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In a utopian situation, we probably wouldn't even need a goverment.. or would we?
But given that there isn't a utopian state... in real life, Democracy is definitely the best deal, AFAIC.
TM
PS: They actually won that battle anyway, but you get the idea.
I am not concerned about the expected rise in interest rates, as I expect that any increase will likely be very small. I think we'll see the Dow above 11,000 before the end of Summer, and 11,500 later this year. Next year is when we might see the bigger gains, IMO. I say this because I don't think the employment numbers and housing data are going to improve enough until next year, and as a result, they will keep a lid on the market for a while longer. Once those numbers start to imporve, I think we'll see a very nice bull rally that I hope to be a part of in a very big way.
TM
Welcome to "Camp Charlie"
If you recall, I took profits back in November, 2009 on just about all the stocks I had accumulated since early March of 2009. I started nibbling at stocks again around December and January. I did not get out during the correction we had, but I added a few more stocks in recent weeks. I really do like the way the market has been acting (I hope it's not the kiss of death.) recently. It also looks as if the major Greek debt problem will be resolved and that can only help the cause.
I pretty much agree with your Dow predictions although as you recall, I thought 11,000 would be reached considerably sooner. I strongly believe that those that are forecasting a "double dip" recession will be wrong.
Once again, welcome aboard my friend.
Investors Diversified Services took my $ and put in their Growth Fund. A couple of years later I took it out of IDS & put it all in the Columbia Growth Fund and it did very well.
A few years later, Smith Barney/American Express sucked us in and that didn't do too well either.
Twenty years ago I met another guy about my age who represented Royal Alliance. Because of his professional expertise we are very satisfied with his managing our portfolio because that's his main full time job and he spends a lot of time investigating the potential investments. Because he knows how and we don't, we feel his fees are very worthwhile. he began his career in the financial services industry in 1959. He has earned the Charter Life Underwriter (CLU) and Charter Financial Consultant (ChFC) designations and holds the NASD Series 7, and 63 Securities License. A background few have to be self managers.
I also enjoy reading the strategies here that some are willing to share.
2013 LX 570 2016 LS 460
"Everyone is a genius in a bull market"
"When my chauffeur started giving me stock tips, that's when I sold everything"
(attributed to Cornelius Vanderbilt, a few months before the October 1929 stock market crash)
I did tax returns for over a decade and folks who bought and held were the only ones who consistently made money over time. In general, the more trading people did, the less money they made. This held true even when the client had enough money to warrant their own money manager, typically the most experienced guy at the office.
What was strange to me from seeing tax returns is that stockbrokers rarely did any trading with their own money. Every once in a while, you'd see one large trade that almost always lost big (probably thought they had inside information). But generally, they bought mutual funds in a 401K and left it alone.
Regards,
OW
There are some important rules to follow, and it is imperative that if your goal is to beat the average, you MUST pay attention on an ongoing regular basis. If you are content with the average, then you can sit back and let it ride, and pick stocks by throwing darts, or let a broker handle it all for you.
In fact, there is something to be said for taking the more relaxed approach and being content with the average returns... but there is more risk in being content than a lot of people realize.
Consider that the S&P isn't really any further ahead than it was about 12 years ago!!! So much for anyone who says it doesn't make any difference to pay attention. As I said, you CAN beat the market average, but it takes a serious committment to do so, and most folks either don't understand the market, or they simply don't want to spend the time necessary, or simply don't have the time it takes to watch out for their investments... and that's understandable.
Years ago, I used to sit back and let my broker do all the work... but that resulted in some years doing well, and some years getting burned. It all averaged out to be a reasonable, ho-hum return.
What's wrong with utilizing the stock market to make serious money that beats the average? Nothing!... IMO.
If there are guys here that don't believe they can beat the average, then that's fine. But I am not one of them. I KNOW I can beat the average, and as I have said, I have done it numerous times. Often, I am too busy with other committments in life, and I cannot spend the necessary time it takes. And sometimes, I just don't feel good about the market, regardless of its performance, and I NEVER invest in the market when that happens, because the market might be messed up or it could be just fine and dandy, but if I'm not properly tuned in, for whatever reason, then I have no business investing until I can tune into the market once again. But when I do have the time, and when I am tuned into the market, it is well worth it. I guess it depends upon one's point of view as to how much money is worth the effort, but I have done VERY well in the market when life has granted me the time and when I feel positive about the market.
If at any time, I do not feel good about the market or my investments, I immediately sell them and wait until everything feels right to me again. I don't worry about missing some upside. I would be more concerned about being in a downward spiral and having a broker tell me to "hang in there" instead of selling, and telling me that market timing never works. That's just baloney.
