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

This intro needs an update, Flagpole!

Flagpole wrote:

Remembering that the markets are forward-looking, note that the S&P 500 hit a low of 752 on Nov. 20. Right NOW it is at 904. That is about a 20% increase since then. The DOW had hit 7,400 and is right now at 8,800. That is also about a 20% increase.

Remembering that the markets are forward-looking, note that the S&P 500 hit a low of 752 on Nov. 20. Right NOW it is at 789. That is about a 5% increase since then. The DOW had hit 7,400 and is right now at 7,553. That is about a 2% increase

Flagpole wrote:

I've not lost anything as I haven't sold.

This is the funniest shit that I've ever seen.

laughing my ass off wrote:

Flagpole wrote:

I've not lost anything as I haven't sold.

This is the funniest shit that I've ever seen.

There's a lot of homeowners out there saying the same thing.

If you can't time the market then you won't be able to time your retirement either

buy options using a strap strategy right now (2 calls and 1 put with same strike price and maturity), it will work

errattic wrote:

If you can't time the market then you won't be able to time your retirement either

This is true, and this is why you invest as much as you possibly can for retirement and you make sure to be debt free so that if there is a big downturn, you can make it work anyway. In my case, because I invested a ton from 1989 to 1996 specifically (50% of our household income went into the market for 7 years) and the market did great during that time, I had a decent amount invested before Bush even came into office. Now, 8 years later with constant investing and dividends, even though I lost (on paper only) some value since October 2007, it doesn't cause me great concern. That peak of 14,100 in October 2007 was a greatly over valued market anyway. Too many people look at a peak and then a valley and think of that as the money they really lost. That's the wrong way to look at it. You don't lose a thing until you sell. If the market ever gets even back to just 12,000 I could transfer it all to bonds and have enough to have a comfortable retirement in 17 more years. If the market does better than that, then I can give more money away to charity and family members.

laughing my ass off wrote:

Flagpole wrote:

I've not lost anything as I haven't sold.

This is the funniest shit that I've ever seen.

Well, then the truth is funny to you.

Since the DOW was at its peak of 14,100 in October 2007, not only have I been able to acquire a LOT of shares, but with increased dividends as the stock prices fell also helped. I don't need it to get back to 14,100 to be back to where I was. I'm actually in an even better financial position since then as more of my house is paid off and I have a bigger income, AND I own lots more shares of stock -- can't cash them in for the same amount as I could have in October 2007, but I wasn't planning to do that then either. It's all about planning to have enough when it is time to retire, and I will. The thing is that some of you call me a dumb ass or laugh at statements like "I've not lost anything as I haven't sold", but ultimately I will be proven right -- that in 5, 7, 10, 12, 15, 17, 20 years (pick) the market will be better than it is today. If things begin to look grim in 12 years again, perhaps I'll go the bonds route from there on in as I will retire in 17 years. I couldn't care less if the DOW drops back down to 2,700 where I started in 1989. I have a boatload of shares, I can continue to purchase at a ridiculously low price, and they will all swell back up anyway. Besides, if the DOW went down to 2,700 and stayed there for 5 years or more, then by the time it went back up to even 9,000 or so again, my value would be right back up to where it was when the DOW was at 14,100. I'm LOVING this low market right now. Some of you young people that aren't in right now will wish you had been when you look back 5-7 years from now.

Flagpole wrote:

I'm LOVING this low market right now.

Since you love it, what stocks have you purchased the last couple of weeks.

What stocks have you held since the beginning of the year.

Why is you losing 50% a year, better than someone else making 50% in a month. Do you honestly believe that puts you in a better position long term.

What you are doing today, determines where you're going to end up tomorrow.

Don't listen to Flagpole. The current stock market crash showed that he can't carry Warren Buffett's jockstrap. Buffett knew to get out before the elevator dropped to the ground floor. Of course he sounds somewhat spot-on when he says 'buy now.' Duh! He forget to say 'sell' last summer.

In fact, Flagpole sucks so bad in comparison to Warren Buffett that if he even tried to sniff Buffett's jockstrap, Buffett's positive, proficient money-making molecules would react with Flagpole's suckjob stock advice molecules and create a turdstorm of disastrous proportions, matter having collided with anti-matter to form a black hole and universal destruction.

