# [2010] Stock Market plunge



## easyrider (May 4, 2010)

It looks like a sell off. I have been watching even the stronger stocks slide real fast this morning.


----------



## laurac260 (May 4, 2010)

It is inevitable.  Nothing we are looking at right now is real.  The economy is being artificially pumped up.  It's like continually pumping helium into a hot air balloon that is full of holes.  You can only keep it inflated for so long.


----------



## Passepartout (May 4, 2010)

laurac260 said:


> It's like continually pumping helium into a hot air balloon that is full of holes.



Interesting... and all along I thought there was helium in a helium balloon and hot air in a hot air balloon. Who knew?

But, on topic, I think a lot of investors- me included- have been sitting on pins and needles waiting for this long-in-the-tooth bull to show some sign of weakening. The European monetary difficulties are as good an excuse as any to take profits and readjust portfolios. In the U.S., businesses are slowly hiring, inventories are building, people are starting to open their wallets and buy. 

This is certainly not the go-go 1990's, but there is still money to be made. IMO.

Jim Ricks


----------



## pgnewarkboy (May 4, 2010)

This to shall pass.


----------



## easyrider (May 4, 2010)

Foreclosurer Forcast not good. Old news.
http://www.calculatedriskblog.com/2009/08/mba-forecasts-foreclosures-to-peak-at.html

The chart may be on.
http://broadcast.ino.com/education/deja_vu_aff/?campaignid=3


----------



## 3kids4me (May 4, 2010)

Buy more Apple while you still can....


----------



## geekette (May 4, 2010)

Passepartout said:


> ....In the U.S., businesses are slowly hiring, inventories are building, people are starting to open their wallets and buy.
> 
> This is certainly not the go-go 1990's, but there is still money to be made. IMO.
> 
> Jim Ricks



agree.  continue to see buying opportunities.


----------



## easyrider (May 4, 2010)

pgnewarkboy said:


> This to shall pass.



What is the source of your optimism ? 

Which direction will it pass ? aapl -2.89% .... hot - 3.66 % ..... wy - 4.16 %
strong stock heading down

bp + 2.09% ???

It will be interesting by mid morning.


----------



## pgnewarkboy (May 5, 2010)

easyrider said:


> What is the source of your optimism ?
> 
> .



I see it as realism - no optimism.  The market always over reacts to events.  There is no reason to believe that the euro zone will fold its tent.  There is too much at stake,   Traders are worried Greece won't make reforms but these reforms are required to get the bailout money.  If they don't reform, they don't get the bailout money, and loans will have to be restructured.  Thus The End Of The World!  Greece is a small economy. If it collapses, the impact would be negligible in U.S.   Oh NO!  What about the rest of Europe!  On and on until the whole thing is resolved - which it will be.


----------



## Tia (May 5, 2010)

I hate seeing my little bitty retirement IRA $ go down. 

I have been wondering re the companies that are reporting they have paid back their govenment bailout loans... do you suppose they did it with stock market bets ?


----------



## geekette (May 5, 2010)

pgnewarkboy said:


> I see it as realism - no optimism.  The market always over reacts to events.



I'm with ya.


----------



## annettewink (May 5, 2010)

*Greece reforms*



pgnewarkboy said:


> I see it as realism - no optimism.  The market always over reacts to events.  There is no reason to believe that the euro zone will fold its tent.  There is too much at stake,   Traders are worried Greece won't make reforms but these reforms are required to get the bailout money.  If they don't reform, they don't get the bailout money, and loans will have to be restructured.  Thus The End Of The World!  Greece is a small economy. If it collapses, the impact would be negligible in U.S.   Oh NO!  What about the rest of Europe!  On and on until the whole thing is resolved - which it will be.



I agree it will all shake out in the end, but it's going to be a bumpy road. Reforms need to be made before Greece gets help, but the news this a.m. is disheartening. The people are rioting over suggestions they accept cuts in pay and entitlements. The only way to solve the problem is thru reduced spending (pay & entitlements) and increase income (taxes). I see this situation in Greece as a micro example of what may happen here if we don't slow down the spending.


----------



## Talent312 (May 5, 2010)

annettewink said:


> I agree it will all shake out in the end, but it's going to be a bumpy road...



We were overdue for a correction. Thankfully, I'm only 50% equities.
But in truth, this is a buying opportunity... buyers live for bad news.


----------



## AwayWeGo (May 5, 2010)

*Taking The Plunge.*

I took the _Timeshare Plunge_ (2002).

I took the _Points Plunge_ (2005). 

I have not yet taken the _Stock Market Plunge_ -- not even mutual funds. 

Just living hand to mouth here, hoping for the best. 

Somehow, it will all work out. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## easyrider (May 5, 2010)

pgnewarkboy said:


> I see it as realism - no optimism.  The market always over reacts to events. .



This seems real to me.

Greece by itself would not be a problem but when you throw in Portugal, Italy, Ireland and Spain it may become a big problem. China's under valued Yaun may become a problem. America's National Debt will be a problem. 

Residential and comercial foreclousers are on the rise. Imo the only reason the housing market didn't tank was because of the Federal Tax Credit which expired recently. 

The unemployment rate is still very high and doesn't reflect the number of people that just gave up. This Fridays report is expected to reflect this.  Retirement funds have been compromised by falling stock values causing many people to stay in the work force.

Goverment regulations in all sectors of the economy will put more of a financial burden on taxpayers and business. These regulations will create more goverment which will be another cost to taxpayers.

Yes, I agree that this shall pass but very slowly and not in time for some.


----------



## Passepartout (May 5, 2010)

easyrider said:


> .....The unemployment rate is still very high and doesn't reflect the number of people that just gave up.
> 
> ......Retirement funds have been compromised by falling stock values causing many people to stay in the work force.
> 
> ...



Easy, which is it? High unemployment or people staying in the workforce? One can make the numbers say or stress whatever point one wants to make. Is the recovering economy perfect? Not by a long shot. Are all the people who want to work employed? Nope. Are all the people who want to retire and put their feet up on the gunwale of their yacht and open a cold one able to do that? Uh, uh.

There needs to be some control (regulation) of bankers, money lenders, and credit issuers to make sure that all in the market are treated fairly. It's no good when you sign up with a CC outfit only to have them send you a sheet with your bill, in 2-point type, that says the rules have changed. Higher interest, shorter grace period, exorbitant late fees, increased annual fees, and if you don't like it, just pay your bill 100%, in full in 2 weeks. 

But anyway, there are always going to be things to consider in our world economy. It all boils down to whether you are a 'glass half-full', or 'glass half-empty' sort of person. Personally, I choose to look at it as half-full.

The above said, I do have stop-loss orders in place. It helps with the sleep.

Jim Ricks


----------



## easyrider (May 5, 2010)

Passepartout said:


> Easy, which is it? High unemployment or people staying in the workforce?
> 
> But anyway, there are always going to be things to consider in our world economy. It all boils down to whether you are a 'glass half-full', or 'glass half-empty' sort of person. Personally, I choose to look at it as half-full.
> 
> ...



Its high unemployment caused by downsizing and loss of businesses that has created the situation where many people have gave up on their old job and went back to school or are on goverment assistance. Many people are staying in the work force past 65 because their retirement nest egg was cracked and they can't afford to retire.

I think your half full glass is broken and your drink is slowly leaking away. I say that thinking that your mutual funds are spread out over to many  companies. These days it seems that a person should look at only strong companies with out too many problems to invest in or maybe buy a bond.

Does any one remember what pulled the US economy out of the depresion in 1929 ? I think it was world war.


----------



## laurac260 (May 5, 2010)

If one wants to seriously understand what is coming in our very near future, one only needs to study a bit of history.  But by history, I am not referring to the economic history of our country.  What is coming will turn everything we have learned about the economics  of the US on it's ear.  What is coming has never been (atleast not here), what was may never be again.


----------



## pgnewarkboy (May 5, 2010)

laurac260 said:


> If one wants to seriously understand what is coming in our very near future, one only needs to study a bit of history.  But by history, I am not referring to the economic history of our country.  What is coming will turn everything we have learned about the economics  of the US on it's ear.  What is coming has never been (atleast not here), what was may never be again.



I have studied and continue to study the history of all kinds of things and don't know what you are trying to say.  Would you kindly clarify?


----------



## laurac260 (May 5, 2010)

pgnewarkboy said:


> I have studied and continue to study the history of all kinds of things and don't know what you are trying to say.  Would you kindly clarify?



Unfortunately I cannot, as it is out of the scope of TUGS.  I've been down that road before.  All I can say is that what is presenting itself on the surface as our "economy" is merely a smokescreen.  None of it represents what is really happening, and what is coming.  It is just what is being presented for us to see and react to.


----------



## pgnewarkboy (May 5, 2010)

easyrider said:


> Its high unemployment caused by downsizing and loss of businesses that has created the situation where many people have gave up on their old job and went back to school or are on goverment assistance. Many people are staying in the work force past 65 because their retirement nest egg was cracked and they can't afford to retire.
> 
> I think your half full glass is broken and your drink is slowly leaking away. I say that thinking that your mutual funds are spread out over to many  companies. These days it seems that a person should look at only strong companies with out too many problems to invest in or maybe buy a bond.
> 
> Does any one remember what pulled the US economy out of the depresion in 1929 ? I think it was world war.



Thankfully, we were not in a depression and the recession is over.  I think the jobs issue has been in the works for a long time because of loss of our manufacturing base, outsourcing, and various forms of automation and computerization which are keeping wages low.  We have not seen real economic growth in decades.  People have made up for lack of earnings by borrowing to buy.  We are not likely to see that again for quite some time.  I am confident that there will be economic growth as the country transitions from an oil based economy to alternative fuels and a fuel efficient infrastructure.  This should promote reasonably well paying jobs that are in this country.  Further, high oil prices seems to have already had some unforeseen benefits in the manufacturing sector.  For example, steel construction has increased in our country because of the cost of shipping from China is prohibitive.  We may see this in other areas of manufacturing as well.  There are always problems on the economic front.  That is the nature of life and business is no exception - always problems.  Despite what the talking heads on the scatterbrained news say, the United States is still the greatest economy in the world for numerous reasons.  As powerful as China may be, they have enormous problems with poverty, and over population.  We all can see what has happened to Japan.  The U.S is still a hotbed of innovation as well as the best place to do business.

The U.S run will probably end at some point.  Nothing goes on forever.  I see nothing, however,  in the near or distant future to make me pessimistic.


----------



## easyrider (May 5, 2010)

pgnewarkboy said:


> Thankfully, we were not in a depression and the recession is over.   (Maybe  I see nothing, however,  in the near or distant future to make me pessimistic. Are you a goverment employee ?



I will agree that the USA is the best place to live.


----------



## 3kids4me (May 5, 2010)

laurac260 said:


> Unfortunately I cannot, as it is out of the scope of TUGS.  I've been down that road before.  All I can say is that what is presenting itself on the surface as our "economy" is merely a smokescreen.  None of it represents what is really happening, and what is coming.  It is just what is being presented for us to see and react to.



I think she's talking about the Apocalypse.

I still say load up on Apple.


----------



## wilma (May 5, 2010)

laurac260 said:


> Unfortunately I cannot, as it is out of the scope of TUGS.  I've been down that road before.  All I can say is that what is presenting itself on the surface as our "economy" is merely a smokescreen.  None of it represents what is really happening, and what is coming.  It is just what is being presented for us to see and react to.



Or just simple paranoia


----------



## laurac260 (May 5, 2010)

3kids4me said:


> I think she's talking about the Apocalypse.
> 
> I still say load up on Apple.



neither the apocalypse, nor paranoia.   just not burying my head in the sand.  

I've said it before and will say it again.  Things are not what they appear.  Unfortunately you will have to do your own due diligence, but history offers plenty of examples of the path this country headed on.


----------



## geekette (May 5, 2010)

wish I knew what the heck Laura was talking about, but understand Mum here.  Smokescreens are woven frequently by politicos and talking heads but it's not too hard to see beyond.  Maybe I haven't looked closely enuf, but I simply do not see reason to project Doomsday.  

US econ history is differing cycles of ups and downs.  This particular downturn was unique in many respects.  But I do believe the recovery is here, and may look different depending on where you live, and might not have made it to you yet.  Jobs are being created by new small businesses and the larger companies that had the cash to expand while the getting was cheap.  

There are many companies reporting earnings surprises of the good variety, which is always sector-specific, but looking at retail, in particular, will tell you that people are starting to spend again.  High end retail has been doing very well, which tells you that the Haves still have it to spend, and are.

I am an optimist, always, but am seeing real signs for optimism in the market.


----------



## easyrider (May 6, 2010)

It looks like another big sell off this morning.


----------



## ricoba (May 6, 2010)

easyrider said:


> It looks like another big sell off this morning.



I don't think 84 points as of right now is a big sell off.


----------



## jmzf1958 (May 6, 2010)

I'm a little nervous.  I'm 52.  Funds will  be in IRA until 65.   Should I stay in or get out?  I'm having flashbacks to the fall and winter of 2008/2009!


----------



## AwayWeGo (May 6, 2010)

*Taking A Chance.*




jmzf1958 said:


> Should I stay in or get out?


I'm cashing out & putting it all into PowerBall tickets. 





-- hotlinked --​
-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## PigsDad (May 6, 2010)

easyrider said:


> It looks like another big sell off this morning.



To me, it is a buying opportunity.

For all those who want to bail on every little dip, go ahead.  It just makes it even better for us long-term dollar cost averaging types! :whoopie: 

Kurt


----------



## rickandcindy23 (May 6, 2010)

PigsDad said:


> To me, it is a buying opportunity.
> 
> For all those who want to bail on every little dip, go ahead.  It just makes it even better for us long-term dollar cost averaging types! :whoopie:
> 
> Kurt



We are exactly five years from retirement, and these dips in the market are scary now.  I used to feel like you, and I can only assume you are a lot younger than we are.


----------



## PigsDad (May 6, 2010)

rickandcindy23 said:


> We are exactly five years from retirement, and these dips in the market are scary now.  I used to feel like you, and I can only assume you are a lot younger than we are.



True, I have about 20 years until retirement.  But as I inch toward that date, I certainly plan to gradually shift towards more stable investments.  That said, I will still be holding equities well past retirement age, it is just the mix that will be different.

Kurt


----------



## ricoba (May 6, 2010)

ricoba said:


> I don't think 84 points as of right now is a big sell off.



Those 84 pts were nothing compared to the 900+ plus points it fell just a bit ago...now leveling to about 400 or a little less....

Like Margo Channing said...."Fasten your seatbelts, it's going to be a bumpy night!"


----------



## Teresa (May 6, 2010)

*Too much activity*

The schwab.com site is having technical difficulties (grin).   Guess I'm staying put then (I do trading online).

I've learned a lot from my dad about trading (sometimes what NOT to do).  I used to have day-trader tendencies but have found that if I take a deep breath during these sliding days (funny that it seems to be problems in Greece that has started this slide (get it?  grease?)) then I'm better off.   Of course, I wish I had bailed 3 days ago and had things in cash to start buying NOW that we're 'down'.    But if I had that kind of foresight I'd be in a WAY different position in a LOT of things (grin).

 I still have my day-trader mentality and have to fight with myself every so often to keep from just jumping in or out.   I have told myself several times I need to put some stop limits in there and I will - as soon as things stabilize a bit (famous last words).


----------



## PigsDad (May 6, 2010)

ricoba said:


> Those 84 pts were nothing compared to the 900+ plus points it fell just a bit ago...now leveling to about 400 or a little less....


Yea, what was _that _all about?  It seemed like some kind of market-wide glitch.  Very weird...

Kurt


----------



## Luanne (May 6, 2010)

Teresa said:


> The schwab.com site is having technical difficulties (grin).   Guess I'm staying put then (I do trading online).



I just got into the Schwab site.  But I wasn't doing anything more than looking........and


----------



## ricoba (May 6, 2010)

PigsDad said:


> Yea, what was _that _all about?  It seemed like some kind of market-wide glitch.  Very weird...
> 
> Kurt



Panic....

I don't know what exact event in the Greek financial crisis put the DOW into the panic mode, but that drop was apparently triggered by pent up panic over the financial mess in Greece.


----------



## laurac260 (May 6, 2010)

ricoba said:


> Panic....
> 
> I don't know what exact event in the Greek financial crisis put the DOW into the panic mode, but that drop was apparently triggered by pent up panic over the financial mess in Greece.



keep watching.  This is  all pre-ordained (and I don't mean that in the religious sense).  It's all part of a master plan.  If I had a crystal ball I'd tell you what to do.  The real truth is often just past the reach of our own comfort zone.  We have to stop having the mentality that "that cannot happen to us."  Our economy is being artificially propped up.  The tail is wagging the dog.  It has been moving like this for some time, but unfortunately the momentum is gaining quickly.  Find someone who was alive when the stock market crashed in the 30's and ask them, "if you had known the great depression was coming, what would you have done differently?"  I think that is where we should be thinking right now.


----------



## Numismatist (May 6, 2010)

CNBC is reporting that a trader entered a 'b' for billion instead of 'm' for million on a Proctor & Gamble trade and that spooked the selloff until it was discovered.

OOPS


----------



## ricoba (May 6, 2010)

Numismatist said:


> CNBC is reporting that a trader entered a 'b' for billion instead of 'm' for million on a Proctor & Gamble trade and that spooked the selloff until it was discovered.
> 
> OOPS



YIKES!!!   

If that's true that's really scary....!!!!!


