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Subject: Somewhat OT - Stocks
Posted by: noobie
- [151038108] Mon, Nov 11, 2002, 18:00
hello, my economics class is doing a stocks competition, where we can buy, sell, sellshort, etc for any use stocks. I've been doing well but last few days because of the situation in US i guess, almost all stocks have been falling.
no one is allowed to have more than 1G in cash (we started with 100G) Is there any safe bets at this point?
Can anyone suggest any strategy to use at this point>? like should i sell short or buy somethign. Any advice will be greatly appreciated.
O This is for fake money so dont fell nervous about giving opinions |
| Only the 50 most recent replies are currently shown. Click on this text to display hidden posts as well. |
| 74 | biliruben
ID: 531202411
Tue, Nov 22, 2005, 12:19
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Short squeeze. Wahoo!
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| 75 | beastiemiked
Sustainer
ID: 03531815
Wed, Dec 14, 2005, 17:36
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Does anyone have any experience with ING Direct? Their savings accounts are currently at 3.75%(4.75% for a 2 yr CD) blowing away anything my current bank could offer. The reveiws I've seen online seem somewhat positive but was wondering if any gurupie faithful have dealt with them.
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| 76 | biliruben
Leader
ID: 589301110
Wed, Dec 14, 2005, 17:59
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Nope, but if it's an FDIC insured savings account, is there any risk?
I've also heard Emigrant and HSBC (4%) have pretty high rates as well, depending on balance of course.
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| 77 | biliruben
Leader
ID: 589301110
Wed, Dec 14, 2005, 18:30
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Bureau of the Public Debt? Who knew.
6.73% for I Bonds. They are estimating an annualized rate of inflation of 5.7%?!? Wow.
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| 78 | sarge33rd
ID: 111156139
Fri, Dec 16, 2005, 09:45
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anybody get in on any of these beauties????
3739%, 3251%, 3248% up since 01/01/2000
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| 79 | nerveclinic
ID: 2511442315
Fri, Dec 23, 2005, 17:01
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Bili:
6.73% for I Bonds. They are estimating an annualized rate of inflation of 5.7%?!? Wow.
That high rate is an anomoly based on the timing of the six month rate being set at an exact moment in time when the price of oil/gas sky rocketed because of Katrina.
It's not an "estimate".
The I bonds are based on the rate of inflation as they are gauged on a particular day/period every 6 months.
It's not a perdictor of future inflation, it's a number based on the current rate of inflation.
It's a blind system that doesn't seperate the core rate of inflation from the overall rate. At the moment in time when this next 6 month rate was set, the overall inflation rate was through the roof because of the huge hike in gas and oil prices post Katrina. (The core rate at that time was quite normal but because oil is included the number was skewed.)
This number was destined to be such an anomoly that Bob Brinker urged anyone in the market for Bonds to jump on them in October when you would lock in a 6 month guarenteed return of over 5% and then lock in again the next 6 months at the almost 7% rate you sited. (Yet another reason to devote time on Sat/Sun to Mr. Brinker)
Of course this will all correct down to a more normalized return six months from now assuming the
price of oil doesn't go through the roof past $70 a barral.
The problem is you are locked into these particular bonds for 5 years to get the full return. (If you opt out early you lose 3 months of interest)
One time anomoly, if you got in, in October you did very well. No guarentees if you choose to get in now.
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| 80 | biliruben
Leader
ID: 589301110
Fri, Dec 23, 2005, 17:16
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Interesting, Nerve. I'd never heard of these things before, and just stumbled upon them. Thanks for the info.
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| 81 | biliruben
Leader
ID: 589301110
Fri, Dec 23, 2005, 17:18
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Though isn't just about any inflation number an estimate? The indexes that we normally use only have a limited number of products in their basket, and I assume some sort of sampling is performed on this products.
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| 82 | nerveclinic
ID: 2511442315
Sat, Dec 24, 2005, 14:22
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Though isn't just about any inflation number an estimate? The indexes that we normally use only have a limited number of products in their basket, and I assume some sort of sampling is performed on this products.
I guess it has to be an "estimate" because you can't check the price of everything, but they arrive at an agreed upon number by going back to stores all over the country and checking the price of specific items. They go to the same stores and look at the exact same items so even though it's an "estimate" it's a "consistant" estimate.
