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

I'm keeping all of my money in Aluminum. Just saving the cans I run by on the side of the road. When your 401K crashes or your company goes bust and leaves you without a pension I will be laughing all the way to to bank. Of coarse by bank I mean scrap yard because the banks are going under too.

I have been buying up all those houses the banks have been giving away the last 3 years. I don't care what anyone thinks they are worth. I do like the rent money that comes in the mail every month. Surprisingly, the rentals we have owned for many years bring in just as much money as they always have even though some might say they are "worth" far less money. Can't say that about the stock market.

Excellent strategy that all of us long term investors can follow!

Some more for you to chew on, from Standard and Poor's website today, all of which allows us to totally appreciate the consummate stupidity of people like Flagpole (yes, I'm still short):

Keep in mind that we have no indication that a bottom is at hand, and top to bottom during the Great Depression, the decline in the SP500 was roughly 85 percent.

konami code wrote:

Sounds to me like you have no understanding of the underlying economic conditions -- or even any interest in acquiring that knowledge -- and are simply betting that the future will be much like the past and we'll soon return to 8% average returns. Why do you think that? What makes you think these big job losses are a good sign? Where's the new employment coming from?

I'm not waiting for a green light, just some decent rational analysis. You haven't provided any, here or on any other thread.

Dude, I wasn't trying to provide you with any info to get you to buy back into the market. Makes no difference to me if you do or not. Do it if you want...don't do it if you don't. I just listed the things economists look at. Huge job losses are a good sign in that they typically signal the end of a recession. Decide if you think we're so bad off we can't recover or not. I'm just telling you what the norm is. Also, Buffett and Grantham are two guys to watch, and they say things are looking up down the line. Do with that what you will. Where do the jobs come from? Lots of places. Baby Boomers will continue to retire freeing up jobs. Last I checked people are still being born, and during a recession when individuals and companies stop buying things and stop producing, it's only temporary. Eventually those inventories drop and new production needs to occur (I'm working with several companies in that situation right now). Familes go longer then they used to without a car, but then theirs breaks down. The jobs will return. Again, use whatever criteria you want and decide for yourself if the jobs can come back or not or if the economy can come back or not -- LOTS of ways to spin statistics. Some say the job losses are worse than what is reported, and some say not as bad. Why not as bad? Because many of the job losses were just due to attrition or early retirement -- many of these early retirement job losses are ones that would have been lost in a few years anyway (not saying which side I agree with -- just that there are two different ways to look at that info...as there are at least two different ways to look at just about any info). Again, I'm not pitching one way or the other...not trying to get you to enter the market or not. Just giving you some other things to look at -- there ARE decent signs of a recovery (down the road yet, but a recovery nontheless) if you look hard enough. Decide for yourself if it's enough or not. Makes no difference to me.

Regarding my business knowledge, I have more hands-on experience than many who post here. I work as a consultant and my clients are global clients. I talk to them every day...about what is going on in their slice of the business world. They all work in manufacturing or distribution in some degree using ERP and CRM software along with other types of business software. I read more publications about business and the economy than most here even know exist. Sorry brother, but I know what I'm talking about. Doom and gloom follows every generation -- 1978, 1982, 1987, 1991, 2001, and now 2008. 2008 in most ways is the worst of that group, but it is not yet an unrecoverable situation, and most economists don't believe it is or will be. I'm not trying to convince you brother, and I will eventually be proven correct (that we will recover from the current situation even if it takes 5 years or more). Not sure why you've mentioned a return to 8% growth...that's not a return to the past. The past brought almost 12% growth. Can I see 8%? Yes. It's not THAT much. You are too down on the future based on how the economy is today.

No need to respond to tell me that I haven't convinced you for three reasons:

1) I'm not trying to convince you of anything.

2) I don't have the crystal ball you require to convince you.

3) I couldn't care less what you do with your money.

Coach D, you are hilarious. First of all your article you linked (nice...try some of your own ideas next time) mentions both plusses and minuses to staying in the market. And then it use the term "real value" and talks about how inflation has eaten away at what's been invested in the last 10 years. Use that if you want to stay out of stocks. Makes no difference to me. Either you put money away for a future date or you spend it now. Assuming inflation will always exist (and it might not), then the money you get today is worth the most it will ever be, so why not just spend it all now? Well, because you will need/want money in the future. You either have money when you retire or you don't. Also, the report is really disingenious. Whenver you look at peaks and valleys you can always make one thing look horrible and another really good. What if you had all your money in oil last summer and left it there until now? What about if you put it in gold when gold was falling like a rock?