----------



## hvacrsteve (May 6, 2010)

[Political post deleted. - DeniseM]


----------



## geekette (May 6, 2010)

laurac260 said:


> keep watching.  This is  all pre-ordained (and I don't mean that in the religious sense).  It's all part of a master plan.  If I had a crystal ball I'd tell you what to do.  The real truth is often just past the reach of our own comfort zone.  We have to stop having the mentality that "that cannot happen to us."  Our economy is being artificially propped up.  The tail is wagging the dog.  It has been moving like this for some time, but unfortunately the momentum is gaining quickly.  Find someone who was alive when the stock market crashed in the 30's and ask them, "if you had known the great depression was coming, what would you have done differently?"  I think that is where we should be thinking right now.



I'm not pulling my money out and stuffing it into the mattress or burying it in the yard.

If I end up on the street in a few years because of it, you are absolutely free to stop by and say I Told You So.

economy artificially propped up?  by ... what?  are you saying that companies aren't making products that aren't selling and that corporate cash flow is all fake numbers?  That the dividends flowing into my accounts aren't real money?


----------



## DeniseM (May 6, 2010)

Folks - it took 42 posts, but this thread is going in the direction that will cause it to be closed.  I know that the stock market and politics are connected, and it's tough, but please don't go there.


----------



## geekette (May 6, 2010)

PigsDad said:


> True, I have about 20 years until retirement.  But as I inch toward that date, I certainly plan to gradually shift towards more stable investments.  That said, I will still be holding equities well past retirement age, it is just the mix that will be different.
> 
> Kurt



I'm with you.  ain't no way I'm ever leaving stocks.  

I come from long-lived ancestors, I might live past 100 (6 relatives so far...) so pulling out at 65 would be extremely foolish.  I'm not shooting for retirement as the finish line, I'm trying to not outlive my money.   ditching the day job is just one milepost along the way, not the destination.


----------



## geekette (May 6, 2010)

jmzf1958 said:


> I'm a little nervous.  I'm 52.  Funds will  be in IRA until 65.   Should I stay in or get out?  I'm having flashbacks to the fall and winter of 2008/2009!



So you plan to pull all of your money out of IRA at 65 and end the use of a tax shelter?  In that case, I would go hard into equities since there is only 13 years until you have only cash.

Look at stock market history - over time you are always best in the market, it's only in the short term, and market timers, that end up losing.


----------



## hvacrsteve (May 6, 2010)

Hooray!

I can afford my beach house now!

Actually two of them!

I made the right call!

Don't spend money you don't have and prepare!


----------



## 3kids4me (May 6, 2010)

My stop loss triggered today for Apple and I'm actually quite bummed.  Generally stop losses are not such a great idea because you can sell out at a bottom out that lasts a millisecond.  My stop loss was a trailing 10 percent...never thought it would actually trigger.

Will look for a dip and buy it again at some point.


----------



## Talent312 (May 6, 2010)

The discussion on CNBC is how casual investors who use stop loss orders for damage control will arrive home from work tonight and find themselves screwed 'cuz their sell order was excuted as result of an erroreous trade at CitiBank and they missed the ride back up. :annoyed:

It may not be smart, but I decided long ago that I'm not going subject my portfolio to the whims of anonymous arbitrageurs. I'll just roll with the punches and hope that at the end of the day, month or year, sanity will prevail. Hopefully, I won't need my $$ B4 then.


----------



## 3kids4me (May 6, 2010)

Talent312 said:


> The discussion on CNBC is how casual investors who use stop loss orders for damage control will arrive home from work tonight and find themselves screwed 'cuz their sell order was excuted as result of an erroreous trade at CitiBank and they missed the ride back up. :annoyed:
> 
> It may be risky, but I decided long ago that I'm not going subject my portfolio to the whims of anonymous arbitrageurs. I'll just roll with the punches and hope that at the end of the day, month or year, sanity will prevail. Hopefully, I won't need my $$ B4 then.



You're right, and fortunately that was the only stop loss I had.  I didn't even remember putting it in place; I did it a few months ago and really...ten percent in one day is something I never expected in association with a market glitch.  The only fortunate thing is that it didn't ride back up much past what I sold it for, so I guess I can rebuy if I'm so inclined.  It will be interesting to see what tomorrow brings.


----------



## laurac260 (May 6, 2010)

geekette said:


> I'm not pulling my money out and stuffing it into the mattress or burying it in the yard.
> 
> If I end up on the street in a few years because of it, you are absolutely free to stop by and say I Told You So.
> 
> economy artificially propped up?  by ... what?  are you saying that companies aren't making products that aren't selling and that corporate cash flow is all fake numbers?  That the dividends flowing into my accounts aren't real money?



No, I am not saying any of the above.  

Nor do I have any interest in saying "I told you so."  We're all on this ride together.  Wagging a finger at you is 3 wagging back at me.  I don't have any more answers than anyone else, except to prepare for things to change, and not for the good of the common folk.  

But define, "real money".  Money that has value is real.  When it no longer has value, it might as well be money you pulled from a board game.


----------



## Talent312 (May 6, 2010)

laurac260 said:


> But define, "real money."  Money that has value is real.  When it no longer has value, it might as well be money you pulled from a board game.



IMHO, the only thing that has any "real" value (to me) is the juicy grilled T-Bone sitting on my plate.


----------



## hvacrsteve (May 6, 2010)

Talent312 said:


> IMHO, the only thing that has any "real" value (to me) is the juicy grilled T-Bone sitting on my plate.



The only "real value" to me is my family, friends and people in my life.

Everything else is just window dressing!

13,000,000,000.00 in debt, surreal, print more!


----------



## easyrider (May 6, 2010)

Wow.....Tomorrow will be interesting for sure. I kind of thought that this tanking was going to take place a few weeks ago but here we are. We sold all mutual funds last November and were able to be totally out within 20 minutes on Tuesday.
Being able to get out so quickly is what I like and if everyone did that at the same time it would make the market do what it did.


----------



## Kal (May 6, 2010)

laurac260 said:


> neither the apocalypse, nor paranoia. just not burying my head in the sand.
> 
> I've said it before and will say it again. Things are not what they appear. Unfortunately you will have to do your own due diligence, but history offers plenty of examples of the path this country headed on.


 
Ahhh, please tell me your thoughts on the Preakness.  Rub up that crystal ball and give me divine guidance! :whoopie:


----------



## rickandcindy23 (May 6, 2010)

The dollar has been weak against all other foreign currency, while the market has been going up.  Does anyone know what this will do to the dollar, if the market goes back down.  

I am asking for the cost of my Aussie RCI points, which I have to pay the fees on July 1st.  I think I should maybe pay them now and not wait.  But maybe the dollar will do better if the market is low.  That happened last summer.  

I don't get the stock market, I think Rick does, but I just say, Okay, let's put that $500 into our Roth IRA's every month and hope the statements look good every quarter.  :rofl:


----------



## John Cummings (May 6, 2010)

I know exactly where Laura is coming from and I agree with her 100%. This cannot be discussed because of TUG's posting rules. I am not in any way being critical of TUG but simply saying why it cannot be.


----------



## Rose Pink (May 6, 2010)

laurac260 said:


> .... We have to stop having the mentality that "that cannot happen to us."
> 
> 
> 
> ...


----------



## AwayWeGo (May 6, 2010)

*Why I Never Dabble In High Finance.*




Rose Pink said:


> People losing their retirement funds (Exxon for example).


Shux, I thought that was Enron. 

Who knew it was Exxon ? 

Live & learn, eh ? 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## Passepartout (May 6, 2010)

It looks like this 1000 point drop today was a computer glitch. I understand all trades between 2:40 and 3 pm EDT have been canceled if they amount to above a certain percent change. 

Hopefully this will save most people who had stop-loss orders that triggered and caused them to sell below where their securities recovered to.

It will be interesting to see how this all washes out and what the markets do tomorrow morning. 

Lemme go get a fresh bottle of Rolaids.

Jim Ricks


----------



## Rose Pink (May 6, 2010)

AwayWeGo said:


> Shux, I thought that was Enron.
> 
> Who knew it was Exxon ?
> 
> ...


Duh, it's late. I shall go back and correct my post. Thanks for the correction, Alan.  Is there a song of the day for ladies of a certain age who cannot seem to think of the correct words?


----------



## John Cummings (May 6, 2010)

Passepartout said:


> It looks like this 1000 point drop today was a computer glitch. I understand all trades between 2:40 and 3 pm EDT have been canceled if they amount to above a certain percent change.
> 
> Hopefully this will save most people who had stop-loss orders that triggered and caused them to sell below where their securities recovered to.
> 
> ...



I heard that it was an input error and not a computer problem. Somebody input a "b" for billion instead of "m" for million on a Proctor and Gamble trade. The computer software should have warning limits on inputs so that the person would be alerted that they were inputting a value well out of the normal range. They could the just click on "verify" if that was really what they wanted to input.


----------



## 3kids4me (May 6, 2010)

Passepartout said:


> It looks like this 1000 point drop today was a computer glitch. I understand all trades between 2:40 and 3 pm EDT have been canceled if they amount to above a certain percent change.
> 
> Hopefully this will save most people who had stop-loss orders that triggered and caused them to sell below where their securities recovered to.
> 
> ...



I just checked.  My orders executed at 2:36.  Hmmm....


----------



## TUGBrian (May 6, 2010)

That excuse is pretty thin IMO....id find it hard to believe that anyone even owns 1 billion shares of P&G...so how would that order even get placed?


----------



## MuranoJo (May 6, 2010)

I didn't bail on the last fallout, hung on for the ride, and was able to ride up & above on the upswing this year.  

What happened today is discomforting, and after reading a few cryptic and ominous posts, I'll just keep my ear to the ground and hang on for now.

...plus follow Alan's plan and go buy a bunch of lottery tickets while I can still afford them.


----------



## geekette (May 6, 2010)

laurac260 said:


> But define, "real money".  Money that has value is real.  When it no longer has value, it might as well be money you pulled from a board game.



it's cash in hand today that I can spend on necessities.  or use to create more assets of whatever kind

tomorrow I may need to pay the doctor in chickens or use a ton more dollars to buy a chicken for dinner than I had to today 

in two weeks I might need to clean the gas station rest rooms in exchange for a tank of gas   since I was paid in golden silly putty, which the gas station won't accept, and I'm out of chickens, which they would have accepted because they are now so rare

in a month I could be dead and whatver I had, or thought I had, is simply irrelevant

turning my cash today into less liquid, way less convenient assets to guard against tomorrow vs believing that whatever breaks can be fixed with time and effort (since it used to not exist, and was created by humans ) ...  

well, maybe I'm simply too foolish, but I'm sticking with the USA and my own ability to provide for myself.  I can live off my land and the nearby dairy until my land is taken, and then I'll end up with all my displaced neighbors and we'll survive whatever together.   worthless currency or not, all I really need is food and shelter.  everything else is luxury.


----------



## John Cummings (May 6, 2010)

TUGBrian said:


> That excuse is pretty thin IMO....id find it hard to believe that anyone even owns 1 billion shares of P&G...so how would that order even get placed?



It could be a large fund or whatever. As I said, the software should have caught it.


----------



## ricoba (May 7, 2010)

"real money" is a term I have heard "Gold Bugs" use.

There's nothing new with gold bug thinking...the coin was termed in the McKinley campaign of 1896, in their argument against bimetallism.

On the other side in the same year, there was the famous "cross of gold" speech by William Jennings Bryant, where we famously said in the defense of bimetallism...

_"Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold."_

Having said this, we are a long way past 1896 and we aren't going to go back to a "hard metal" standard or "real money".  For good or bad we are a credit based world today.  As we see in the Greek situation, there is a price to pay for overextended credit.  But I don't think that returning to a gold or silver standard will stabilize the economy.  Having said that, I see that today gold was up, at $1,198.85 a year ago it was just a few dollars above $900.

Just my two cents...which on the currency markets are worth more than they were a week ago!


----------



## easyrider (May 7, 2010)

All the people who couldn't sell today are probably aware of whats happening now. I think the sell off continues tomorrow. Unfortunately, many people will be selling mutual funds and will get tomorrows closing price. 

Selling these investments has never been so easy as it is today. I think that is why the market moved so freakishly fast today. Just my opinion.

So, does anyone have a hot stock picked out for tomorrow ? I wonder how Nalco Holding Company NLC, will do. They make Corexit 9500 that is used to disperse oil spills.


----------



## John Cummings (May 7, 2010)

Computer trading causes some wild swings as the trades all go in the same direction.


----------



## pgnewarkboy (May 7, 2010)

geekette said:


> it's cash in hand today that I can spend on necessities.  or use to create more assets of whatever kind
> 
> tomorrow I may need to pay the doctor in chickens or use a ton more dollars to buy a chicken for dinner than I had to today
> 
> ...



:hysterical: :hysterical: :hysterical:


----------



## pgnewarkboy (May 7, 2010)

If the situation with Greece is so bad and will cause a collapse of the Eurozone - why is the Euro still worth more than any other currency?  I haven't see this addressed anywhere.


----------



## Twinkstarr (May 7, 2010)

geekette said:


> it's cash in hand today that I can spend on necessities.  or use to create more assets of whatever kind
> 
> tomorrow I may need to pay the doctor in chickens or use a ton more dollars to buy a chicken for dinner than I had to today
> 
> ...



Just don't forget you tinfoil hat when going out to tend the chickens.


----------



## Talent312 (May 7, 2010)

Twinkstarr said:


> Just don't forget you tinfoil hat when going out to tend the chickens.



Stranger Than Fiction:
A local prosecutor was warned by the Sheriff's Office that a crazy lady was on her way there to seek charges against a neighbor for beaming rays into her house. The State Attorney got a roll of aluminum foil and covered his windows with it.

When she went into his office, her eyes went wide. "So you know about the rays!" she exclaimed. "Yes, ma'am, I do. I have the same problem you do," he replied.

"I've looked high and low for something I could do about it, but can't find anything that covers this." She left, satisfied that he was just as loony as she was.


----------



## MULTIZ321 (May 7, 2010)

Bull-Gator,

Thanks for a good laugh.


Richard


----------



## AwayWeGo (May 7, 2010)

*I Resemble That Remark.*



Twinkstarr said:


> Just don't forget you tinfoil hat when going out to tend the chickens.







-- hotlinked --​
-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## Elan (May 7, 2010)

I find the suspicious action in the stock market yesterday far more disheartening than the actual drop itself.  I'm generally pretty good at playing the "stock market game", but I don't think many people were prepared for the action that took place around 2:45 ET yesterday.


----------



## John Cummings (May 7, 2010)

pgnewarkboy said:


> If the situation with Greece is so bad and will cause a collapse of the Eurozone - why is the Euro still worth more than any other currency?  I haven't see this addressed anywhere.



The Euro has declined substantially in the past few months.


----------



## laurac260 (May 7, 2010)

Some guy types a b for billion instead of an m for million, and that caused what happened yesterday???  C'mon, really????

I'm not buying this story.  How many years has the stock market been in action, how many trillion billion zillion (does anyone even KNOW the number) of trades have happened, and yesterday, May 7th 2010 at 2:30 something eastern time some guy hit the wrong button?  Just yesterday???

If this story is indeed true  then  Heaven help us if the system is really that flimsy.


----------



## easyrider (May 7, 2010)

pgnewarkboy said:


> If the situation with Greece is so bad and will cause a collapse of the Eurozone - why is the Euro still worth more than any other currency?  I haven't see this addressed anywhere.



The cultural differences between countries in the European Confederacy might be part of the problem of the declining value of the Euro. Some of these countries are less productive than others. My guess.

The USA national debt and the USA trade deficit are the reasons why the Euro is worth more than a Dollar.


----------



## John Cummings (May 7, 2010)

laurac260 said:


> Some guy types a b for billion instead of an m for million, and that caused what happened yesterday???  C'mon, really????
> 
> I'm not buying this story.  How many years has the stock market been in action, how many trillion billion zillion (does anyone even KNOW the number) of trades have happened, and yesterday, May 7th 2010 at 2:30 something eastern time some guy hit the wrong button?  Just yesterday???
> 
> If this story is indeed true  then  Heaven help us if the system is really that flimsy.



There were several articles on ABC and Yahoo etc. about this. Yes, it seems far fetched but they claim that is what happened. The typo was for the dollar amount and not the number of shares. It is greatly magnified by computer trading which has created a lot more volatility in the market.

If in fact it was a typo error then the fault is with the software for not flagging the input as being far out of the normal range.


----------



## geekette (May 7, 2010)

John Cummings said:


> There were several articles on ABC and Yahoo etc. about this. Yes, it seems far fetched but they claim that is what happened. The typo was for the dollar amount and not the number of shares. It is greatly magnified by computer trading which has created a lot more volatility in the market.
> 
> If in fact it was a typo error then the fault is with the software for not flagging the input as being far out of the normal range.



Normal range for whom?  Bounds are fine, but, who determines what is normal, but can be overridden, etc.?  

And if the software is at fault, why has this not happened before?  Does anyone think that there have never been data input errors in all the time that online trading has been available to anyone with internet??  Accutrade showed up in the early 90s!

While I am obviously biased, anyone entering into a transaction has the responsibility to check their work before hitting Submit and not rely on data validation to save their butts.  I maintain that it is possible to engage in transactions with these very high numbers being absolutely valid (tho certainly not from MY account).  

I wouldn't want to be the geek on the receiving end of What For when Mr Got Rocks bitches because someone put an upper bound in that prevents him from selling exactly what he wishes to sell.


----------



## easyrider (May 7, 2010)

Im not sure how the big companies trade but when I trade I have to input the trade on one page then submit on another page. Then I get a confirmation. So if some one fat fingered they would have also submited the mistake. 

Anyone go short today ?