Here are some cut and pasted explanation of the I Bonds...
The index for measuring the inflation rate is the nonseasonally adjusted CPI-U.(U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS).)
CPI-U was selected by Treasury because it is the best known and most widely accepted measure of inflation.
Every six months Treasury pays interest based on a fixed rate of interest determined at auction.
Semiannual interest payments are determined by multiplying the inflation-adjusted principal amount by one-half the stated rate of interest on each interest payment date.
So oil is part of the "inflation gauge" and on the day that they "multiplyed the inflation-adjusted principal amount by one-half the stated rate of interest on that semi-annual date." Oil was through the roof thus the high rate. Luck.
The core inflation rate (food and clothing) was actually fairly normal on that date (I think about 2% annual, that's a guess). Partly because people had less money to spend because of the high cost of gas.
One of the reason the Feds are starting to state they are close to ending the interest rate hikes is because even though the price of oil has shot up the "core" inflation rate has stayed very normal.
This is also something Brinker predicted for months now based on the sharp price of oil limiting consumer's excess spending power for core items.
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| 83 | nerveclinic
ID: 19730619
Tue, Dec 27, 2005, 23:22
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Just to reinforce what an anomoly the October inflation number was (Due to oil spike), Novembers number were just released and inflation for the month was minus 6/10ths of a percent (This is the largest drop in a long time). On a yearly basis this would be de-inflation of more then 7% for the year.
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| 84 | Madman
ID: 43410119
Wed, Dec 28, 2005, 16:18
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nerve, bili -- yes, the inflation-adjusted rate will be high through April. But it will likely be low after that; the inflation blip will be counteracted in the subsequent 6 month return (unless the blip extends, which has always seemed to be very unlikely and as nerve points out, the CPI-U index has already begin to reverse). Also as nerve pointed out, you have to hold those things. I don't even think an off-the-run market exists in them.
Perhaps I'm missing something, but I don't see how you can effective "game" this system. You're going to get a 1% real return, adjusted for the CPI-U (unless you can buy an off-the-run i-bond that is ready to expire, and the unrealistic inflation estimate is the very last one ... and for some reason the seller was stupid enough to not adjust his price accordingly).
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| 85 | Madman
ID: 43410119
Wed, Dec 28, 2005, 16:25
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BTW, bili, would you object to a private account proposal for Social Security that includes as a component the option for the private account to be invested in either TIPS or I-Bonds? Both TIPS and I-Bonds are MORE SECURE than the "scheduled" Social Security benefit, which, as you likely know, depends on the average wage index that exists when each worker turn 62.
Right now, the market in these things is very illiquid, and few people take advantage of them. But it seems like a win-win from my perspective. I was trying to figure out a way to use I Bonds for my retirement, and current restrictions make it difficult. Utilizing private accounts within Social Security seems like one of those small proposals with big implications.
It would turn Social Security into a mechanism whereby the government would bear virtually all the real risk for your retirement. It might also lower debt service, since people accept lower returns for lower risk.
Any liberal otherwise skeptical of private accounts can feel free to respond. This idea struck me while trying to compose a blog post on the "Non-Partisan" Social Security plan that recently came out. Obviously, I haven't finished.
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| 86 | nerveclinic
ID: 19730619
Thu, Dec 29, 2005, 22:24
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Perhaps I'm missing something, but I don't see how you can effective "game" this system. You're going to get a 1% real return, adjusted for the CPI-U
My take on it is that the only reason these make any sense is if you feel there is a good chance that inflation will be a problem in the next 5 years.
Even with a low inflation environment, these bonds have given a reasonable return the last few years comparable to other secured government bonds, with the built in confidence that if inflation takes off you're protected. Most people probably use this as only a portion of their bond portfolio.
You mentioned the 1% + Inflation figure, that number was higher until this last rate period when it was lowered to the 1% (In part to the realization that these bonds would become so high with the October inflation rate.)
The reason Brinker recommended them (Only if you bought in Oct not Nov) is for the first year you owned them you were locking in a govt. guaranteed over 6% interest. Nothing else Guaranteed could touch that. Granted it would not likely hold up for the remaining 4 years you hold, but for a low risk portion of your portfolio, you got a sweet 1 year deal and for the next 4 years you would do "fine" so evened out over the 5 years it would be a good "low risk" play.
