Down goes the Dow

Pointing Out the Obvious wrote:

Brian Boru wrote:

Your (2) does not in any way support your (1).

Each statement is true on its own. However, if you don't understand how the fact that nobody can predict the market supports the statement that investment advice is worthless, then you really ought to stay off this thread.

You seem to have no grasp of basic logic.

You honestly don't understand how the fact that nobody can predict the market (statement 2) leads to the conclusion (i.e., "supports") (statement 1) that nobody should be paying for investment advice and therefore the best thing agip can do for his clients is stop taking their money? Really? Maybe you can this one time try to actually explain your view (rather than making broad statements without argumentation like "You seem to have no grasp of basic logic".

Are you ignoring me, K5?

You're hitting pretty hard, Brian.

Some people may wish to pay for that advice. They find value in the feeling of security, and of not being alone in their investing activity. They also find value in assistance with the basic mechanics of buying, selling, and monitoring, and in an introduction to the basic investment vehicles.

Yes, people can do it all themselves, but then again, with research and practice, they can also fix their own cars, build their own houses, represent themselves in court, prepare their own tax returns, etc. Some of these things, like successful legal representation, take one heck of a lot more research and practice than others, like painting--but people still pay others to paint, because they find value in the service.

You wouldn't believe what people with money will pay for, unless you move in those circles. In what they find value is up to them to decide for themselves, not for you to decide for them.

Plus, some people aren't stupid--they listen, but do what they will do anyway, because one never knows what somebody else will know, and the smartest understand that they don't know everything, and that sometimes listening to somebody else--even if you don't act directly on what they say--can be a catalyst.

BTW I personally do all my own stuff. If you are really into this, you should make sure to let everybody on this thread know about self-directed IRA's.

Consumers are earning more money -- and spending it.

According to the Deloitte Consumer Spending Index, which tracks consumer cash flow as an indicator of future consumer spending, consumer outlays were higher in September for a second straight month.

The index, which is made up of 4 components -- tax burden, initial unemployment claims, real wages and real home prices -- increased to 4.21 from 4.11 in August.

“A rise in real wages boosted the index this month,” said Daniel Bachman, Deloitte’s senior U.S. economist. “Although unemployment claims remain at the level of the previous month, seeing them continue to hover around the 300,000 mark is a positive sign for the labor market.

“The uptick in wages -- although only of one month’s duration -- is also consistent with the improving labor market,” he continued. “If employment and wages continue this positive trajectory, consumers are likely to respond with more confidence and higher spending.”

____

WASHINGTON—Consumer spending rose a seasonally adjusted 0.5% in August from a month earlier and personal income rose 0.3%, putting the U.S. economy on track for solid growth in the third quarter that ends on Tuesday, Commerce Department figures showed.

Recent growth in spending and income is "acceptable," J.P. Morgan Chase JPM -0.81% economist Michael Feroli said. "But it would be nice to see some acceleration."

_____

Consumer spending rebounded in August as employment gains revived household earnings growth and encouraged Americans to return to shops and car dealerships.

The 0.5 percent increase in purchases was more than forecast and followed little change in July, Commerce Department figures showed today in Washington. Incomes (PITLCHNG) advanced, rising 0.3 percent last month as wages and salaries climbed the most in three months.

Worker pay over the past 12 months is showing its biggest gains since the end of 2012, raising the odds for improving sales at companies such as Hooker Furniture Corp. The pickup in spending that accounts for almost 70 percent of the economy will help put the expansion on firmer footing as the housing market shows signs of fatigue.

______

The consumer looks to be in a fairly healthy position,” said Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, and the second-best forecaster of consumer spending over the last two years, according to data compiled by Bloomberg. “The labor market is the key behind the income growth that we’re seeing.”

__________________

I could go on. The consumer is well, ok and improving. Not great, but certainly not tapped out.

Not sure why you are quoting Joe Biden as an expert. Why are you quoting Joe Biden as an expert?

as for poverty - we all know that american poverty is a special breed of poverty - they still spend money. And usually poverty stats don't include government transfers like different forms of welfare and food stamps.

Brian Boru wrote:

Pointing Out the Obvious wrote:

Each statement is true on its own. However, if you don't understand how the fact that nobody can predict the market supports the statement that investment advice is worthless, then you really ought to stay off this thread.

You seem to have no grasp of basic logic.

You honestly don't understand how the fact that nobody can predict the market (statement 2) leads to the conclusion (i.e., "supports") (statement 1) that nobody should be paying for investment advice and therefore the best thing agip can do for his clients is stop taking their money? Really? Maybe you can this one time try to actually explain your view (rather than making broad statements without argumentation like "You seem to have no grasp of basic logic".

Ah, the Great K5. Always happy to address your concerns.

To conclude that "the fact that nobody can predict the market leads to the conclusion that nobody should be paying for investment advice and therefore the best thing agip can do for his clients is stop taking their money" requires certain assumptions. In particular, it rests on the assumption that the only (or at the very least, the primary) value added by an investment advisor lies in dynamically allocating the investor's assets based upon market predictions.

That is a false assumption.

Pretty simple really. I would have thought that would have been obvious to the Great K5 (currently known as Brian Boru or B2 for short).

Pointing Out the Obvious wrote:

... it rests on the assumption that the only (or at the very least, the primary) value added by an investment advisor lies in dynamically allocating the investor's assets based upon market predictions.

That is a false assumption.

Why is that false? Isn't a primary part of a financial plan based on diversification which is, by design, based on historical data interpreted as a prediction of future prospects?

Big Dog Investments wrote:

Pointing Out the Obvious wrote:

... it rests on the assumption that the only (or at the very least, the primary) value added by an investment advisor lies in dynamically allocating the investor's assets based upon market predictions.

That is a false assumption.