----------



## laurac260 (May 7, 2010)

*no fat fingering*

They're basically saying it was a "ripple effect".

http://whitehouse.blogs.foxnews.com...-finger-behind-on-thursday-wall-street-chaos/


----------



## easyrider (May 7, 2010)

laurac260 said:


> They're basically saying it was a "ripple effect".
> 
> http://whitehouse.blogs.foxnews.com...-finger-behind-on-thursday-wall-street-chaos/



Two days ago I thought fat finger was when I hit two numbers intead of one on my cell phone. 

Or, it could have been the finger that doesnt help picka nose.


----------



## laurac260 (May 7, 2010)

easyrider said:


> Two days ago I thought fat finger was when I hit two numbers intead of one on my cell phone.
> 
> Or, it could have been the finger that doesnt help picka nose.



I figured the "fat finger" theory wasn't true.  But I have two feelings about this new theory.  Either A, it is categorically untrue, (and I do have theories on what might have really happened), or B, if it is true, why hasn't it happened before?  I have a bit of trouble understanding the lingo used in the article, but I took it to mean something to do with many stop gap measures people have in place, and triggering one would cause a ripple effect.  How then did it jump right back in place so fast?   I think this was someone's idea of a "litmus test."  Makes me wonder if a "Black Wednesday" (Sep 16, 1992, the day the Bank of London was broken) is in the works.


----------



## "Roger" (May 7, 2010)

pgnewarkboy said:


> If the situation with Greece is so bad and will cause a collapse of the Eurozone - why is the Euro still worth more than any other currency?  I haven't see this addressed anywhere.


I am not sure what this question is about.  Is it based upon the exchange rate?  By that measure (not a good one), the British Pound is worth the most (more than the Euro).  But that does not mean the British Pound (or the Euro) is in good shape.

Let's try putting this way.  I go to work for a transnational company.  They offered me the choice of being paid in dollars or pennys.  As a yearly salary, I was offered

100,000 dollars or
10,000,000 pennies

Obviously, they are offering more pennies because of the exchange rate.  (They would never offer me to be paid the same number of dollars as pennies.  They have to take into account the "exchange rate.")  In this case, it made no difference which I chose.  In the end, I could buy the same amount of goods regardless of whether I was paid in dollars or pennies. That was true six months ago and is still true today.

Now let us try this with dollars and Euros.

Six months ago, I could have chosen to be paid

100,000 dollars or
67,000 Euros

At the time, it made no difference which I chose.  Just as with pennies and dollars, in the end, I could (at that time) have bought exactly the same amount of goods.  

But how things have changed.  Six months later, if I had chosen to be paid in dollars (or pennies), I can now buy about 15% more than if I had chosen the Euro.  (My 67,000 Euros are now only worth 85,000 dollars.)  Why?  Greece.  The Europeans are a lot poorer (by world standards) today than what they were six months ago.


----------



## John Cummings (May 7, 2010)

geekette said:


> I wouldn't want to be the geek on the receiving end of What For when Mr Got Rocks bitches because someone put an upper bound in that prevents him from selling exactly what he wishes to sell.



I did not suggest that the upper bound prevents him from making the transaction. I only suggested that the software could warn him and he could continue with the operation by 1 click if he wanted to.

I have written many CI software applications that do boundary testing.

However, this discussion is probably academic as the fat finger theory is now being debunked by Wall Street experts.


----------



## John Cummings (May 7, 2010)

"Roger" said:


> I am not sure what this question is about.  Is it based upon the exchange rate?  By that measure (not a good one), the British Pound is worth the most (more than the Euro).  But that does not mean the British Pound (or the Euro) is in good shape.
> 
> Let's try putting this way.  I go to work for a transnational company.  They offered me the choice of being paid in dollars or pennys.  As a yearly salary, I was offered
> 
> ...



Thank you for posting this. I was going to do a similar post last night but was too busy to take the time. In any event you probably explained it better than I would have.


----------



## Goofyhobbie (May 8, 2010)

Roger,

Your last post was an excellent explanation and explains a lot about why folks in Greece are currenlty so upset. 

When your currency has been devalued significantly in a very short period of time and then you get hit with the prospect of stringent government and much higher taxes it is no wonder those folks are upset.

Thanks,


----------



## easyrider (May 8, 2010)

Goofyhobbie said:


> When your currency has been devalued significantly in a very short period of time and then you get hit with the prospect of stringent government and much higher taxes it is no wonder those folks are upset.
> 
> Thanks,



This seems to be whats hapenin to us in our good ole USA. REGULATIONS and TAXATION. Both cost us something. When a person can go to bed with $100,000.00 in an entirely safe enviroment, wake up an go to work and then only have $50,000.00, let it ride, and wake up again to see that cut again, then be forced to watch it dwindle while others profit.......... Holy Cow,,,, I need another shot. Make mine a double.


----------



## "Roger" (May 8, 2010)

easyrider said:


> ..The USA national debt and the USA trade deficit are the reasons why the Euro is worth more than a Dollar.


Sorry, but no.

At the end of the last century, the Japenese were buying up US companies, real estate, and American icons.  They were able to do so because of the strong yen.  At the time we had tons of debt and the trade deficit was much worse than today.  So how much was the yen worth?  Less than a penny.  The German mark was also considered to be a stronger currency than the dollar, but it was worth about twenty five cents.

Your comment (and the one above this) simply reflect your political attitudes.  Unfortunately, it puts those of us who want to comment in a bad position in that we also want to respect TUG rules.  I tried to keep the above comment non-political, but there is no way that I can respond to the comment right above this one without being political.


----------



## laurac260 (May 8, 2010)

"Roger" said:


> Sorry, but no.
> 
> At the end of the last century, the Japenese were buying up US companies, real estate, and American icons.  They were able to do so because of the strong yen.  At the time we had tons of debt and the trade deficit was much worse than today.  So how much was the yen worth?  Less than a penny.  The German mark was also considered to be a stronger currency than the dollar, but it was worth about twenty five cents.
> 
> Your comment (and the one above this) simply reflect your political attitudes.  Unfortunately, it puts those of us who want to comment in a bad position in that we also want to respect TUG rules.  I tried to keep the above comment non-political, but there is no way that I can respond to the comment right above this one without being political.



I cannot speak to the political attitudes of the previous posters, nor will I attempt to do so.  Unfortunately the climate today is such that as soon as we get wind of something that someone says that runs even slightly against the grain of our own political attitudes, we quickly dismiss anything they have to say, because the assumption is made that their opinion is tainted by their political leanings.  And we miss the big picture.  And there is a big picture here that transcends anyone's political leanings.   It's just a matter of stepping back, shoving the donkey and the elephant in the closet for now and looking at matters as a whole.  When we do that, we will begin to head on the right path.  Until then, we will flounder.


----------



## John Cummings (May 8, 2010)

Goofyhobbie said:


> Roger,
> 
> Your last post was an excellent explanation and explains a lot about why folks in Greece are currenlty so upset.
> 
> ...



The protesters in Greece are mad because of the austerity program the government will have to invoke that will reduce entitlements. Most of the protesters are from the public unions in Greece.


----------



## laurac260 (May 8, 2010)

John Cummings said:


> The protesters in Greece are mad because of the austerity program the government will have to invoke that will reduce entitlements. Most of the protesters are from the public unions in Greece.



Agreed.  Basically it is an attempt to swing the pendulum back.  Too many social programs, too many entitlements.  It has crippled their economy.    Just like they say, don't feed wild animals.  They will "forget" how to find their own food.  Once you give people a lifetime of entitlements, they have unlearned how to take care of themselves.  We are a few steps further behind them.  Still it is a good exercise to watch and prepare ourselves against.


----------



## Passepartout (May 8, 2010)

"Roger" said:


> Sorry, but no.
> 
> At the end of the last century, the Japenese were buying up US companies, real estate, and American icons.  They were able to do so because of the strong yen.  At the time we had tons of debt and the trade deficit was much worse than today.  So how much was the yen worth?  Less than a penny.  The German mark was also considered to be a stronger currency than the dollar, but it was worth about twenty five cents.
> 
> Your comment (and the one above this) simply reflect your political attitudes.  Unfortunately, it puts those of us who want to comment in a bad position in that we also want to respect TUG rules.  I tried to keep the above comment non-political, but there is no way that I can respond to the comment right above this one without being political.



Thanks for saying this n a nonpolitical, non accusatory way, dealing just with facts and not attitudes. I have been searching for a way to do just this. 

The subject of 'market plunge' was probably exhausted pages ago. Until some stability has been reached in the European monetary crisis, the British election has been settled and a PM moved into #10, oil has stopped flowing unabated into the Gulf of Mexico, the US equity market will be in flux.

Jim Ricks


----------



## Talent312 (May 8, 2010)

laurac260 said:


> I cannot speak to the political attitudes of the previous posters...



So I will...
Drivel, whether from the left or right, wastes my time, which to me, is the ultimate evil.
Life is short, and there are too many vacations to take.


----------



## Kal (May 8, 2010)

Passepartout said:


> ...Until some stability has been reached in the European monetary crisis, the British election has been settled and a PM moved into #10, oil has stopped flowing unabated into the Gulf of Mexico, the US equity market will be in flux.
> 
> Jim Ricks


 
Simply stated, Wall Street hates uncertainty.  More to the point, significant buy/sell decisions are computerized programmed selling.  Much too fast for human interaction and second guessing.  Multiple worldwide "uncertainty" events taken together can easily ascerbate the triggered sell-off.  Microsecond computerized actions leave the little guy in the dust.


----------



## easyrider (May 8, 2010)

"Roger" said:


> Sorry, but no.
> 
> At the end of the last century, the Japenese were buying up US companies, real estate, and American icons.  They were able to do so because of the strong yen.  At the time we had tons of debt and the trade deficit was much worse than today.  So how much was the yen worth?  Less than a penny.  The German mark was also considered to be a stronger currency than the dollar, but it was worth about twenty five cents.
> 
> Your comment (and the one above this) simply reflect your political attitudes.  Unfortunately, it puts those of us who want to comment in a bad position in that we also want to respect TUG rules.  I tried to keep the above comment non-political, but there is no way that I can respond to the comment right above this one without being political.



I didn't think there was any political overture to any of my posts. My attitude is capital driven and not political. You can pm if you want.

So why is he Euro worth more than the Dollar ?


----------



## Kal (May 8, 2010)

Passepartout said:


> ...oil has stopped flowing unabated into the Gulf of Mexico, the US equity market will be in flux.
> 
> Jim Ricks


 
If the oil stopped flowing at this minute, do you think the Equity Market will relax? Learning from Valdez the real long term impacts haven't yet been realized. But maybe there will be no economic consequences. I'm sure we can count on BP (formerly the National Iranian Oil Company) for full and complete restitution.


----------



## easyrider (May 8, 2010)

Passepartout said:


> Thanks for saying this n a nonpolitical, non accusatory way, dealing just with facts and not attitudes. I have been searching for a way to do just this.
> 
> The subject of 'market plunge' was probably exhausted pages ago. Until some stability has been reached in the European monetary crisis, the British election has been settled and a PM moved into #10, oil has stopped flowing unabated into the Gulf of Mexico, the US equity market will be in flux.
> 
> Jim Ricks



Im not an expert investor and only shared information on TUG that I thought could help preserve vacation money. The charts that I used seem to sugest that the stock market may be in trouble. Capital gains taxes are only 15% now. This tax will be going up but if you didn't make much you don't pay much. It was a good day to get out Tuesday morning. That was when I first posted about the drop. 

If your reading politics or attitude in my posts it is unintended. 

I find investments very interesting. I didn't say the SKY IS FALLING or try to panic anyone. Just gave a heads up. Thats all.


----------



## laurac260 (May 8, 2010)

Talent312 said:


> So I will...
> Drivel, whether from the left or right, wastes my time, which to me, is the ultimate evil.
> Life is short, and there are too many vacations to take.



things are way beyond drivel at this point.  You say life is short.  Well, life is LONG, too long to bury your head in the sand and wait for the storm to pass.  To me, life extends beyond the point of my last breath.  I've brought human beings into this world.  They will do the same.  We have a responsibility to our present AND our future.


----------



## wilma (May 8, 2010)

laurac260 said:


> Agreed.  Basically it is an attempt to swing the pendulum back.  Too many social programs, too many entitlements.  It has crippled their economy.    *Just like they say, don't feed wild animals.  They will "forget" how to find their own food.  Once you give people a lifetime of entitlements, they have unlearned how to take care of themselves.  We are a few steps further behind them. * Still it is a good exercise to watch and prepare ourselves against.



We are not a few steps behind Greece.  Sounds like you're auditioning for a Fox News anchor job.


----------



## laurac260 (May 8, 2010)

wilma said:


> We are not a few steps behind Greece.  Sounds like you're auditioning for a *Fox News anchor job*.



what's that about??  sounds like someone using their OWN political leanings to make assumptions about mine.


----------



## "Roger" (May 8, 2010)

easyrider said:


> ...
> So why is the Euro worth more than the Dollar ?


This is a little bit like asking why is a sawbuck (a ten dollar bill) worth more than a dollar.  It was set up that way.

When the Euro was introduced, the European commission decided that so many Francs (German marks, Dutch Guilders, etc.) would be worth one Euro.  They then issued the appropriate number of Euros so that when everyone cashed in their prior European currancies, everyone came out even.  (No one had more spending money nor less than what they had previously.)

They could just as easily have issued ten times as many Euros and then adjusted the exchange rates accordingly.  Why didn't they do that?  Probably because they wanted to have the Euro have a similar status as the dollar so they set up the initial value to be close to the dollar.

Since then,  how the value of the Euro has fluxuated against the dollar (it has gone up and down) is influence by things like trade deficits, current economic conditions in the various European countries, etc.  (Right now, the value of the Euro is plummeting against what it was valued just a few months ago because of Greece.)  Still, the initial value was an arbitrary decision.  The European commission could have made that value ten times higher than they did or a hundred times less.  (Don't laugh at the latter.  If they had done that, then the initial value would have been close to the yen - a currency that was considered extremely strong at the time the Euro was introduced.)


----------



## wilma (May 10, 2010)

Why so silent when the stock market surges??


----------



## AwayWeGo (May 10, 2010)

*No Need For Comment When Things Are OK.*




wilma said:


> Why so silent when the stock market surges?


Human nature. 

Accept good developments as simply our due. 

Complain about anything bad. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## easyrider (May 10, 2010)

wilma said:


> Why so silent when the stock market surges??



Im watching and wondering what bargains are out there. AAPL looked good so we hit the buy. AAPL is the only stock I feel good enough about to buy so far. AAPL is a projected target of $320.00.

Im still watching NLC and the oil spill. 

The 4% gain this morning was a result of a bail out and is only buying some time. The reasons that caused the need for this bail out havent changed to much.


----------



## Passepartout (May 10, 2010)

wilma said:


> Why so silent when the stock market surges??



Last week it was, 'OMG how fast can I get out', today (albeit a bit early in the session), it's 'Boy, I sure am glad I stayed in'. When it gets to that point, and if it disturbs your sleep, you're probably a little heavy in equities. With the run-up the equity markets have enjoyed for the late 14-15 months, many investors have had their allocations skew towards risk. Depending on each individual's risk tolerance, age, employment security, this might be a good time to reallocate towards less risk. There's nothing wrong with holding some cash and metal. IMO.

Jim Ricks


----------



## 3kids4me (May 10, 2010)

easyrider said:


> Im watching and wondering what bargains are out there. AAPL looked good so we hit the buy. AAPL is the only stock I feel good enough about to buy so far. AAPL is a projected target of $320.00.



I continue to think AAPL is the best buy out there.  My fear is that, when everyone else realizes it, it will become overvalued.  I guess that will be when it hits $400!  

Jim, I think it's human nature to always feel like "what if".  When the market is doing well, I always look at my bond funds thinking...wow, if only I had been in stock...but I was sure glad to have those funds last week!

I also like Google as a buy and hold, as well as some of the gold/mining funds.


----------



## laurac260 (May 10, 2010)

wilma said:


> Why so silent when the stock market surges??



What I have stated has not changed just because the stock market surged.  Day to day fluctuations, regardless of what direction they head in, does not change the _big picture_, whatever the "big picture" happens to be.  Never has.   I would imagine even in the days of the depression the stock market showed upticks.   Money was to be made even in the days following 9/11.  It happens.


----------



## ricoba (May 10, 2010)

wilma said:


> Why so silent when the stock market surges??



A one day surge doesn't make a long term bull rally.  We are still lower than where we were two weeks ago before this Greek mess.

Here is a good interview (Yahoo Finance) with Richard Suttmeier, a long time technical analyst discussing that the Dow will see 8,500 before it sees 11,500.

While it's good to see surges and hard to see plunges, we do live in a time of economic uncertainty.  As we have seen discussed in this thread, markets very much dislike uncertainty.


----------



## laurac260 (May 10, 2010)

ricoba said:


> A one day surge doesn't make a long term bull rally.  We are still lower than where we were two weeks ago before this Greek mess.
> 
> Here is a good interview (Yahoo Finance) with Richard Suttmeier, a long time technical analyst discussing that the Dow will see 8,500 before it sees 11,500.
> 
> While it's good to see surges and hard to see plunges, we do live in a time of economic uncertainty.  As we have seen discussed in this thread, markets very much dislike uncertainty.



Thank you for stating this better than I could.


----------



## geekette (May 10, 2010)

laurac260 said:


> What I have stated has not changed just because the stock market surged.  Day to day fluctuations, regardless of what direction they head in, does not change the _big picture_, whatever the "big picture" happens to be.  Never has.   I would imagine even in the days of the depression the stock market showed upticks.   Money was to be made even in the days following 9/11.  It happens.



