The Stock Market and Investing

tagman · January 2010

Hey OW... glad to see you here today. Sounds like you and I are on the same page with the stock market, as well as with cars, although I still think I could be tempted enough to buy that Prius... LOL... and you might or might not agree with that.

Yes, Ford is on a roll... and it's the increasing momentum of the marketplace (regarding Ford) that I like, because the increased sales will result in increased media attention and increased stock prices... it's all a wonderful business cycle for Ford at this point, IMHO.

TM

circlew · January 2010

If you want a Prius, that's ok by me. I just think you might not glean as much enjoyment from a Prius thinking on your past rides!

Regards,
OW

cyclone4 · January 2010

Tag and OW,

I have a feeling that Nicholas Vardy is right on with his contrarian view. There is a lot to be said against the herd mentality. If everybody thinks one way in the commodity world for example, it's time to take the opposite path. I have seen this time and time again over the years. Since everybody has been betting on China and ignoring the U.S., it's now time to bet on the good old USA. I really do think that in some ways, this trend has already begun. I am BULLISH on America and have been since Obama got elected. Maybe my Obama remark

will awaken and inspire Len to get back in here to present his current views on the economy.

Those that are betting that the dollar will go to zero and gold will reach $3,000-4,000 will be in for a rude awakening.

Mr_Shiftright · January 2010

I mean, historically, doesn't gold suck as an investment? I would think if say in 1981 you put $10,000 in an interesting bearing savings account, you'd be way ahead of $10K in gold right now.

cyclone4 · January 2010

I'm sure you are correct. On January 6, 1981 gold peaked for that year at $599 per ounce. The low for the year was at $393 in August (Isn't Google wonderful?). Today, gold stands at about $1,133 per ounce. We have had some incredibly high interest rates on a lot of the years since 1981. Therefore, a $10,000 CD investment would probably be worth at least $40,000 right now. With a gold investment, your money would have only a little more than doubled.

stever · January 2010

Cramer is yelling (well, he's always yelling) that the markets will soar if the Republican wins Ted Kennedy's seat in MA tomorrow.

So, if you have a poll that you trust and it shows Brown ahead, double down. :shades:

cyclone4 · January 2010

I don't want to get political here but sometimes it's unavoidable. We desperately need a healthcare plan for the benefit of ALL U.S. citizens. I sure hope the Democrat wins. Ted Kennedy's last wish was that a national healthcare plan would become law very soon. The stock market will soar over the next several months and years regardless of who wins in MA tomorrow. The reason the race is so tight in MA is because a lot of the residents there have been disenchanted with their own healthcare plan. They think that a national healthcare plan will be no better.

fintail · January 2010

I had some PM investments. When prices peaked about 6-8 weeks ago, I dumped 90% of it. No regrets yet. I hope that continues.

cyclone4 · January 2010

I strongly believe that it is a buying the dips type of stock market. I think we will see the Dow up to 11,000 in the next 2-3 months. Obviously though, only time will tell for sure.

circlew · January 2010

IBM expected to post eps gain when announced officially this week.

Analysts surveyed by Thomson Reuters estimate that the blue-chip technology titan (IBM 131.81, +0.03, +0.02%) earned $3.47 a share on revenue of $26.96 billion for the December quarter. In the fourth quarter of 2008, IBM generated a profit of $3.27 a share on $27 billion in sales.

Since I am heavily invested in bigblue, I'm standing pat....look for 139 (which is their all-time high) to be met or exceeded this year.

Regards,
OW

tagman · January 2010

I strongly believe that it is a buying the dips type of stock market.

At this point in time, I agree. Previously, it was about buying overly beaten down stocks.

OK, a little politics, but then I won't go too far with any of it...
As a registered Republican, I no longer vote Republican with any loyalty like in the past. In fact, I might as well un-register myself... I voted for Obama (and glad I did) and I think a Democratic Congress is a good thing in order to get some things accomplished for once... including health care. I am so sick of the partisan politics and divided nature of our government. And I think lobbyists and special interests should be outlawed. My biggest beef with the Democrats are their taxation policies... and the Republicans aren't much better, although they do a great job at having most of us believe that taxes and wasteful spending are solely the fault of the Democrats... and nothing could be further from the truth.

