Heading under 10,000 on the way!

[Steve O]

Google Bilderberg group

 

[Martha]

Avocado and Harvest effing Gold. Put a lid on it Steve-O!

 

[Steve O]

Moody's just lowered Illinois bond rating...

Moody's Lowers Illinois Rating On Budget Concerns - WSJ.com

 

[bbbamI]

Avocado and Harvest effing Gold. Put a lid on it Steve-O!

....could NOT have said it better myself!

 

[Dawg52]

Down over 300 now. Dang, I'm outta the house for a few hours and the market goes to h-e-double-hockeysticks. Eddie's here with your meds Dawg.

Ahhhh.....the tranquil pic of nice cold med. Who says down markets are not a good thing?

I may be alone in this...but when the mkt made it to 9,000 I was pleased.

Yeah, for some reason I don't feel so smart when I sold off a good portion of my stocks when the DOW was around 9,600. Maybe if it drops to 8,500 as our board guru predicts, I can tell you guys 'I told you so'! Now, time to get ready to go have some dinner at the club. Might chase it down with a nice cold.........well you know. The portfolio was down .89% today so I might chase it with two if I really want to celebrate, or cry depending on my mood. Hard to lose with my logic these days.

 

[73ss454]

Me too, I always sell at the top and get in at the bottom, right!

 

[ziggy29]

Me too, I always sell at the top and get in at the bottom, right!

Yeah, that's usually a stupid thing to do caused by letting emotion get in the way. But having said that, if you "loaded up" in early 2009 you'd still have most of your gains off the highs in April and it wouldn't be too late to "take profits." Assuming you were a trader who invested that way.

 

[Steve O]

Gonna add to my stockpile of Viagra LOL

Stock tip of the day

Smith and Wesson...

Just make sure theirs a gun attached to the stock

 

[M Paquette]

How many bank failures will we have today

It's FDIC Friday

So far, just one for the Eastern and Central time zones.

The Associated Press: Regulators shut small Miss. bank

But, the day is young...

And remember, kids; "When in panic or in doubt, run in circles, scream and shout!"

 

[Steve O]

....could NOT have said it better myself!

Good luck and God Bless

 

[bbbamI]

Now, time to get ready to go have some dinner at the club. Might chase it down with a nice cold.........well you know. The portfolio was down .89% today so I might chase it with two if I really want to celebrate, or cry depending on my mood. Hard to lose with my logic these days.

Heh...I'm not worried about the stock mkt. DH is subbing in a band tonight and will make $133. Shoot...I don't have a flippin' care in the world.

 

[MichaelB]

Avocado and Harvest effing Gold. Put a lid on it Steve-O!

what she said.

 

[DblDoc]

Avocado and Harvest effing Gold. Put a lid on it Steve-O!

Going to take a page out of Brewers handbook and use the Ignore feature for the very first time...

DD

 

[harley]

Having sold everything myself last September, I do not put a time frame on it, I am just 100% US treasuries, with long term puts from the overage I made in I thought the video Clifp put up from Australia was perfect for the current scenario. I do not know what direction the markets are going to take for certain, but I don't think the valuations are going to be positive for stocks with all the governments needing money. To this point all the investors have enjoyed the govenrments taking on debt to prop up the investments of the world but............
If the debt unravels unruly I fear it will be deflationary hell, killing PE's from the earnings side if instead the goverments succeed in what I believe they would rather do, inflate the problems away, interest rates should really jump and that will kill the PE's from the P side.

What is the time frame for my change? I am in a fortunate situation in that I am planning to retire in 4 years and I don't need to earn one dollar in investment returns to be able to retire, but I will need reasonable returns forward from that point. I just believe between now and then I am going to be able to take advantage of major valuation shifts.

Were I already retired and needing investment results or short of my goals and needing to be more aggressive to retire I don't know if I would have the patience to sit in 0 percent return assets. But I do feel right now is extremely high risk, which is the same I felt in September.

I think this is a fairly interesting post, but I'm not sure exactly what you mean. It looks like you saved up all your periods and used them all after one sentence.

But after parsing the post, it sounds like you are pretty much 100% in Treasuries. If so, I can see you making out if deflation hits. But don't you think you'll get hurt fairly badly if inflation goes way up, as you expect?

I'm not sure I understand how those that expect an extended bad economy are protecting themselves. Other than gold, of course. Isn't being in cash or treasuries a good investment in a deflationary world? But what about inflationary? Cash again, to invest in CDs when interest rates reach the double digits? Then of course, something in stocks in case you're wrong? Inflammatory posts are entertaining (sometimes), but real suggestions would be educational.

 

[Purron]

Perhaps better suited for the gold thread...