I am happy to report that I agree with you completely!


----------



## easyrider (May 17, 2010)

Monday , May 17, 2010 -- half of the trading day result is DOW minus 160 to 10460.The rate of decline from May 3 to May 17 at aprox minus 700 points divided by 10.5 days of trading = aprox 66.6 points a day. At this rate the Dow will be close to 9000 on June 14,2010 or Flag Day.

This drop rate can change as there are many things that can affect the stock market.


----------



## geekette (May 17, 2010)

my 403b is still in positive return range ytd so I'm already have a better week this week!

also keep in mind that Dow is 30 stocks.  and giant mkt caps.  not indicative of all stocks.


----------



## fillde (May 17, 2010)

*Fox News news anchor job*

Fox News = Fair and Balanced


----------



## easyrider (May 17, 2010)

Wow.. I wanted to buy something this morning because last Friday things were down. This morning everything went down and it just looked like things were tanking. I thought about buying after half time but all of my watch list still looked bad. Should have bought AAPL at noon and sold at close.


----------



## Talent312 (May 17, 2010)

fillde said:


> Fox News = [:hysterical:]


Everyone's entitled to their own opinion. So what if facts need adjusting to make 'em work.

On-Topic: The arbitrageurs and timers can play their games, I'm in it for the long haul.
That means not losing sleep over a "difficult" week, month or even one-year time horizon.


----------



## 3kids4me (May 17, 2010)

easyrider said:


> Wow.. I wanted to buy something this morning because last Friday things were down. This morning everything went down and it just looked like things were tanking. I thought about buying after half time but all of my watch list still looked bad. Should have bought AAPL at noon and sold at close.



AAPL only went up $5 from noon until close.  At a $250 share price, that's a pittance.  You would have had to spend hundreds of thousands to make any real money.  I wouldn't day trade Apple.  Buy and hold.  You heard it here first.  (Well maybe not, but you also heard it here.)


----------



## Passepartout (May 17, 2010)

fillde said:


> Fox News = Fair and Balanced



....= neither one.  But I may be wrong. I thought this thread was about a plunging market, not fiction. :hysterical:     Jim


----------



## easyrider (May 17, 2010)

3kids4me said:


> AAPL only went up $5 from noon until close.  At a $250 share price, that's a pittance.  You would have had to spend hundreds of thousands to make any real money.  I wouldn't day trade Apple.  Buy and hold.  You heard it here first.  (Well maybe not, but you also heard it here.)



I heard it before. I have been told that Im wrong but 50K on AAPL would have brought in another quick 1k today. These small hits do add up. So to be consevative is the only way to do this. Im not playing Jim Crammer and the Bull's although I am watching his picks.   

Im done with mutual funds and t bonds. I think. 

btw Jim Crammer says to buy BP. ?

DOW 2000 = 10700  DOW 2010 = 10700 .... It looks like its back to where it was 10 years ago. What are you guys considering long run. 20 years ? 10 years ? I dont understand how a 75 year old is in anything for the long run.


----------



## John Cummings (May 17, 2010)

fillde said:


> Fox News = Fair and Balanced



Absolutely!!!


----------



## rickandcindy23 (May 17, 2010)

John Cummings said:


> Absolutely!!!


Yep, me too.


----------



## Talent312 (May 17, 2010)

easyrider said:


> Btw, Jim Crammer says to...


IMHO, JC's little more than a shill. My taste in market gurus began and ended with Peter Lynch.

When I say L/T, I started about 30 years ago, when the DJI was ~825. Notwithstanding the market corrections and bear-markets that I've suffered thru, and the occasional hits (Coca Cola) and misses (USAir) since then, I have little to regret for being all-in during this time... without day-trading or market-timing.

But as they say, the past is no guarantee of future performance, and I find that, as I approach retirement age, I could use a little less heartburn, and so shifted to a 50-50 blend of equities+bonds -- a form of investor lithium (highs not so high, lows not so lows), but that's just what works for me. YMMV.

-------------
Fox News = Vacuous + Insipid


----------



## PigsDad (May 17, 2010)

easyrider said:


> DOW 2000 = 10700  DOW 2010 = 10700 .... It looks like its back to where it was 10 years ago. What are you guys considering long run. 20 years ? 10 years ? I dont understand how a 75 year old is in anything for the long run.


First off, the DOW number doesn't factor in dividends, and reinvestment of those dividends.  Over the long run, that is huge.

However, if an investor was diciplined and simply kept constantly investing over that period (i.e. dollar cost averaging), they would be showing an even larger gain.  The more volitility, the better it is for the dollar cost averager, since you purchase more shares when the price is low, and less shares when the price is high.  Personally, I have done just fine dollar cost averaging in my retirement funds for the last 20 years.

Kurt


----------



## geekette (May 17, 2010)

PigsDad said:


> First off, the DOW number doesn't factor in dividends, and reinvestment of those dividends.  Over the long run, that is huge.
> 
> However, if an investor was diciplined and simply kept constantly investing over that period (i.e. dollar cost averaging), they would be showing an even larger gain.  The more volitility, the better it is for the dollar cost averager, since you purchase more shares when the price is low, and less shares when the price is high.  Personally, I have done just fine dollar cost averaging in my retirement funds for the last 20 years.
> 
> Kurt



Yep, dividends and dca are what's gonna keep me outa the streets when I'm old and doddy.


----------



## easyrider (May 17, 2010)

I guess I was spoiled by the mid to late 90's and really didn't pay attention because things were good. In the 2000's I didn't pay too much attention to investments until they went the wrong direction. Now in 2010's I'm paying attention and learning by joining investment sites and have discovered that there is alot to know. Some of the best traders I have watched are day traders using chart software. So, any good tip is appreciated.

I just read that BP's exposure to the oil spill was caped at 10 million instead of 75 million by some politicians. Could Crammer be right ?


----------



## Jaybee (May 17, 2010)

All the talk is interesting, as are most of the opinions, but end the end, it's still a crap shoot, as far as I'm concerned.


----------



## PigsDad (May 18, 2010)

easyrider said:


> I guess I was spoiled by the mid to late 90's and really didn't pay attention because things were good. In the 2000's I didn't pay too much attention to investments until they went the wrong direction. Now in 2010's I'm paying attention and learning by joining investment sites and have discovered that there is alot to know. Some of the best traders I have watched are day traders using chart software. So, any good tip is appreciated.


I have known several people that dabbled in day trading in the hayday of the late 1990's.  I don't know anyone that did very well, however (especially given that anyone could invest in almost anything and double your money back then).  In fact, an ex-manager of mine lost everything -- house, college funds, retirement, _EVERYTHING _-- trading commodities and getting hit w/ margin calls.  Very sad; he had several kids still at home, and they ended up having to move out of state back to his family.

Personally, I'll stick to tried and true investment strategies.  Day trading is just too risky to me.

Kurt


----------



## PigsDad (May 18, 2010)

Jaybee said:


> All the talk is interesting, as are most of the opinions, but end the end, it's still a crap shoot, as far as I'm concerned.


Well then, by all means, put your money on the craps table in Vegas if that's what you think.  I'll just keep on investing.

Kurt


----------



## Passepartout (May 18, 2010)

*How to make a small fortune in 'the market':*

Start with a large fortune and day-trade.... 

This is not to say that strict buy-and-hold is the ONLY way. Portfolios require management and adjustment when conditions change. Day-trading and market timing have simply proven unworkable for the vast majority of practitioners. Doing so turns a rational market into a casino. In a casino, only the house wins in the end.

Jim Ricks


----------



## Talent312 (May 18, 2010)

easyrider said:


> Some of the best traders I have watched are day traders using chart software... Could Crammer be right ?



Rely on the tarrot car readers, soothsayers and blowhards if you want...
Frankly, I'd sooner trust the Warren Buffett "way" and than any talking head on CNBC.

In the go-go days of the 80's + 90's, I knew folks who thought they could make enuff money as a day trader to retire early.
I don't know anyone for whom that worked out.


----------



## geekette (May 18, 2010)

Passepartout said:


> Start with a large fortune and day-trade....
> 
> This is not to say that strict buy-and-hold is the ONLY way. Portfolios require management and adjustment when conditions change. Day-trading and market timing have simply proven unworkable for the vast majority of practitioners. Doing so turns a rational market into a casino. In a casino, only the house wins in the end.
> 
> Jim Ricks



I agree.

I consider it somewhat of Tortoise vs Hare.  My slow build-up of capital via dollar cost avg in retirement plans and periodic new dividend-producing stocks is 'tortoising' me where I need to be.  

The Hare jumps in and out, some wins, some losses, but paying cap gains and trading fees off the top.  

While I think it would be a ton of fun to spend a week day-trading, I don't feel that I have the money to lose.  It's best right where it is, making me more money.

No approach that is well thought out is wrong if it gets you to your goals.  

I just don't have any reason to sell.  Hopefully I'll pass up some hares before I end up needing to live off the investments but it doesn't matter, I'm doing what's right for me and am happy for any hares that amass great fortunes.


----------



## Elan (May 18, 2010)

The term "day trading" is being tossed around pretty loosely here.  There are a lot of investment styles between true "day trading", which explicitly means buying and selling a position on the same trading day, and "buy and hold".   I buy and hold, swing trade, and occasionally day trade.  They are all equally viable strategies if executed properly.  The stock market, like most things, is not "one size fits all".


----------



## easyrider (May 18, 2010)

Im trying to spot trends using charts. I can only focus on a few stocks at a time and do not trade daily but watch daily. The Van Gaurd Mutual Funds I had did very good until the last decade. The advice I recieved was to leave it in for the long run. Very diverified. They tanked 3 times during the last decade.  

This chart sugests that the market has entered a bear market. 

http://www.cornerstoneri.com/Research/100yearchart.pdf


----------



## caribbeansun (May 18, 2010)

Best of luck to you.  You might want to consider not using 100 year charts and relying on Cramer in doing so.



easyrider said:


> Im trying to spot trends using charts. I can only focus on a few stocks at a time and do not trade daily but watch daily. The Van Gaurd Mutual Funds I had did very good until the last decade. The advice I recieved was to leave it in for the long run. Very diverified. They tanked 3 times during the last decade.
> 
> This chart sugests that the market has entered a bear market.
> 
> http://www.cornerstoneri.com/Research/100yearchart.pdf


----------



## easyrider (May 18, 2010)

caribbeansun said:


> Best of luck to you.  You might want to consider not using 100 year charts and relying on Cramer in doing so.



Thanks for the extra luck, its always handy.

It would be hard to not use a 100 year chart to see trends that last longer than 20 years.

Yes I am watching Cramers picks as they are emailed to me through out the day. I am also paying attention to others such as Adam Hewison and David Gardner.


----------



## pgnewarkboy (May 18, 2010)

I don't trust any TV (radio,internet, etc) person, show, network, etc. to give me accurate, useful information, much less investing advice.  The reason is simply that "they" make money through advertising and that means garnering eyeballs to their shows.  IMO "they" distort, misinform, and sometimes intentionally lie because it is to their advantage to do so.  Investing is difficult and they make it even more difficult.  What great information do they have that the investor doesn't have access to. None.  Just read the reports that come out weekly.  Or have some "non-entertainer" that you trust keep track of all the information and have that person help you make decisions or in some cases manage your portfolio for you.  That is not a guarantee of success but at least you won't be tempted to follow the advice of some entertainment low life making a buck at your expense.  IMO people sell low and buy high because they are swayed by these lowlifes who manipulate the emotions of greed and fear for their personal benefit.  There is no such thing as free advice.


----------



## easyrider (May 18, 2010)

Cramer -- the street plus Cramers picks cost $600.00 per year-- 30 day free trial

Hewison -- Market Club  $600.00 per year -- 30 day free trial

Gardner -- Motley Fool  -- Im not sure of the cost but did get some info here.

I chose the street and Jim Cramer because of the info on the website. On a practice portfolio I have nothing but Cramer's picks and it up 14%.

With my Scott Trade investments its up and down. Not really day trading but swing trading with some long.

My favorite free investment learning site is www.investopedia.com
This site was sugested at a stock market forum set up simalar to TUG.

I trust these guys more than I trust most brokers and fund managers.

From my own obsevation the Dow, which is only an indicator for this purpose, has lost 3629 points in the last 30 months. Thats a 121 drop each month or 4 point drop per day average. This would indicate that the Dow is on a slight downward trend. The 100 year chart would indicate that this could last for a long period of time.

So, I guess I think its a bear market for the above reason.


----------



## pgnewarkboy (May 18, 2010)

easyrider said:


> Cramer -- the street plus Cramers picks cost $600.00 per year-- 30 day free trial
> 
> Hewison -- Market Club  $600.00 per year -- 30 day free trial
> 
> ...



Funny thing, my post was not in response to your post. It just followed it even though I wrote mine before you posted yours.   I don't know a thing about the services you subscribe to and wish you the best of luck with their advice.


----------



## geekette (May 18, 2010)

I've periodically cruised Motley Fool since their infancy on AOL.  I don't buy any of their stuff, so it's a little annoying with the "learn more" at teh bottom of the article, but they've always been decent at giving you the tools and ideas to craft your plan, even if you don't pop for the full article.  I've not spent much time in their message boards.

I've only recently found investopedia but it seems to have good content.  

Keep educating yourself, that's the best thing you can do for your portfolio.


----------



## easyrider (May 19, 2010)

The guys on the market forums are prepareing for a sell off. It sounds like something bad is happening.


----------



## caribbeansun (May 20, 2010)

Because you're going to hold something for 20 years and nothing has changed in the underlying fundamentals of the market in the last 100?  




easyrider said:


> It would be hard to not use a 100 year chart to see trends that last longer than 20 years.


----------



## easyrider (May 20, 2010)

caribbeansun said:


> Because you're going to hold something for 20 years and nothing has changed in the underlying fundamentals of the market in the last 100?



I don't know. A person can make money in a bear market. Even with mutual funds. But I think the odds of making money increases with a bull market. From 1990 to 2000 mutual funds did very well.

This morning , however, the Dow fut is down 140 - 150 points so Im out and will either go fishing or away. Im expecting another sell off.

Even gold is down.

Dow opened the droped 178 points in 2 minutes.


----------



## Talent312 (May 20, 2010)

easyrider said:


> ... This morning , however, the Dow fut is down 140 - 150 points so Im out and will either go fishing or away. Im expecting another sell off. Even gold is down. Dow opened the droped 178 points in 2 minutes.



So, its down a for a day, for the week, for the year. Guess we should all go fishing?
Its corrections + bear markets that create buying opportunities. While I don't like seeing any drop in the total value of my portfolio, over-reactions to bad news is a good time to look for bargains. Markets that do nothing but rise can be bad news too. Equities get overpriced, if you sell there's taxes, and the down-side at the other end will likely be more painful than it would have been, had we taken some lumps all along.


----------



## Passepartout (May 20, 2010)

I'd say we are getting closer to some major buying opportunities than selling opportunities. A little stability in jobless claims and certainty in European debt and markets would be all it takes. IMO 

Jim Ricks


----------



## easyrider (May 20, 2010)

Talent312 said:


> So, its down a for a day, for the week, for the year. Guess we should all go fishing?
> Its corrections + bear markets that create buying opportunities. While I don't like seeing any drop in the total value of my portfolio, over-reactions to bad news is a good time to look for bargains. Markets that do nothing but rise can be bad news too. Equities get overpriced, if you sell there's taxes, and the down-side at the other end will likely be more painful than it would have been, had we taken some lumps all along.



I can only bring 3 of you on my boat.  

I have been tracking my old Mutual Funds and they have lost 11% of the gains to profit from the 40% March 2009 drop. Capital gains, like last year, are capped at 15%. Capital gains taxes were as high as 39%. 

If your capital gain is $100,000.00, the tax difference could be 15% = $15,000 and at 39% = $39,000.00 a difference of $24,000.00.  

Im thinking Adam Hewison charted the senario we are currently in. Less confidence in the market place is causing the market to drop. The only thing that kept the market some what stable were the bail outs and stimulus plans. Those are played out. Many small investors are freaked out as they near the age they want to retire. It seems like every one knows some one who had to go back to work because their investments tanked. Here is the chart.

http://broadcast.ino.com/education/deja_vu_aff/?campaignid=3

This list of cons outweighs the list of pros world wide. The jobless claims have exceeded 10%. The Euro will need more bail outs. Forclorsures are on the rise again. The Dow has been on a roller coaster decline for the last 31 months. This decline has acelerated.


----------



## geekette (May 20, 2010)

... and I look at my paper loss (ytd, -2% in 403b) and am grateful I'm not at retirement age.  Even if I were, I'd count on another 20 years IN retirement to draw down whatever I have.

But instead, what I see are solid companies posting better than expected sales and earnings taking a beating from investor fears.  I don't see doom and gloom, I see Opportunities!  So keep on beating down the Dow, I love dividend-paying bluechips, the Dividend Aristrocrats.


----------



## caribbeansun (May 21, 2010)

So your strategy is to go to cash and wait for the market to stabilize?

Personally I've put on a sizable position in a leveraged inverse ETF with a tight stop order.

What about the rest of posters to this thread - sitting in cash from the sounds of it?



easyrider said:


> This morning , however, the Dow fut is down 140 - 150 points so Im out and will either go fishing or away. Im expecting another sell off.


----------



## Ironwood (May 21, 2010)

PigsDad said:


> Personally, I'll stick to tried and true investment strategies.  Day trading is just too risky to me.