Punitive taxing of financial success is counter-productive and downright anti-American, IMO.

TM

cyclone4 · January 2010

OK, a little politics, but then I won't go too far with any of it...
As a registered Republican, I no longer vote Republican with any loyalty like in the past. In fact, I might as well un-register myself... I voted for Obama (and glad I did) and I think a Democratic Congress is a good thing in order to get some things accomplished for once... including health care. I am so sick of the partisan politics and divided nature of our government. And I think lobbyists and special interests should be outlawed. My biggest beef with the Democrats are their taxation policies... and the Republicans aren't much better, although they do a great job at having most of us believe that taxes and wasteful spending are solely the fault of the Democrats... and nothing could be further from the truth.

Tag, I have always respected you, but my respect for you has jumped to another level. The reason is that you also care about those that have nothing. I hope I don't offend anyone here, but I am convinced that the major reason wealthy, conservative Republicans oppose a national healthcare plan is because that may mean they would pay a little more tax and take money from their pocketbook.

stever · January 2010

I see that Schwab is lowering trading prices to $8.95 for small investors, effective today. Price war? Time to dump TD Ameritrade or the like?

Well, since the announcement was made a few weeks ago, maybe that news has already been absorbed.

Mr_Shiftright · January 2010

WE know the SEC was broken....maybe Congress is broken, too?

Partisan politics completely aside, I am very uncomfortable with the level of control corporate business has over the American political system. It used to be, for most of our history, that great care was taken to separate the two---they *communicated* of course, but business did not dare strong arm Congress. Say goodbye to that.

Some have speculated that the financial center of the USA is now shifting from NY to Washington, in terms of HQs and astronomical business office rents.

I wonder if the stock market is drifting towards a situation where the winners will always be the winners and the losers will always be the losers....ultimately I mean, no matter how hard most of us try. Hope not, but look how it came down this year after the dust settled.

tagman · January 2010

I wonder if the stock market is drifting towards a situation where the winners will always be the winners and the losers will always be the losers....ultimately I mean, no matter how hard most of us try. Hope not, but look how it came down this year after the dust settled.

Unsettling thought.

However, it is clear to me that money can be used to gain power and power can be used to gain money. And when acquired, who wants to give it up? What is done with the money and power is, in part, what writes history. It is not the only factor. There are others. For example, the way nature effects the planet or large regions of the planet (climate, global infectious disease, etc.), innovation that is significant enough to change the world (internal combustion engine, mass media, nuclear power, fast-food, computers, internet, etc.), religion... and other factors.

So from that perspective, while it may be like steering a tanker, a change in direction is still possible, however slow it can be... and winners can still lose and the little guy still has a chance to make a difference.

Sometimes it takes generations for the wrongs of the world to right themselves.

Regarding the stocks (winners and losers)... companies like General Motors and AIG receive bailouts... yet a great company like Apple stands on its own merits.

TM

Mr_Shiftright · January 2010

I think you make an excellent point about power structures in general, be they political or business. Once a certain power is granted, that power rarely is un-granted, even if the parties in power change.

tagman · January 2010

Tag, I have always respected you, but my respect for you has jumped to another level.

Charlie,

Thanks... The respect is quite mutual... and we are already at the highest level.

(Goodness, we made some serious money today, didn't we?!)

TM

stever · January 2010

If Cramer is right, just wait for the opening bell. :shades:

houdini1 · January 2010

I can hardly wait. Now that the revolution has started, the market should go sky high !!

fintail · January 2010

Revolution?

houdini1 · January 2010

Yes, in the sense that just maybe people will be more apt to cross party lines to vote for the best person, and not just along party lines.

