# Hole is dug for our new stock market! :)



## jswordy (Jun 20, 2013)

Man, anybody who's trying to make a living on stocks is getting handed their hat the past couple days since ol' Ben had his talk. It's a market now that looks to be good for buyers and those with the stomach to hold, but tough for those overextended, optioned out on margin, or in immediate need of their principle investment cash.

I've got decent weight in REITs, and that is not a pretty sight to see right now, though I think it'll all come out in the wash when things settle down a bit - er, a bit LOWER! I'm fortunate to have money to buy in now and wait it out.

Still, it is hard to escape the red ink no matter what sector you are in, as this is almost a purely emotional market right now. Beside the ability to enjoy an efter-work glass of wine, this is one more good reason to long for 4 p.m. EDT Friday!

Here's hoping your ride is as smooth as it can be right now.


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## novalou (Jun 20, 2013)

jswordy said:


> Man, anybody who's trying to make a living on stocks is getting handed their hat the past couple days since ol' Ben had his talk. It's a market now that looks to be good for buyers and those with the stomach to hold, but tough for those overextended, optioned out on margin, or in immediate need of their principle investment cash.
> 
> I've got decent weight in REITs, and that is not a pretty sight to see right now, though I think it'll all come out in the wash when things settle down a bit - er, a bit LOWER! I'm fortunate to have money to buy in now and wait it out.
> 
> ...



You really have to take the emotion out of it. If you own stocks (mutual funds) for the long haul, hold what you own. If you have cash, buy and wait.

In the mean time, lets drink some wine!


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## Pat57 (Jun 20, 2013)

You guys have to realize that the ONLY reason the stock market has rallied for the last 4 years was from Fed money printing. The "real" economy is dismal. The Fed can only prop up the market so long before fundamentals take over. Ben Bernanke, and Alan Greenspan for that matter, will prove to be the most destructive wealth-destroying people ever to have existed. there names will no doubt figure prominently in future history books. If I were in stocks I would be looking for the exit real soon. 

Welcome to the 2nd great Depression, brought to all of us by a Federal Reserve near you !!


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## BobF (Jun 20, 2013)

Patience. The herd is taking profits and moving out of issues that benefit from making $85B/month from thin air and into issues that benefit from not making $85B/month from thin air. Plus a bit of overreaction. A story we've seen repeated a few times recently, no?

It's actually pretty good for the 3+ year horizon. We're moving from stilts to real, organic growth. *Everybody* wins in a genuine growth environment.

The real question is, "How good is Bernanke's crystal ball?"

It's been a great ride for the last couple of years. I'll be shifting from 25% invested to 75% or so over the coming months, adjusting on a rolling 8-12 week window. The days of buy and hold for 20 years have been over for a Very Long Time.

It would take a 20% downturn across the board from here for any real damage to be done, and that would only be for those that are "all in" - not a group I'm very often a member of.


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## Julie (Jun 20, 2013)

You know reading this post my first thought was now who is going to come on here and post that it is this political party's fault and then someone else will say no it's not it's this persons fault and the whole thread pretty much craps the bed.

So take this as the only warning, talk about the stock market and the economy as much as you want BUT KEEP POLITICS OUT OF IT or the thread will be shut down.

Thanks for reading


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## jamesngalveston (Jun 20, 2013)

I own dirt, lots and lots of dirt. Was never smart enough to figure out the stock market, are mutual funds, never met a financial planner I trusted, and my last wife was one.
JS u will like this..when I was young my father bought a piece of property for 5000, with two rentals on it.He could not do the upkeep and sold it after a year..
The guy that bought it....sold it 2 years later for 90,000...Today it is where Louisiana Downs Horse Race track sits.. 
I learned a lesson then.


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## jswordy (Jun 20, 2013)

novalou said:


> You really have to take the emotion out of it. If you own stocks (mutual funds) for the long haul, hold what you own. If you have cash, buy and wait.
> 
> In the mean time, lets drink some wine!



My uncle the retired stockbroker said it best: "There are only TWO times when a stock has a price - when you buy it, and when you sell it. All that stuff in between doesn't matter."

As far as emotion, I love an emotional market on the downside. If the money is available, I buy on the market move and later make out very well. Some people can't stomach that. They get nervous when there is more red ink after they've bought. But I just wait it out. 

Even after today's losses, my Ford stock is up 412%. Back when the shares got considerably cheaper than a Big Mac, that was when I pounced. 

I don't know if this market is oversold, but it smells like it could be.


