[2020] A little stock market sense

[Ralph Sir Edward]

Germany's problem was a war debt owed internally. The UK very nearly ran into a similar situation with its Napoleanic War debt when the Bank of England ran out of gold to back its currency, and would have had a real mess if the Rothschilds had not ridden to their rescue.

You overlook the point that gold, conceptually, is an external currency. In both those situations, currency was supposed to be convertible to gold. There was not enough gold to back up the currency in circulation, which caused the circulating currency to be "discounted" to gold.

 

[Carolinian]

that's right, being the world's reserve currency has its perks. a run on US debt is not impossible but it's a lot harder than if you are a defeated WWI European country with onerous reparations owed in foreign currency.

The number of dollars held as reserves by other central banks has been falling for several years. On the other hand, central banks are buying gold at record levels for the last few years.

THere is another problem with being a currency held widely around the world. If foreign holders start dumping dollars, it is easy to start a run on the dollar. That is why foreign central banks who are dumping dollars do it in small enough batches not to start a run. They also do it in ways that it is not apparent like the Chinese dumping dollars through their shadow banks instead of through their official central bank.

Currencies in private hands can impact currency values. In the runup to the euro many experts were scratching their heads about why the Deutschmark was declining in value. This was moving the opposition direction than the fundaments indicated. Finally The Economist magazine identified what was causing this under the radar. Deutschmarks were the second most favorite hard currency after the daollr being held outside the banking system. Holders of those DM's were often in countries outside the EU and when the euro came in would not be able to convert their marks. Everyone with non-banked marks from households with mattress money to criminal gangs with stashes of cash in marks rushed ton convert them to dollars. While this was not enough for anything close to triggering a run on the DM that would casue a hyperinflation, it did demonstrably reduce the value of the DM on the market. There are a whole lot more dollars being held around the world than there were DM's in non-bank stashes. If there is a widespread movement to excchange those dollars for any other currency, whether a fiat currency or a monetary metal, it would be felt in the dollar's value. would it be enought to trigger hyperinflation? I hope we never have to find out. Those holdings of dollars abroad are both banked and unbanked. In the situation with the DM, it was only the unbanked currency that created the problem as the banked currency could seamlessly transition to euros, unlike the unbanked currency. There are quite a few countries where local banks will set up acocunts or even CD's in dollars. In the two European counties I have maintained personal acounts, one could maintain accounts in dollars. In one bank, they would set up accounts in local currency, dollars, or euors and in the other it was local currency, dollars, euros, and Swiss francs.

 

[letsgobobby]

The number of dollars held as reserves by other central banks has been falling for several years. On the other hand, central banks are buying gold at record levels for the last few years.

THere is another problem with being a currency held widely around the world. If foreign holders start dumping dollars, it is easy to start a run on the dollar. That is why foreign central banks who are dumping dollars do it in small enough batches not to start a run. They also do it in ways that it is not apparent like the Chinese dumping dollars through their shadow banks instead of through their official central bank.

Currencies in private hands can impact currency values. In the runup to the euro many experts were scratching their heads about why the Deutschmark was declining in value. This was moving the opposition direction than the fundaments indicated. Finally The Economist magazine identified what was causing this under the radar. Deutschmarks were the second most favorite hard currency after the daollr being held outside the banking system. Holders of those DM's were often in countries outside the EU and when the euro came in would not be able to convert their marks. Everyone with non-banked marks from households with mattress money to criminal gangs with stashes of cash in marks rushed ton convert them to dollars. While this was not enough for anything close to triggering a run on the DM that would casue a hyperinflation, it did demonstrably reduce the value of the DM on the market. There are a whole lot more dollars being held around the world than there were DM's in non-bank stashes. If there is a widespread movement to excchange those dollars for any other currency, whether a fiat currency or a monetary metal, it would be felt in the dollar's value. would it be enought to trigger hyperinflation? I hope we never have to find out. Those holdings of dollars abroad are both banked and unbanked. In the situation with the DM, it was only the unbanked currency that created the problem as the banked currency could seamlessly transition to euros, unlike the unbanked currency. There are quite a few countries where local banks will set up acocunts or even CD's in dollars. In the two European counties I have maintained personal acounts, one could maintain accounts in dollars. In one bank, they would set up accounts in local currency, dollars, or euors and in the other it was local currency, dollars, euros, and Swiss francs.

sorry this is all part of goldbug fantasy land, the von Mises Institute school of thought etc. A run on the dollar is something that would take decades even generations to unfold. it isn't impossible, but foreign countries holding marginally fewer dollars isn't proof it's happening especially when the dollar as measured by the USD index is hovering near 25 year highs.