Both parties should take notice as they have both been forewarned. Looks like the American people are sick and tired ( and educated and engaged) and are not going to take it any more. Should be good for the market and all of us.

fintail · January 2010

Interesting thought...if some kind of viable third party could FINALLY get off the ground, I wonder what kind of effect it would have on the markets.

tagman · January 2010

This is exactly like I posted here...

There are significant economic concerns about China, and sure enough the market is affected. The real questions are how serious will this be for China and how will all of it effect the global markets.

What are your opinions? Will it encourage a shift to investment in the U.S. stock market?... or drag all of us down?... or is it being over-hyped and it's just a temporary blip?

TM

stever · January 2010

The election results are in and the DOW is down about 1.75% this morning. Oh Cramer?

I guess that's an example why you shouldn't trade on the news but do your company research first.

tagman · January 2010

Cramer is very good, IMO, but guilty of changing his tune. Previously, he said that the situation in Washington was good for stocks, and now he said yesterday that the Brown victory would be good for stocks. According to Cramer, nearly everything is good for stocks... and that just isn't always the case.

Sure, there are typically some stocks that are better suited for different political and economic conditions, but Cramer is so often yelling "Buy, buy, buy"... and I think he should fine-tune some of his perspective a little better.

He is very good at putting a spin on nearly any situation to make his own case, and support his view. That said, however, I think he is one of the best out there, and I tend to agree with him more often than not.

TM

anthonyp · January 2010

I agree with you more than Cramer......I have come to think he is really an hour by hour sort of announcer, a good spokesman for finance and very knowledgeable overall, but

you know the rest...Tony

cyclone4 · January 2010

You guys beat me to the punch about Cramer today. We have had a nasty ice storm in central IA today and I was very busy with work. As I stated on an earlier post, the stock market will rally big time over the next several months to a year regardless of the MA results. I was disappointed about that outcome, but still have a lot of faith in this administration that it will make the right decisions most of the time. This President took office amidst a catastrophic world-wide disaster and I strongly believe that he saved us from a total economic collapse. I don't think that many here will argue that we are better off now than when he took office. Obviously, the people in MA were disgusted with the Democratic candidate there. Hey, maybe Brown will make a great Senator.

As far as the market is concerned, I really believe that one needs to buy sharp dips like we had today early in the session. The hell with Cramer. He is just another talking head.

circlew · January 2010

Charlie, I have the opposite political views from you BUT agree your forecast should be a positive one. At the end of the day, I don't care which party is in the White House (government is so much bigger than the WH), I only hope and pray we are successful as a country.

The stock market is pegged to go higher despite the intermittent drops. If taxes are controlled and spending is decreased it should continue to reflect sustained recovery. I'm strongly for that!

Regards,
OW

cyclone4 · January 2010

OW, I cannot disagree with anything you stated above even though we have opposite political views. We both very much want this country to prosper. I don't mind Republicans as long as they are not selfish SOB's. I like people that care about the less fortunate. What is happening in Haiti puts everything into perspective.

Mr_Shiftright · January 2010

I didn't see the Mass vote as well-informed, only knee jerk. Frankly I think a cocker spaniel could have won that election given the Dems gaffs and errors in the campaign.

I only mention this to suggest that some forces on the market may continue to be irrational.

Remember when everyone thought that a "global economy" would be more stable? This doesn't seem to be the case at all. It's just as subject to panic, rumor and fear as the Holland Tulip Bubble IMO. And yes, even then, the very smart can prosper. The Few. The Chosen.

I'm a very conservative, somewhat risk-averse type of market player. I really don't know enough, except to know that I don't know enough!

So I win small, lose small. I don't have "market courage"! (I ride motorcycles, though---go figure). My only excuse is my age. I think the big bets are best left to those with years and years of earning power before them, don't you?

tagman · January 2010

If taxes are controlled and spending is decreased it should continue to reflect sustained recovery. I'm strongly for that!

Doesn't look good from that perspective does it?

Obama's speech this morning sent shockwaves. Frankly, I am concerned. I have taken my profits immediately, and will now sideline until I feel I better understand the implications of his agenda. I never invest when I don't feel confident, and it might take me weeks, days, or only hours... I don't know, but once I get a better personal grip on where I think things are going, I will return to the market. At this very moment, I am out. I will keep you posted.

