Staying the Course?

[haha]

Looks like stocks shoot up as well as down-WFC up 25% so far today! And their profit was down, their loss loss provision increased. Only revenues were better than expected. However, they did give a good dividend raise.

I am happy to say that at present, WFC is my only bank stock. I am down to 12% fixed, plus another 3% "enterprising fixed" such as beaten down corporate inflation adjusted bonds. So, if we get a good hard rally, I'll look to lighten up once more in a tax-deferred account. It shouldn't take long at 10%/day.

While it has been easy to be transfixed by the distress in credit markets and banks, there are a lot of other cheap stocks out there. And of course many not so cheap.

Ha

 

[Meadbh]

Staying the course. Unfortunately, cash flow is such that I am unable to DCA into the market right now.

Interesting to experience this ~5 years pre desired FIRE date. All I can say is, I'm glad I haven't pulled the plug yet.

 

[rogersteciak]

While history may not repeat itself, it does rhyme (according to Mark Twain).

How Bad Could Things Get?
How Bad Could Things Get? - Interactive Graphic - NYTimes.com

Uncomfortable Answers to Questions on the Economy
http://www.nytimes.com/2008/07/19/business/economy/19econ.html

 

[d]

i'm increasing the number of shares and the $ amount invested, but the decline in prices is decreasing my equity %.

 

[ikubak]

Staying the course......what other option is there? Sell when the market goes down and then buy back in when it goes back up? I'll just keep doing what I have been doing and I'll keep my 80/20 ratio in my retirement accounts.

 

[hankster]

Staying the course with approx. 65/35 AA. Planning 9 years to ER at 59 1/2.

 

[RDamien]

Staying the course. 37 years old, 70/30 AA and if anything I'm wondering if I should go higher into stocks. I feel fine about it. Now whether that's me being naive or smart is debatable I guess

Maybe I'm crazy but I'm kind of excited about it.

 

[ESRBob]

Nice thread -- staying the course and just did our rebalancing earlier this month. Something about 'stocks down 20%' made me feel it was time to dust off the old rebalancing spreadsheet I'd been putting off all year. When (if!) it goes down another 20% I'll do it again, but probably less comfortably.

Retired and living off SWR from assets. Not feeling much pinch yet as we are 40% stocks, 40% bonds and 20% other stuff like commodities, oil and commercial real estate.

 

[audreyh1]

Nice thread -- staying the course and just did our rebalancing earlier this month. Something about 'stocks down 20%' made me feel it was time to dust off the old rebalancing spreadsheet I'd been putting off all year. When (if!) it goes down another 20% I'll do it again, but probably less comfortably.

Same here - ugh! At least until bonds+cash reduces to 10 years expenses - that'll give me pause!

Audrey

 

[toofrugalformycat]

Staying the course at 60/40 equities/fixed, waiting until 5% out to do anything. Last bear market I procrastinated until about 6.5% out (white knuckles), may do that again because I'm a chicken at times.

 

[unclemick]

Retired/er layed off Jan 1993. Started investing 1966. Should be used to 'stay the course.'

But then I've been thru many a 4th quarter of Saint's football.

As for retirement - full auto - for the serious money. Lifestrategy moderate for over ten years and now Target 2015.

But hormones being what they - can't resist peeking, putzing with some side money, even though the main event Vanguard computers just rebalance away and don't get excited.

Bring on football season! I hear the Pats as usual have a good football team. As if my balanced index really cares.

If it gets too wooky - I'll start measuring my SEC yield of Target 2015 to the second deicmal place and mumble Pssst - Wellesley shoulda bought pssst - Wellesley!

Geaux Saint's again this season(hope springs eternal) - tough it thru on my 3.2X% SEC yield if I must, stay the course.

heh heh heh -

 

[kumquat]

Uncle....... you forgot the "psstt...."

 

[HFWR]

Staying the course at 60/40 equities/fixed, waiting until 5% out to do anything. Last bear market I procrastinated until about 6.5% out (white knuckles), may do that again because I'm a chicken at times.

I had my triggers set at 10%, but with recent volatility, I bumped IGR, PCRIX, and VWO to 15%. Was trading to often...

 

[Dawg52]

Boy, nice day for the portfolio even though the dow was only up 30 points. EMC, STON, MO, GE, T, and CZN all had a nice day. EMC was up almost 14%. Too bad I'm still in the red with it.

 

[W2R]

Boy, nice day for the portfolio even though the dow was only up 30 points. EMC, STON, MO, GE, T, and CZN all had a nice day. EMC was up almost 14%. Too bad I'm still in the red with it.

I am ecstatic at this upturn!! I have great hopes.

 

[laurence]

We spent, what, a week in bear territory? This upturn seems too soon. I am reticent, music man.

 

[haha]

We spent, what, a week in bear territory? This upturn seems too soon. I am reticent, music man.

I find it hard to guess the direction of the market. I will say though, that bear markets usually don't start when stocks have gone nowhere for 10 years- which is exactly what the S&P had done until this last little bounce.

But individual stocks are another matter. Whatever happens in the next few months, GE for example will be much higher a few years down the road than it is now, and an holder will have gotten healthy and growing dividends in the meantime.

I think their hook-up with Abu Dhabi Sovereign Fund points the way to their future. Immelt is a visionary, light bulbs and washer/dryers are a thing of GE's past. They are being spun off rather than sold because he doesn't want to spend any more management time messing with it, and I think they were not getting very good bids.