 

[RENTER]

Why is necessary to have a winner and a loser?
Such a negative world view!

Takes the gambling out of the market by hedging your risk. Sell the winner buy the loser. With fraction trading and commission free trades it is much easier to do today. It is call catch a falling knife. Keep selling the winner and buy the loser until it turns around and the loser becomes the winner and the winner becomes the loser.

Also as you play catch a falling knife, if the loser pays dividends, you are buying more shares which will increase your dividends.

 

[letsgobobby]

Takes the gambling out of the market by hedging your risk. Sell the winner buy the loser. With fraction trading and commission free trades it is much easier to do today. It is call catch a falling knife. Keep selling the winner and buy the loser until it turns around and the loser becomes the winner and the winner becomes the loser.

Also as you play catch a falling knife, if the loser pays dividends, you are buying more shares which will increase your dividends.

you know most stocks over time are losers and the majority of index gains come from a relatively small number of stocks which go up 100 or 1000 fold... so your "method" manages to get exactly those two things wrong...

 

[rapmarks]

Takes the gambling out of the market by hedging your risk. Sell the winner buy the loser. With fraction trading and commission free trades it is much easier to do today. It is call catch a falling knife. Keep selling the winner and buy the loser until it turns around and the loser becomes the winner and the winner becomes the loser.

Also as you play catch a falling knife, if the loser pays dividends, you are buying more shares which will increase your dividends.

I mean you the winner and the rest of us losers. That’s how you address the rest of us

 

[Carolinian]

sorry this is all part of goldbug fantasy land, the von Mises Institute school of thought etc. A run on the dollar is something that would take decades even generations to unfold. it isn't impossible, but foreign countries holding marginally fewer dollars isn't proof it's happening especially when the dollar as measured by the USD index is hovering near 25 year highs.

I would remind you that I pointed out that central banks are moving slowly and carefully to reduce their dollar holdings because a run on the dollar is not in their interest. An exception might be China if they decided to use it for assymetric warfare, but they would suffer a lot of economic damage, too. The biggest risk of a run on the dollar lies in the billions of dollars out there in private hands, both banked and unbanked. In many countries, bank acounts, CDs, loans, and other products can often be held in a variety of currencies and the dollar is usually one. Local people often held foreign currency accounts, It was not just expats. Even though the local currencies have been stable for a while, the memories of rapid declines are still fresh enough that most local people prefer to keep their savings in hard currencies, the dollar, euro, or Swiss franc., which is why local banks have accounts and CD's in other currencies.

The dollar's value held steady from the 1790s to 1913 and has been gradually declining since. Today's dollar has the purchasing power of aout 4 cents in 1913 money. In my lifetime, it has dropped quite a bit. Today's dollar is worth about what ten cents was when I was in high school. As out national debt mushrooms, it is not going to get any better. If we can knock down the national debt, our inflation problems can be whittled down, but that is going to be tough to accomplish.

The loss of value varies among fiat currencies, some better than the dollar and some worse. The currencies that merged into the euro are now hard to compare, but using two that did not go into the euro illustrates the point. When I was in high school, the British pound was $2.80 and the Swiss franc was 23 cents. Now the pound and the Swiss franc are worth a little more than a dollar. The Swiss franc held its value much better than the dollar and the British pound much worse.

 

[letsgobobby]

I would remind you that I pointed out that central banks are moving slowly and carefully to reduce their dollar holdings because a run on the dollar is not in their interest. An exception might be China if they decided to use it for assymetric warfare, but they would suffer a lot of economic damage, too. The biggest risk of a run on the dollar lies in the billions of dollars out there in private hands, both banked and unbanked. In many countries, bank acounts, CDs, loans, and other products can often be held in a variety of currencies and the dollar is usually one. Local people often held foreign currency accounts, It was not just expats. Even though the local currencies have been stable for a while, the memories of rapid declines are still fresh enough that most local people prefer to keep their savings in hard currencies, the dollar, euro, or Swiss franc., which is why local banks have accounts and CD's in other currencies.

