The case for a quick recovery

[ziggy29]

So, I agree, a full recovery will require real housing to recover. But a housing recovery won't happen without employment and non-real estate investment recovery first.

The problem is that falling housing prices, unemployment and a terrible stock market are all feeding on each other in a vicious cycle that's tough to break. And as long they continue to drive consumer sentiment down to multi-decade lows, it's hard to see what catalyst will snap us out of the cycle.

 

[Rustic23]

Just looked Dow down 255.75. Guess it has not read the article.

 

[ziggy29]

Just looked Dow down 255.75. Guess it has not read the article.

So much for http://www.early-retirement.org/forums/f28/new-years-cautious-glee-41679.html, I'd say...

 

[REWahoo]

Just looked Dow down 255.75. Guess it has not read the article.

Remember the qualifying statement in the original article?

"...when things start to show signs of improvement..."

Today obviously isn't "when". I haven't seen anything pointing to signs of improvement, only more gloom & doom.

 

[Rustic23]

Hey! They did say it was down from 300!

 

[Bestwifeever]

Perhaps W2R could start a thread about cautious pessimism--that's the ticket!

 

[Moemg]

I'll take a recovery at any speed right now !

 

[Gearhead Jim]

To me a good investment plan isn't based on hope. I'll take Shillers view on the matter.

Leading economist fears decade of weakness in US


Leading economist fears decade of weakness in US - Times Online

Not to sound flippant, but to me a good investment plan isn't based on experts' predictions. Use firecalc, and LBYM so you can adjust if things turn out to be worse than history.

 

[2B]

Good Contrarian Indicator

For those looking for a positive sign of a recovery about to begin....

Even I'm getting scared.

I haven't sold yet but I've been tempted.

 

[unclemick]

Oh crap - maybe this time is different - I'm retired and ain't gonna work. Famous last words.

So we get one of those decades of higher earnings growth in history, the P/E slowly falls thru the years toward 6 until someone spoils it all with another 'Death of Equities' type article.

Meanwhile the Norwegian widow cashs her dividend checks and goes shopping - ever mindfull of that guru Yogi's admonition that cash is almost as good as real money.

heh heh heh - and perhaps congruent with the end of the Mayan calender(2012), the Saint's finally make the Superbowl.

 

[Dawg52]

I don't watch CNBC or any other financial news anymore. What's the point? . I figure it's gonna take 5-10 years for the markets to recover. If it happens sooner than that, great. So all I do now is read a brief recap from Yahoo finance as to what the markets did for the day. And I don't do that every day.

Hey, I think the med's are working.

 

[Hobo]

Many banks are still on perilous ground, even after TARP.........
Most of the jobs he will create will be GOVT jobs, those jobs don't raise GDP long term.........
So, Walmart will succeed and 20 other retailers will fail, how is that going to spur on the economy??

I wasn't trying to make any predictions. I could make an equally valid argument on how the whole economy could continue to sink into a deep depression.

We aren't seeing any signs of recovery. My point was, "Yes, I can see a way for the economy to make a fast recovery. The money we are throwing around is like throwing fertilizer on parched land. Whether anything will actually grow is a big question mark. But if it does start to grow, then we have fertile ground for a fast recovery."

 

[Dennis]

For investing? Just remember they start buying 6 mos beforehand...thus see whay some on TV are saying..Not till summer..will the recovery start..
and when are Houses Sold? Spring and Summer..

Gas will go up ? gee, yah think? Doesn't it always before Labor day?
Market may hit new Bottom in Jan...> Gee with Earnings reporst from 08' comming out then and they were all Loosers..Yah Think?

From my Broker at Willimington Trust.....

Good time to be buying when Market hits a New Bottom again in Jan..and if you feel confident a Recovery is comming?
You can Use 50% as Much $ this time by just buying some Leveraged Funds from Pro Funds.. ( pays 2-1 ) I bought UAPIX ( Small cap) on 11/21.. just don't hold it forever.. Recoveries last ave of 18-24 mos.. He was right and it Worked In late 02' for 03' and 04' and don't see why it won't again..

$15k Min. to own them....in 03' they paid 105% rtn while the SC Index did only about 46%...

