonable strategy. On the sovereigns, just make sure you stick with top shelf credits (AA or better) and you should be fine. I haven't honestly looked at the world bank, etc., but I guess I would pay attention to who the guarantor is and what the entity's credit profile is. I'd probably be comfier with the State Bank of Bavaria and some of the Landesbanks than the ADB or the world bank, personally. I tend to view the Federal Home Loan Bank as equivalent to the US govt, but with a smidge higher yield.

The complicated structures are also best generally avoided. The one area I will play in is shorter term callables. Last month I bought a 1.5 year FHLB bond. It was callable at 6 months (one shot opportunity). For accepting this (minor) risk, I got 35BP more yield than 1.5 year paper and about the same as 6 month paper. If the trade goes against me, its short term AAA paper, so no big deal.

When the credit markets crack (and they will), be ready to buy some corporates. They will become a very attractive deal at some point.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 06-10-2007, 12:05 PM   #19
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by brewer12345 View Post
What is actually surprising this time is that the bond market has taken it in the butt at the same time as the stock market got hit. Pretty unusual, I would say.
Not really. When the stock market is falling mostly because of inflation and interest-rate fears, bonds to tend to "take it in the butt" along with stocks.

When stocks are falling because of slow growth or fears of a recession, that tends to cause interest rates to drop and THAT creates a bull market in bonds. But this market is more afraid of inflation than slower growth, thus betting interest rates will move up if anything...and taking bonds down with stocks.

What's more unusual, IMO, is that gold has also been taking it in the butt lately. Usually when market action is dominated by inflation fears, that would be bullish for gold, but not lately. It seems cash is king right now.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 06-10-2007, 01:44 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by ziggy29 View Post
Not really. When the stock market is falling mostly because of inflation and interest-rate fears, bonds to tend to "take it in the butt" along with stocks.

When stocks are falling because of slow growth or fears of a recession, that tends to cause interest rates to drop and THAT creates a bull market in bonds. But this market is more afraid of inflation than slower growth, thus betting interest rates will move up if anything...and taking bonds down with stocks.

What's more unusual, IMO, is that gold has also been taking it in the butt lately. Usually when market action is dominated by inflation fears, that would be bullish for gold, but not lately. It seems cash is king right now.
I still have not seen any real logical reason for the bond market sell-off. Sure there are reasons why longer maturities should be yielding more, but those reasons have been out there for a while.

I think what we saw was the markets for all risky assets repricing a bit: gold, commodities, bonds, equities, etc. The spooky thing is that everything seems to move in the same direction when things get ugly, so diversification is less useful than it was. The market seem to have stabilized on Friday, though.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Take A Hit on IRA For a One Year Break? mikex FIRE and Money 16 05-13-2007 07:11 PM
Challenge to Rich: Can You Top This? poboy Health and Early Retirement 1 12-30-2006 08:56 PM
real interest rates hit 2.5% wabmester FIRE and Money 8 04-14-2006 05:02 PM
Top Ten Things We Don't See On The Board Donner Life after FIRE 87 09-09-2005 06:09 PM
When You KNEW You Had Arrived! Tommy_Dolitte Life after FIRE 7 08-28-2004 08:16 AM

 

 
All times are GMT -6. The time now is 02:28 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.