I look at my statements today and what they were 10 years ago and I'm still very pleased. The last year sucked really, but I'm far enough away from retirement that I don't care. 10 years of investing with net gains per year plus dividends which were reinvested plus just the money itself that I put in. The market has been good to me, and it will be again. The gain is coming. Maybe not this week or even by fall, but it's coming. You know, you really ought to look at yourself in the mirror and ask yourself if calling someone you don't even know stupid is really very nice. Someone should have told you that when you resort to name calling you lose the argument. Come up with something more intelligent to say or stay out of the discussion. It is possible to disagree without silly name calling. Disagree with me if you like, but by any measure possible, I am far from stupid.

I love peeps wrote:

The Stock market has nothing to do with food shortages.

People are poor because they spent all of their money. If they are poor because they invested, then they invested way way way too much in the market.

CORRECT!

I knew you have some common sense in there Peeps! This is why I'm not bothered by the swings of the market today. People should NOT be investing in the market unless they are debt free but for a house that is no more than 25% of their takehome pay in a fixed rate mortgate (no more than 30 years), and you've got a 3-6 month emergency fund in place. You're in that position and then you can afford to invest. Got credit card debt or student loan debt or other kinds of debt (car loans, etc.), then you need not be investing in the market -- good way to become poor.

Give us a break, Flagpole. Nobody has been more vociferous over the past 18 months about how the market is/will be fine, that we're not heading for/in a recession etc than you.

To paraphrase what Lou Reed said about his album Metal Machine Music, anyone who listens to you is stupider than you are.

Flagpole wrote:

BLAH BLAH BLAH and then:

No need to respond to tell me that I haven't convinced you for three reasons:

1) I'm not trying to convince you of anything.

2) I don't have the crystal ball you require to convince you.

3) I couldn't care less what you do with your money.

Nice way to frame the debate -- I'm not asking for you to convince me; I'd just like some insight into your thought process. You have none. You blindly follow gurus and assume things will revert to past trends. You have no idea where economic growth will come from and don't seem concerned about that. That is foolish.

You do not perform any fundamental analysis to arrive at your conclusion that it's a GREAT time to buy. You simply assume that things will be OK and that great returns are just around the corner.

Guess what? Since I've been out of the market, your investments have declined by 50%. Mine haven't. That's because I choose to invest based on facts and fundamental analysis, not chart-based guru-worshipping mumbo jumbo. How has Buffet done on that Goldman investment, by the way?

Anyone that listens to you is a fool.

Back to the future:

It will be a long slow slog off the bottom.

History is repeating itself; FlatulencePole has seen to that by electing Blobama.

Think about world events and politics in 1938, apparently we are doomed to repeat it closely. Just like the return of Tie-die shirts and bell-bottoms, leisure suits can't be far off... after the next world war of course.

warren buffett wrote:

anyone who listens to you is stupider than you are.

The amazing thing is he thinks losing money is helpful and the more he loses the better.

Absolutely delusional.

Flagpole is the dumbest lets run poster of all time.

Flagpole wrote:

I couldn't care less what you do with your money.

For someone who doesn't care what others do with their money, you sure do waste a lot of time trying to convince others what to, well, do with their money. If you truly didn't care, you wouldn't post about it ad nauseum.

Don't scapegoat Obama for our financial woes. It's all about the Shrub family mafia protecting their cronies. Clinton bailed us out from Reagan and Shrub Senior's legacy of greed. Obama will have to bail us out from Junior Shrub's greedfest.

This is an interesting thread. Good to see the return of I love peeps. While I rarely agree with him, his posts certainly make for lively discussion.

As Flagpole and I have discussed in the past, I'm not invested in equities at all. I have my savings in municipal bonds, which offer nearly the same rate of return after factoring in taxes and trading costs, but without the wild ride of the stock market. At the maturity date, your initial investment is returned. Of course there are market risks if one needs to sell before maturity, depending on current interest rates. And while it has rarely happened, if the municipality defaults you could lose your principal.

I don't think we will see a mass default by municipalities, although it is a possibility. I think the real risk with bonds, as with most investments, is with the hyperinflation that is likely to result from the unrestrained printing of money that is likely to occur. Can anyone offer suggestions as to what investment is likely to retain some value if inflation goes wild? Historically, gold has done well, but it is an unwieldy and non-income producing investment. Any other thoughts? Are inflation protected Treasuries a good alternative?