TM
In other words, it doesn't "feel" right if I find myself unable to make a rational decision, so therefore I rationally decide under those conditions to not engage in the activity.
When I am fully informed and understand what I am doing and believe that I understand the market, it "feels" right... otherwise not.
Make sense?
edit: As one example, recent political behavior (interference... haha) by the President negatively affected the markets, and it threw me a curve, and to be safe I totally retreated from the market temporarily.
TM
I am not convinced though, that the majority of investors in the stock market are even remotely rational, though they would like to think so.
I don't even think the market itself is rational.
LOL... That's funny. True to a large extent. Fundamentals ultimately have the most significance to me, but not entirely... there is so much market "sentiment" to contend with... consider our recent historic "irrational exuberance".
Y' know, last year, I posted here on the Edmunds forum (on another forum that had some off-topic posts moved to this forum) my predictions (as a non-professional, non-advisory position) regarding a number of stocks, especially Ford (and Citigroup). I purchased the stocks I spoke about, as well as others... so it wasn't a case of just posting for the sake of posting. I shared my predictions and have proven without a shadow of a doubt that I made some very good selections that beat the market averages in a huge way. I even made some risky speculative moves that I shared with the members such as that crazy and risky AIG investment I made that landed me a potful of dough in one day. Now, I must admit that one was a whole lot of luck, but I took the money anyway... LOL.
But, back to Ford. The amazing thing to me is that some members thought I was crazy to suggest that Ford was a great investment. They were, and are, entitled to their opinions, of course, but at the end of the day... it has practically doubled since the date I mentioned it... Anything wrong with a 100% return in a matter of months? For those that couldn't see the future for Ford, they lost out. As they say, you can lead a horse to water but.........
I also posted at length about how the wireless internet and phone technology is exploding wildly on a global level... it makes good sense to invest in this technology... it WILL beat the market averages... because the market averages also include companies and sectors that aren't doing as well at this point in time.
But that doesn't mean that every wireless phone and internet company is a good investment, because it's not. The point is that the sector is a good one, and there are great stocks to find, once you go mining for them. Better to go mining in a mine (market sector) that has lots of gold (great stocks) than in a mine (market sector) that has very little to offer.
Anyway, enough of this rambling... at least for now.
TM
They used to be like Coors Beer back in the day. When Coors wasn't sold east of the Mississippi because it wasn't pasteurized, people would go to great lengths to get their hands on a six-pack.
Same with Krispy Kreme - when I'd go visit my mom back in Chattanooga, I'd run by the shop and hope the fresh ones were coming down the conveyor. Now that there's one in Boise, I never go there.
Ford was a good pick for me, but I just used some "play" money to buy some. Money that I could afford to lose in other words. Ford hocked everything to the gills so there was (and is?) a real risk that they could have gone down the penny stock road.
2013 LX 570 2016 LS 460
A couple of years later they opened several more restaurants in the area just a couple of miles away. Soon I couldn't stand the things. All the stores are now closed!
The stock market reminds me of my poker playing days. I won consistently for a while before I took the cure !!
2013 LX 570 2016 LS 460
I sold most of my stocks again around Nov.Dec as I felt a correction coming. That was a bit too soon but it was OK. I started buying again during the true correction but once again the timing was no perfect (too soon). I kept adding to my collection of stocks as the market kept on correcting and I am now in good shape again.
I am not sure how much of this is luck and how much is skill, but I doubt it is all luck. I just wanted to point out that one can beat the market average as TM stated. I have experience in trading commodities and to me trading stocks does not seem all that difficult. One very important rule in all of this is to trade what you can afford to lose. In other words, don't bet the farm.
I will always respect your brilliance regarding your sale of your stocks in '08. Many folks do not have the guts to differ with their brokers to the point you did. You did what was necessary... and smart!
No one gets every move just right... but, overall, as you have shown, it is clearly possible to beat the averages.
TM
If I only had the money back that I spent on those (not the stocks).. I'd be set for life!
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2013 LX 570 2016 LS 460
These two stocks, Citigroup and Ford, among some others, were the primary ones I repeatedly and strongly suggested to you guys. Those of you that bought shares of them must be very happy campers today.
The logical question is, how far can they go? Still higher, IMHO.
TM
I had a client, an otherwise bright guy, blow $25 million in one year trying to outsmart the market. Nobody (who can't influence the market) has proven they can beat the market consistently over time. I can't think of anyone anyway. Feel free to prove me wrong. Post pdfs of your schedule D's for the last 10 years of so in condensed form or something.