Abu Dhabi and GE Capital will each invest $4 billion and leverage it up to $40B to create new infrastructure investments in Abu Dhabi. I expect GE Capital's more consumer directed businesses will be sold, spun off or run off. Additionally, GE's share price will find support because Abu-Dhabi has vowed to be one of its 10 largest shareholders, buying in the market, not a private equity deal or capital injection.

It is likely that this train will not be sitting around for long.

It's my largest position.

Ha

 

[Dawg52]

I find it hard to guess the direction of the market. I will say though, that bear markets usually don't start when stocks have gone nowhere for 10 years- which is exactly what the S&P had done until this last little bounce.

But individual stocks are another matter. Whatever happens in the next few months, GE for example will be much higher a few years down the road than it is now, and an holder will have gotten healthy and growing dividends in the meantime.

I think their hook-up with Abu Dhabi Sovereign Fund points the way to their future. Immelt is a visionary, light bulbs and washer/dryers are a thing of GE's past. They are being spun off rather than sold because he doesn't want to spend any more management time messing with it, and I think they were not getting very good bids.

Abu Dhabi and GE Capital will each invest $4 billion and leverage it up to $40B to create new infrastructure investments in Abu Dhabi. I expect GE Capital's more consumer directed businesses will be sold, spun off or run off. Additionally, GE's share price will find support because Abu-Dhabi has vowed to be one of its 10 largest shareholders, buying in the market, not a private equity deal or capital injection.

It is likely that this train will not be sitting around for long.

It's my largest position.

Ha

It's close to my largest individual stock position. You got me licking my lips to buy a little more.

 

[Moemg]

I find it hard to guess the direction of the market. I will say though, that bear markets usually don't start when stocks have gone nowhere for 10 years- which is exactly what the S&P had done until this last little bounce.

But individual stocks are another matter. Whatever happens in the next few months, GE for example will be much higher a few years down the road than it is now, and an holder will have gotten healthy and growing dividends in the meantime.

I think their hook-up with Abu Dhabi Sovereign Fund points the way to their future. Immelt is a visionary, light bulbs and washer/dryers are a thing of GE's past. They are being spun off rather than sold because he doesn't want to spend any more management time messing with it, and I think they were not getting very good bids.

Abu Dhabi and GE Capital will each invest $4 billion and leverage it up to $40B to create new infrastructure investments in Abu Dhabi. I expect GE Capital's more consumer directed businesses will be sold, spun off or run off. Additionally, GE's share price will find support because Abu-Dhabi has vowed to be one of its 10 largest shareholders, buying in the market, not a private equity deal or capital injection.

It is likely that this train will not be sitting around for long.

It's my largest position.

Ha

I have some money on the sidelines that I'll be spending today .

 

[cute fuzzy bunny]

bear markets usually don't start when stocks have gone nowhere for 10 years- which is exactly what the S&P had done until this last little bounce.

Yeah but do you really want to track from a level derived from overpriced non-companies and 80 PE's from irrational exuberance? If you take a chart of the last 15 years and forget about that 99/00 spike it looks like stocks are just about on the curve to where they should be. Maybe even a little bit overpriced still.

Bargains relative to stupid prices may not quite be the same as bargains relative to normal prices...

 

[haha]

I have some money on the sidelines that I'll be spending today .

I wish I could always be this persuasive.

Ha

 

[TromboneAl]

That line is pretty arbitrary, based on what you decide to ignore. I'd say that either of these lines could also be justified:

 

[ziggy29]

That line is pretty arbitrary, based on what you decide to ignore. I'd say that either of these lines could also be justified:

I think this would be a lot easier to analyze on a logarithmic scale.

 

[cute fuzzy bunny]

That line is pretty arbitrary, based on what you decide to ignore. I'd say that either of these lines could also be justified:

Of course.

You could argue that the real story is following the long term trend for valuations that existed prior to 1990, as in your first chart. BTW, that was the only actual piece of identifiable financial message in the Ho$ux/JWR dynamic duo's routine...that stocks were expensive compared to long historic valuations and therefore shouldnt be owned. That would have had you out of stocks from about 1994 on. Although they backtracked around 2006 to say that prices were kinda okay in 2002-2003.

Or that "something changed in the modern era" and that the trend established just prior to the bubble reflects modern valuations based on global operations, the internet, productivity improvements, and/or some other change.

I think theres some rationale to that latter, but since market inefficiencies rarely run year after year after year, and finding a relatively clean trend that existed for 8 years before the bubble and for 7 years after, split the highs and lows.

Answer me three questions: do you think stocks were grossly overvalued in 98-00? Do you think stocks were reasonably cheap in 02/03? Do you think they were a little overpriced in 07?

My answer to all three of those is 'yes', which is born out by the chart I put up.

But I guess the real question is "do we mark todays relative price and valuations against the top of a bubble market, particularly when it might be tough to get everyone to agree on what the right measure of valuations are?"

 

[haha]

I think in recent years there has been a tendency for sectors to go through their own little bull and bear markets. So overall market metrics may not be too helpful.

Even the 2000-2002 bear did not involve all sectors. Look at MO and UST for examples. And the recent and perhaps ongoing financial bear certainly missed the E&P and Oil service sectors, while clobbering the refiners.

Horses for courses- just because they all can't run under today's conditions doesn't mean that some won't.

Ha