If inflation does go up, then you get the added bonus.
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| 87 | Madman
ID: 43410119
Fri, Dec 30, 2005, 08:36
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My take on it is that the only reason these make any sense is if you feel there is a good chance that inflation will be a problem in the next 5 years.
Agreed.
My only comment here was that the Sept. CPI-U figure was overstated, for the reason you mentioned. Similarly, the next 6- month inflation measure used for the I-Bonds we would expect to entirely back-out the "overstated" portion of the CPI-U.
In other words, if inflation is trucking at 3% and for fluky reasons oil prices spike to drive a 6-month estimate to 6% (annualized), then subsequent CPI levels will drop according. I'm not saying that the next observation would be zero (enough to average out to 3%), but over the long-haul -- and you have to hold these bonds for awhile -- your aggregate return is going to be the CPI-U + the fixed rate.
I don't see a free $20 lying on the ground, either now or even in last October. Unless, of course, you are genuinely concerned about inflation, in which case these instruments are great deals, as you already noted.
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| 88 | biliruben
ID: 531202411
Fri, Dec 30, 2005, 12:18
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So they reset to the latest inflation figures annually?
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| 89 | Madman
ID: 43410119
Fri, Dec 30, 2005, 13:16
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br -- I think it's every six months, actually.
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| 90 | Madman
ID: 43410119
Fri, Dec 30, 2005, 13:20
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IBond FAQ ...
"The earnings rate combines two separate rates:
A fixed rate of return, which remains the same throughout the life of the I Bond.
A variable semiannual inflation rate based on changes in the Consumer Price Index for all Urban Consumers (CPI-U). The Bureau of the Public Debt announces the rates each May and November. The semiannual inflation rate announced in May is the change between the CPI-U figures from the preceding September and March; the inflation rate announced in November is the change between the CPI-U figures from the preceding March and September."
If Sept. of one year has blipped upward for spurious reasons, you'd expect the Sept.-Mar. observation to reverse that blip.
There is a windfall to those who purchased i-bonds more than 5 years ago (and who therefore should consider liquidating them after the bump upward in inflation in Sept. of this year), but prospectively, I don't see how you can game this for the long-run.
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| 91 | biliruben
Leader
ID: 589301110
Fri, Dec 30, 2005, 16:08
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Interesting.
re 85: I'll have to go back and re-remember my stance, but I don't think I was against instituting a voluntary option for investment, and one of the proposals you highlighted in DPS (I can't recall at the moment) sounded very solid in that it protected the lower end of the income scale from erosion of their payout. I think my main objection was what amounted to penalizing folks for not opting to invest, as well as the tricky language which didn't make it clear that you were taking what amounted to a 3% loan that you would have to repay to the gov't, whether your investment garnered 3% or not.
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| 92 | biliruben
ID: 52014814
Thu, May 10, 2007, 17:53
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Is anyone else bothered, after a bad day on the street, by ubiquitous statements along the lines of "Stocks Down amid Profit Taking"?
Is this just a feeble attempt to put positive spin (profits! Yeah!) on a negative situation, or is there really some way these financial reporters have of determining motivations behind the how the market traded that day?
I've never seen any evidence or justification for using this apparently lamo explanation pulled out of some reporter's behind, but perhaps I'm mistaken.
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| 93 | Baldwin
ID: 14358177
Thu, May 10, 2007, 19:54
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I think there is justification for the term. Walk could prolly answer this with more authority than I can but...
If the selling is unrelated to bad news and comes at a logical time to sell based on trend analysis tools then what else can you call it?
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| 94 | biliruben
ID: 52014814
Thu, May 10, 2007, 20:31
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...at a logical time to sell based on trend analysis tools...
You're suggesting market timing? Show me a market timer and I'll show you a poor man.
How about fear. How about a decrease in confidence in the economy.
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| 95 | Baldwin
ID: 14358177
Thu, May 10, 2007, 21:55
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Well when we played the market in that market parallel game, I used standard trend analysis tools and made money so I don't know why you are that down on them. I'm not exactly sure what you mean by market timing. Are you suggesting that anyone who isn't a buy and hold dollar cost averager is going to be a loser?