Day traders are usually nimble enough to go to cash or reposition investments at the start of a 380 point down day and not suffer the full brunt of the sell off.  Tried and true investment strategies that have worked in the past are increasingly being called into question as effective strategies in uncertain markets ahead...to wit...buy, hold and be broke when your old!


----------



## Elan (May 21, 2010)

caribbeansun said:


> So your strategy is to go to cash and wait for the market to stabilize?
> 
> Personally I've put on a sizable position in a leveraged inverse ETF with a tight stop order.
> 
> What about the rest of posters to this thread - sitting in cash from the sounds of it?



  Same strategy.  Took positions in a couple leveraged inverse ETF's last week and early this week.   Was actually up a little in my trading portfolio Thursday.


----------



## Talent312 (May 21, 2010)

I ain't gonn'a spend my days churning my portfolio.
Sorry, but I have a life outside of CNBC and the ticker.
Being nimble enuff to time the market is a FT job, and I already have one.

So, I'll have to...
-- Trust a few decent MF-managers watch it for me;
-- Use mad-money to dabble with ETF's and stocks; and
-- Cushion it all with some bonds.
Let the blue-chips fall where they may.


----------



## easyrider (May 21, 2010)

Our mutual funds are gone since last November. I make conservative choices managing our transactions and only go long when I get stuck with a good stock that has lost value. Who would of thought that these $200.00 - $500.00 profits from trades would be safer than closeing ones eyes and hanging in there.  

I would only trust mutual funds if the market showed a long trend to the upside. If you just leave your money in the mutual fund your in for another spanking, imo.

With the new regs passed last night it will be too tough a day for me to invest. I think going short would work on technology or banking but Im not trading today. The Dow fut is down over 100 points before the maket opens this morning so I think it will be another down day.


----------



## geekette (May 21, 2010)

caribbeansun said:


> What about the rest of posters to this thread - sitting in cash from the sounds of it?



I'm buying.  

Increased my 403b contribution to 2% above level of match a few months back.  I usually run at 5-10% of that account in bond funds.

aside from a starting a Roth that I'm buying stocks for, I'm making small buys for the after tax portfolio, mostly adding to existing positions, but added a couple new companies.  Buying mostly large established companies that offer dividends and a long history of div increases.  A few small companies also, and they of course offer dividends.

June divs should be a lot more fun (lucrative) for me this year.  I reinvest divs and will for the next 20 years or more.  

I also plan to buy some TIPS but want them in a tax shelter and the Roth I started won't allow it, so will most likely start another Roth with my bank (no admin fee) and buy TIPS for it.


----------



## PigsDad (May 21, 2010)

For those of you who try to time the market when investing for the long term, you may want to consider the following table.  This chart illustrates a $10,000 investment in the S&P 500 Index from Dec. 31, 1994 - Dec 31, 2004


```
Period of investment     Average annual total return     Growth of $10,000 
Fully Invested                    12.07%                          $31,260 
Miss the Best 10 Days              6.89                            19,476 
Miss the Best 20 Days              2.98                            13,414 
Miss the Best 30 Days             -0.39                             9,621 
Miss the Best 40 Days             -3.19                             7,233 
Miss the Best 60 Days             -7.90                             4,390 

Source: Factset Research Systems as provided by AIM Distributors, Inc.
```
If you only missed the best 10 market days during that period, your return would have been cut almost in half.  I have seen other charts w/ different timeframes and the results are basically the same -- if you miss a few key days, your returns are majorly affected.  You have to ask yourself -- do you really know when the best market days will be?

For example, it was posted here that today was thought to be a bad day for the market.  The last I checked, the DOW was up 100 points.  As a long term investor, I personally can't risk being out of the market on those days where the bulk of the gains come from.  If I had perfect vision into the future of the markets, I certainly wouldn't be working my current job!  And study after study shows that most money managers rarely beat the market averages.  DCA is the best strategy for me.

Kurt


----------



## 3kids4me (May 21, 2010)

I bought more Apple today.  

I'm sure old school dividend paying stocks have their place, but dividends are small and the share price drops in relation to the dividend paid.  Solid dividends seem to be around 2.5 percent per year which you can get other ways without having suffer the risk/losses of a stock price dropping.  Just not my thing, but everyone has to figure out what works for them.  It also depends on how actively you manage your portfolio and how much you *like* to do so.


----------



## tlwmkw (May 21, 2010)

I remember when Apple was trading at $14 a share and I thought "maybe I should buy some"- that was about 15 years ago.  Since then there have been ipods and iphones and ipads and so on.  Wish I had bought some shares then.  We were at the beach and my bil (who is heavily into the market and claims to have all sorts of knowledge about things) said not to buy because it was then the feeling that Apple wasn't going anywhere and would be drowned out by MSFT.  Ha, were the pundits ever wrong.  Bottom line is don't follow the herd- you have to do what you think is right and even then you could be very wrong.

tlwmkw


----------



## Elan (May 21, 2010)

3kids4me said:


> Just not my thing, but everyone has to figure out what works for them.  It also depends on how actively you manage your portfolio and how much you *like* to do so.



  Well put.  

  One other thing to consider, when discussing investment strategies, is that some of us are always 100% long in our 401K's by necessity (I can't short, and don't have access to inverse ETF's).  So I can be net short in my personal portfolio, or at least partially hedged to the short side, and still make money overall if the market goes up.

  As I said before, there is not one single best strategy for investing.


----------



## geekette (May 21, 2010)

3kids4me said:


> It also depends on how actively you manage your portfolio and how much you *like* to do so.



Also very true.  I'm on it a lot right now from annual tax time rebalance, reassess.  Once I complete my buying spree, aside from monitoring news on companies I own, I won't check frequently.  I have very few reasons to sell and nothing has triggered it, I still believe in every company I own.  I'll go on autopilot a while, let my shares buy more shares, DCA.  

and, sure, I could be very wrong.  or I could double my money every 5 years.  or win the lottery and become a day-trader  

It's interesting to hear the strategies others use since we are all so very different in so many ways.


----------



## Ironwood (May 22, 2010)

PigsDad said:


> For those of you who try to time the market when investing for the long term, you may want to consider the following table.  This chart illustrates a $10,000 investment in the S&P 500 Index from Dec. 31, 1994 - Dec 31, 2004
> 
> 
> ```
> ...



I have seen numerous illustrations like this one to promote the 'buy and hold' strategy espoused by financial planners and investment advisors.  The results differ widely depending on the time frames used.  Remember advisors or fund managers need to keep you invested to maximize their pay packet.  As a retired advisor, I can tell you from experience the key is not so much to make sure you are invested on the 'best days' but to avoid the big drops and extended sell-offs...and I know in these markets it's impossible to know from one day to the next how world indices will perform.  A simple strategy that for the most part holds true is 'sell in May and go away' or 'buy when it snows and sell when it goes'.


----------



## caribbeansun (May 23, 2010)

Funny, I had a very similar thought - what would those numbers look like based on avoiding the 10 worst days?  One study I found indicated the following (as with everything, these figures may be flawed):


1)	A $100 investment at the beginning of 1900 turned into  $25,746 by the end 2006, and delivered a mean annual compound return of  5.3%.
2)	Missing the best 10 days reduced the terminal wealth  by 65% to $9,008, and the mean annual compound return one percentage  point to 4.3%. But avoiding the worst 10 days increased the terminal  wealth by 206% to $78,781, and the mean annual compound return by more  than one percentage point to 6.4%.
3)	Missing the best 20 days  reduced the terminal wealth by 83.2% to $4,313, and the mean annual  compound return to 3.6%. But avoiding the worst 20 days increased the  terminal wealth by 531.5% to $162,588, and the mean annual compound  return to 7.2%.
4)	Missing the best 100 days reduced the  terminal wealth by 99.7% to just $83 ($17 less than the initial capital  invested), and reduced the mean annual compound return to −0.2%. But  avoiding the worst 100 days increased the terminal wealth by a  staggering 43,396.8% to $11,198,734, and more than doubled the mean  annual compound return to 11.5%.







Ironwood said:


> I have seen numerous illustrations like this one to promote the 'buy and hold' strategy espoused by financial planners and investment advisors.  The results differ widely depending on the time frames used.  Remember advisors or fund managers need to keep you invested to maximize their pay packet.  As a retired advisor, I can tell you from experience the key is not so much to make sure you are invested on the 'best days' but to avoid the big drops and extended sell-offs...and I know in these markets it's impossible to know from one day to the next how world indices will perform.  A simple strategy that for the most part holds true is 'sell in May and go away' or 'buy when it snows and sell when it goes'.


----------



## easyrider (May 24, 2010)

I would rather miss the bad down days but be in for the good days. I would like to have my cake and eat it too. 

We watched this documentary this weekend on the documentary channel. Its called "Broke,The new American Dream ". Its very interesting. Here is a clip.

http://www.youtube.com/watch?v=eCZh4YmBeHo&feature=related

My friend in a retirement based mutual fund pulled out for 30 days the same time I did. He has kept about 9k that would have disappeared since then. The downside is he has to wait 30 days to get back in.

Investing seems like Texas Hold Um in a way that to win, I play good hands only. Folding is like passing on a day of trading. Just like I want all my chips in poker, I want all my dollars in investing.


----------



## easyrider (May 25, 2010)

Monday opening at aprox 10200 and Tuesday not even a hour after opening dropping to 9800 makes it look like May 2010 will be a month that will be remembered. The drop started slow and now is picking up speed to the low. Is 8500 realistic for bottom ? Some feel that 7000 might be the bottom of this. I thought 9000.

My daughter is being told to ride it out by her broker. The word broker includes the word broke. Or my daughter might be broker tommorow than she was today.


----------



## Ironwood (May 25, 2010)

If markets revisit March 2009 then your looking at 6700 on the Dow and about 700 on the S & P, and we have a way to go yet.  The pain may only be accelerating.


----------



## caribbeansun (May 27, 2010)

Question for those posting to this thread:

After the fall of 2008 (or even before that) do you use stop loss orders?  If yes, do you set them at a pre-defined %'age below cost or do you use trailing stop orders?

Just curious

Personally, I use trailing stop loss orders on about 70% of my equities leaving some ride that have monthly DRIP plans.  I tend to set them between 8-10% off of the high point.


----------



## Elan (May 27, 2010)

caribbeansun said:


> Question for those posting to this thread:
> 
> After the fall of 2008 (or even before that) do you use stop loss orders?  If yes, do you set them at a pre-defined %'age below cost or do you use trailing stop orders?
> 
> ...



  Sometimes yes, sometimes no.  Sometimes I set an 8-10% trailing stop at time of purchase.  Sometimes I won't set it until I'm up on a position.  Other times, I if I'm up significantly, I'll set a 3% trailing stop, with the intention of re-buying if/when the previous high gets taken out.  Having said all that, most of the time I just use mental stops, because I've seen the market makers run stops way too many times, often immediately before a stock rises dramatically.  If it weren't for this last phenomenon, I'd more consistently set 8-10% trailing stops at time of purchase.


----------



## Ironwood (May 27, 2010)

Make sure you use stop-limit orders not just stop orders.  When you use a plain stop order it becomes a 'sell at the market' order when the share price falls to the stop price.  When we have a day like the 1000 point 20 minute drop on the Dow, your stop loss could be executed as a market order well below the price you set.  With a stop limit order, if the share price gaps down, you won't get taken out.  I got hurt on one simple stop loss that day, and I should know better.  Set your stops much tighter than 8-10% below the share price in these uncertain markets....do you really want to loose another 10%!  This is a simplistic explanation so Google stop-limit orders for more detail and explanation.

We could be headed for a double or tripple top before a sustained sell-off.  I'm a little more optomistic than that, but all bets are off these days with the volatility we have endured.  These thoughts are only for those that have some sense of what they are doing.  If you don't have some reasonable understanding of markets get professional help...but don't 'buy, hold and suffer'!

*Market tops and bottoms are complex* 

With the severity of the current market selloff, one might think that my previously discussed downside objectives of Dow 9000 will be reached in a matter of weeks. It probably won’t happen that easily, and here’s why:

Markets rarely form “V” reversals, whether we are speaking about a top or a bottom. A “V” reversal is one where the markets reach a climactic top (or bottom) and then rapidly begin to move in the opposite direction with little or no pause. Instead, markets tend to form what most technicians call ‘complex” tops or bottoms. Complex formations involve a series of troughs and rallies that make up a recognizable pattern indicating a reversal.  As we are looking at the markets from a topping perspective right now, this would imply that the complex top that we will put in will likely have at least one rally during the summer, before a final and even more severe selloff occurs. It is the occurrence of a rally, or perhaps a couple of rally/trough combinations, that will create the topping formation.

For example, we may get a “double top”, which is comprised of 2 peaks with a trough in between (the current selloff being that trough). Or we may get a “triple top” or “head and shoulders top”—made up of at least 3 peaks and troughs. While it’s too early to tell which formation it will be that creates this trough, I am confident in suggesting is that the market will likely not keep heading down without some type of relief rally in the mix. All of these formations will tend to have a level of support that the rallies bounce off of. I call this level the “neckline”. When that neckline is broken, the final downside objective will be achieved. As mentioned above, my target is for about Dow 9000. I think that’s going to happen by November. Perhaps I’m too conservative with that target----we’ll see.


----------



## caribbeansun (May 28, 2010)

Sorry for the poor wording - I meant to say stop-limit orders for the exact reasons you've mentioned below.  I learned that lesson the hard way a couple of years ago 



Ironwood said:


> Make sure you use stop-limit orders not just stop orders.  When you use a plain stop order it becomes a 'sell at the market' order when the share price falls to the stop price.  When we have a day like the 1000 point 20 minute drop on the Dow, your stop loss could be executed as a market order well below the price you set.  With a stop limit order, if the share price gaps down, you won't get taken out.  I got hurt on one simple stop loss that day, and I should know better.  Set your stops much tighter than 8-10% below the share price in these uncertain markets....do you really want to loose another 10%!  This is a simplistic explanation so Google stop-limit orders for more detail and explanation.


----------



## Talent312 (May 28, 2010)

So, ER, how are your doomsday scenarios playing today?
Did you short-sell and miss the run up?


----------



## Elan (May 28, 2010)

caribbeansun said:


> Sorry for the poor wording - I meant to say stop-limit orders for the exact reasons you've mentioned below.  I learned that lesson the hard way a couple of years ago



  All of my stop orders are limit orders as well.


----------



## easyrider (May 28, 2010)

Talent312 said:


> So, ER, how are your doomsday scenarios playing today?
> Did you short-sell and miss the run up?



Yesterday was the only day last week that things didn't go to heck in the last hour of trading. I jumped in after half time and out 45 minutes before closing with HOT and ALK . This morning Im planning on making the same moves depending on whats hapening. 

I never said it was doomsday, where are you getting that. I said I felt the market was on a decline and Im not riding out mutual funds anymore. If you scaled back on a mutual fund  around May 5 - 6 you most likely are a bit weathier than a person that didn't.

I still track my mutual funds and yeterday they did go up about 3% after droping more than 9% since May 5.


----------



## easyrider (May 28, 2010)

http://www.youtube.com/watch?v=MrFIbUeoOTY&feature=related

I'm safe and I'm neither an optomist or a pesmist but for sure a realist. Not going down with the ship this time.


----------



## 3kids4me (May 28, 2010)

I've gotten ride of my stop losses for now.  I don't actually like stop limits because, even though you won't get taken out if the share price gaps down, the price can gap down even with a permanent fall and you may wish you had a plain stop loss in.  There is so much volatility these days that one has to have some confidence in the stock to buy it in the first place.  Again, I don't think there is any correct answer, but I will probably put my stop losses back in at some point because I can't watch the market every minute, and I have more stocks and less funds than I used to have.


----------



## Ironwood (May 28, 2010)

3kids4me said:


> There is so much volatility these days that one has to have some confidence in the stock to buy it in the first place.  Again, I don't think there is any correct answer, but I will probably put my stop losses back in at some point because I can't watch the market every minute, and I have more stocks and less funds than I used to have.



Stop losses, especially if they are kept tight, aren't the perfect tool and in volatile markets with 100 point swings almost daily, you can find yourself taken out more frequently than you wish, but at the same time it will save you if we ever have another catastrophic sell off, and markets are so skittish that it wouldn't take much negative news to set it off.  The only safe way is to keep your finger on the sell trigger and unload when your holdings are trending against you...and determining when to sell brings in a whole host of variables, including many that may have nothing to do with your particular stock/index...and I for one can't sit in front of my screen all day.  

carribeansun...as we are both in Ontario and likely more interested in Cdn markets than US, here's a couple of Canadian sites for a daily technical view of where we are headed short term, and a site for current collective 'expert' opinion on any equities you may own.

http://www.dvtechtalk.com/

http://www.stockchase.com/


----------



## easyrider (May 28, 2010)

Sitting in front of the screen isn't too bad. You can surf over to TUG, facebook, redweek, ebay and your other internet hangouts between trades.


----------



## easyrider (May 28, 2010)

I may need another screen or two.


----------



## easyrider (May 28, 2010)

*DJI 872 points down ( 7.29 % ) May 2010.  *

In case you were curious, the five worst months for the DJI in terms of total points lost:

2008-10, -1525.65 points
1998-08, -1344.22 points
2008-06, -1288.31 points
2001-09, -1102.19 points
2002-09, -1071.57 points


Here are the top 10 biggie drops in DJI.

September, 1931 (-30.7%)

April, 1932 (-23.68%)

March, 1938 (-23.67%)

October, 1987 (-23.22%)

May, 1940 (-21.70%)

October, 1929 (-20.36%)

May, 1932 (-20.01%)

June, 1930 (-17.72%)

December, 1931 (-17.01%)

February, 1933 (-15.62%)


Also very noteworthy is the May 6 2010 plunge of 1000 points during one hour session of trading.