Better to keep Flagpole and his crap genes and molecules away from Warren Buffett. Don't want contamination.

J.R. wrote:

Since you love it, what stocks have you purchased the last couple of weeks.

What stocks have you held since the beginning of the year.

Why is you losing 50% a year, better than someone else making 50% in a month. Do you honestly believe that puts you in a better position long term.

What you are doing today, determines where you're going to end up tomorrow.

I don't buy individual stocks. My stuff is all in mutual funds with Vanguard and Fidelity and then outside of them I own American Funds. The vanguard and Fidelity mutual funds are well diversified, and I have about 13% of my total in bonds, the rest in stocks.

You seem to think that I care if someone else does better than me. I couldn't care less about that other than if they are doing better than me, that makes me happy for them, for I wish financial success to everyone. And, I've never lost 50% in a year, not even 40%. If someone can make 50% on their money in a month, then more power to them. I'm not arrogant enough to think I can or willing to risk it enough to try. 50% in a month? Brother, if I could do that I'd retire in about 4 months.

I only care about whether MY financial goals are being met, and while I would rather see the stock market just continually go up, when it drops like it has, then I'm just very glad that I can acquire. The number of shares I've bought since the beginning of 2008 is insane. They will pay off big.

In my opinion, I'm not in a position to dabble in individual stocks anyway. People should dabble in individual stocks ONLY when they have NO DEBT (I still have a mortgage), and they are putting 15% or more away for retirement (I'm doing that -- a little over 20% these days). So perhaps you say I should just sell my stocks (or should have) and buy bonds until the market turns around? Ok. Looking back, that would have been a good thing to do in October of 2007 (except that I wouldn't have received all the dividends I have since then and wouldn't be adding to the number of shares, but whatever). Since October 2007 there have been big ups and downs. When to time the market? Lots of people though the drop was done in January 2008. Would it have been a good idea to get back in then? No. How about when the DOW recently got back over 9,000? Would it have been good then? Seemed like a good time to though. So, I've just stayed in and continued to buy, and in 5-7 years from now when the market is screaming along, I will have more than made up for anything I lost (which I didn't really lose anyway since I never sold anything). I hope the DOW stays low or even goes lower over the next few years. Would be AWESOME.

Someone said I wasn't Warren Buffett. Well, no kidding. Neither is anyone.

toast a bagel wrote:

Don't listen to Flagpole. The current stock market crash showed that he can't carry Warren Buffett's jockstrap. Buffett knew to get out before the elevator dropped to the ground floor. Of course he sounds somewhat spot-on when he says 'buy now.' Duh! He forget to say 'sell' last summer.

In fact, Flagpole sucks so bad in comparison to Warren Buffett that if he even tried to sniff Buffett's jockstrap, Buffett's positive, proficient money-making molecules would react with Flagpole's suckjob stock advice molecules and create a turdstorm of disastrous proportions, matter having collided with anti-matter to form a black hole and universal destruction.

Better to keep Flagpole and his crap genes and molecules away from Warren Buffett. Don't want contamination.

1) I never pretended to be Warren Buffett.

2) You can not listen to me if you want. If you don't, then you're all for running up tons of credit card debt, deferring student loans as long as possible, getting up to your eyeballs in car loan debt, buying a house with an interest-only loan or some other crap adjustable loan (which is BAD even if you plan to sell in a few years -- like NOW when people are having a tough time selling their homes), you will NOT invest at all in any way for retirement, and you'll decide to always be in debt and die in debt, all the while spending a TON of money in interest instead of having that money to spend on things.

3) You really can't win this argument, because pretty much no one other than Warren Buffett can effectively time the market, and even he's not even close to perfect with that. Since I will not have sold any stocks during this bad time and just continued to acquire, when the market does turn around (and it will) then I'll just be back to where I was (which was pretty good by the way) and even higher; doesn't matter to me if it takes 5 years, 10 years, or hell even 20 years. I can live frugally my first three years of retirement if I have to (and I won't have to). 20 years from now, the bad economy of 2008, 2009 and how many ever years it is will be a distant memory -- like the gas lines in the 70s and the bad recession of the early 80s.