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| 96 | Seattle Zen
ID: 46315247
Thu, May 10, 2007, 23:06
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Well when we played the market in that market parallel game, I used standard trend analysis tools and made money...
Wrong. Biliruben and I were the only two entries that did not lose money. Your memory has failed you again.
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| 97 | biliruben
ID: 4911361723
Fri, May 11, 2007, 10:28
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No, Baldwin. There are lots of ways to invest, and many of them "make money" (I'd put the bar a little higher to beating the market, however).
I've just never seen someone jumping in and out of the market, which is how I interpret "taking profits", based on pretty charts, which is how I interpret "trend analysis", who consistently beats to market. If there were, than we'd see market timing mutual funds with nice historical returns. We don't.
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| 98 | nerveclinic
ID: 105222
Sun, May 13, 2007, 05:27
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Bili
You're suggesting market timing? Show me a market timer and I'll show you a poor man.
Bob Brinker
He only does very limited moves but he has slaughtered the market the last 10 years by going mostly to cash in Jan 2000 and has been 100% invested since March 2003 almost exactly at the market bottom.
He is a market timer and he and his disciples certainly have not gotten poor following his moves.
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| 99 | nerveclinic
ID: 105222
Sun, May 13, 2007, 06:20
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Here's what a top market timer does...
Brinker's 3 model portfolio's 10 year performance through 12/01/07.
High growth portfolio...323%
Less agressive portfolio 233%
Very conservative portfolio 147%
Here's what a buy and hold investor did the last 10 years if they owned the total stock market index and never market timed.
127%
Who is the poor one?
Nerve
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| 100 | biliruben
ID: 4911361723
Sun, May 13, 2007, 09:17
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That is pretty impressive, but my guess is that is largely associated with a one-time event: the internet bubble.
How's his 5 year performance?
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| 101 | biliruben
ID: 4911361723
Sun, May 13, 2007, 09:18
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Woops. Missed post 98.
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| 102 | biliruben
ID: 4911361723
Sun, May 13, 2007, 09:23
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Here's his results.
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| 103 | biliruben
ID: 4911361723
Sun, May 13, 2007, 09:30
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Does he actually have a fund? In other words, is there any way to verify the results?
One major problem with timing (as well as most mutual funds in general, actually) is the transaction costs associated with buying and selling frequently. Taxes, fees, and such. Does he take these costs into account in his performance?
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| 104 | nerveclinic
ID: 354291313
Sun, May 13, 2007, 15:06
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Does he actually have a fund? In other words, is there any way to verify the results?
There's no problem verifying Brinker. He is one of the top watched newsletters in the business and he's been on ABC radio for over 20 years 8 hours a weekend. He’s published a monthly newsletter since 1988.
He is monitored by Hulbert for example (A newsletter analyzer who writes for marketwatch.com and monitors over 100 monthly newsletters) and Hulbert rates him as the number one performance newsletter of the last 10 years.
He doesn't have "a fund" he has a newsletter that comes out monthly (I subscribe for $180.00 a year) that tells readers what he thinks and suggests a basket of no load mutual funds.
One major problem with timing (as well as most mutual funds in general, actually) is the transaction costs associated with buying and selling frequently. Taxes, fees, and such. Does he take these costs into account in his performance?
Brinker would agree with everything you said above. These aren't really issues with his performance.
He only recommends no-load mutual funds with extremely low expense ratios. He does not recommend any fund that charges commissions or "fees". He virtually never recommends any individual stocks. He uses a lot of Vanguard but also carefully handpicks a number of other funds but ALL have to be no load, no commission and low expense. Most have .25 to .50% yearly expenses tops.
All the performance ratings you are seeing are AFTER expenses are taken into account of course. He will be the first to tell you that it's the only way to judge fairly and he will tell you the reason he does so well is his mantra is exactly as you suggested...avoid Taxes, fees, and such.
He doesn't have big tax issues because even though he does market time it is only very rarely. I've listened to him since the mid 90's, he was 100% in the market until January 2000 then went mostly to cash, then went back in 100% in March 2003. Those are the only moves in 10 years but they were so "right on" that he slaughtered the market.