TM

Mr_Shiftright · January 2010

I just don't see how Americans expect to rebuild a modern infrastructure, conduct multiple wars, pay for SS Medicare, VA, unemployment benefits, etc without paying more taxes. They want everything and they don't want to pay for any of it. I see the American economic model as unsustainable in its present form. I mean, we didn't keep the Pax Romana or Feudalism forever, either. :P

tagman · January 2010

Responsible spending and taxation are fine with me... but when have we seen it?

What I don't like is taxation that is literally punitive, coupled with mindless over-spending. It's a poor prescription to say the least.

I am very concerned. Where does it go from here?

TM

Mr_Shiftright · January 2010

Dunno, but really this has been a sickness within us since at least the early 1970s when we started printing money for fun. To me, this is just all the fruit of the tree ripening, or better yet, getting rotten.

I suspect that unless we can fix the system we shall see a gradual shifting of economic power to Asia. Even if they falter, they have some highly efficient (if not exactly democratic) models. The USA will not be poor by any means, but we won't be calling the shots anymore.

I don't think the European model works for us, because they have existed so long under our military umbrella and could devote huge resources to social betterment. It's odd really, about western Europe. We helped to create a kind of paradise that we ourselves can't live in. They seem to have spent their tax dollars more wisely (once we gave them the latitude to do so I mean).

We don't have a national vision anymore. We just seem to be drilling holes in the lifeboat in order to get even with the other passengers. :P

tagman · January 2010

Interesting post... I enjoyed it.

I am so glad that I got out of the stock market yesterday morning. I will return only when I feel strongly that there are stocks that have dipped enough for me to reap the reward of their rebound... this could be months, weeks, days, or only hours... depends upon what I see happening as we move forward.

In the meantime, I am keeping the bond portion of my portfolio intact, and the portion that was once in stocks will be sidelined in cash... waiting.

I am currently of the opinion that there could be some serious challenges ahead.

I wish all of you good luck with your investments. I will keep you posted on my perspectives and investment activities.

TM

Mr_Shiftright · January 2010

Well you sound like a smart guy about how to approach the current situation---cautious and yet opportunistic, should the window open for some clever investing. I don't have that level of expertise but I do know how to read handwriting on walls. I'm in some bonds right now and shifted over to conservative mutuals, CDs and even some cash. I don't buy many stocks, but when I do, it's about products I know and use and/or companies I know something about--perhaps regionally, in my area.

I like to actually see the building and make sure there are cars in the parking lot--LOL!

Hey, have you ever read the book "The Way We Live Now"---by Anthony Trollope, written in England about 1875? Uncanny resemblence to our present day situation in many ways. It's written in a bit of the old fashioned style of Dickens of course, but it's a great story and an interesting look at how attitudes, habits, hopes, dreams, scams, skullduggery, nobility---all mash together in the milieu of "investments".

The main villain, a Mr. Melmotte (Melmotte-Madoff?).

I especially liked the suggestion made in the book by one cynical wag, that marriageable heiress of the time should have stock market symbols attached to them and rising and lowering values depending on how much Daddy will give them and how attractive they were. Very funny, if cruel.

Trollope was on a tear with this book. He had returned from the colonies and apparently was appalled at what he was seeing. Can't say how accurate it was---the man was angry.

This book,by the way was recently put on the "Must Read" list by I think Newsweek.

I got mine at Amazon.!

anthonyp · January 2010

Mr Shiftright
Around two thousand or so, you were the first host I experienced on Edmonds....I forget the site, but i remember you sending me a picture of the old Porsche---back in the fifties or early sixties....You were down on Mercedes or BMW at the time due to breakdowns......I wish you `fair weather` in your investments, and everything else also..Tony ps a quick brutal correction..

circlew · January 2010

Well, we're half-way( around 5%) to a defined "correction" in the S&P. There's still room to run, afaic. With only 70 of the 500 companies reporting so far, the good news is 79% are beating expectations.