TIPS, I think there are some zeroes with an inflation adjustment add-on, as much as it pains me to say it -- real property where you would employ leverage if you think rates have nowhere to go but up and the bank is on the other unenviable side of that bond locked into a series of unattractive revenues, and hard assets where there is either finite supply or serious supply destruction. Silver appears a better investment to me than gold if you subscribe to this thesis.

Oversold indicators were just about pegged to the floor this morning and with Obama's "It's gonna get worse, but I'm still smiling speech" on deck, this reversal should come as no surprise. Could get traction, but I am not in the "double-bottom" camp, though you will hear a lot of that in the coming days/weeks.

Sagarin, I've answered some of these questions for you before -- regarding Baby Boomers, regardless of whether they WANT to continue working or not, at some point they CAN'T work. This recession is going to make some of them work longer than they had planned, but not that much longer; they just won't be able to -- old age has a way of telling you when you can't do it anymore. Regarding gay marriage, I disagree that it's a big concern currently -- the economy and the war far outweigh that. You like to bring up all the negative things about the state of our society and dwell on them. Seems like a bad way to live if you ask me. I'll always be a glass is half full type of guy -- you don't need to be if you don't want to be. Has nothing to do with reality either -- it's looking at the same situation and deciding if there are good things in there or not. I'm not blind to any of the negative things anyone here has every spouted. I know all too well about them. I've lost one big client during this recession, and that has cut into my income. I'm very aware that things are bad now -- I've said that for over a year. Too many here are taking my optimism about the future to mean I don't see the bad things now -- that's not true. I fear mostly for the reading comprehension of those who post here. I'm VERY down on the current situation -- I just think it will get better -- LOTS better in the coming years.

You wonder aloud who would start a business now -- well, some very smart people would. SBA loan rates are at historic lows. If you need to borrow money to get started, now is a way better time than a year ago to do so. Lots of people start businesses out of necessity in down times. Go do a Google search about the people who have started thriving businesses during recessions -- it's a big topic.

I see that I'm really fighting a losing battle here. Too many of you are doom and gloom participants, and unfortunately that's one of the things that could keep us in the recession longer than necessary. Too many are also fickle -- Peeps was wrong they said when the DOW continued to climb after he told everyone to get out. Now I'm wrong because the market has dropped (and I NEVER said it wouldn't drop). The people throw out incorrect stats like "returning to 8% annual gains". Well, that's not returning to anything -- 12% annual gains would be returning to something, and I've said since at least 2006 that 12% annual gains are unrealistic going forward and that 8-9% is more realistic. If it's 7% then ok.

No one can really call me wrong though unless they continue to post here for the next 17 years and in 17 years the DOW has done nothing but steadily declne from where it is now. I predict that will NOT happen, so if in 17 years someone wants to come back here and tell me I was wrong, then so be it.

The reason people get themselves into trouble with investing is that they try to make the absolute MOST they can -- too many errors happen when they do that. Greed makes people make bad decisions. If though you decide what it is you will NEED by retirement and invest conservatively to reach that goal, as long as you maintain the track to get there, then it doesn't matter what the ups and downs are (though if it went WAY up you could cash out and buy bonds or CDs). This economy stresses too many of you out. It doesn't stress me out at all. If you're not in over your head with bad financial decisions, and you're educated so that you can get hired by a company if you need to or resourceful enough to do your own thing, then you need not worry about the current state of the economy. If more of you had more money saved and less debt, you'd be less worried about how things are today.

"I surrender" and "I am sorry" and "I am wrong"

Obviously there have been some quite big gains in the US stock market today. Of course it may be reversed later in the weeks... But I couldn't work out what caused today's movements (I just had a quick look at the numbers on Fidelity's website, and accompanying them is sometimes some good analysis of what's driving the market, but today there was just discussion of the numbers, but nothing deeper). Could someone fill me in please?

Two further thoughts

1) I can't believe so many people have such a hard time understanding Flagpole. His premise is that the markets will be back up to decent levels some time in the coming years. Accordingly, any sensible long-term investor will be keen to put more money in the stock market at these low prices.

When he said he hoped you didn't miss the bottom, of course he was referring to the possibility that it may have been the bottom. But his argument does not require that it actually was the bottom. Rather if it is the bottom and you buy now, you do well. If the markets have further to fall, buying now is probably still a good idea. This only requires that markets do OK in the long-term - not a particularly wild claim.

2) Might the markets pick up before the economy does? This is a genuine question about stock markets coming out of recessions. Also, it is at least conceivable that inflation will take off quite soon. Maybe stock markets will do well simply due to inflation. Thoughts?