Dow at 2-year high

Obama is saving the country its obvious.

But your wife's wizzard sleeve is at a two year low. Never seen it dangle so much before.

Flagpole wrote:

Well...it is.

It touched 11,500 today...not sure where it will close today, but it's now just 500 points shy of 12,000.

Flagpole,

When you consider the value of the Dow and your general it is always a good time to invest, do you factor in the devaluation of the dollar?

In a nutshell although U.S. financial assets might be going up in nominal terms, the devaluation of the U.S. dollar means that relative to virtually everything else, U.S. financial assets are losing value.

The stark reality is that things are not good.

Black Kid wrote:

Obama is saving the country its obvious.

Well, he's not hurting anything, and even going along with Republicans on this tax thing (though he wouldn't if he didn't feel he had to).

So far under Obama's watch:

1) Recession ended.

2) Dow at 2-year high.

3) Unemployment down from over 10% (though still not really falling).

4) CRAZY earnings reports from businesses. While hiring hasn't really picked up just yet, we are solidly in the recovery phase...BELIEVE IT!

5) No combat troops in Iraq.

6) Working in a bipartisan way to try to move forward (as he promised).

7) Personal wealth, spending, saving...all UP.

8) Manufacturing has grown for 16 straight months.

9) Tech companies are declaring the beginning to a multi-year bull run for them.

So, ain't so bad really. Most of the bad stuff he inherited.

It's at a two year high, from its recent crash. It's still thousands of points away from where it was three years ago. You're celebrating a partial recovery from a recent crash?

Anything that goes from really bad to somewhat better, slowly, is at a "two year high" two years later. There's a "two year high" in plant life two years after a fire burns a field, but that doesn't mean the field is in good shape.

Fire and Ice wrote:

Flagpole,

When you consider the value of the Dow and your general it is always a good time to invest, do you factor in the devaluation of the dollar?

In a nutshell although U.S. financial assets might be going up in nominal terms, the devaluation of the U.S. dollar means that relative to virtually everything else, U.S. financial assets are losing value.

The stark reality is that things are not good.

Fire and Ice,

Either you have money in the stock market that has GAINED since you started investing, or you DON'T have money in the stock market.

As of this morning, BEFORE the decent run up today, I've made 18.6% year to date (following the 34.7% I made in 2009). No dollar devaluation can touch that.

Complaining about a devaluing dollar doesn't help you build wealth brother. Either you invest over a number of years to have a shitpile of money when you retire (or so that you CAN retire), or you don't. It's really as simple as that.

Let's say you invested enough over 40 years so that you ended up with $4.5 million dollars. Or $3 million or hell, even just $1 million. No matter how little that buying power is compared to what it USED to be, the investor didn't HAVE X million dollars when they started investing.

IF you are concerned about a devaluing dollar, then what you do is invest MORE than you think you need to...not less, and certainly not nothing. Don't talk yourself out of investing. It's foolhardy.

Should I sell everything now? I got into the market in March 2009 when the Dow was sub-7000.

Unhappy News wrote:

It's at a two year high, from its recent crash. It's still thousands of points away from where it was three years ago. You're celebrating a partial recovery from a recent crash?

Anything that goes from really bad to somewhat better, slowly, is at a "two year high" two years later. There's a "two year high" in plant life two years after a fire burns a field, but that doesn't mean the field is in good shape.

1) We're about 2600 points away from the high in October 2007.

2) We're also UP 5100 points from March 2009...hope you were investing then brother...I was!

3) I think you're one of the ones who thinks that when we get back to 14,100 that you're back to "even". That is SO not true. First of all, the SPIKE up to 14,100 happened very quickly so that for me (investing since 1989) hardly any money of mine was invested at above even the 13,000 Dow level. Secondly, if you spike to 14,000 and then x number of years later hit that spike again, that means that if you were investing the whole time (as you should have been) that EVERY purchase between those two points has now made money...every single one. When you go just before the first spike too, then you also find a TON of purchases that were below the 14,100 level.

It's been several months ago now that the value of my portfolio surpassed what it was in October 2007, and considering how much I had then, that is VERY good. Dividends and continued investing helped me do that along with investing when the Dow was at 6400 and seeing it get back up to 11,500 today.

