RE: Here's hoping you didn't miss the bottom of the market...

I love peeps wrote:

Uh, if BAC failed all hell would break lose.

There are huge numbers of BAC bank accounts, if there were to be some sort of bankrun at those, it would be...

I don't know how to describe it, but you don't want to see it.

I wouldn't like it anymore than the government is now going to bale out people with iffy mortgages.

The reality is that the government will back every dollar that is in those bank accounts, or at the very least up to the insured amount. No big deal when you are talking billions for all the other programs. I'm not saying I agree with this but that is what will happen should BAC go down the tube.

Flagpole wrote:

We got it Sagarin. Dude, people incorrectly label me as being arrogant when they really should be looking at you. Man, you and Peeps know better than Warren Buffett. That's OUTSTANDING! How do you get that inflated head of yours through the doorway each day? Honestly...think about what it is you're saying. You know better than Buffett. Must suck then to know that you could have formed a company worth billions and become one of the wealthiest people on the planet...if only you had applied your knowledge! Holy Crap! The arrogance you are displaying right now is unbelievable.

Flagpole's finally starting to get ticked off, which is very telling I might add. And to think that that article was in NO WAY posted as a response or an affront TO YOU. Just general dissemination of information.

When did I ever say that I was smarter than Warren Buffett (the investor, not the poster)? Although, smarter isn't really the operative word here so much as better investor is. I do make a good living, yes, but I have no interest in investing OTHER people's money. I'm simply saying that Buffett isn't necessarily the guru people make him out to be (and if you knew anything about his early history and failures and the fact that he almost didn't make it in the industry but for a "bailout," then you would know this for yourself). Anyhow, you seemed to have taken this personally. This Buffett post was not a post for you in the first place.

Sagarin wrote:

Flagpole, and I'm not projecting this as a certainty, but it would seem to me that you simply have not at least considered that this is nowhere close to your father's recession, that you simply do not understand the gravity and implications of the massive structural dislocations this time around, and that we may very well have a period like the 30s, where investments didn't fully come back for over two decades (and just what was the inflation-adjusted return?)? As I said, I'm not sure what we are "reflating" into this time. I don't think the government really understands the gravity of the situation either, because they've never experienced an environment quite like this one, and this is why the approach thus far has been piecemeal and will merely serve to exacerbate and prolong the situation.

Sagarin,

You tell me what it is I don't understand. There is NOTHING that you have ever said on this message board that I don't understand fully; understanding the global market is CRITICAL to my business; I talk to business owners every day, and I consult with them about their business. The difference between you and me is that I don't believe the situation of today will last forever or even for decades...it has nothing to do with any lack of understanding. I read more financial publications each week than most here even know exist. Perhaps it is you who doesn't understand how this world economy is SOOOOOOO different from the 1930s that they really can't be compared in the simplistic way that you like to compare them.

But beyond that, you've stated you know more than Warren Buffett and that he was just lucky due to a Bull Market...really, for now that's all I need to know about you. Maybe you'll climb down from that imaginary perch one day and I can begin to at least respect you again.

the pink monkey wrote:

I wouldn't like it anymore than the government is now going to bale out people with iffy mortgages.

The reality is that the government will back every dollar that is in those bank accounts, or at the very least up to the insured amount. No big deal when you are talking billions for all the other programs. I'm not saying I agree with this but that is what will happen should BAC go down the tube.

Ok, how would you feel waiting 3 months for a FDIC check to pay next week's electric bill?

There are a lot of problems, just because the money doesn't go away doesn't mean there isn't a problem.

Now, the FDIC could buy the bank outright, and insure all of the money electronically. But what happens is you still could have a physical run, in which some banks just run out of cash. Just the news from such an event would send the people to the bank. You're talking about thousands of branches, with millions of people.

This isn't IndyMac or some local bank, this is national.

I didn't realize I had your respect in the first place. Gosh, now I'm hurt. I've worked so hard for it. I'm on no perch (soapbox, maybe, but not a perch) and I've certainly NEVER stated that I know more than Warren Buffett (the investor, not the poster), but people apathetically follow this guy like the old Fidelity Magellan or Bob Brinker or Janus. Oh, and thanks for telling me that you don't think the current situation will last forever.

So, go back to the comfort of your financial "publications." You have no idea who I am, what it is that I do and have done for a living, and that I could have helped. You fully understand, yet you did nothing to rearrange your portfolio over a year ago? Yep, you fully understand. Oh, wait, that's luck and gambling. My mistake.

Good luck to you my friend. I'm not quite sure when or how this got so personal for you, but I think I know why.

There's a good saying, never fall in love with stock. Also, in terms of finance, never fall in love with a person, or even an investment strategy.

People made the same mistake with Madoff. People are also making the same mistake with Buy and Hold. Am I comparing Madoff to Flagpole? Maybe.