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## jamesngalveston (Jun 20, 2013)

agree with Julie...no POLITICS


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## jswordy (Jun 20, 2013)

jamesngalveston said:


> I own dirt, lots and lots of dirt. Was never smart enough to figure out the stock market, are mutual funds, never met a financial planner I trusted, and my last wife was one.
> JS u will like this..when I was young my father bought a piece of property for 5000, with two rentals on it.He could not do the upkeep and sold it after a year..
> The guy that bought it....sold it 2 years later for 90,000...Today it is where Louisiana Downs Horse Race track sits..
> I learned a lesson then.



James, I just got through selling dirt for 10 times what it was bought for in 1968, and that price was down from what it was worth a few years back. I do my own online investing, no advisors. I prefer financial instruments for tax reasons.


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## jswordy (Jun 20, 2013)

Julie said:


> You know reading this post my first thought was now who is going to come on here and post that it is this political party's fault and then someone else will say no it's not it's this persons fault and the whole thread pretty much craps the bed.
> 
> So take this as the only warning, talk about the stock market and the economy as much as you want BUT KEEP POLITICS OUT OF IT or the thread will be shut down.
> 
> Thanks for reading



I am talking about financial matters. I have found in my long history as an investor that people who cannot divorce their politics from their pocketbooks generally do not do well in the marketplace. It blinds them to the market. When enough get blinded like that, stuff like what we see in the past few days happens and those without blinders can make money. I have been buying my future profits almost all week.

James, are you *sure* that comment about your last wife wasn't political?


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## BobF (Jun 20, 2013)

A quick note:

The only times politics have been mentioned so far have been in premature warnings to not mention politics. And in this note ;-)


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## jswordy (Jun 20, 2013)

Pat57 said:


> You guys have to realize that the ONLY reason the stock market has rallied for the last 4 years was from Fed money printing. The "real" economy is dismal. The Fed can only prop up the market so long before fundamentals take over. Ben Bernanke, and Alan Greenspan for that matter, will prove to be the most destructive wealth-destroying people ever to have existed. there names will no doubt figure prominently in future history books. If I were in stocks I would be looking for the exit real soon.
> 
> Welcome to the 2nd great Depression, brought to all of us by a Federal Reserve near you !!



I can point to several business fundamentals that have led to the stock market's rise since 2009. It is not just the Fed's QE policies, which I much prefer to Europe's approach, and I can see a scenario where the Fed can ease out without much turmoil at all - except for emotional responses like this market we see right now. 

Bernanke is following his well-worn path of making known what he is going to do well before it begins. I've liked that approach because it deflates bubbles well before they are so huge they are a fundamental risk to the economy. There are always winners and losers. In the aggregate, those who invested in 2009 when everybody else was getting out have a huge cash profit in their portfolio to use up before being underwater. This won't use up that profit, they'll still be on the plus side.

At any rate, Ben will not be returning and the person most named to replace him is not as much of an inflation hawk. The trick is to scale back QE just as the economy allows by growth. And the signs are that it will grow faster. We're only in year 6 of the 10-year pullout cycle most economists predicted would occur.

I'm a believer we're poised to grow faster in the latter half of the 10-year cycle, and so I buy when others run. I still have people who thank me for urging them to buy Ford at ~ $2 back when everyone else was running for the treeline.


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## Runningwolf (Jun 20, 2013)

Jim, I'm feeling your pain.AGGGGGG


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## Deezil (Jun 20, 2013)

jswordy said:


> Bernanke is following his well-worn path of making known what he is going to do well before it begins. I've liked that approach because it deflates bubbles well before they are so huge they are a fundamental risk to the economy. There are always winners and losers. In the aggregate, those who invested in 2009 when everybody else was getting out have a huge cash profit in their portfolio to use up before being underwater. This won't use up that profit, they'll still be on the plus side.



I remember, I had spent the spring and summer of '08 watching and learning the stock market, trying to understand what all the analysts were saying and was intrigued by how the politics, as well as the financial reports and quarterly reports, influenced the market.. Keep in mind, this was the 6-months before the bubble burst... I wanted to get my feet wet - my Grandpa played the market, I could learn it too.

Then it popped, about the same time I had a decent understanding of it all. I'm what.. 21 at the time? My peers are in college, graduate schools, coming out with degrees and hoping for big paying jobs.. 

I was sitting on the floor of my Mom's bedroom, watching the news at some 3:30AM in the morning because I couldn't sleep & was freaking out - I had just a clear enough understanding to know that everything and the kitchen sink hit the fan, that it took the Japanese 10 years, that our hole as a nation was deeper, that I was in the prime of my life, and we were almost out of our own personal 15-year hole... 