It's a huge advantage if you can make those calls right rather then buy and hold and I can't tell you how well I slept having my 401 K in bonds from 2000-2003 because I did exactly what he said. Fortunately I had already been listening to him for the preceding 5 years, 8 hours most weekends or I wouldn't have done it.
Never the less, even though his moves are rare, it is market timing and you can see the results. If it was a 2 or 5 year track record I would be skeptical but his newsletter goes back to 1988.
The last market drop in late February he was actually hoping for a bigger 10% correction but said there was nothing to worry about as stocks dropped 6.5% and some people started to panic.
You should give his show a listen Bili, the best time is the first 15 minutes each Saturday as he usually sums up what he's thinking. The stations and times are listed on his website. I listened in Seattle for years.
Make sure it's him though; sometimes he has a guest host named "Bill" who can't hold a candle to him.
Based on your concerns about market timing expense, I think you would really like him. He has had John Bogle the founder of Vanguard on a number of times.
Obviously I am a big fan.
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| 105 | Baldwin
ID: 14358177
Sun, May 13, 2007, 17:16
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SZ, you are wrong. I showed a profit at the end of the game.
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| 106 | nerveclinic
ID: 504531413
Mon, May 14, 2007, 14:57
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I miss spoke.
Brinker is only on 6 hours a weekend.
3 hours each saturday and Sunday.
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| 107 | biliruben
ID: 33258140
Wed, Jun 04, 2008, 13:59
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Smucker Pays $3.3 Billion for Folgers Coffee:
So is the creation Smolgers, or...
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| 108 | Boxman
ID: 571114225
Wed, Jun 04, 2008, 19:24
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Bili: I'm really surprised companies like Campbell's Soup, Clorox and Dr. Pepper have been allowed to float around on the market without being scooped up by a P&G or Kellogg's type company.
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| 109 | biliruben
ID: 33258140
Thu, Jun 05, 2008, 19:56
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Finally. Someone who understands what money's for.
Dr. Henry T. Nicholas III, the flamboyant co-founder and former chief executive of semiconductor chip maker Broadcom, was indicted Thursday in California on various charges, including spiking the drinks of industry executives with ecstasy and maintaining several residences from 1999 to 2005 that were used to distribute and sell other drugs, including cocaine and methamphetamine.
A second indictment filed in the Federal District Court in Santa Ana, Calif., and also unsealed Thursday accused Mr. Nicholas and William Ruehle, the former chief financial officer of Broadcom of improperly backdating stock options, which forced Broadcom to take a $2.2 billion write-down.
Mr. Ruehle, who faces conspiracy and securities fraud charges, is not charged with drug violations.
Broadcom executives did not return calls seeking comment. But Mr. Nicholas, who turned himself in to the FBI on Thursday morning, is expected to appear in federal court Thursday afternoon.
From his early days running Broadcom at the height of the dot-com boom, and when he was nicknamed Darth Vader by rivals, Mr. Nicholas has been known for his outlandish stunts and spectacular outbursts.
In one incident, according to the indictment, Mr. Nicholas and his guests smoked so much marijuana on a flight to Las Vegas from Orange County, Calif,, that the smoke drifted into the cockpit of the private plane they were flying in and the pilot was forced to put on a gas mask.
Mr. Nicholas is also accused of hiring prostitutes not only for himself but Broadcom’s customers. He used several residences in Orange County, Calif. and Las Vegas, as well as a commercial office space called the “warehouse” for his activities. According to the indictment, Mr. Nicholas “used threats of violence and death and payments of money to attempt to conceal his unlawful conduct.”
In January of 2003, Mr. Nicholas resigned from the company he co-founded, which went public in 1998 and made him a billionaire many times over. The reason he gave then was to focus on salvaging his marriage after his wife, Stacey, filed for divorce.
In work and play, Mr. Nicolas always had a wild streak.
He once tried to strip an investment banker at a winter conference in Utah and roll him in the snow because he thought the banker was too uptight. And on his 40th birthday in 1999, his guest list included a porn star, as well as MTV’s band of the year, Orgy, which performed at his home. Police officers showed up at the party and warned Mr. Nicholas to turn the music down.