The sky is falling! The sky is falling! Literally and figuratively. How soon before we go below 6800? It’s a nor’easter out there. Looking out, the snow is almost perpendicular to the ground. So, stop complaining all you naysayers and get your arse out the door for an invigorating and rejuvenating run!!! I’m heading out now for a real survival run. And all will be right upon my return…

Flagpole wrote:

You are correct I will say that your small loss in stocks was luck...because it was. Sure you decided to move things around, but you got lucky with the timing. In 2005 my uncle wrote a book about the second depression coming in...2007. So, what did he do? He took all his money in stocks and put them in safe vehicles...in 2005. Well, he lost out on the run up from then until October 2007, and that was a HUGE run up. How much in dividends did you earn during that time? Not as much as I did. How many shares have you snatched up during that time? Not as many as I have. The immediate future for stocks doesn't interest me this far away. You still now have to guess correctly on when to get back in the market.

(1) It is not all luck.

(2) Your uncle was wrong, not unlucky.

(3) People have plenty of time to get back in the market. If they got out at a good time, they are so far from the peak they exited at that they don't have to worry if they catch the absolute floor.

Sagarin wrote:

I didn't realize I had your respect in the first place. Gosh, now I'm hurt. I've worked so hard for it. I'm on no perch (soapbox, maybe, but not a perch) and I've certainly NEVER stated that I know more than Warren Buffett (the investor, not the poster), but people apathetically follow this guy like the old Fidelity Magellan or Bob Brinker or Janus. Oh, and thanks for telling me that you don't think the current situation will last forever.

Warren Buffet? I'm not sure he has that much credibility considering what has happened to Berkshire Hathaway in the last year or so.

Their shares a down >50% since December 2007, a bargain at 73050.

Ok, so just a couple of items so we can be on the same page:

1.) I see no reason for this to get personal or chippy, and it surprises me that it did (actually, not really). I have no vendetta to exercise against Flagpole or others, an I have not, certainly not on this thread, accused him of being arrogant, having a big head, or being overzealous. Simply making points that, while not directed to him personally, may challenge his underlying thesis. And to think, while Flaggy may not have lobbed any expletives, this is the guy who, on this thread I believe, asserted that as soon as you start the name-calling, you have lost the argument.

2.) I would never assert that I or anyone else in the business is a "better" investor than Buffett. He follows some very good fundamental concepts like solid and sustained EBIDTA, FREE cash flow, and an understandable, recurring business model, which served him well while the structural trend was intact. Moreover, too many analysts get away from the fundamentals, chasing ousized returns not adjusted for risk. My 25-year time frame is not all that different from Flaggy's or Buffett's AS I'VE ALREADY STATED. But I am a trader, with a short horizon, and until I fully grasp the implications of this brave new world we are entering and believe that the market has fully discounted the AFTERMATH of the structural dislocations and tampering of our bumbling government officials, I am in no way inclined to send the all's clear signal.

3.) I can specifically remember responding to a post from Blowing Rock Master or Carnivore or someone else @ Dow 7400 when Citigroup seemed to be going through its initial capitulation, that we would probably get a rally, that we would see the pundits come out and IMPLY that you may have missed the bottom if you weren't in, and that that rally should be faded. I'm certainly not the only one, and I'm definitely not the smartest guy in the room. Never said I was. But this is not a market for the meek and unwise.

4.) I will attempt to take a page from the playbook of many of the more astute traders on here and post sparingly. I can see I'm doing little good. Besides, everytime we have another sell-off, the panic sets in, and I get "tasked."

Good luck to all.

EBITDA.

I think you read my post as more critical of your advice than it was. Whatever the stock market does, the advice you give about saving and living within your means is great advice. Most people wouldn't have to worry about retirement if they followed your advice. I have been dumping 15% into my 401k since the first month I had the opportunity in late 1999.

Regarding timing, I probably did get lucky. You don't care what the market does because your time fram is long-term and you are buying at levels significantly lower than last year. I understand that. I don't pretend to know when/where the bottom is. You are missing my point if you think I am mostly out of the market because I think I can time it. I don't care what the market does in the short-term because I was convinced (not through my expertise but someone I trust) that there was huge risk based on an inflated housing market, CDS market etc.. It was that risk, not an expectation of timing the market that led me to reallocate my 401k. I will almost guarantee I won't get in at the bottom. If the market takes off before I get back in, I will be fine because I made a decision based on perceived risk, not an expectation of market timing.

1) Well, I can respect people even if I disagree with them.

2) By bashing Buffett, you are in effect saying "I knew better than he did..."

3) You know, just because someone LISTENS to the advice of Janus or Bob Brinker or Buffett or Cramer or whomever else, it doesn't mean they buy it all hook line and sinker. People get info from lots of different places and make reasonable educated guesses -- yourself included.

