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08-20-2007, 01:19 PM
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#31 | |
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Read? I only know how to write.
Join Date: Jan 2001
Posts: 11,933
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One girlfriend as a bank VP heard rumors about a chicken farm disease. So she visited the clients - major chicken producers. All those chickens could have been sick and she would have never known it. She was an expert on this industry only because she could read spreadsheets. Therein lays so much fear and wild speculation. We don't listen to stock commentators to know what industry is doing. We listen to them to learn how the street is feeling and guessing and rumor mongering. How to make money on the street. Know the difference between reality and fear so often promoted by stock market bean counters. The sub-prime fallout has created massive problems in some financial institutions. However, others saw this obvious problem long ago and bet accordingly. Whereas even Goldman Sachs is caught bailing out their bad investments, a few hedge funds are rumored to have made $billions by seeing the obvious. We discussed here a serious problem in the housing market. An economy in recession if not for low interest rates that were maintaining strong housing sales and strong auto sales. Is that a healthy economy - or curing symptoms by throwing money at it? If other more productive parts of that economy start doing better, then low interest rates were a solution. In the past four years, without low interest rates, then this economy was not doing well. Those low interest rates can create economic activity which is confused with growth. An economy can have massive economic activity and near zero growth. Welcome to the early 1970s. Even with money games from easy money, economic growth had still fallen to about 60%. Are stock brokers in panic mode? Good. Time to buy. We listen to bean counters because they have little idea what makes companies prosper. When they panic for reasons financial, then this is good time to return to the market. Only rarely do we listen to market analysts to know how productive or stable a company is. By the time the spread sheets finally report it, those realities have existed for years. Now for caution. Market analysts like to panic in October. October with so many panicked market analysts tends to imply a stock market meltdown. Did the stock market crash of 1928 create the recession? No. Those problems existed long ago - masked by easy money. If we are in a recession, then market analysts are only just beginning to suspect it - which makes October so dangerous. How long ago were we talking about the housing market crash? What was known in reality finally appeared in the market how many years later? These are the people with "boots on the ground" who could not see this problem how many years ago? Why do stock brokers underperform the market? They have 'boots on the ground' but forget to have what is necessary behind the eyes - knowledge of how the work gets done. This liquidity crisis did not just suddenly appear. It has been ongoing for years right in front of those so many 'boots on the ground' who still did not see. Why the panic? Because market analysts did not see for years what should have been obvious to every one of them. Instead they kept pointing to economic indictors (that measure things four and more years ago) to prove everything is just fine. We listen to market analysts to learn about their emotions – because so many bean counter types have little grasp of what is really happening. But again, stock broker performance tends to underperform the market. Listen to learn their emotions because their emotions determine prices. Some are so foolish as to think they are experts on an industry. |
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08-20-2007, 03:33 PM
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#32 |
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changed his status to single
Join Date: Apr 2004
Location: Right behind you. No, the other side.
Posts: 10,308
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I'll respond to that in two ways:
1) Who is this "we" you keep referring to? Are the voices getting to you again? (I'm actually just teasing, I'd be disappointed if you had broken form and hadn't posted this) 2) Who says stock brokers, financial advisors, financial planners, shiny shoe whores, (pick your favored term) underperform the market? I challenged you a few years ago to post your portfolio performance against my recommendations in real time, changes made as needed to test your theories. You have never even responded, let alone accept the challenge.
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Getting knocked down is no sin, it's not getting back up that's the sin |
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08-20-2007, 10:29 PM
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#33 | |
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Read? I only know how to write.