I owned Broadcom back in the day and made lost money on it in the dot-bomb crash. Glad my money went for a good cause.
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| 110 | Boxman
ID: 337352111
Mon, Jun 09, 2008, 13:32
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I haven't posted in this thread in a while.
I sold off my cost basis in Visa today (been in since the IPO date) and rolled it into Pepsi (PEP; not the bottling division). Since PEP has been on a downslope lately I thought this was a good time to increase a position in a company with strong cap appreciation and dividend growth.
I left the remaining shares of V in the portfolio to see if this thing will turn into MasterCard. I have to admit that I'm curious to see if this thing will go to $300. At that point I'll get out entirely unless there's a strong dividend. Since there is no dividend currently and even if it pays a comparable one to MC it would be weak and the share would still be kind of volatile. The SEC documentation isn't very promising in that the greatest risks to V are gov't restrictions and legalities on the fees they charge. Since V basically prints money for themselves via these fees so long as they keep G&A under control, this would be crippling.
Now I'm waiting on Intrepid Potash (IPI). This thing has finally started moving up for me since I got in on the IPO date.
It looks like my summer move into Burlington Northern (BNI) may fail. I looked back at historical prices over the past 3 years and there's been a minimum of a 10% price decline in June compared to the April high price. BNI has been as unstoppable as, well, a train lately so I don't know if the pull back will be that dramatic if at all. Their dividend is weak too, but the cap appreciation has just been so consistently strong that it justifies it as part of my portfolio.
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| 111 | nerveclinic
ID: 5047110
Mon, Jun 09, 2008, 18:16
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I sold off my cost basis in Visa today
I bought more today on the downturn.
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| 112 | Boxman
ID: 571114225
Mon, Jun 09, 2008, 19:26
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I bought more today on the downturn.
I can see why. V looks like a juggernaut. Outside of the dividend, which is my own personal strategy, from a trading perspective I worry about an out of control P/E ratio. If we learned anything from dot.com it was that.
There's plenty of $$$ left to be made with V fo' sho'.
I did get my lunch handed to me by Citigroup. I just got tired of it and when the rumors about C and their dividend started flying around I sold off all my holdings about a month ago and turned that into more WFC common stock and JPM preferred.
What's your take on the S&P? The index has been getting murdered.
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| 113 | biliruben
ID: 33258140
Tue, Jun 10, 2008, 13:26
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I started dollar-cost-averaging into the index last week. I think there is a good possibility it will dip down into the 12s again, but I want to get some of my money I cashed out of my house working so that it inflation doesn't eat too much of it. I can't withstand too much volatility right now, given that I am going to be buying a house within a year, though I am buying a little bit of stock as well.
What's annoying me right now is how much TD-Am. is charging me to buy the index - 5-times what they charge for a stock purchase.
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| 114 | Boxman
ID: 337352111
Tue, Jun 10, 2008, 13:29
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What's annoying me right now is how much TD-Am. is charging me to buy the index - 5-times what they charge for a stock purchase.
Are you buying a mutual fund? What about an ETF? What are they charging?
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| 115 | biliruben
ID: 33258140
Tue, Jun 10, 2008, 13:37
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I'm buying vfinx, which they consider a mutual fund not an ETF, I guess. $49.99. Not a huge deal, but I don't see why it should be so much more than a stock purchase.
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| 116 | Boxman
ID: 337352111
Tue, Jun 10, 2008, 13:45
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For my mutual funds I just do it straight thru the brokerage that created the fund. They don't charge me anything other than the management fee.
Could you get around it that way?
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| 117 | biliruben
ID: 33258140
Tue, Jun 10, 2008, 14:07
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I suppose. I have a retirement account with Vanguard, but it just isn't worth it to create another account just for this. I am having account overload as it is. My mortgage broker was overwhelmed with accounts when I sent her the paper-work for pre-approval.
They sure do make it a pain in the ass to maximize your tax-advantages.
It's enough to suspect that they want you to give up and get someone to manage it all for you. For 1% of assets, of course. F 'em.
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| 118 | nerveclinic
ID: 5047110
Tue, Jun 10, 2008, 14:28
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Bili
Just by the SPY ETF trades exactly like a stock, replicates the SP 500 and commission should be exactly the same as buying stock.