Onward and ......

Regards,
OW

tagman · January 2010

Well, we're half-way( around 5%) to a defined "correction" in the S&P. There's still room to run, afaic. With only 70 of the 500 companies reporting so far, the good news is 79% are beating expectations.

Those are good percentages that will be helpful if some of them get dragged down in the rubble, because that will then make it easier for us to pick the winners that are most likely to bounce back when the "correction" ends.

Frankly, I think it's quite possible that this mess could be more than a textbook correction. There are a lot of issues... not just domestic issues, but on a global level. If it is indeed a correction, or even worse, I am so glad to have gotten out of all of it yesterday morning. Nice to have salvaged my profits, keep my portfolio intact, and not ride this thing down. Of course, the harder part will be getting back in.

TM

Mr_Shiftright · January 2010

Don't you think that the news out of China (to rein in lending) the Congress planning to gang up on Bernanke's next vote (March?), and Obama's speech are all factors here to maybe push us past "normal" correction into deeper doo-doo? That's a lot of punches all at once.

Mr_Shiftright · January 2010

Wow, ten years already, huh? :surprise:

I'm *excellent* at managing money and cultivating it, but not so great at making it in the first place.

houdini1 · January 2010

I am all into tax free munis except for one sizable utility fund that I am going to risk holding onto for now.

stever · January 2010

One of these years I'm going to stumble across a copy of "Where Are All the Customers Yachts". I see that it's been reissued in paper so maybe my library will finally get a copy.

Mr_Shiftright · January 2010

What's that about?

tagman · January 2010

Don't you think that the news out of China (to rein in lending) the Congress planning to gang up on Bernanke's next vote (March?), and Obama's speech are all factors here to maybe push us past "normal" correction into deeper doo-doo? That's a lot of punches all at once.

Yes... I mentioned the China factor previously, and I think we can also add the recent Senator vote to the equation.

Maybe someone here wants to add recent planetary alignment?... j/k

TM

Mr_Shiftright · January 2010

Isn't that how Cramer does it? :P

cyclone4 · January 2010

I'll tell you what. When I found out the past couple days that Coakley stated that Curt Schilling was a Yankee fan when interviewed on WEEI radio in Boston, it is no wonder she lost. This is beyond belief. I don't care if you pay zero attention to sports. If you live in MA, you know who Curt Schilling is. BTW, Curt Schilling has been very active campaigning for Republicans in recent elections in MA and on the National scene.

cyclone4 · January 2010

Folks, for better or for worse, I am riding out this correction. In fact, I bought back PKX today on this big dip. I am not talking about a huge amount of money invested in the stock market so I am willing to take the chance and stay the course. When I sense (as Tag states) that the correction is finished, I am going on a buying spree. I do not think this will be anything more than a nice correction. The worst of the economic debacle is finished and the stock market will make new highs (from the year ago lows) a few months down the road. As my late, wonderful Uncle Tony use to say, "everything is going to be OK". Besides, whenever any of you feel down and out, all you need to do is think about Haiti. None of us can fully comprehend the pain and horror we are witnessing there.

tagman · January 2010

Charlie,
I also believe you will be fine in the long run on this. Personally, I got out because I am glad to avoid the 5 - 10 percent loss that could be in progress. I had a lot of green riding on the market, and the recent events have really ticked me off because I consider them to be political interference, IMO, with a market that should have performed better this past week.

The silver lining is that we will have a terrific buying opportunity again at some point in the near future. I really hope to take advantage of that... if I can get back in at the right time. I still cannot get a sense of when that will be, but I think that the continuation of political events next week will be a potential negative factor. I am so disappointed at the political blundering and interference.

TM

stever · January 2010

"The title refers to a story about a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers' yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers."

It's a 50 year old classic that I've never read, but apparently we've all heard the advice from various sources over the years. Supposed to be a hilarious book too.

The Stock Market and Investing

Comments

Helpful Tools

Most popular vehicles