Join Date: Jan 2001
Posts: 11,933
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Quote:
For example, important in what each of 'they' say are the reasons why. The 'whys' can quickly identify those who know only by playing numbers games from those who know by acutally understanding the a company is doing. Same applies to finaniclal markets. Many appear to be taking significant losses verses a smaller number who saw this problem many years ago and hedged appropriately. Meanwhile, numbers repeatedly reported from various sources noted how stock brokers underperform the market by about 1%. A summation of mutual funds (that are not indexed) also demonstrates the problem. Mutual funds tend to underperform the market by about 1% - sometimes 2%. Recommending one to ignore the analysts is good if the investor blindly hands his money to others for investment. Becoming a good investor is not hard as long as one limits to industries that he understands. As Peter Lynch noted, the private investor with about 5 stocks can often outperform the market. But that means knowing the company, understanding its industry, and keeping an eye on those market analysts who can subvert or upend the market with their fears. Applying to current situations - caution is advised. These market analysts have a history of misreading the numbers, promoting things as good (as they usually do) and then suddenly going into panic mode. This tends to occur in October but has lately occured in months earlier. Having said that and if believing in an industry that is poised to get or stay on track, then one now would be watching some investments that should be very good buys in these next few months. But again, that means watching those market analysts so as to understand their and their peers emotions. Investors in Google, Goldman Sachs, Toyota, and Citigroup have recently taken a beating. I believe each may have lost their entire profits for the year in but a month. The first three appear to be very solid companies. Could one take advantage of investments at fire sale prices? Or invest in Cisco that is now at 150% of the price last September even after the sharp downturn? Or Intel that is now at 133% (did you notice how Intel started chewing into AMD)? Or Apple at 185% even after the downturn. Do we invest based upon these numbers? Both reasons are usually offered by those analysts. Neither are, by themselves, significant reasons for making a decision. But listening to those analysts who promote this reasoning should make it apparent whether he makes money on promotion - or actually understands the investement, its industry, and its products. Listen to those market analysts. Sometimes they can draw attention to a gem. Use their emotion to understand the hype. Don't listen to them for what to do. Listen to them to, instead, understand the whys. Now is a good time for making a decision if even only talking about 100 shares. I don't waste money on lottery tickets. 100 shares on the stock market is currently is far more fun than any lottery tickets. I don't like buying losers - such as lottery tickets. Second guessing market analysts is also part of the fun. Right now is when it gets very fun. |
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08-20-2007, 10:36 PM
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#34 |
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Banned - Self Imposed
Join Date: Dec 2005
Posts: 1,847
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tw, did you just use "fun" and "emotion" multiple times is the same thread? I must be sleep posting!
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08-20-2007, 11:17 PM
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#35 |
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changed his status to single
Join Date: Apr 2004
Location: Right behind you. No, the other side.
Posts: 10,308
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TW, I've said it before and I'll say it again. You have no idea what it is I (or other advisors) do for a living. You refer to numerous studies, but show me the actual numbers. Many mutual funds do under perform the market. Fewer underperform if actually compared to the appropriate benchmarks. That's the point. But many, MANY, outperform the market. Finding them is the trick. That is what I do. I match my clients up with the appropriate investments for their A) risk tolerance, B) time horizon, C) goals. When you take that into account, you'll realize that the benchmark isn't the end all, be all.
I've often stated that it is not necessary to have a financial advisor. One can successfully build their own retirement plan, they may also be capable of planning for the catastrophic needs that come up. A few can effectively assemble an efficient estate plan as well. Unfortunately, most individuals would be just as successful doing all of those things as I would be building a computer, writing a program, mounting a successful legal defense, performing surgery, or designing a revolutionary component for the space program. The point is that not everyone has the time, ability, or desire to learn what it is that I spend all day every day doing. Most of those people aren't concerned with making sure they get to brag about milking every last basis point out of the market at the next geeks-r-us meeting. Believe it or not, successful individuals don't begrudge me my fees because they've taken the time to learn what I do for them. I provide returns in line with the market in up times, I protect them in down times, I walk with them through both up and down times, and I do this all with less risk than the overall market. But you can keep reading your white papers about my industry, and thinking you know it all. BTW, care to venture a guess as to who is bankrolling the studies you refer to? I'm sure they don't have an agenda. But I'm sure you thought of that.
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Getting knocked down is no sin, it's not getting back up that's the sin |
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08-21-2007, 12:28 AM
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#36 | |
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Read? I only know how to write.