I hope you are not serious with these remarks. Beating the market average and betting the farm are two very different things. One of the most important rules of trading is to only risk what you can afford to lose. You CAN beat the market average but that does not mean you will be successful on each and every trade. If you "bet the farm" as you state, all it takes is one wrong move and you are bankrupt.
Tag and I have given you plenty of examples over the past couple years where we either beat the market average or in my case avoided losing 50-60% of the equity by getting the hell out of the market in the spring and summer of 2008.
Perhaps education improves probability to some extent, but fact is, IMO, the "game" is not rational, so the probabilities never predictable.
Regards,
OW
LOL... interesting question.
I'll go with a "Yes" for my opinion... case in point...
I have a certain percentage of my portfolio that must seem ancient and stagnant because it has been "invested" in very long-term high-yield highly-rated bonds. Many years ago, I made the decision to do that, because there was every reason to believe that if I would simply be patient, then I would reap a nice hefty reward at a predetermined time in the future... almost guaranteed (there is always risk, but very minimum).
Beyond that, I usually keep a portion of my portfolio in cash... so I am usually able to make a trade instantly if I see something that requires instant action... such as the day I made a bundle on AIG in a single day.
I also have recently purchased a blend of stocks that I might be more inclined to keep for a longer-than-usual amount of time... years perhaps. That is more like "investing" in stocks as opposed to trading stocks.
But, consider that the stock exchange is known for it's "trading floor", not its "investing floor".
Anyway, I guess if I were to consider your perspective, it might be more accurate to say that I have made some investments in stocks and bonds, and in addition to that, I also trade stocks.
I also think that there are other methods of investing. For example, real estate (both commercial and residential), collectables of many various types, art, precious metals or gems, and buying businesses, just for starters.
One thing for sure... in this rapidly changing global environment, anything long-term can be "subject to change" at a moment's notice.
TM
We will see what happens as the next wave of indecision comes as the markets bounce off the top. Will they break through or correct awhile?
Regards,
OW
IMO...
Could be some mild squirelliness ahead, but I believe the trend is still up... possibly led by the financials. But it somewhat depends upon the flavor of the daily news, latest economic reports, as well as anything disruptive from the Obama camp.
TM
Yeah... you have recently been more patient than I've been with the fluctuations in the market. But you've proven your ability to make a quick and bold decision to flee the market at the right time, which is hard to do when all the brokers are screaming at us to stay in it and ride it out for the long term... I will always be impressed with your brilliance when you ditched the market before it went completely over the cliff, back in the depths of the financial crisis.
That said, my latest blend of stocks is geared more towards longer term ownership than previously. So far, so good.
TM
And if it plunges even below their initial investment of $1000, they still don't "lose" until they sell it.
Stocks are not real money, they are potential money.
Even money is conceptual.
My mind always boggles when I think of how an entire society mutually agrees that this little scrap of paper in my wallet with Benjamin's face on it is really worth $100.
ARTWORK: I was at the art museum in SF yesterday. I came upon a large canvas, about 5 ft X 5 ft, painted gray. That was it. I swear. I cross my heart. A gray square. Not many shades of gray, not textured gray. Just a gray square with no other detectable features.
Why is this worth $50,000? (or more). Because......art critics say so, because some of the artist's other creations are not gray squares, because it sits on a museum wall.
Is this a good investment? What if all the artist's touts die off?
TM
I have an even BETTER one for you---in another room of the museum, next to the one with the gray square, was a pencil/charcoal sketch hanging there---what it was was an ERASED (yes, completely erased) drawing done by one famous artist, erased (with permission) by another famous artist.
What is even more discouraging is that it is one of the most requested items asked to be borrowed by other museums.
We today laugh at the Tulip Bubble and at once-popular authors who are no longer read (Like Horatio Alger, author of over 400 novels and once the most read author of all time)----I wonder what historians of the year 2110 will laugh at about us?
Because they have convinced art collectors that their work is an A+++ 'value' to be bought, and art collectors then can pull the ropes with galleries and museums just to not loose their well acquainted 'value'. A vicious circle.
There are some good lines on modern art written in Robert Hughes' The Shock of the New: Art and the Century of Change, 1991. A nice book.
Regards,
Jose
As for today and for three months John Singer Sargent's 'Daughters of Edward Darley Boit' hangs side by side with Diego Velázquez's 'Las Meninas' in El Museo del Prado, Madrid.
I can imagine Julia Boit and Infanta Margarita playing together in El Museo corridors when no other people fuss around there. After all, they were just four and five years old when they were respectively painted.
Not that I do not like modern art as well because I do.
Regards,
Jose