----------



## Ironwood (May 28, 2010)

easyrider said:


> Sitting in front of the screen isn't too bad. You can surf over to TUG, facebook, redweek, ebay and your other internet hangouts between trades.



Actually, that's what I do most mornings....and don't forget the sports sites. Was engrossed in writing a TUG reply the other day, came back to a double up ETF I had picked up a few minutes earlier only to see it had turned on me and I was down hundreds.....should have seen it as I have two screens and business TV on at the same time.


----------



## easyrider (Jun 1, 2010)

June 1   Market is still heading down. DJI -112


----------



## PigsDad (Jun 1, 2010)

easyrider said:


> June 1   Market is still heading down. DJI -112


Wow -- aren't you the Gloomy Gus!    I notice you only post a DOW summary when it is down -- you were very quiet the two days it was up last week.  Are you shorting now?  Just curious.

Kurt


----------



## easyrider (Jun 1, 2010)

PigsDad said:


> Wow -- aren't you the Gloomy Gus!    I notice you only post a DOW summary when it is down -- you were very quiet the two days it was up last week.  Are you shorting now?  Just curious.
> 
> Kurt



I was about to short BP and GS last month but didn't. On paper it looks like I should have.  I'm not comfortable shorting yet. I have two moves that I'm comfortable with when dealing with real money in stocks. Buy and Sell.  

Around mid September we might go long on a few stocks. BTW.. Jim Crammer has been a bit off lately....imo. So far I think Adam Hewison (Market Club) has been describing what is currently happening.

Crammer did say " Buy and Hold is the new Buy and Die ". I'm watching his BP pick but think  BP is in for some problems.


----------



## PigsDad (Jun 1, 2010)

easyrider said:


> I'm watching his BP pick but think  BP is in for some problems.


Yea, I woudn't touch that with a 10-foot pole right now.  Too many variables.  But in general I am still bullish on the energy sector.

Kurt


----------



## Tia (Jun 2, 2010)

easyrider said:


> ....think  BP is in for some problems.



Of their own creation. Saw they are now going to look into criminal and civil charges.


----------



## caribbeansun (Jun 2, 2010)

Truly shocking! 



easyrider said:


> Jim Crammer has been a bit off lately....imo.


----------



## easyrider (Jun 2, 2010)

Were in with ALK but may be getting out pretty soon. 30k = 627 shares this morning .... 627 shares = $30,622 now ..ALK is still heading up.



Stayed with it until around 1 pm. 627 shares = $31193.00  That is $1193.00 profit.

Cost =  $18.00 commisions + 15% CGT $179.00 

Total earning after taxes and commission = $996.00


----------



## easyrider (Jun 4, 2010)

DJI still heading down. This article in the WSJ is interesting.

I think this plunge is going to ruin many a retirement fund. If you had 100k in a mutual fund and it decreases by 60% like it did in March 2009 you would have 40k left. If that 40k rallys 60% you now have 64k so you would still be down 36k. 

Cash is king. 


http://online.wsj.com/article/SB127517060464598905.html?mod=WSJ_hp_mostpop_read
________________________________________________________________________________________________________________
I was watching V but it just petered out for today. Nothing on my watchlist is moving up right now. Anyone watching a good one ?

nflx is moving again. the wrong way. GLD is up. ro ro its down. 
___________________________________________________________________________________________________________________
Almost noon Pacific Coast Time and it looks like another crappy day in the stock market.


----------



## easyrider (Jun 4, 2010)

Wow.. DJI down 321 today. No end day rally. Tuesday's high was 10200 and Friday's close was 9931. Thats minus 269 points in a four day week. If this average goes through out next week, next Fridays close would be 333 points lower to 9596. 

Looks like aapl is loosing ground. There may be a lawsuit happening soon that might cause aapl to drop next week. This is just a rumor I hope.


----------



## 3kids4me (Jun 4, 2010)

easyrider said:


> Looks like aapl is loosing ground. There may be a lawsuit happening soon that might cause aapl to drop next week. This is just a rumor I hope.



If you want to start an Apple lawsuit rumor, the TUG board probably isn't the best venue...lol!!

(I would have bought more at the end of the day had I been watching the computer, but I have a day job.  It's a long term buy and hold for me.  Look at the five year chart, or even the two year chart.  Even if you had bought it at its high point right before the market plummeted in November of 2008, you would have bought it for $200/share.  It's now hovering around $250.  I think it will make it to $300 in the next year or so, but even if it takes two years, that's 10% per year.)


----------



## "Roger" (Jun 4, 2010)

easyrider said:


> ...
> I think this plunge is going to ruin many a retirement fund. If you had 100k in a mutual fund and it decreases by 60% like it did in March 2009 you would have 40k left. If that 40k rallys 60% you now have 64k so you would still be down 36k...


This is exactly why most financial advisors suggest that you shift the percentage of your retirement fund in equities to lower levels as you get older.  It can take ten to twenty years to recover from a major downturn. 

The Japanese, having lived through the "lost decade" are still waiting to fully recover from their downturn.  Their market prices are about what they were in the mid to late '80's.  The Nasdaq became so super inflated so fast, it will take decades to recover from the 03 crash.  The Dow Jones has often gone static for periods approaching twenty years.

Throw in the fact that if you slowly take money out of your retirement fund (quite normal), you are doing the opposite of dollar cost averaging.  That is, you are removing larger numbers of shares when the price is low and fewer numbers of shares when the price is high.  So, just for the same reasons that financial advisors will often recommend dollar cost averaging as a better strategy than trying to successfully execute market timing, the reverse occurs when you gradually take money out in periodic sums. (Ouch!)


----------



## pwrshift (Jun 4, 2010)

Time to put it all in annuities?  :zzz:


----------



## easyrider (Jun 4, 2010)

This might be the aapl thing that is the cause of speculation. 

http://news.cnet.com/8301-31021_3-20001424-260.html

How does an annunity work ? I thought that older people buy these because they can't get life insurance.


----------



## John Cummings (Jun 4, 2010)

easyrider said:


> How does an annunity work ? I thought that older people buy these because they can't get life insurance.



You must be joking. A fixed annuity basically pays you a fixed monthly income for the rest of your life. The amount you receive is based on age and the size of the annuity. It is the opposite of life insurance in that you pay a lump sum for it and the longer you live, the more you get out of it.


----------



## easyrider (Jun 4, 2010)

John or anyone, can you give an example of how this works ?

Lets say I give 100k to an annuity. How much do I get each month ? What if a person dies within a short time after purchasing the annuity ?


----------



## 3kids4me (Jun 4, 2010)

http://www.sec.gov/answers/annuity.htm


----------



## John Cummings (Jun 4, 2010)

easyrider said:


> John or anyone, can you give an example of how this works ?
> 
> Lets say I give 100k to an annuity. How much do I get each month ? What if a person dies within a short time after purchasing the annuity ?



How much you get depends on your age. The older you are, the more you will receive. It also varies with where you buy the annuity. Generally speaking, if you die the money stops.

There are also variable annuities that are like a mutual fund in that they rise and fall like any investment. They also pay a guaranteed income when you start withdrawing.from it. Some of them do have survivor benefits. I have 2 variable annuities that have been awesome.

Bear in mind that there are many variations of fixed and variable annuities. If you are interested in them, I suggest that you do a search for them and you will find tons of info.

Annuities are typically offered by insurance companies like Prudential but I have also seen fixed ones offered by some non-profit organizations.


----------



## Passepartout (Jun 5, 2010)

easyrider said:


> John or anyone, can you give an example of how this works ?
> 
> Lets say I give 100k to an annuity. How much do I get each month ? What if a person dies within a short time after purchasing the annuity ?



There are lots of different types of annuities, because they are made by and sold by insurance companies. The quality of the annuity is dependent on the quality of the insurance company. 

But as to your 1st 'for instance', I bought 2, $100k (+-) immediate annuities when I retired last year, that pay a skosh over $500/mo each and will pay my estate the amount I put into them when I achieve room temp. I can also cash them in and do whatever I want with the money any time before I check out- say if a better annuity comes out or I have some horrible life shortening illness and want to fulfill a bucket list item or two.

As to your second question, that person is still dead whether they buy an annuity or not.

Jim Ricks


----------



## pwrshift (Jun 5, 2010)

I've found this an interesting site on annuities.  Basically, they are something like a 'defined benefit' pension plan that dies with you, although there are survivor plans, etc. that in most cases lowers the monthly payouts.

http://annuityshopper.com/archives/2010-Jan-Annuity-Shopper.pdf

http://annuityshopper.com/

I didn't see anything listed like Passepartout has, but there are a tremendous amount of variables.  The 'calculator' on this site may be great help.

Brian


----------



## AwayWeGo (Jun 5, 2010)

*Reverse Life Insurance.*




easyrider said:


> How does an annunity work ?


It's gambling. 

When you take out life insurance, you're betting you're going to die & the insurance company bets you're going to live long enough for them to collect big bux via your policy premiums. 

When you buy an annuity, you're betting you're going to live long enough to collect big bux from the insurance company & the insurance company bets you're going to die before the benefits they pay out add up to all that much. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## "Roger" (Jun 5, 2010)

I was under the impression until just this week that all annuities were "defined benefit" annuities.  (You receive a defined monthly payout the rest of your life.  The prior post by Away We Go correctly describes the dynamics of this sort of annuity.)

I learned this week that there are also death benefit annuities (that is what I think Rick has) and tax deferred annuities (which work much like an IRA).  For a description of all three, go to this government sponsored page ( use them because they are not trying to sell you anything):

http://www.sec.gov/investor/pubs/varannty.htm


----------



## Elan (Jun 5, 2010)

Passepartout said:


> There are lots of different types of annuities, because they are made by and sold by insurance companies. The quality of the annuity is dependent on the quality of the insurance company.
> 
> But as to your 1st 'for instance', I bought 2, $100k (+-) immediate annuities when I retired last year, that pay a skosh over $500/mo each and will pay my estate the amount I put into them when I achieve room temp. I can also cash them in and do whatever I want with the money any time before I check out- say if a better annuity comes out or I have some horrible life shortening illness and want to fulfill a bucket list item or two.
> 
> ...



  Don't know much of anything about annuities as I'm not near retirement age, but that sounds like a pretty good deal.  If I read this correctly, you're getting about 6% pre tax with no risk.  What's the downside?


----------



## ricoba (Jun 5, 2010)

Elan said:


> Don't know much of anything about annuities as I'm not near retirement age, but that sounds like a pretty good deal.  If I read this correctly, you're getting about 6% pre tax with no risk.  What's the downside?



Kiplinger's Magazine has a whole section on annuity information that you can snoop around and find out more about them. 

My only caveat about is annuities is that some life insurance people are really no more scrupulous than some timeshare sales reps, so be careful.


----------



## Elan (Jun 5, 2010)

ricoba said:


> Kiplinger's Magazine has a whole section on annuity information that you can snoop around and find out more about them.
> 
> My only caveat about is annuities is that some life insurance people are really no more scrupulous than some timeshare sales reps, so be careful.



  Thanks for the link.  

  I get the basics.  I was more interested in the specifics of Jim's particular annuity -- primarily because 6% is a decent return in today's economy.


----------



## easyrider (Jun 6, 2010)

The insurance company commission on a 100K for an annuity policy looks like 5.5% off he top or $5500.00. That only mater's if you die before the policy has earned anything. 
At $500.00 per month it would take over 199 months to break even. Thats 16.6 years.
If you buy this at 62 versus 65 your chances of earnings look better as you only earn on this if you live the required amount of time. 

Buying this at age 65 makes you 81.6 years old before earning anything.
Buying this at age 62 makes you 78.6 years old before earning anything.

The average male lifespan is around 78. If you do make it to 78 you are expected to live another 8.8 years making you close to 87.

If you buy this at 65 and earn 6k a year for 5 years then you have made 30k in just under 22 years. 

Now you are 87 and expected to live another 4.1 years. You have earned another 24k if you make it for a total earnings of 54k.

After these 4.1 years go by you are now over 91. If you make it this long you are expected to live another 3.56 years. You earned another 21k.

This optimistic plan is really a good way to ensure that if your going to live that long you will have some income. After reading about annuities it seems that it is more of an income insurance plan. People are living longer but I think the odds are most people die before collecting.  

My next door neighbor just turned 102 and he is still puttering around his yard and is still driving. His wife is 72 so that might some thing to do with his life span.

Thanks for the explanations.


----------



## "Roger" (Jun 6, 2010)

easyrider said:


> ...My next door neighbor just turned 102 and he is still puttering around his yard and is still driving. His wife is 72 so that might some thing to do with his life span....


Now wouldn't you have thought that the insurance companies would have taken that into account in their actuary tables.  It just goes to show how even the experts can overlook some of the most obvious variables when they draw their conclusions.


----------



## cotraveller (Jun 6, 2010)

easyrider said:


> After reading about annuities it seems that it is more of an income insurance plan.



I've done some looking into annuities and my opinion is that is a good description of them.  Unlike an IRA or other savings that you may use for retirement, an annuity provides the security that you cannot outlive the income it produces. 

That security comes at a price and you need to consider if the upside of that benefit outweighs the downside.  It is difficult to put a price on the peace of mind offered by the fact that you know you will have a check coming your way every month.

I receive my pension as an annuity (there was no option about that) but I have not purchased any additional annuities.  Only time will tell if that is the right decision.


----------



## Passepartout (Jun 7, 2010)

Elan said:


> Don't know much of anything about annuities as I'm not near retirement age, but that sounds like a pretty good deal.  If I read this correctly, you're getting about 6% pre tax with no risk.  What's the downside?



The only potential downside was that to get this payout I had to accept a 'declining payback' of 1% per year from 10% if I cash it in early. In other words if I'd cashed in the 1st year, I'd get 90% of my money back, if next year 91% etc. That bought extra 'paper value' which grew 12% last year, so I could cash in now, and even with the 'penalty', I get more than my original investment back. You've gotta check the issuer's rating. This one happens to be the 'Rock' I bought a piece of. They have many many plans. For those looking to achieve this kind of stability- and not of retirement age, one can buy at any time, and (when I last looked) the one I bought would continue to grow at a guaranteed 7% until you trigger payouts, then it pays on the amount your annuity has grown to.

As they say, YMMV. Call your independent advisor for details.

By the way, I'm typing this on a beach in Spain. Life is _very_ good!

Jim Ricks


----------



## Elan (Jun 7, 2010)

Passepartout said:


> The only potential downside was that to get this payout I had to accept a 'declining payback' of 1% per year from 10% if I cash it in early. In other words if I'd cashed in the 1st year, I'd get 90% of my money back, if next year 91% etc. That bought extra 'paper value' which grew 12% last year, so I could cash in now, and even with the 'penalty', I get more than my original investment back. You've gotta check the issuer's rating. This one happens to be the 'Rock' I bought a piece of. They have many many plans. For those looking to achieve this kind of stability- and not of retirement age, one can buy at any time, and (when I last looked) the one I bought would continue to grow at a guaranteed 7% until you trigger payouts, then it pays on the amount your annuity has grown to.
> 
> As they say, YMMV. Call your independent advisor for details.
> 
> ...



  Excellent info -- exactly what I was looking for.  Thanks!

  Enjoy the duration of your vacation.  It's raining pretty consistently here back home!


----------



## caribbeansun (Jun 7, 2010)

There are a variety of annuity products available - you can't broad brush this stuff.

In Canada there are RRIF's which are an annuity with the minimum payout strictly determined by the government.  The risk is the same as any other investment that would have otherwise qualified for an RRSP (that's a Canadian 401k).  RRIF's can be done with survivor payouts for spouses at the same or reduced amounts.  You can name a beneficiary of the RRIF who would receive the remaining capital upon your death.

There are life annuities - those are the ones that have been referred to above as gambling.  They are gambling because typically they do not have survivor provisions nor payment of capital upon death.  You pay the insurance company an amount and they agree to pay you a fixed monthly amount (NOTE: some contracts are indexed to inflation and some are not).  The rate of return can be "fudged" because the insurance company is factoring in your mortality rate when they agree to pay you this monthly amount - if they think you will live until 90 and you depart this earth at 85 they "win", if you don't go until 95 you "win".  Because of uncertainty this particular product isn't as popular as it once was.

There are also fixed term annuities ie. 25 years OR to a particular age ie. 90.  The end date is defined, the upfront principal is defined, typically these have survivor provisions so somebody gets paid every month.  The unknown is the rate of return on the capital - this means the monthly payment will be recalculated every year and be dependent upon the anticipated earnings.  These contracts can also be done such that they don't encroach upon the capital (or leave a lesser amount of capital at the end) and the capital is paid out at the end to the beneficiary (or more than 1 as the case may be).  The insurance or investment company makes their money by taking a management fee off the top of the investment returns.

There are many other options, permutations, etc.


----------



## pwrshift (Jun 8, 2010)

It's all so confusing.  The only thing for sure is that the insurance company will be the winner.  

My broker, of course, has another idea.  He says, in Canada, if you had a $2 million *RRSP*, at the end of your 71st year the govt makes you take out 7% ... or $140,000.  But if your portfolio makes $120,000 in dividends, interest and growth (6%) that year, you only deplete your principle by $20,000.  If you earned only 4% you deplete the portfolio by $60,000...but you'd have to live 33 years to exhaust your portfolio and probably provide for your kids when you pass.  With annuities, it's all committed and you can't play the game that way.