That ought to pay for your Gas for your car and your Boat for the next few yrs! LOL

 

[RonBoyd]

The "dump your Broker" trend should help improve things.

Morgan Stanley and Smith Barney Merger: Consolidation and Client Anger

As former SEC Chairman, Arthur Levitt told Bloomberg News:

“Brokerage is such a personal, intimate business…What we’re going to see in the brokerage business is breakaways from these managed institutions and the beginnings once more of boutique brokerage firms.”
​

But not so fast. ... investors arent happy with their -40% returns and blame their advisors for not being better at their jobs.

Clearly there is an opportunity for new models to emerge that can address the needs of individual investors and provide a better service.

 

[ziggy29]

The money we are throwing around is like throwing fertilizer on parched land. Whether anything will actually grow is a big question mark. But if it does start to grow, then we have fertile ground for a fast recovery."

I guess what we need here is a good gardening/farming analogy for the ground hoarding all the fertilizer that's being spread around and not using it to grow the seeds lie within it...

 

[Architect]

I don't believe in blindly following any strategy: I'll step out of the way of a freight train I see coming. So I use firecalc/asset allocation maybe 80% of the time, and otherwise do my best to avoid the potholes. Worked well so far.

I got the idea from a friend who is a close friend of William Bernstein.

Not to sound flippant, but to me a good investment plan isn't based on experts' predictions. Use firecalc, and LBYM so you can adjust if things turn out to be worse than history.

 

[ziggy29]

Perhaps W2R could start a thread about cautious pessimism--that's the ticket!

Yes, yes -- definitely. We're waiting. Not sure how many times the 7800-8000 Dow level can hold...

 

[Hobo]

So many people are saying, "this is uncharted territory - unlike past recessions, unlike past depressions". So many unknowns - how can anyone really know what will happen in 6 months? They can't.

Until I see the horns of the bull, I will never try to guess when this bear market (or sideways market). Find the safest harbor you can possibly imagine. Plenty of money to be made when the Dow finally breaks 10,000 again. Why put your money at risk now?

 

[ziggy29]

Find the safest harbor you can possibly imagine.

Many people think that's Treasuries.

But if they buy into Treasuries and that "safety bubble" pops, how much have they really protected themselves, and how safe was it?

The closest thing to "safe" is very short term T-bills earning something like 0.00000000000003243%.

 

[RonBoyd]

 

[NW-Bound]

I guess what we need here is a good gardening/farming analogy for the ground hoarding all the fertilizer that's being spread around and not using it to grow the seeds lie within it...

Metaphorically speaking, even with loads of fertilizer, we still need some rain. Politicians are playing rain doctors now.

When the rain comes, an optimist as I am, I hope that the seeds that germinate will not be of the crab grass, or the dandelion. Will the rain doctors be willing to work as gardeners, stooping down to the back breaking labor of pulling those nasty weeds? Or will we stand back and admire the deceptive lush green that our collective efforts brings, like the dotcoms and housing bubbles of the past?

 

[Gardnr]

Plenty of money to be made when the Dow finally breaks 10,000 again. Why put your money at risk now?

But how will you know that it's above 10K "for good"? If you wait 'til you think it's "safe" again you're setting yourself up for buying after a 25% advance, only to see another down draft, and miss out on the dividends in the mean time. What would you do then? Get out 'till it's "safe" again?

Are you a chart reader/tech analysis type? Or will you just go with your gut?

It's tough to pull off market timing. Good luck with that!

 

[samclem]

But how will you know that it's above 10K "for good"?

He already told us--he'll know it when he sees the "horns of the bull." It's like groundhog day-if you see the horns of the bull you'll have six more weeks of the bull market. Or, maybe I've got it wrong and it's an astrological reference: When Saturn enters the house of Taurus and sees the horns of the bull, the market will have changed course. Or it's time to buy Saturn (GM) stock. Or a Dodge Aries. This technical analysis is confusing.

Market timing is easy. In retrospect.

 

[RonBoyd]

market timing is easy.

 

[TromboneAl]

how can anyone really know what will happen in 6 months? They can't.

Until I see the horns of the bull...Plenty of money to be made when the Dow finally breaks 10,000 again.

To paraphrase: "No one can know what's going to happen. When the Dow hits 10,000, we will know what's going to happen."