A definite "you've gotta be *kidding* me" moment.. I started laughing through my hysteria, and said "This is going to make a new generation of millionaires".



jswordy said:


> At any rate, Ben will not be returning and the person most named to replace him is not as much of an inflation hawk. The trick is to scale back QE just as the economy allows by growth. And the signs are that it will grow faster. We're only in year 6 of the 10-year pullout cycle most economists predicted would occur.
> 
> I'm a believer we're poised to grow faster in the latter half of the 10-year cycle, and so I buy when others run. I still have people who thank me for urging them to buy Ford at ~ $2 back when everyone else was running for the treeline.



The japanese had their 10-year 'cycle', a while back.. I cant remember the exact years, I was too young - in the 90's I believe.. They call it the "Lost Decade" or some such.. I think thusfar, we've faired the storm a bit better than they did although the circumstances may be a bit different.

I think the latter half will show 'actual' growth, as opposed to 'QE-propped-up growth'.. I think they'll manage to pull the QE back as the economy grows and by year 10 we should, hopefully/imo, see actual growth without intervention.. Which is when things have actually scabbed over enough to call them 'healed'


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## BobF (Jun 20, 2013)

Required reading:
http://www.amazon.com/dp/0394721039/?tag=skimlinks_replacement-20

It will help you understand the markets and understand the need to know yourself if you're going to participate in them.


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## jamesngalveston (Jun 20, 2013)

lol
too funny.
yea, property does go up and down, somewhat, but as a general rule, the better the properties, the better they hold there value...mostly but not always.
after hurricane ike , here, properties were dirt cheap..you could buy a 100g house for 30, invest 30, now its worth 125. thats good return on your money for 4 years. not always like that, but you get lucky.


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## Pat57 (Jun 20, 2013)

jswordy said:


> I can point to several business fundamentals that have led to the stock market's rise since 2009. It is not just the Fed's QE policies, which I much prefer to Europe's approach, and I can see a scenario where the Fed can ease out without much turmoil at all - except for emotional responses like this market we see right now.
> 
> Bernanke is following his well-worn path of making known what he is going to do well before it begins. I've liked that approach because it deflates bubbles well before they are so huge they are a fundamental risk to the economy. There are always winners and losers. In the aggregate, those who invested in 2009 when everybody else was getting out have a huge cash profit in their portfolio to use up before being underwater. This won't use up that profit, they'll still be on the plus side.
> 
> ...



You've got to be kidding !!?

The economy is horrible. Almost 50 million people on food stamps, "real" unemployment about 17%, inflation adjusted wages back where they were 30 years ago, highest poverty rates since the Great Depression. 

The ONLY thing supporting the stock market is Fed money printing....PERIOD !! Ask yourself one question....what would stocks do if Bernanke announced tomorrow that all bond and MBS buying was going to end abruptly. The Dow futures would be limit down and stocks would absolutely crater. Commodities would crash too. 

The Fed has created yet another asset bubble, as have all central bankers around the globe. They have basically printed about $16 trillion in new money and flooded the markets with it. When this thing blows up you better be out of all markets, I doubt there will be many places to hide !!


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## Rocky (Jun 20, 2013)

I think that Will Rogers had the best advice on the stock market: "Buy good stocks when they are low and when they go up, sell them. If they don't go up, don't buy them!"


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## jamesngalveston (Jun 20, 2013)

I agree with you 100 percent rocky.;


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## BobF (Jun 20, 2013)

Pat57 said:


> You've got to be kidding !!?
> 
> The economy is horrible. Almost 50 million people on food stamps, "real" unemployment about 17%, inflation adjusted wages back where they were 30 years ago, highest poverty rates since the Great Depression.
> 
> ...



Not having a crystal ball is what keeps me in a rolling 8-12 week window. Fundamentals don't really matter for trading, which is waaaaaaay different from investing. I quit investing years ago. The best part is that trading only requires movement - money to be made both directions.


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## DoctorCAD (Jun 20, 2013)

Pat, the reason stock are up (ok, were) is that COMPANIES are flush with cash. The general public economy and corporate economy are two different things. Once you realise that, it all becomes easier to understand.


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## jswordy (Jun 21, 2013)

BobF said:


> Not having a crystal ball is what keeps me in a rolling 8-12 week window. Fundamentals don't really matter for trading, which is waaaaaaay different from investing. I quit investing years ago. The best part is that trading only requires movement - money to be made both directions.



Spoken like a true options man! 

I just buy and sell in more of a value investor mode, with some added restrictions on what I'll buy. I guess 66% profit in a year is plenty. I try not to get greedy.


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