The dollar's value held steady from the 1790s to 1913 and has been gradually declining since. Today's dollar has the purchasing power of aout 4 cents in 1913 money. In my lifetime, it has dropped quite a bit. Today's dollar is worth about what ten cents was when I was in high school. As out national debt mushrooms, it is not going to get any better. If we can knock down the national debt, our inflation problems can be whittled down, but that is going to be tough to accomplish.

The loss of value varies among fiat currencies, some better than the dollar and some worse. The currencies that merged into the euro are now hard to compare, but using two that did not go into the euro illustrates the point. When I was in high school, the British pound was $2.80 and the Swiss franc was 23 cents. Now the pound and the Swiss franc are worth a little more than a dollar. The Swiss franc held its value much better than the dollar and the British pound much worse.

these are all arguments for owning diversified portfolios of profit-making companies - not gold.

 

[RENTER]

you know most stocks over time are losers and the majority of index gains come from a relatively small number of stocks which go up 100 or 1000 fold... so your "method" manages to get exactly those two things wrong..

you know most stocks over time are losers and the majority of index gains come from a relatively small number of stocks which go up 100 or 1000 fold... so your "method" manages to get exactly those two things wrong...

you can't be more wrong but enjoy your laugh

 

[RENTER]

I mean you the winner and the rest of us losers. That’s how you address the rest of us

Where the hell did you get that from? But don't bother. I don't want to waste any more of my time. Good luck with your positive view of the world.

 

[RENTER]

you know most stocks over time are losers and the majority of index gains come from a relatively small number of stocks which go up 100 or 1000 fold... so your "method" manages to get exactly those two things wrong...

I assume your talking about the Kiplinger's article about the Bessembinder study. Sure if you include small stocks which I do not. Also if you read the bottom line it says to be a psychic or own hundreds of stocks if you want to make money.

Owning hundreds of stocks is what I do. But not in an index as the study recommends. Because of fractional trading and commission free trades, I own them individually to compliment my individual sector funds.

So again enjoy your laugh while I keep marching on in a up or down market. And people wonder why a part of me wishes for a 1987 stock market crash. It did not hurt the little guy because it did not cause a recession. It just hurt the elite corporate snobs who mocked people before the crash because they thought they were smarter than others and were not and lost their jobs.

Also with my plan, I will benefit from a 1987 stock market crash. I just wish I had today's products back then. I took a minor loss back then because I do the opposite of what most do.

I learned from Joe Kennedy. People who thought they were experts did not even know the basic rules, so I took money off the table like he did and made it safe before the crash.

 

[Ralph Sir Edward]

these are all arguments for owning diversified portfolios of profit-making companies - not gold.

Probably, but not certainly. You see, you are measuring with a shrinking yardstick. If you look at inflation inversely, it is the value of the dollar shrinking versus a basket of goods and services. So you might be making a "profit" in terms of dollars, but not making a profit in terms of cost of goods and services. This occurred in the late 1970's when solid companies like Coca Cola and Hershey's chocolate raised their dividends, because their "profits were increasing, but those dividends were actually shrinking in terms of goods and services they could purchase. The stocks didn't go up much in "price", but even that was actually shrinking in real terms.

 

[Brett]

I assume your talking about the Kiplinger's article about the Bessembinder study. Sure if you include small stocks which I do not. Also if you read the bottom line it says to be a psychic or own hundreds of stocks if you want to make money.

Owning hundreds of stocks is what I do. But not in an index as the study recommends. Because of fractional trading and commission free trades, I own them individually to compliment my individual sector funds.

So again enjoy your laugh while I keep marching on in a up or down market. And people wonder why a part of me wishes for a 1987 stock market crash. It did not hurt the little guy because it did not cause a recession. It just hurt the elite corporate snobs who mocked people before the crash because they thought they were smarter than others and were not and lost their jobs.

Also with my plan, I will benefit from a 1987 stock market crash. I just wish I had today's products back then. I took a minor loss back then because I do the opposite of what most do.

I learned from Joe Kennedy. People who thought they were experts did not even know the basic rules, so I took money off the table like he did and made it safe before the crash.