On the other hand, another investment year like 2008 and your annuities might permit you to sleep better at night.  I think an annuity is much like a corporate *defined benefit* plan that pays you a guaranteed pension when you retire and can provide survior benefits for your spouse...but even those DB plans run out of steam at some point.  And *defined contribution* plans are just a cop-out for companies that don't want to really provide any pension guarantee for their long term employees.

Brian


----------



## John Cummings (Jun 8, 2010)

pwrshift said:


> It's all so confusing.  The only thing for sure is that the insurance company will be the winner.
> 
> My broker, of course, has another idea.  He says, in Canada, if you had a $2 million *RRSP*, at the end of your 71st year the govt makes you take out 7% ... or $140,000.  But if your portfolio makes $120,000 in dividends, interest and growth (6%) that year, you only deplete your principle by $20,000.  If you earned only 4% you deplete the portfolio by $60,000...but you'd have to live 33 years to exhaust your portfolio and probably provide for your kids when you pass.  With annuities, it's all committed and you can't play the game that way.
> 
> ...



There are variable annuities that do give you capital appreciation as well as the guaranteed income. I have 2 American Skandia accounts with Prudential Insurance. It is rather complicated to explain exactly how it works. Basically there are 2 values. The first is the cash out value which is like any Mutual Fund. The second value is the Protected Withdrawal Value. That amount increases by the greater of 5% guaranteed or the Market, whichever is higher. It increases on a daily basis until you start withdrawing. This amount never goes down. You are guaranteed an income of 5% on the highest amount. There are survivor benefits. If you keep it for 10 years without drawing income from it, you are guaranteed a Protected Withdrawal Value of 200% of your investment.

If you invested $100,000, at the end of the first year, your Protected Withdrawal Value will be a minimum of 5% or the market appreciation if higher. So if the market went up 10%, the Protected Withdrawal Value will be $110,000 and if the market went up less than 5% or went down, the value will be $105,000. As I said, it increases daily. Once you start withdrawing, that is the high water market and the Protected Withdrawal Value will never go below this but the guaranteed 5% appreciation will no longer be in effect and will only appreciate if the market appreciates. but will not fall if the market goes down. Your guaranteed income is 5% of the Protected Withdrawal Value.

Separate from this is the actual value that you can cash out which is like any mutual find. With the current market, that value is less than the Protected Withdrawal Value. Fortunately, they realized the market was crashing in 2008 so they moved out of equities into a fixed rate option and then have gradually moved back to some equities but still is mostly in the fixed rate option.

I am retired so income protection is very important. I currently withdraw income from one of the accounts and don't from the other. The Protected Withdrawal Value is much higher than the market value.

There were no commissions but there is a hefty surrender charge that declines each year to $0.0 after 4 years.

There are many state regulations on annuities.


----------



## caribbeansun (Jun 8, 2010)

Your broker is referring to a RRIF which has mandated withdraw percentages based on your age.

The payment isn't guaranteed, it's changed yearly based on expected and actual returns and the fair market value at the beginning of the year.

Many people will withdraw large amounts from their RRSP's prior to reaching age 72 in order to avoid being force-feed their withdraw amounts and controlling the funds going forward.  Of course you need to do this in a tax efficient manner not just going about it without a plan.




pwrshift said:


> It's all so confusing.  The only thing for sure is that the insurance company will be the winner.
> 
> My broker, of course, has another idea.  He says, in Canada, if you had a $2 million *RRSP*, at the end of your 71st year the govt makes you take out 7% ... or $140,000.  But if your portfolio makes $120,000 in dividends, interest and growth (6%) that year, you only deplete your principle by $20,000.  If you earned only 4% you deplete the portfolio by $60,000...but you'd have to live 33 years to exhaust your portfolio and probably provide for your kids when you pass.  With annuities, it's all committed and you can't play the game that way.
> 
> ...


----------



## MuranoJo (Jun 8, 2010)

And here's what our Broker just sent us regarding a Prudential product.  There's an 8-minute video, but you could cut to the 3-minute mark or so and avoid the lead-in.  I didn't hear anything about having survivor benefits for children, if that's important to you.

He's really encouraging us to add annuities to our portfolio.  
https://secure.prudential.com/rrz


----------



## easyrider (Jun 8, 2010)

I don't like the idea of losing up to 8% of my investment to start an annuity. 

Most people who buy these will not live long enough to see a profit. The insurance company life chart suggests the average American man has a life span of 77 but in reality the average life span is only 72. The odds are in favor of the insurance company on these. Unless there is a survivor benefit I wouldn't buy one.


----------



## pwrshift (Jun 9, 2010)

easyrider said:


> ... Unless there is a survivor benefit I wouldn't buy one.


 
But aren't the defined benefit pension plans (that govt people get and most non-govt people want) a form of annuity which expires with the employee's death and only 'some' have a survivor benefit (usually 50%)?

Brian


----------



## AwayWeGo (Jun 9, 2010)

*I Resemble That Remark.*




pwrshift said:


> But aren't the defined benefit pension plans (that govt people get and most non-govt people want) a form of annuity which expires with the employee's death and only 'some' have a survivor benefit (usually 50%)?


Yeh, once.  But no more. 

A big part of _Civil Service Reform_ back in 1976 or so was replacing the old defined benefit retirement plan with a new retirement system based on a combination of 401k (with matching monthly government contributions) plus Social Security.  The government 401K is called the Thrift Savings Plan. 

The feds must have figured the new system was a better deal _-- for them --_ because there was a big push to get people covered by the old retirement system to switch to the new system.  

People who started under the new system were stuck with the new system.  People who started under the old system could stick with the old system _or_ switch to the new system -- their choice.  

I stuck with the old system.  With such a big push to get us old timers to switch, I figured the old system must be better. 

People saying _No Thanks_ to the new system could still participate in the new Thrift Savings Plan -- minus the matching monthly government contributions.  That's because Uncle Sam was already forking over a monthly contribution for each employee into the old system, while collecting a percentage of each employee paycheck & adding that to the old retirement system.

Survivor benefits under the old system were optional.  Skip survivor benefits & collect maximum straight-retirement benefits.  Or, add survivor benefits & take a reduced straight-retirement monthly benefit.  

The amount of the survivor benefit is also optional -- from about half of the annuitant's monthly benefit down to about 15%.  The larger the survivor benefit, the greater the reduction in the retiree's regular monthly benefits.  

The key thing about survivor benefits is that the survivor must be receiving civil service survivor benefit payments in order to keep eligibility for Federal Employee Health Benefits (e.g., civil service Blue Cross).  

So even if the survivor is filthy rich & won't need monthly survivor benefit checks from Uncle Sam, if the survivor wants federal Blue Cross on top of Medicare, then the original annuitant (the retiree) has to make sure to sign up for at least the minimum survivor benefit option.  

Writing about survivor benefits reminds me of a magazine cartoon showing an old couple seated side by side in front of the TV.  The woman turns to the man & says, "If 1 of us dies 1st, I'm moving to Florida." 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## John Cummings (Jun 9, 2010)

muranojo said:


> And here's what our Broker just sent us regarding a Prudential product.  There's an 8-minute video, but you could cut to the 3-minute mark or so and avoid the lead-in.  I didn't hear anything about having survivor benefits for children, if that's important to you.
> 
> He's really encouraging us to add annuities to our portfolio.
> https://secure.prudential.com/rrz



There are different options you can select.


----------



## John Cummings (Jun 9, 2010)

easyrider said:


> I don't like the idea of losing up to 8% of my investment to start an annuity.
> 
> Most people who buy these will not live long enough to see a profit. The insurance company life chart suggests the average American man has a life span of 77 but in reality the average life span is only 72. The odds are in favor of the insurance company on these. Unless there is a survivor benefit I wouldn't buy one.



The ones that I have, and described, in my previous post allow you to start withdrawing 5% per year whenever you want regardless of age. Of course the longer you wait, the amount you are drawing from will be larger. It does have survivor benefits.


----------



## easyrider (Jun 10, 2010)

Its a morning surge. NC, CAT, HOT, as well as many others are making good gains. Its pretty good so far.

_______________________________________________________________________________________________________
CAT and HOT are showing resistance so time dump it. NC is still way up but might as well get out with a profit. I wonder where things will end up today.


----------



## Dave55123 (Jun 23, 2010)

So, should a person consider annuities when they are in there early 40's with a young family if they had some extra income and no bills?

Just curious what the investors have to say here?

Is it better to invest more in an index fund and/or target fund (have about 10% of income going here already) and 401k is max'd per year? or look at more fixed income tool like annuities?  

Assumption - won't touch the funds for 10 - 15 - 20 years or so.

Thanks for your feedback.


----------



## Tia (Jun 23, 2010)

Someone said to me once that annuities were just high cost mutual funds with an extra wrapper charging a commission paid to whoever sells it to you. You also can't get your $ out if you change your mind without penalty. Vanguard has annuities, I think they are as honest as companies get, with lower costs associated then most.


----------



## ricoba (Jun 23, 2010)

I would look at no-load mutual funds or ETF's (exchange traded funds) before I would consider an annuity at your age.  

As primarily an insurance product annuities usually come with a lot of fees or loads built into them.  I would simply continue to max out your 401K and use either index funds or funds you are comfortable with.  Right now my personal preference is not for index funds, I currently like value funds, asset allocation funds and bond funds with a heavy emphasis on cash, but that's me.  Each investor has to put their own money where they are most comfortable.

As mentioned Vanguard is an excellent company with very low cost funds and investments (it's where we currently invest our 401K).  But there are many other fine management companies that offer very good service at very low or very reasonable price.


----------



## easyrider (Jun 24, 2010)

We had Vanguard mutual funds. I'm still tracking these. The only one of the five funds Vanguard funds that we had that is experiencing a slow gain is VTRIX. This stock peaked at around $47.69 per share in 2007 then crashed and came back to $31.48 in 2009 when we dumped it. Now it is worth $27.77 per share. 

VASVX, VPMAX, VGHAX, VTSMX are all the same story. The only way to have made a profit on these was to hold them for years. The earnings through out the last 10 years were wiped out 4 times by sudden drops caused by one thing or another.

If your planning on geting involved with stocks it might be a good idea to to go to www.investatopia.com and try out the simulator for a year to get the hang of it. 

What a young person should do is buy a house and pay off their mortgage and look into a life insurance policy that pays at least a minimum 4-5 %interest rate.


----------



## pgnewarkboy (Aug 2, 2010)

*What happened to the plunge?*

The plunge didn't last too long.


----------



## Passepartout (Aug 2, 2010)

pgnewarkboy said:


> The plunge didn't last too long.



Kinda interesting... This thread kicked off May 4th. The Wall Street 'conventional wisdom' is and has been 'Sell in May and Go Away'. 

July was the best month across the board in a year and today's (8/2) gains are building on that. The conventional wisdom was 'on the money' again. Looks like some of the sideline sitters are getting back in the game.

'Course this could all reverse tomorrow. Me, I was already defensively diversified. The highs aren't as high as for some folks, but the lows aren't nearly as low either. And that's fine by me.

Jim Ricks


----------



## easyrider (Aug 2, 2010)

When we sold our Vangaurd mutual funds last Nov. we were in the profit zone. Not as much as we would have liked. 

Im still tracking these funds and even though they made gains last week, including 9k+ today they are still off from when we sold them. They might make it back before taking another loss but maybe not. 

The swing trades and long positions are doing allright averaging a little better gains than we would have made if we left them in Vangaurd.

Sometime in late August through mid September we will see what happens.


----------



## bobcat (Aug 2, 2010)

easyrider said:


> When we sold our Vangaurd mutual funds last Nov. we were in the profit zone. Not as much as we would have liked.
> 
> Im still tracking these funds and even though they made gains last week, including 9k+ today they are still off from when we sold them. They might make it back before taking another loss but maybe not.
> 
> ...



I have a saying" Bears make money, Bulls make money and Pigs get killed".


----------



## easyrider (Aug 2, 2010)

Isn't it " Pigs get slaughtered ". by Jim Crammer. Crammer is way off this year. Half the news from "The Street" seems only marginally correct this year.

I consider myself an opportunistic " market maven". Not a bull, bear or pig.


----------



## bobcat (Aug 2, 2010)

easyrider said:


> Isn't it " Pigs get slaughtered ". by Jim Crammer. Crammer is way off this year. Half the news from "The Street" seems only marginally correct this year.
> 
> I consider myself an opportunistic " market maven". Not a bull, bear or pig.



Yes it is. I like mine better. Better image in your mind. Greed will kill you in the market.


----------



## pgnewarkboy (Aug 3, 2010)

bobcat said:


> Yes it is. I like mine better. Better image in your mind. Greed will kill you in the market.



Greed and Jim Cramer will get you killed or slaughtered in the market.  Pick your poison.


----------



## Nickfromct (Aug 3, 2010)

bobcat said:


> Yes it is. I like mine better. Better image in your mind. Greed will kill you in the market.



I think Cramer's been pretty spot on regarding his continued recommendation of high dividend yielding stocks.


----------



## easyrider (Aug 3, 2010)

I watch Crammer for the caller picks. I use his website "The Street" and just like the show, the website has many outside influences from advertisers. The articles seem bullish for the most part.

Most fund managers main goal is to not loose your money and keep you investing, imo. If you loose money it is NEVER the managers fault. Its your own.


----------



## pgnewarkboy (Oct 1, 2010)

*Stock Market Just had best Sept. in 71 years*

I think it pays to re-visit panic city once in awhile to look at reality.  The stock market just had its best Sept. in 71 years.


----------



## easyrider (Oct 1, 2010)

Even the Cardnials win once in a while. 515 point gain in for September in the dji is good news. The gains seem artificially created for the November elections imo.   

Gold has went up over $70.00 per ounce in Sept. and over $125.00 per ounce in the last 60 days.  

Foreclosures are on the rise again. Good for some investors. 

The unemployed are still around 9.5% with many people not counted anymore as they do not qualify for unemployment bennifits anymore. This has created more wellfare recipients.

The upward trend might continue through November then after the elections it will be back to reality.


----------



## beanie (Oct 1, 2010)

I also think things will be different after november but the other way. in fact we just  went under contract on a foreclosed home and will keep our townhouse as an investment . last week we went to look at about 16 - 17 homes that met our wishes ( 3 bedrooms with a pool ) this week half of those homes are under contract .  so things are starting to move a little down here .


----------



## Passepartout (Oct 13, 2010)

*Kind of interesting....*

When this thread was started on May 4th this year, the Dow opened at roughly 11,150 and closed about 10,926. Not all that different than today.  Five months of water-treading for those in index funds. Some winners and some losers for the more selective investors. 

So it goes....

Jim Ricks


----------



## Conan (Oct 13, 2010)

*The Long View*

The long view;


----------



## AwayWeGo (Oct 13, 2010)

*Financial Planning.*




Conan said:


> The Long View


Shux. 

I should have cashed out & put everything into PowerBall tickets. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


----------



## Passepartout (Oct 13, 2010)

AwayWeGo said:


> Shux.
> 
> I should have cashed out & put everything into PowerBall tickets.
> 
> -- Alan Cole, McLean (Fairfax County), Virginia, USA.​



I figured out some time ago that the odds of winning that are about the same whether you play or not.

Jim


----------



## 3kids4me (Nov 1, 2010)

(Originally posted on June 4th)



3kids4me said:


> If you want to start an Apple lawsuit rumor, the TUG board probably isn't the best venue...lol!!
> 
> (I would have bought more at the end of the day had I been watching the computer, but I have a day job.  It's a long term buy and hold for me.  Look at the five year chart, or even the two year chart.  Even if you had bought it at its high point right before the market plummeted in November of 2008, you would have bought it for $200/share.  It's now hovering around $250.  I think it will make it to $300 in the next year or so, but even if it takes two years, that's 10% per year.)



Guess it got there quicker than I thought.  Closed at $303 today.


----------



## easyrider (Nov 1, 2010)

What happens Tuesday will either make things better or worse for investments. We can clearly see on the S&P historical chart that in times of less goverment regulation the S&P did well.


----------



## Passepartout (Nov 16, 2010)

It may be interesting to look back to 11/2/2010 as we go forward. Here's a link to a news article of that day showing Dow closing at close to the years' high so far... http://www.naplesnews.com/news/2010/nov/02/stocks-rise-election-day-dow-near-2010-high/

Probably just a random date, though.

Jim Ricks


----------



## Pens_Fan (Dec 27, 2010)

ricoba said:


> Here is a good interview (Yahoo Finance) with Richard Suttmeier, a long time technical analyst discussing that the Dow will see 8,500 before it sees 11,500.



Oops.  I guess Rich was wrong.

http://money.cnn.com/data/dow30/


----------



## Big Matt (Dec 27, 2010)

I think that there is a better chance to see it hit 20,000 before 8500 at this point.


----------



## John Cummings (Dec 27, 2010)

It will more than likely get to 12,500 before a major correction.


----------



## pgnewarkboy (Dec 27, 2010)

John Cummings said:


> It will more than likely get to 12,500 before a major correction.



Right now the market is under bought and under priced.  Many people have stayed away that will soon jump in.  I don't know what the market will go to but I agree that 8500 is out of the question barring a major calamity like a nuclear war.


----------



## John Cummings (Dec 27, 2010)

pgnewarkboy said:


> Right now the market is under bought and under priced.  Many people have stayed away that will soon jump in.  I don't know what the market will go to but I agree that 8500 is out of the question barring a major calamity like a nuclear war.



There are a lot of analysts that think the market is over bought right now. In any event, nest year should be interesting.


----------



## Elan (Dec 27, 2010)

Although the stock market is ahead of the economy right now, there is a ton of money that's been sitting on the sidelines for the better part of 2 years.  Since the economy is apparently at the early stages of a recovery, many investors don't want to miss out on the possible opportunity to recoup the losses incurred from late 2007 on.  