Where your analogy fails is that in a fire, EVERYTHING is wiped out. In a stock market plunge, that is not true. In fact you still have the same number of shares with the new ability to add significantly to those shares. Now, when the market improves, the old shares AND the new ones grow.

slackderdom wrote:

Should I sell everything now? I got into the market in March 2009 when the Dow was sub-7000.

Congratulations! I would get out now. In the world of buy low, sell high, few people buy low. You did.

I think this is pretty high, given the conditions that led to the crash a few years ago are looming again.

Although, if you bought at sub-7000, you could teach us some, particulary Flagpole, who didn't sell at 14,000 and rode his portfolio all of the way down to it being cut in half, or so he contends.

I will never understand why people ride their own losses for so long.

Fire and Ice wrote:

Flagpole,

When you consider the value of the Dow and your general it is always a good time to invest, do you factor in the devaluation of the dollar?

In a nutshell although U.S. financial assets might be going up in nominal terms, the devaluation of the U.S. dollar means that relative to virtually everything else, U.S. financial assets are losing value.

The stark reality is that things are not good.

What are you talking about? Spot rate EUR/USD today is 1.3418, one year ago it was 1.4648, and two years ago it was 1.4358. Dollar is significantly stronger than it was against the other benchmark currency in 2008 and 2009.

GBP/USD is the same story, 1.5796 today, one year ago was 1.6305. For five years from 2003 to 2008, GBP/USD never dipped below 1.6000. The dollar is stronger now than it ever was then.

Of course JPY has appreciated, which is not surprising due to its negative real interest rates (interest-rate parity, which forward rates are based on). But the yen's global importance is steadily declining, and the country maintains a relatively closed economy.

The RMB has been pegged to the dollar for years, and it's not an offshore deliverable currency (except CNH in Hong Kong), but as the government slowly loosens the peg it will appreciate against the dollar. Contrary to what you and your tinfoil hat-wearing friends think, the Chinese government is not going to let this happen all of a sudden as it would significantly hurt their exports. Additionally, the United States has the unique position (as the dollar is the main global "reserve currency") of being able to print more money and send that to the Japanese or Chinese governments as a last resort to pay our debts.

Frankly, I think you don't know what you're talking about and you should take your GED and give me an order of fries.

These three points you make show just how stupid you really are. Unemployment was 8% when he came into office. It is now 9.8% barely down from a peak of 10.1% a year ago. It is still substantially higher than when he took office. If you don't want to blame him for that then you can't give him credit for #1, #7, and #8. "Crazy earnings" from companies are a result of aggressive cost cutting measures (i.e. including massive lay-offs that have driven the umeplomyment rate higher). These "crazy earnings" have not come from higher revenues. Unless revenue starts to pick up earnings will flatten out. Not to mention we have some pretty weak comps on earnings from one year ago. And your point on the dow being at a 2yr high is also rediculous. That has more to do with the fed pumping money into the economy than anything else.

Flagpole wrote:

2) Dow at 2-year high.

3) Unemployment down from over 10% (though still not really falling).

4) CRAZY earnings reports from businesses. While hiring hasn't really picked up just yet, we are solidly in the recovery phase...BELIEVE IT!So, ain't so bad really. Most of the bad stuff he inherited.

Flagpole,

I used to think you were pretty smart guy and astute as an investor. You probably still are in my mind, but you are a pied piper leading people to destruction if you say stuff like: worried about devaluation then invest more, etc.

As your mantra is to invest and always centers on the stock market (not real estate, commodities (which is where you should invest if you are concerned about devaluation), venture caps, etc.) then you are subject to 1. devaluation 2. taxes 3. market risk.

Sorry to tell you but if you are up 18.9% this year that is great for you but you still are worse off than if you had invested in commodities.

Your 19% gain is devalued because corn, gold, etc. cost more and are reflective of the devalued dollar.

Because I think you are a smart guy, I was actually asking you whether you think devaluation will continue long term and where you see things going. Please drop the mantra of invest is always a good thing and anytime is better than no time, blah blah blah. I wish you continued success in your investing. Just be careful telling others that they should double down when concerned with the devalution of the dollar. Good luck.

Unhappy News wrote:

slackderdom wrote:

Should I sell everything now? I got into the market in March 2009 when the Dow was sub-7000.

Congratulations! I would get out now. In the world of buy low, sell high, few people buy low. You did.