Stocks are CHEAP! BUY BUY BUY!

Flagpole wrote:

laughing my ass off wrote:

This is the funniest shit that I've ever seen.

I couldn't care less if the DOW drops back down to 2,700 where I started in 1989. I have a boatload of shares, I can continue to purchase at a ridiculously low price, and they will all swell back up anyway. Besides, if the DOW went down to 2,700 and stayed there for 5 years or more, then by the time it went back up to even 9,000 or so again, my value would be right back up to where it was when the DOW was at 14,100. I'm LOVING this low market right now. Some of you young people that aren't in right now will wish you had been when you look back 5-7 years from now.

I think I'm going to keep some of this stuff on my disk for the next time you try to trick some inexperienced investor with your "expertise" (which is nonexistent, of course).

The first thing that you need to get straight is that it is ALL REAL MONEY. I'm sure you would have told somebody in Germany in the 1930's how rich he was with a wheelbarrow full of Marks. The value of a wheelbarrow full of Marks back then: About $1. What you are promoting is one of the key novice investor mistakes: Lack of a Selling Discipline. You want to believe that you haven't lost anything (it will come back of course) until it finally hits you how much real money you lost--and my then it's usually too late to sell. Opportunity cost--Economics 1a.

I have monthly stock market data going back to the 1870's and I've been in the market longer than you have. Here are some basic facts about buy and hold investment:

--If you bought an index 5-7 years ago like you said....you have lost money.

--If you were a buy and hold investor in 1929, it took about 25 years to get back to even.

--If you were a buy and hold investor in 1972-1973 it took almost 10 years to get back even. Don't just talk about how much you would have made if you bought at the bottom in 1974; ALSO talk about how much you would have LOST before it got there.

--5 years ago, Standard and Poors publicized a large academic study of 401K results (looking at actual results of actual investors). The conclusion was that the average investor made NOTHING during the great bull market of the 1990's, after the bear market of 2000-2002 was taken into account.

--You can see the results from various hedge fund indices here:

Notice that over 1,3,and 5 year time frames, MARKET TIMING has beaten the SP500 handily. That's not supposed to be possible, right?

--If you go back to 40 years from right now, the rate of return from buy and hold (not counting dividends) is 5.25%.

What you see here is what buy and hold investing really gets you...and over the last 100 or so years, conditions like we had in the 1980's and 90's happened precisely ONCE. The annual rate of return of the SP500 index from 1983 to 2000 was 16%; The next closest period was 1952-1972 at 8%. In both of these cases things ended badly and returns ultimately regressed to the mean. You should not expect better if you mindlessly hold stocks/funds for the next 25 years.

1) Of course it's real money. I never said it wasn't real money. I just haven't lost anything until I sell, and if you think I have then you don't understand very basic investing. I could have an emergency that would force me to sell and THEN I would have lost something, but that hasn't happened.

2) No other country is like the United States, so no, I would not tell someone in Germany or Japan or any other country that has had tough times what they should do. They live in countries that pale in comparison to the United States.

3) Your stats are full of crap brother. You're looking at bad times in the market and then making statements that just aren't true. I was in the market from 1989 all the way to the Dot Com bust, and believe me brother, no way did I just break even during that time (even including the Bust). The DOW was at 2,700 in 1989. Maybe if a person was only in the NASDAQ, but I don't invest that way -- diversification is the key.

4) When looking at my spreadsheet of returns from 1989 until the beginning of 2008 (that INCLUDES some down time from the end of 2007 to Jan. 2008 and also the down time in 2002), my rate of return is 11.6% annually. Sorry brother, but your stats aren't right.

5) Who even said I was currently in index funds? I'm not. I HAVE been all in index funds, but currently am not (and I've said that many times).

6) Who said anything about mindlessly holding stocks? I readjust things once or twice a year. And of course, these are not individual stocks, these are mutual funds.

7) Your "Lack of a selling discipline" only applies to people wanting to make short-term gain on stocks or possibly to people who are within 5 years of retirement and they don't go more conservative when they should. This is something Jim Cramer talks about, and it is central to buying and selling individual stocks (which I don't do). Even the stock-picking Cramer tells people to fully fund retirement accounts first before getting into individual stock picking.