  I believe that there will be both significant rallies and significant pullbacks in 2011.  I also believe there will be a disproportionate amount of M&A activity, so if one's inclined to put fresh money into the market, that might be a good place to start their research.


----------



## easyrider (Dec 27, 2010)

I can see more reasons how stocks could fail than maybe gain in 2011.


----------



## John Cummings (Dec 28, 2010)

easyrider said:


> I can see more reasons how stocks could fail than maybe gain in 2011.



I agree that there are a lot of reasons for the market to fall. However at the present time, the market is disjointed from the economy. One big cloud is housing which isn't getting any better with prices still going down.


----------



## pgnewarkboy (Dec 28, 2010)

John Cummings said:


> I agree that there are a lot of reasons for the market to fall. However at the present time, the market is disjointed from the economy. One big cloud is housing which isn't getting any better with prices still going down.



The market is not disjointed from corporate profits which are at record highs.  Stock valuations are on the low side when compared to corporate profits.


----------



## Talent312 (Dec 28, 2010)

"Reasons" for believing that the market will fail, correct, or whatever, may be _reasonable_, but after observing the market for about 20 years, I fail to see that "reason" has much to do with it.

All I can say is that, my portfolio is up a net of 18% year-to-date (with a mix of ~40% fixed income, ~60% equities).  While tempted, I'm glad I didn't pull a Chicken-Little whenever we hit a rough patch.


----------



## pgnewarkboy (Dec 29, 2010)

I read an article yesterday on CNN that said the U.S.A corporations hired 1.4 million people outside of the U.S. last year and less than one million within our borders.  One example of a reason to do this was Caterpillar corporation which finds higher demand for its products outside of the U.S and is therefore building plants in other countries.  Another cited reason for this trend is that U.S business finds a more educated workforce in other nations.

The world has changed greatly and will continue to do so.  Much of what is happening is beyond the ability and understanding of any one group be it government or the private sector to influence what is happening.  

Events and changes happen piecemeal and almost imperceptibly at first before they look like a tsunami.  Caterpillar and Widget Corp act independently of each other but are heading in the same direction.  Soon it becomes one thousand companies doing the same thing.

I don't think there is an actual "answer" to all the issues arising out of what is now clearly taking the shape of a tsunami of foreign hiring and investment by U.S business.

As an investor, not an employee, I see money being made and the opportunity for even greater money being made by the companies I invest in.  I can invest on U.S or foreign exchanges.  

The so called "disconnect" from the American Economy is factual and will likely continue.  That doesn't mean that an investor should stay away from investing in corporate equities.  They are making money.

What has become the "plight" of the american labor force is another matter.  It is my perception that hiring will return but wages will be lower.


----------



## easyrider (Dec 29, 2010)

AARP reported that during the 2000 - now time frame the average return on market investments was 4% or less.

18% is a really decent return. Your doing something right.

We would have earned around 9% on our Vanguard investments had we left it in. We ended up buying more real estate. We have made more on real estate investments than market investments in the last 30 years so I hope it continues that way. I think that inflation will be a factor driving real estate prices up in our market.

Next year with energy prices expected to increase and a drought in the Midwest caused by a double la Nina event there should be cost increases in food and gas which will help real estate investments through inflation.


----------



## 3kids4me (Oct 19, 2011)

3kids4me said:


> If you want to start an Apple lawsuit rumor, the TUG board probably isn't the best venue...lol!!
> 
> (I would have bought more at the end of the day had I been watching the computer, but I have a day job.  It's a long term buy and hold for me.  Look at the five year chart, or even the two year chart.  Even if you had bought it at its high point right before the market plummeted in November of 2008, you would have bought it for $200/share.  It's now hovering around $250.  I think it will make it to $300 in the next year or so, but even if it takes two years, that's 10% per year.)




I just did a search for the last time I talked about buying Apple.  Wow, was I wrong.  It's over $400 now.  There's a dip today because of their recent iPhone earnings announcement...a good day to buy more, IMO.

{Mods, you may want to mark the title of this thread as starting in 2010 so as not to panic anyone}


----------



## Kal (Oct 19, 2011)

APPL is a spendy stock so think about the capital it would take to make a meaningful return.  Do you want to buy 10, 50 or 100 shares? That would be $4000, $20000 or $40000.  If you buy 10 shares and the stock gained 6% you would get $240 on a $4000 investment, $1200 on a $20000 investment.

However, 4 months ago the price was $315.  Then again, 3 months ago it was $400.  2 months ago it was $373.

Be careful!


----------



## 3kids4me (Oct 19, 2011)

Kal said:


> APPL is a spendy stock so think about the capital it would take to make a meaningful return.  Do you want to buy 10, 50 or 100 shares? That would be $4000, $20000 or $40000.  If you buy 10 shares and the stock gained 6% you would get $240 on a $4000 investment, $1200 on a $20000 investment.
> 
> However, 4 months ago the price was $315.  Then again, 3 months ago it was $400.  2 months ago it was $373.
> 
> Be careful!




Well if *any* stock gained 6% it would be $240 on a $4,000 investment...that is no different whether it's Apple or not...so I'm not exactly sure what you are saying?  Also, I'm not talking about day trading here, or anything short term like two, three or four months. (Apple is down about 1.5% this month including today's "down 4%" fiasco.) The stock has grown 31 percent over the last year, and 441 percent over the last five years.  Obviously past performance is not an indicator of future results.

I'd love to hear other stock recommendations.


----------



## Kal (Oct 19, 2011)

If you're thinking about very high priced stocks, take a look at Intuitive Surgical (ISRG). They are in the medical technology field. As the population ages there will be an increasing demand so maybe it's worth a look. BTW, today they are up 39 points.

BTW, I own both AAPL and ISRG.


----------



## am1 (Oct 19, 2011)

Appl was $373 2 weeks ago.  I would have liked to get in then.    

Q3 was down because of the new iphone coming out in early Q4.  That is doing big numbers.  

Appl is a great stock until its decline like what is happening to Rimm or has happen to a few other tech stocks.  There seems to be no bottom.


----------



## easyrider (Oct 19, 2011)

I was about to re-buy netflix at 130 but decided to wait. Im glad I waited but netflix is on my watch list. 

Sirius - siri, is also on my watch list. It bottomed out for about 10 cents a share in 09 and closed at 1.72. This was a 61.00 a share stock in better times.

Starwood , hot, is also on my watch list.


----------



## tompalm (Oct 20, 2011)

easyrider said:


> I was about to re-buy netflix at 130 but decided to wait. Im glad I waited but netflix is on my watch list.
> 
> Sirius - siri, is also on my watch list. It bottomed out for about 10 cents a share in 09 and closed at 1.72. This was a 61.00 a share stock in better times.
> 
> Starwood , hot, is also on my watch list.



Netflix is an unknown company these days and going through too much change.  Buying that is like playing craps in Vegas.  Also, there are too many other companies out there right now with new video service and the industry has changed. 

The stock market has changed during the last 10 years.  I started investing in 1980 and spent 20 years of dollar cost average, or buy and hold and that worked great.  However, since 1999, this has become a market for stock traders.  Anyone that bought 10 years ago was lucky to make money if they held until today.  The index is right back in the same spot it was 10 years ago.  The technical indicators are the only way to go in this market.  I just can't afford to loose my savings account and being very careful.   Take a look at Investview for technical training or maybe buy a book.  It seems to work 80 % of the time.


----------



## geekette (Oct 20, 2011)

Call me lucky - I am a buy and hold investor, but dividend payers only.  Were I to sell today I would be greatly ahead on some stocks and only a bit ahead on others counting reinvested divs in the basis.  But ahead, regardless.   If we're talkign about ahead or behind based on what came out of my pocket, I am waaaay ahead.  the divs bought new divs, not me.  

Say what you will about the last decade, but we didn't ALL lose.   

and, funny enuf, div stocks are suddenly back in vogue.  For me, they never went out.  None of my holdings quit paying divs in the past few years.  Sure, I trend towards large companies, but I do have mid and small caps in there.  Just harder to find div payers in the small guys.


----------



## geekette (Oct 20, 2011)

tompalm said:


> Netflix is an unknown company these days and going through too much change.  Buying that is like playing craps in Vegas.  Also, there are too many other companies out there right now with new video service and the industry has changed.
> 
> The stock market has changed during the last 10 years.  I started investing in 1980 and spent 20 years of dollar cost average, or buy and hold and that worked great.  However, since 1999, this has become a market for stock traders.  Anyone that bought 10 years ago was lucky to make money if they held until today.  The index is right back in the same spot it was 10 years ago.  The technical indicators are the only way to go in this market.  I just can't afford to loose my savings account and being very careful.   Take a look at Investview for technical training or maybe buy a book.  It seems to work 80 % of the time.



agree, would not touch Netflix at this point.  I don't like it's long term prospects for survivability.


----------



## tompalm (Oct 20, 2011)

geekette said:


> Call me lucky - I am a buy and hold investor, but dividend payers only.  Were I to sell today I would be greatly ahead on some stocks and only a bit ahead on others counting reinvested divs in the basis.  But ahead, regardless.   If we're talkign about ahead or behind based on what came out of my pocket, I am waaaay ahead.  the divs bought new divs, not me.
> 
> Say what you will about the last decade, but we didn't ALL lose.



You are right that there have been a lot of buying opportunities during the last decade and holding a stock bought during the down years, or any year that the index was about the same level as today would have worked great.  Also, dollar cost average would have been excellent, if someone started 10 years ago.  

My view was putting a lump sum into the market (S & P 500 index) 10 years ago would not have gained much.  Buying right now might look great when the DOW gets back up to 14,000 and I think that it will someday.  Or buying one stock that is a wild card and hoping to hit a home run on it is risky.  Last year I invested everything I had during September and sold it in May and had about a 18% return.  I am hoping for positive results this year, but right now it doesn't look safe and will wait a little longer before jumping in.  I would be happy to make half of that each year if possible.


----------



## pgnewarkboy (Oct 21, 2011)

The Market is falling!!! The Market is falling!!!  GET out of it!  

The Market is rising!!! The Market is Rising!!! GET in right now!


----------



## geekette (Oct 21, 2011)

sadly, too many investors buy too high (figured out the stock was Going Places too late) and then sell low (so they don't "lose more money").  What a shame.  

A friend of mine told me she "lost" about $100k in the dot com bust.  which means that she either bought companies that went defunct and lost those entire investments or sold unwisely.  either way, it scared her out of the market for good.  too bad, she could have instead learned from her mistakes.

market timing is not a game I'll play.  Slow and steady should win the race for me.

and, yes, dollar cost averaging.  Will give me the ability to choose gain or loss when/if the time comes to sell any positions since I'll have lots at a wide variety of prices.  I feel like I have the best of both worlds:  pick good companies, then Set It and Forget It, buying a small portion monthly.  When I'm into retirement, can turn on the div faucet to collect divs or turn it off to let em continue to ride, and then still have the stock.  

I am so very ok with people thinking I'm nuts to buy and hold or only buying div-payers.  I simply do not need to be fashionable, I just need to guard against Old and Poor.  DRIPS are the way for this small timer to have a shot at accumulating wealth in stocks.

Not as "fun" as buying and selling, but it's more fun to not have trade fees/commissions eating profits from my tiny account.


----------



## easyrider (Oct 21, 2011)

I still track the 7 mutual funds that we had. These funds made pretty good money until 1999. From 99 to 2009 they were up and down but did sell at a small profit. 
Today these funds are showing a 37K loss, this morning, even though the DOW is up over 200 points.


----------



## geekette (Oct 21, 2011)

that's not a big surprise to me - no matter what the market does, how the fund performs, the big fat fees are still coming right off the top.  

partially why I don't invest in mutual funds.  etf's are slightly better, expense-wise, but I'll only hold those in my tax shelters.  I like to think that my Roth is my personal mutual fund, with about 30 holdings.  I have 4 etfs there - TIPs, treasuries of mixed duration and a bond fund.


----------



## easyrider (Oct 22, 2011)

*FDIC now gaurantees 75 trillion of BOA derivative*

JP Morgan gets some too -- Greece means were fleeced again  

http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html

Sooner or later this is going to be baaaaadddd for the stock market.


----------



## pgnewarkboy (Oct 22, 2011)

easyrider said:


> JP Morgan gets some too -- Greece means were fleeced again
> 
> http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html
> 
> Sooner or later this is going to be baaaaadddd for the stock market.



The source is supposed to be Bloomberg news.   I checked bloomberg and can't find the story.   Do you have a news source for this story?


----------



## pgnewarkboy (Oct 22, 2011)

pgnewarkboy said:


> The source is supposed to be Bloomberg news.   I checked bloomberg and can't find the story.   Do you have a news source for this story?[/QUOTE
> 
> I found the source for the story.   The daily bail recap of the story is hyper a expected and mixes its own "facts" in that are not part of the source story.   Apparently there is a dispute about the propriety of what is being done. Even so,  I don't like what BOA is doing.


----------



## easyrider (Oct 22, 2011)

http://occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq111.pdf

The tables on page 24 show the totals of the derivatives that need to be paid for. So here we go again, many will wake up broke by the stroke of a  pen. Because of recent banking regulations the banks and the occ and oct don't need to involve the public on the deals they will make.

notoinal value = pennies on the dollar, imo
http://www.investorwords.com/5930/notional_value.html


----------



## Tia (Oct 22, 2011)

easyrider said:


> http://occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq111.pdf
> 
> The tables on page 24 show the totals of the derivatives that need to be paid for. So here we go again, many will wake up broke by the stroke of a  pen. Because of recent banking regulations the banks and the occ and oct don't need to involve the public on the deals they will make.
> 
> ...



Not sounding too good   but no numbers person here. Seems there is more and more slight of hand complication type activity...


----------



## easyrider (Oct 22, 2011)

pgnewarkboy said:


> pgnewarkboy said:
> 
> 
> > The source is supposed to be Bloomberg news.   I checked bloomberg and can't find the story.   Do you have a news source for this story?[/QUOTE
> ...


----------



## easyrider (Oct 25, 2011)

*The best and worst S&P Investments from 9/11/01 to 9/7/11*

http://www.bespokeinvest.com/thinkbig/2011/9/7/market-performance-since-911.html

I could hardly believe that Hansen Natural was number one. I thought they made soda pop but it looks like they made money too.


----------



## Talent312 (Oct 29, 2011)

"All I can say is that, my portfolio is up a net of 18% [2010]."


easyrider said:


> 18% is a really decent return. You're doing something right.



I'm bumping this thread to report that this year, I have a different story...
As we know, past performance is not an indication of future perfomance.

I'm down a net 3% YTD. _The market Gods giveth and they taketh away._


----------



## tlwmkw (Oct 30, 2011)

We're actually up at the moment- this is such a crazy market it seems to change from day to day but overall we are doing better now.  Go figure.

tlwmkw


----------



## easyrider (Oct 30, 2011)

We kind of got out of stocks for the most part and bought more real estate. I'm not sure what math formula to use to determind the return on the investment.
The partial article below is from Daily Wealth.

___________________________________________________________________________________________________

If your down payment for the house was $20,000 (20% of $90,000 is $18,000, plus about $2,000 to spruce the house up), your rate of return on that $20,000 is an amazing 54%.

But there is another major benefit to owning a rental property. With all the money the Federal Reserve has printed, the decline of the dollar and high inflation are all but inevitable in the years ahead. So the $600 a month you will be paying for interest and expenses toward your home will become easier to pay because your income, through inflation, will almost certainly go up.

In other words, the weakening of the dollar will make your debt less expensive in real terms.

And if that's not incentive enough, consider this: as inflation increases, so will the market value of your home. It is quite possible that you could see your $90,000 house double in value in 10 years. And even if that doesn't happen, it's almost certain to double, triple, or quadruple by the time you pay off your mortgage. That translates into an extra $180,000 to $360,000 you can put toward retirement.

Look for the kinds of houses I'm buying: single-family, three-bedroom, two-bath homes under $100,000. You will find plenty of them, but they tend to go quickly. (Peter and I are not the only two guys who understand the values.)


----------



## Talent312 (Oct 30, 2011)

easyrider said:


> The partial article below is from Daily Wealth....
> ...
> As inflation increases, so will the market value of your home. It is quite possible that you could see your $90,000 house double in value in 10 years....



Except that the value of R/E here has dropped in the two last years running and there are a lot of folk who are underwater. There was a tour one could take of foreclosure neighborhoods in Orlando (not sure if it still operates). If somone's planning to retire in L-T 5 years (like me), they may not see any return.

"'In this world nothing can be said to be certain, except death and taxes." -- _Benjamin Franklin_

However, hold an individual bond until maturity and the face value will be redeemed. We're in the process of buying a few bonds of varying maturities (a ladder). They may not be sexy, but with a S-T time horizon, I like knowing that l'll still own something of value when I'm done..


----------



## easyrider (Oct 31, 2011)

In some real estate markets it would be pure speculation to buy rental homes but rental real estate is a good investment in any area that you can get in cheap and collect rent. imo

Anything tied to the USD is going to take a big hit for many reasons. FDIC may have problems covering all of its obligations. Many countries are making deals that do not include the USD. Many countries do not want our USD, not even Mexico. 

If the Fed is having fianacial problems how can they help the states ?

The unemployment rate is figured by counting people collecting unemployment checks which is said to be over 9% but if you look at how many people are now on food stamps the unemployed might close to 15%. 

We are probably going to wake up one morning and find that the USD is devalued. 
So, gold, silver and real estate are good investments in my book.


----------