I remember Joe K. !
But I learned from J Bogle, Warren and Burt M.
.

 

[RENTER]

I remember Joe K. !
But I learned from J Bogle, Warren and Burt M.
.
View attachment 107401
View attachment 107402

So did I. But commission free trades and fractional shares have changed the rules and made it easier to invest and to play CATCH A FALLING KNIFE which they always told you not to. Makes it easier to become your own index rather than invest in an index.

 

[TolmiePeak]

What is a bigger waste of time? Reading through all of his useless swill in this thread or attending an owner's update?

 

[VacationForever]

What is a bigger waste of time? Reading through all of his useless swill in this thread or attending an owner's update?

At least you get gifts for attending owner's update. You only get repeated gibberish here.

 

[PigsDad]

At least you get gifts for attending owner's update. You only get repeated gibberish here.

Plus you get accused of being a snob and not even having the intellect of an 8th grader by one of the more childish, prolific posters. What more do you want?

Kurt

 

[rapmarks]

Plus you get accused of being a snob and not even having the intellect of an 8th grader by one of the more childish, prolific posters. What more do you want?

Kurt

I got slammed for having a positive world view!
Plus I don’t have the intellect of an eighth grader either, even after thirty years of teaching high school. So I really know how bad that is.

 

[RENTER]

I got slammed for having a positive world view!
Plus I don’t have the intellect of an eighth grader either, even after thirty years of teaching high school. So I really know how bad that is.

Your a teacher? I feel sorry for your students. I hope you don't teach them how to invest.

 

[RENTER]

Some more gibberish which I am sure will set off the snobs who think they are smarter then everyone else but can't understand something so simple that 8th graders can.

I would not take investment advice from most teachers. They are not well informed about investing. For years they were taken advantage off with their retirement accounts. There 403B or 457 plan was invested in crappy plans that were expensive.

Their unions sold them out. For years i warned them they were costly, and their plans were breaking the basic rules off investing. Like mixing insurance and investing and putting tax exempt bonds into a retirement plan. But like here I was considered a joke and ignored.

If you go back to around 2006, you will see the NY Teachers union was caught taking bribes putting them in these crappy accounts. There have been other lawsuits over the years by teachers throughout the country over how they were taken advantage off.

If they were investment smart as they claim to be, they would have recognized it and organized other teachers to force their unions to make changes. But they are not and did not.

I may be investment smart which some doubt but I am not tech smart and do not know how to share. When I post pictures it says the file is too big. So check out Forbes on June 29th, 2021, where it talks about how a forensic audit found the Ohio teachers were taking advantage off.

The July 28, 2020 issue of Education Next where the Florida teachers were taken advantage off.

A paper put out on Feb 19th, 2009 by Vanderbilt University titled Teacher Retirement Ponzi Schemes

Just yesterday March 9, 2025, a National Law Review article the SEC fails retirement plans for educators.

I can go on and on but I tired of talking to the wall again.

But the teacher who mocks me should not worry. His positive view of the world should overcome all negatives of the world.

Signing off for the night. Have a good laugh. Futures are down now. If the losses continue, I will be back tomorrow with more gibberish. My winners for the day.

 

[TolmiePeak]

Plus you get accused of being a snob and not even having the intellect of an 8th grader by one of the more childish, prolific posters. What more do you want?

Kurt

Yes. Just as entertaining as getting accused of taking advantage of Marriott when I buy resale instead of directly from them.

 

[rapmarks]

Your a teacher? I feel sorry for your students. I hope you don't teach them how to invest.

I have never given investing advice on here. Do you realize how insulting and offensive your statements are

 

[rapmarks]

Do what I did and use the board's Ignore feature on that asswipe. Life is too short to deal with people like that. There are a few on this board that I disagree with at times, but at least they usually have interesting and/or intelligent views, unlike his/her posts. TUG is a much better place w/o seeing that crap.

Kurt

I think you are correct.

 

[letsgobobby]

I have never given investing advice on here. Do you realize how insulting and offensive your statements are

of course he knows, he is a genius!

 

[letsgobobby]

Your [sic] a teacher? I feel sorry for your students. I hope you don't teach them how to invest.

at least you are here to teach us how to spell!