I think this is pretty high, given the conditions that led to the crash a few years ago are looming again.

Although, if you bought at sub-7000, you could teach us some, particulary Flagpole, who didn't sell at 14,000 and rode his portfolio all of the way down to it being cut in half, or so he contends.

I will never understand why people ride their own losses for so long.

1) I didn't lose 50% (I mark losses and gains on calendar years only, not a spike and a dip). I lost 39% in 2008 after making 8.7% in 2007. I then made 34.7% in 2009 and so far 18.6% in 2010.

2) Even though I "rode" all the way down to 6400, it was no big deal, and no sweat off my nose. For one thing, 80% of my holdings are in retirement accounts. I could have moved stuff within there out of stocks and into bonds or cash, but that would have been trying to time the market, and if I did it correctly on the UP, I'd have to guess correctly on the DOWN too. Nah. Can't do that, and I don't believe any of you can either...if you did, you got VERY lucky. Remember that when the Dow was at 6400, people here said they would wait to get back in until it hit 3500 and 2700 and 1500 and ZERO. Well, I guess they're still waiting eh?

3) I kept the same amount of shares, didn't need that money then, and bought on the cheap all the way down to 6400. Woo Hoo! I wish it would have gone lower or stayed lower longer. Oh well. I'm already back up past where I was in 2007, so no harm no foul, and the stuff I bought at 6400, 700, 8500, 9000, 10,000, 11,000...will only bring me more gains in the years to come.

You think today is high. Well, put your money where your mouth is then and take that money out. Not sure why you'd do that as all indicators are that we could be in for several years of a bull market yet, but go ahead brother. Talk to me in a couple years about whether that was a good idea or not. You'll miss out on dividends and buying opportunity.

Okay Champ,

To be clear:

1. devaluation of currency is being done by all the countries you cited

2. your are confusing exchange rates with purchasing power - see commodity prices and price index over the last 25 months

3. unique position??? the effects of quantitative easing are already being felt (loaning out the $ and making it flow easier) and pretty hard effects, to suggest we print more $ is to suggest war famine etc. because that would be the result

I guess I should be appreciative that you just chose to falsely insult my education and job status, instead of challenging my position based on my collegiate race times, or worse, rejecting my point of view altogether because I am not an elite runner.

I'm surprised we do not have a regular place here on lets'run called "ask a Kenyan" since the average Kenyan can run faster than 90% of us and therefore we should value their opinion more.

I wish there was a Kenyan Flagpole to run the economy ... wait ... Obama

Ha!1) I know that unemployment was lower when he took office (actually 7.7% in January 2009, not 8%), which is why I worded it the way I did...I'm no fool brother!. Unemployment though is a LAGGING indicator. The high of 10%+ to come was already set in stone when Bush was still in office.2) You are just flat out INCORRECT about the company earnings. The time for the decent balance sheets due to cost cutting (layoffs) is over. What we are seeing now is REAL growth with high revenues. You are wrong brother...just 100% wrong. Your statement is so 6-9 months ago. Get in the NOW!3) Matters NOT why the Dow is high...only that it is. The government ALWAYS has its hand in how the Dow does. I didn't say it was great or bad or anything other than the Dow is at a two-year high...because it is. BUT, while PART of the reason for the rise is due to The Fed, most of it is due to company earnings, pulling out of a recession, global economies doing well, etc.

Flagpole,

no offense meant to you about the Kenyan flagpole, just assumed you are not interested in running the economy for us all, of course yours would make a lovely first lady for all of us to admire from afar

remember, the flag of freedom won't fly without a pole

Flagpole wrote:

Well...it is.

It touched 11,500 today...not sure where it will close today, but it's now just 500 points shy of 12,000.

>>Implying what politicians do really has that much to do with how fast or slow the economy recovers, or what happens to it at all for that matter.

The economy functions pretty independently. Changes made by a politician take a long time to take effect. Reagan claimed that his policies would take 20 years to see their greatest effect. 20 years later, we were booming, but Clinton was in office. Oh, who to believe?

let's say that the dollar is devalued (no new story there: the dollar has been devaluing most of the time since around 1980, the last time it was cheap to travel in Europe). How does that affect our money? It affects it negatively only if prices are rising for us. They are barely rising at all. Hence, no problem.

prices are rising my friend ... the problem is coming

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