Why is that false? Isn't a primary part of a financial plan based on diversification which is, by design, based on historical data interpreted as a prediction of future prospects?

I think the point is that a good advisor has several tasks,and only one of which is asset allocation.

A good advisor will manage greed and fear, offer advice on all things financial, maybe do a financial plan, and deal with cash, insurance and estate planning issues.

And tax - a good advisor can lower cap gains by balancing gains and losses.

agip wrote:

interesting again that small caps are again down less than the big caps.

big caps down 1.6%, small caps down 0.6%

hard to interpret this since the market keeps hitting new lows, but I think it is more positive than negative.

agip, I think what could be going on here, SmCaps > LgCaps, is unwinding of Long-Short Momentum strategies. Here is today's U.S. Sector ETF performance

The daily is the mirror image of YTD. Funds and individuals that follow this strategy are probably being hit with margin calls or have hit their risk limits. This results in selling longs and covering shorts; if short covering is large enough it will contribute to short squeeze on all other shorts. Thus the anomaly of this year's losers, IWM, XLE going up while the whole market goes down. Similar to Quant blow up in 2007???

wow that would mean hedge funds really got slammed - I sort of hope that happened - no one is more arrogant than a 2/20 hedge fund. I was there, I know.

Not exactly bullish tho, if short covering is moving hte market rather than firmer money. But I'll take it. ANd I'll take this:

Index Future Future Date Last Net Change Open High Low Time

Dow Jones Indus. Avg Dec 14 16,201.00 +186.00 16,061.00 16,208.00 16,039.00 07:30:00

S&P 500 Dec 14 1,877.60 +27.00 1,853.50 1,878.40 1,851.30 07:30:00

...but on the other hand, hedge fund blowups might explain some of the problems in the market - maybe that explains some of the waves of selling at any price.

So when that unwinding is over, the selling may abate.

I have read about some arb funds getting taken out to the woodshed on busted deals - maybe some of those have to liquidate.

One piece of the puzzle anyway.

To conclude that "the fact that nobody can predict the market leads to the conclusion that nobody should be paying for investment advice and therefore the best thing agip can do for his clients is stop taking their money" requires certain assumptions. In particular, it rests on the assumption that the only (or at the very least, the primary) value added by an investment advisor lies in dynamically allocating the investor's assets based upon market predictions.

That is a false assumption.

"Dynamically allocating assets based on market predictions"?

When you start slinging bullspit like that it is clear that you have no idea what you are talking about.

Clearly it requires no assumption, no leap in faith, to understand it is a waste of money to pay someone to pick your investments when that someone has no idea what the future of any investments will be. But you just can't admit the obvious, can you. Which is why your name is so Orwellian. In plain, truthful English you would be called Spreading the Bullspit.

agip wrote:

A good advisor will manage greed and fear, offer advice on all things financial, maybe do a financial plan, and deal with cash, insurance and estate planning issues.

And tax - a good advisor can lower cap gains by balancing gains and losses.

Blah, blah, blah, blah, blah.

Manage greed and fear? Offer advice? Deal with cash? I mean, WTF? This is all sales pablum. What nonsense.

Face it agip. Your industry is one big parasite taking much, giving nothing

well I'd expect one more surge in fear and panic as the markets do what they can to scare away the weak hands.It's rarely a one day spike and fall - usually a few days later there is a reprise.

Probably late next week.

That was a wild spike in the vix - up to 31 - that is serious panic

I'm liking the hedge fund forced sell hypothesis the more I think about it. But usually that doesn't end in one panicked week - lots of stronger funds that can handle margin calls probably still have these crappy positions on their books and will want to sell them.

Unless the crap rises so much so quickly that they can stay on the books.

Masearati:

re; the consumer, this one's for you:

WASHINGTON (MarketWatch) -- Consumer sentiment in October rose to a reading of 86.4 from 84.6 in September, according to reports out Friday, marking the highest level since July 2007. Economists had forecast a reading of 83.5. The index was as high as 96.9 in January 2007 and was as low as 55.8 in August 2011.

Brian Boru wrote:

"Dynamically allocating assets based on market predictions"?

When you start slinging bullspit like that it is clear that you have no idea what you are talking about...

I am sorry. I was not aware that you were not an English speaker.

So, let me try to help you out here. Which of the words in "Dynamically allocating assets based on market predictions" do you not understand? Perhaps any word with more than two syllables?

If it is a classic problem with multi-syllable words just let me know. I can try to stick with words with less than or equal to two syllables if that will make it easier for you.

Hey, K5, why do you ignore my question? I'm curious about your investment philosophy and how you came to it. You obviously don't think much of agip's chosen profession, so how about telling us a better way to invest? I'd love to hear about who you listen to.

Brian Boru wrote:

agip wrote:

A good advisor will manage greed and fear, offer advice on all things financial, maybe do a financial plan, and deal with cash, insurance and estate planning issues.

And tax - a good advisor can lower cap gains by balancing gains and losses.

Blah, blah, blah, blah, blah.

Manage greed and fear? Offer advice? Deal with cash? I mean, WTF? This is all sales pablum. What nonsense.

Face it agip. Your industry is one big parasite taking much, giving nothing

Wait, let me see if I have this straight:

1) agip's industry is on big parasite taking much and giving nothing.

2) "Giving nothing" refers to the fact that those upon whom it feasts (hosts) get absolutely nothing from agip's services.

3) These hosts get nothing from his services because they are fully capable of making rational decisions with respect to their money without him.

4) Being fully capable of making rational decisions with respect to their money they choose to give some of said money to agip for his investment management services.

Hmmmmmmm....

"...is one big parasite..."

agip, will get back to you later on consumers.

DJIA up 221 today with an hour-and-a-half to go. Somebody found some buying opportunities!