4) Seems like I have to say again and again that the current situation won't last forever (or even decades) because people (yourself included) keep going on as if this is the greatest doomsday thing ever -- it isn't. And IF by your last comment on this you also believe that it won't last forever (or even decades) then first of all that is a departure from what you've been saying, and secondly, then I have no idea what you are so worried about then.

5) And, I DO know what you've done in the past -- apparently enough to be smarter than Warren Buffet, so good show.

6) Who said I didn't rearrange my portfolio a year ago? I did. I usually do so twice a year on average -- little balances here and there. Yes, I knew a drop was likely coming, and I knew that some called for a HUGE drop, but even the biggest of the naysayers weren't calling for much below 8500 for the DOW (Jim Cramer was among the biggest of the Doom and Gloom and he called for a bottom of 8200).

I do maintain that getting it right both IN and OUT of the market is not an even close to an exact science and that more people than not (WAY more) hurt themselves by trying to time markets.

Two nice quotes by Peter Lynch:

"Don't bottom fish."

"I've found that when the market's going down and you buy funds wisely, at some point in the future you will be happy. You won't get there by reading 'Now is the time to buy.'"

One thing I have learned from following threads like this is that there are really a lot of people that feel they are always 100% right whether it is predicting the stock market or predicting the National Champion in football.

I always thought forums were for conversations to listen to ideas and opinions of others but it seems a lot of people use this site for their own personal soap box.

I am not going to pretend I know a lot about the stock market but seems to me that everything is on sale now and if everyone panics and takes their money out of the market things are only going to get worse.

also young wrote:

young and not ready to invest wrote:

Just curious. How many people reading this thread have lost more money in the market since October than they have made working? Is it that bad yet?

I haven't lost anything because I haven't sold anything. I'm not going to retire for AT LEAST 30 more years, so I don't really care what my retirement accounts do this year...or even this decade.

By the way, if you're young and not investing (especially as cheap as so many securities are right now), you're missing out on the opportunity of a lifetime.

Not ready to invest meaning I have college loans and a car loan I am currently about 6 months ahead on and will have paid off years early.

I know plenty about the time value of money so save me the 6 bullet point flagpole lecture. Saying you haven't lost anything is like buying firewood, saving the ashes after you use it, and saying that is just as good as when you bought it. All the while counting on the fact that some day there will be a market for ashes.

It was just a question and this board is anonymous so it doesn't hurt to answer. Fine with me if no one wants to admit it.

OK, so, I've never predicted ANY forever scenario. What I have said is that a multi-year stagnation is highly likely (that's what the market is telling us now) and a decade(s)-long Japan-style scenario cannot be ruled out. That doesn't mean the market will always "sync-up" with the economic landscape, but there's a good chance of a fallout, some type of rebound, and then multi-year flattish to downish trend, with all types of little cycles in between. We have entered a new secular era. Japan has lost nearly 80% of the value of its stock and real estate markets from almost 20 year ago. Am I predicting this? No, but I warned you about deflation well over a year ago, posted some robust links to it, and warned you about the risks of quantitative easing. Many structural differences, to be sure, but their Keynesian-style policy surely didn't help alleviate or abbreviate the situation.

Have you not read any of the links I post? That is what I do, consult, blog, and trade. For all YOU know, I am one of these guys (I'm not). You don't know as much as you think you do or purport to, Flagpole. Your vacuous and insipid references to this week's mortgage applications, or unemployment projections, or weekly jobless claims numbers make that much obvious. Now, you may be able to come back on here in 25 years and say, "I told you so," even though you haven't told anybody anything. But, that doesn't mean that there won't be others on here who will have been able to pack it in some 15 years earlier than you or have three times the money you should have. It also doesn't mean that I won't turn more bullish in a couple of months. Anyway, I'm done here.

http://www.financialsense.com/Market/daily/tuesday.htm

http://www.financialsense.com/Market/daily/friday.htm

I honestly have no idea how your "firewood and ashes" bit relates to the discussion. I see no relevance whatsoever. I haven't "burned" anything, and nothing has changed forms. I dollar cost average into an index fund. I'm sure it's down this year, just as I'm sure it was last year. How much, I honestly don't care. I only care that I continue to accumulate shares (and right now, I'm accumulating more shares due to the cheaper price). When I'm ready to retire 30, 40, or more (who knows?) years from now, I'll have accumulated a nice chuck of change. The year to year ups and downs along the way interest me none.

Any time you buy stocks it's a loss.

You only gain when you sell.

It is foolish to say you've not lost anything because you've not sold what you've bought, because you already lost it when you bought. When the stocks keep going down then you're losing your opportunity to sell them for a reasonable price.

The object is to sell them for more than you paid when you bought them.