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| 119 | biliruben
ID: 33258140
Tue, Jun 10, 2008, 14:30
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Cool. I'll check it out, Nerve. Thanks.
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| 120 | nerveclinic
ID: 5047110
Tue, Jun 10, 2008, 14:48
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Box I did get my lunch handed to me by Citigroup. I just got tired of it and when the rumors about C and their dividend started flying around I sold off all my holdings about a month ago and turned that into more WFC common stock and JPM preferred.
Well you and I just have completely different philosophies, as I said early last fall, I don't understand owning financial stocks during a crisis that is being called the "worst since the depression".
I understand blood in the street and everything but it's been obvious for some time this was going to protracted and there were lots of shoes to drop in financials...maybe more. We got blood in the streets, arms, legs, etc. If you have your head wrapped around it hats off but no one interviewed on Bloomberg seems to agree on when the end will be.
What's your take on the S&P? The index has been getting murdered.
The index has been getting murdered lately because of financials...8-}
Also the oil prices are freaking everyone out. Good, chance to buy stocks cheaper again. I've been buying on the way down and selling a little on the way back up. I went 100% invested the day we hit 1260...thinking it was the second retest of the bottom and I'm back to 85% now (Although bought some V yesterday)
The markets going to be crazy until we see more light at the end of the tunnel, but with the Fed putting interest rates at 2%, and shoveling money at the banks, and with an election coming up in November, it's hard not to take risks here.
I don't even know what Visa PE ratio is (Wait there isn't one yet is there?), I just see a great American company that's just started trading, a solid business that grows as the world grows. Mutual Funds have to accumulate shares, no exposure to the financials, the banks loan the money, VISA just collects fees. This seems like a long term story in a portfolio that can survive downturns. Wish I had figured it out as early as you did Box.
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| 121 | Boxman
ID: 337352111
Tue, Jun 10, 2008, 16:26
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Well you and I just have completely different philosophies, as I said early last fall, I don't understand owning financial stocks during a crisis that is being called the "worst since the depression".
True. Different ways of circling the world I suppose.
Most of the shares I sold I've had for years. It was the threatening of C's entire dividend that made me woozy and finally say enough of them. I am still in Wells Fargo common and JP Morgan preferred though. I respect market fluctuations as part of the game, but I do want income as part of the assumption of taking on risk. Admittedly I do make exceptions if there's a nice growth stock out there like V and what I think Intrepid Potash (IPI) will be at least for the short/medium term.
I don't even know what Visa PE ratio is (Wait there isn't one yet is there?), I just see a great American company that's just started trading, a solid business that grows as the world grows.
There wouldn't be a formal one yet I believe, but based on earnings forecasts some analysts on CNBC and Bloomberg radio have said it was getting expensive; especially when compared to MC. I saw PEP take a beat down recently and I decided to take out the V cost basis and increase PEP.
All V does basically is collect fees. It's a very simple business model. All they really need to do is lobby Congress to keep them off their back about the fee amounts, keep G&A under control, and get chin deep into the emerging economies before MC does.
The fed has got to be worried now that the 2% rate has been around. They shouldn't take it any lower for fear of inflationary and dollar weakening risks. It is here I defer to econ-studs like Madman, but I just don't see a continual 2% rate as good for the economy. Eventually rates have to go back up. Otherwise, won't the dollar just not even be worth wallpapering your house with?
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| 122 | nerveclinic
ID: 5047110
Tue, Jun 10, 2008, 17:34
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The fed has got to be worried now that the 2% rate has been around. They shouldn't take it any lower for fear of inflationary and dollar weakening risks.
Why would they take it lower? Except for financial companies, numbers have been fine given the circumstances.
Inflation has been high for oil and food (both in your face) but other areas continue to track well if not lower...
clothing, cars, electronics, appliances...houses.
The inflation hawks never mention this.
Ok eggs cost more, but if you want to buy a house it's 20% less now. Lotta eggs
by the way, $1.59 a gallon for gas here, just filled an empty tank for 14 dollas...sorry
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| 123 | nerveclinic
ID: 5047110
Thu, Jun 12, 2008, 02:48
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Looks like we are going to retest the March Lows.
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