 

[calmloki]

Hmm. what we call a red-letter day when looking at Morningstar portfolio tracker. Nuttin green, even our dab of USAGX gold stock was down about 2%. Gold store is offering $1220 for the gold Philharmonics though, which is up maybe 1%. My big investment this week was in German steel. Bought a replacement BMW 528i touring wagon from a wholesale lot - ten years old and 248,000 miles - after driving a new Honda Fit I just couldn't bring myself to spend four times the money for something that is noisy, lacking in comfort and doodads, and does nothing of note when the go pedal is pushed - the BMW makes much nicer noises at that time. Something to be said for comfort when doing a multi hour drive. Now to address the little i$$ue$ the BMW came with.

 

[Running_Man]

I think this is a fairly interesting post, but I'm not sure exactly what you mean. It looks like you saved up all your periods and used them all after one sentence.

But after parsing the post, it sounds like you are pretty much 100% in Treasuries. If so, I can see you making out if deflation hits. But don't you think you'll get hurt fairly badly if inflation goes way up, as you expect?

I'm not sure I understand how those that expect an extended bad economy are protecting themselves. Other than gold, of course. Isn't being in cash or treasuries a good investment in a deflationary world? But what about inflationary? Cash again, to invest in CDs when interest rates reach the double digits? Then of course, something in stocks in case you're wrong? Inflammatory posts are entertaining (sometimes), but real suggestions would be educational.

If inflation heats up treasuries will jump first. If you go back to the 1980's when inflation began to hit in earnest short term treasuries were yielding as high as 18%. Treasuries, while not making me anything will hold my portfolio value while I await something I feel is a good value.

My biggest risk would be missing a large rally in stocks as the loss in available fixed income is not all that high anyway. So I agree in principle and in 4 years I will never be under 25% holdings in stocks, I do believe that is really the minimum anyone should hold at any one time. But I have thought about this for a long time and nothing I have seen has indicated there is enough money for the governments of the world to cause a smooth landing so I have time and funds on my side to stick with what I forsee happening.

 

[FUEGO]

Hey, runningman, how's that selling all your portfolio and watching the run-up working out for you?

http://www.early-retirement.org/forums/f44/is-this-rally-for-real-44144-8.html#post851507

Looks like you sold half your equities about 13% ago on the SP 500 (when it was at 941) and the rest of your equities August 31, about 4-5% below where the SP500 is now (even after the recent dramatic slide). I'd be very bearish too if I were you - hoping for the market to keep crashing so I could buy back in without having lost a lot of ground.

 

[FUEGO]

I'm inclined to agree with you, but don't forget that this sort of I-know-it's-coming doomsdaying was scoffed at three years ago, and not long after that came their smug "I told you so" sentiments...

Obviously this may end differently than the bearish sentiment in 2007 early into 2008, but there's no way to know. All I know is that the permabears will be back again to rub it in everyone else's noses if they are again correct.

Oh yes, the permabears will be proven correct. Maybe next week, maybe next month, maybe in 2, 5, or 10 years. My broken clock downstairs will be right tomorrow morning around 6:43 am, then again tomorrow evening shortly before 7 o'clock. Then the following day the same times. I wish the permabears could get on a regular schedule of accurately predicting the market like my broken clock accurately predicts the time twice a day. Then we could all trade market timing tips and all become fabulously wealthy.

Maybe I'll eat my words. Until I'm right again.

 

[Running_Man]

Hey, runningman, how's that selling all your portfolio and watching the run-up working out for you?

http://www.early-retirement.org/forums/f44/is-this-rally-for-real-44144-8.html#post851507

Looks like you sold half your equities about 13% ago on the SP 500 (when it was at 941) and the rest of your equities August 31, about 4-5% below where the SP500 is now (even after the recent dramatic slide). I'd be very bearish too if I were you - hoping for the market to keep crashing so I could buy back in without having lost a lot of ground.

That is exactly what I did. I am not ever worried about buying after a rush up if I like the values and whether I am bullish or bearish. I try as much as possible to be unemotional, which allowed me to purchase the positions I sold where you stated when the S&P 500 was at 700 in February and March of 2009. The fact I did not participate in a certain uptrend does not in any way effect me actually, I do not expect to be able to get out at the very top. I have not liked what I have seen in the economy for a long while and I still am not seeing anything really positive. And I am hardly a permabear.

 

[Purron]

How many bank failures will we have today

It's FDIC Friday

Regulators shut banks in Neb., Miss., Ill. - Yahoo! Finance=

 

[ziggy29]

Looks like you sold half your equities about 13% ago on the SP 500 (when it was at 941) and the rest of your equities August 31, about 4-5% below where the SP500 is now (even after the recent dramatic slide). I'd be very bearish too if I were you - hoping for the market to keep crashing so I could buy back in without having lost a lot of ground.