8) You can pull out all the crap stats you want brother, but my spreadsheet tells me not only what I've put in the market since 1989 but also the total value, and trust me, even when including the bad 2008, the difference (on the positive side for me) is staggering.

toast a bagel wrote:

Don't listen to Flagpole. The current stock market crash showed that he can't carry Warren Buffett's jockstrap. Buffett knew to get out before the elevator dropped to the ground floor. Of course he sounds somewhat spot-on when he says 'buy now.' Duh! He forget to say 'sell' last summer.

In fact, Flagpole sucks so bad in comparison to Warren Buffett that if he even tried to sniff Buffett's jockstrap, Buffett's positive, proficient money-making molecules would react with Flagpole's suckjob stock advice molecules and create a turdstorm of disastrous proportions, matter having collided with anti-matter to form a black hole and universal destruction.

Better to keep Flagpole and his crap genes and molecules away from Warren Buffett. Don't want contamination.

Remember the adage, "Don't confuse brains with a bull market?" No one has yet to convince me that this doesn't pertain to Warren Buffett as well. Looked smart for side-stepping the tech craze, but he's made some bad bets on insurers, on Goldman, even on rails. He averages down like everyone else as he has all the years between 1982-2007, seeks free cash flow, and, I don't know what the beta of his portfolio is, but it looks good only in one direction. Let's see his performance from 2007-2017.

The Japanese Nikkei index hit 38,900 in 1990 and now, almost two decades later despite numerous govt. stimulus plans, the index is at 7,500. Buy and hold would not have panned out here.

There are many Elliot Wave theorists who say we have another leg down on the S&P500 possibly going to 450-600. Ever look at this theory?

Demographics certainly point to a lower market in the years ahead. Retiring baby-boomers want to pull their investments from riskier to safer as they make the transition, causing money to move from stocks to bonds. Many older people with money are frightened of the market now and their confidence may never return after the 2008 40% hit to their nest egg. So where will the demand for stocks in the supply/demand equation come from, especially now that unemployment is increasing(401k contributions decreasing)? I just don't see it. The steps the Obama administration are taking will make matters worse and the market is strenuously voicing its collective displeasure.

Could we have two decades of economic stagnation like Japan? Possibly.

One item I wish you would not perpetuate, is the idea that you don't have a loss until you sell. I completely disagree, for even if it is not entered as an accounting loss, it is already a loss of wealth, an opportunity cost loss, and a loss of confidence to a person's investing mentality. Therefore, as a rule, cut losses as quickly as possible, never letting a position go in the red over 7- 8%.

I have commented on this very subject myself numerous times. And who's to say that boomers have even fully capitulated yet? What if it does get worse? What then? Mass selling perpetuating more mass selling to salvage what's left of the nest egg? They won't be retiring in droves under that scenario.

For all of those who support Stimulus I, TARP, auto bailout I, Stimulus II, housing bailout I, the inevitable stimulus III, and so on, you clearly aren't watching credit default swap spreads reflecting stress in the insurance market for government debt. Of course, if the government defaults, there's much more to worry about than no one on the other side of the transaction being able to fulfill your claim. But, it is an indicator that serves as a harbinger that we have reached the tipping point. What is the correct "multiple" for stocks under that scenario?

Flagpole:

What vanguard and fidelity funds have you held and for what periods.

Your stated rates of return, with a few exceptions, are above the rates of return for just about all of their offerings over the past 20 years (or since inception of the funds).

My retirement account is up over 100% since July, about 50% this year. What is all this buy and hold crap? Make money now! I was short the N100 from about 1800 down to 1200. I've been in and out, long and short since. I'm now long the N100. I though 1200 would hold but it didn't so I am becoming a little concerned. The techs have been leading the way up as I predicted but the last couple days and today's afterhours are worrisome. Oh well, if I'm wrong, I'll get out and ride the next short wave down. That money in the fall was the easiest money I ever made. Go short and just ignore every rally-it was beautiful.

older than dirt wrote:

The highest rate for a 5 year CD is 3.85%.

It's 5% at one CU here, and 4% at another.