Join Date: Jan 2001
Posts: 11,933
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Quote:
Ego is not relevant. Whether you are hurt or not is not relevant. The topic is the stockmarket that has nothing to do with any one or anyone's image. If you have facts relevant to the discussion, then post them. Don't just threaten to post information. Post it - or get off the pot. |
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08-21-2007, 07:34 AM
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#37 |
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Banned - Self Imposed
Join Date: Dec 2005
Posts: 1,847
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tw - I have tried, in vain, to make peace with you - I have posted numerous times my thoughts, opinions and YES my feelings. All of this and you still attack me or act as though you are better than me - before you go off on your "no attack was made therefore it doesn't exist" bullshit. Lemme ask you "Pulling a yesman" what exactly does that mean???? I tried to treat you with consideration and attempted to make amends - YOU, tw, are an asshole in the first, second and third person. There is no reason for you to bring me up in this thread - I have not posted once nor given you any call to use me as a negative reference. You are too much of a pussy to even respond when I directly post to you and here you go like a little girl??? Fuck you and the go cart you road in on.
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08-21-2007, 10:12 AM
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#38 | |
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UNDER CONDITIONAL MITIGATION
Join Date: Mar 2004
Location: Austin, TX
Posts: 20,012
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Quit taking it so personally, dude. Lots of people have no respect for lots of other people on this board. It's not the feud of the century you make it out to be. |
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08-21-2007, 10:39 AM
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#39 | |
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changed his status to single
Join Date: Apr 2004
Location: Right behind you. No, the other side.
Posts: 10,308
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Quote:
Here's an idea. Step away from the keyboard and the encyclopedia. Walk out of your mother's basement and try joining the rest of humanity. You might just like it. You might also learn something. A good place to start would be with the idea that maybe you don't know everything.
__________________
Getting knocked down is no sin, it's not getting back up that's the sin |
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08-21-2007, 10:44 AM
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#40 | |
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Person who doesn't update the user title
Join Date: Jan 2001
Posts: 12,486
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08-21-2007, 10:55 AM
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#41 | |
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Why, you're a regular Alfred E Einstein, ain't ya?
Join Date: Jun 2006
Posts: 21,206
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__________________
A word to the wise ain't necessary - it's the stupid ones who need the advice. --Bill Cosby |
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08-21-2007, 11:30 AM
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#42 | |
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Banned - Self Imposed
Join Date: Dec 2005
Posts: 1,847
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08-21-2007, 11:32 AM
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#43 | |
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Banned - Self Imposed
Join Date: Dec 2005
Posts: 1,847
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08-21-2007, 01:12 PM
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#44 | |
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Read? I only know how to write.
Join Date: Jan 2001
Posts: 11,933
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Quote:
Lookout123, if you know so much about the stock market, then simply state those facts and and include numerous reasons 'why'. Posting emotional tells us you think you are smarter. I don't care if you are a genius. It is not relevant. Only relevant are the reasons why you obtain a conclusion. If your only reason 'why' is because you are a stock broker, then your post has zero credibility. That is no insult of stock brokes. Who you are is not relevant. Only the 'whys' are relevant. So prove me wrong. Show me you can stay adult. Show us these insights you have into market analysts AND provide numerous supporting facts 'why'. Do it without a meltdown. I don't care about your emotional state. And I may just decide to feed on it because you cannot even state 'why' you are angry. Your emotion is not relevant to the topic. That you do not post reasons 'why' is very relevant. I don't care who you are. You, the person, do not even exist here. Only existing here are your posts - that are currently shy of 'why'. Your posts only credibilty comes from posting those 'whys'. The source is not relevant. Why are you upset only because my conclusions are a completely different perspective from yours? If you are confident of your conclusions, then upset would instead be replaced with 'whys' and 'why nots'. |
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08-21-2007, 01:16 PM
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#45 |
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Why, you're a regular Alfred E Einstein, ain't ya?
Join Date: Jun 2006
Posts: 21,206
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Okie dokie, Hal.
Dave Bowman: All right, HAL; I'll go in through the emergency airlock. HAL: Without your space helmet, Dave, you're going to find that rather difficult. Dave Bowman: HAL, I won't argue with you anymore! Open the doors! HAL: Dave, this conversation can serve no purpose anymore. Goodbye
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A word to the wise ain't necessary - it's the stupid ones who need the advice. --Bill Cosby |
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