I wish there was a more "mechanical" and emotion-free way to implement it, but the more I study the markets and look at what may lie ahead, the more I like the concept of "dynamic AA" based on market valuation. For example, if one could encapsulate a specific, emotion-free formula to overweight cheap stocks and underweight pricey stocks, I would think it a good thing. I suppose one could use something like PE10 but you might also need to consider what the current yields on cash and bonds might be. Such an approach might have told folks to underweight stocks in 2006 and 2007, and overweight them in late 2008 into 2009 -- perhaps with a fairly "neutral" weighting now. Of course, it might have also underweighted expensive stocks in 1996, and you'd have missed a fairly explosive last run of the secular bull market.

I see no real way to implement such a mechanical strategy, though -- unlike the standard rebalancing of a fixed AA. But in principle, it sure sounds good.

 

[FIREd]

I wish there was a more "mechanical" and emotion-free way to implement it, but the more I study the markets and look at what may lie ahead, the more I like the concept of "dynamic AA" based on market valuation. For example, if one could encapsulate a specific, emotion-free formula to overweight cheap stocks and underweight pricey stocks, I would think it a good thing. I suppose one could use something like PE10 but you might also need to consider what the current yields on cash and bonds might be. Such an approach might have told folks to underweight stocks in 2006 and 2007, and overweight them in late 2008 into 2009 -- perhaps with a fairly "neutral" weighting now. Of course, it might have also underweighted expensive stocks in 1996, and you'd have missed a fairly explosive last run of the secular bull market.

I see no real way to implement such a mechanical strategy, though -- unlike the standard rebalancing of a fixed AA. But in principle, it sure sounds good.

I use a dynamic AA based on market valuation and interest rates. It is a mechanical strategy for me. I created an excel spreadsheet incorporating a number of factors into an equation. I plug in the current numbers and it tells me what asset class to buy or sell. And that's what I buy or sell. No emotions involved. This spreadsheet has been refined over time. For example, I noticed that in 2008-2009 it was forcing me to start buying stocks too early into the bear market, and start selling stocks too early into the bull market - although, since I only rebalance with new money, I should say it forced me to stop buying stocks too early into the bull market. In other words, "momentum" was not factored in properly into my equation. Even now, it's not perfect of course (timing the market perfectly is impossible and it's not my goal either), but at least this strategy makes more sense to me than dollar cost averaging blindly into the market (which is what I used to do until 2007).

 

[MichaelB]

I wish there was a more "mechanical" and emotion-free way to implement it, but the more I study the markets and look at what may lie ahead, the more I like the concept of "dynamic AA" based on market valuation. For example, if one could encapsulate a specific, emotion-free formula to overweight cheap stocks and underweight pricey stocks, I would think it a good thing. I suppose one could use something like PE10 but you might also need to consider what the current yields on cash and bonds might be. Such an approach might have told folks to underweight stocks in 2006 and 2007, and overweight them in late 2008 into 2009 -- perhaps with a fairly "neutral" weighting now. Of course, it might have also underweighted expensive stocks in 1996, and you'd have missed a fairly explosive last run of the secular bull market.

I see no real way to implement such a mechanical strategy, though -- unlike the standard rebalancing of a fixed AA. But in principle, it sure sounds good.

James Montier at GMO agrees with you. He just wrote a paper on this, see here https://www.gmo.com/America/Research/default. He doesn't answer the question of how much to allocate where, but measures like Shiller PE can be of help. Regardless, I think it is critical to have a view on valuations in the asset classes you invest in.

 

[DblDoc]

I wish there was a more "mechanical" and emotion-free way to implement it, but the more I study the markets and look at what may lie ahead, the more I like the concept of "dynamic AA" based on market valuation. For example, if one could encapsulate a specific, emotion-free formula to overweight cheap stocks and underweight pricey stocks, I would think it a good thing. I suppose one could use something like PE10 but you might also need to consider what the current yields on cash and bonds might be. Such an approach might have told folks to underweight stocks in 2006 and 2007, and overweight them in late 2008 into 2009 -- perhaps with a fairly "neutral" weighting now. Of course, it might have also underweighted expensive stocks in 1996, and you'd have missed a fairly explosive last run of the secular bull market.

I see no real way to implement such a mechanical strategy, though -- unlike the standard rebalancing of a fixed AA. But in principle, it sure sounds good.

With a fixed slice and dice AA you do have a mechanical way of investing that does capture valuation in a sense. When stocks run up (and are relatively more expensive) you are buying bonds to "catch up". When the market falls and stocks become relatively cheaper you are buying them. In our case we were buying equities all of 2008 and most of 2009 and constantly chasing our target AA without quite getting there until late 2009. As equities took off I had to switch to buying bonds which I continued to do until last month when it was back to equities again - foreign as they had fallen the most.

DD