Interesting stuff.....any comments?

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Feb 27, 2006 7:11 pm

http://www.horsesmouth.com/hm.asp?ID=77506&Loc=&Flag =x&r=0%2E3652918


Feb 27, 2006 7:24 pm

GWB

Feb 27, 2006 9:05 pm

Ah, the mantras and platitudes of "Buy and Hold" Why, just look at this Ibbotson chart showing stocks have returned 10%+ (Or whatever the hell the # is) for the last 77 yrs. Well I'm here to ask the question, "Who here has a 77 yr horizon?". The fact is that most of the wealth in this country is controlled by those 50+. 77 yr horizon for those 50+??. The S&P has shown +.54%/yr. for the past 5 yrs. Let's "financial plan" around those #'s. Well? Go ahead and do the "plan". Running 12 inflation #'s are @ 4% (not counting FOOD & ENERGY!) Why not disclude water and air while we're at it? Go ahead and do the "plans" @ 8% growth (conservative enough don't you think?) and using inflation @ 3% (pretty conservative historically isn't it?) This whole thing we do is ENTIRELY flawed if you/we accept these mantras and platitudes. How about THIS fact. The baby boomers are JUST STARTING to liquidate their positions accumulated in the last 10/20 yrs. MORE TO COME. This market is not going to embark on a new bull from these valuation levels. Don't agree? OK, go ahead and do the 77 yr "thing". I'll do something else with my $$.   

Feb 27, 2006 10:17 pm

Revealer,


If you place all of your money in the S & P 500 your a moron.  I am doing my feburary reviews and most clients are up 12-15% from prior year. 


Doom and gloom your paid to ignore the crap and focus on the future, of course the boomers are going to sell their stock, they'll sell it to purchase goods, which will generate profits, which will be dispersed to present company executives, shareholders and employees (In that order ), do you think the money is going to vanish?

Feb 27, 2006 11:47 pm

In case Dude's post wasn't enough of a bummer:



"In the February 20, 2006 edition of Fortune ("The Tragedy of General

Motors"), reporter Carol J. Loomis suggests that a GM bankruptcy will be a

major event for the U.S. economy and, more importantly, for the U.S.

psyche:

"It is the instinctive wish of most American businesspeople, even those

unlikely to be directly affected, that General Motors not go bankruptcy.

True, some people will say, 'They had it coming to them.' But the majority

will be more practical, telling themselves that the company is so central

to the economy, so sprawling in its commercial reach, that bankruptcy --

'going into chapter,' as restructuring folks say -- is ominous almost

beyond contemplation. And yet the evidence points, with increasing

certitude, to bankruptcy....Bankruptcy isn't going to occur next week. But

down the road -- say, past 2006 -- its probability is high."

A GM bankruptcy, which HCM views as inevitable (with Ford soon to

follow), will be such a monumental psychological event because it will toll

the death knell of the American industrial model. No longer will

politicians and business leaders be able to defend a system that includes

prohibitively expensive legacy costs (healthcare, pensions), uncompetitive

union demands (i.e. work rules, uneconomic wage and benefit packages),

and a dysfunctional tort system. It is obvious to a child of elementary

school age that the system is broken; it is a true American tragedy that it

is going to take the bankruptcy of an American business icon to force the

point home. And even then, in today's political and economic system,

there is no guarantee that anything more than a band-aid will be applied

to the problem while America's industrial system is allowed to slide

further into the abyss. "



More to come tomorrow...

Feb 28, 2006 12:33 am

Dude's post is only a bummer for those who think they're going to retire by investing in large cap stocks and index funds alone.

For those who explore alternatives, there are still plenty of options for the future.

Thanks dude...good stuff!

Feb 28, 2006 8:56 am

Bankrep: This "moron" has a personal investment portfolio in multiple 7 figures. Point is that you rookies continue to believe the BS put out by your "investment strategy,planning, ad nauseum " depts. Read Mon. WSJ re retirement "planning" trainwrecks about to happen. Oh,I forgot, most of you rookies don't read the WSJ. After all you have all the answers.

Feb 28, 2006 11:29 am

The main idea behind Economics in general is supply and demand.  No one can argue that by virtue of sheer # of investors alone (baby boomer retirees), demand for US stocks by US investors will go down.


Returns CAN be generated by an money manager by properly playing the volitility of the market (i.e. buying low, selling high), but that has little to do with actual GROWTH, just good timing. 


I don't think it's gonna be THAT bad for another decade or so, but I do tend to agree with the article for the most part.  If you want to invest in stocks and grow your money, you have two choices IMO...


1.  Go where the growth is (international, small cap, private placement, etc)


2.  Time the market (invest in cyclical sectors, buy low/sell high)


I choose #1

Mar 2, 2006 12:33 pm

BankFC makes a good point.  I would add that "innovation" will always create investment opportunities.  Areas that I'm find attractive are:  nanotechnology, biotechnology, anything wireless, alternative energy and natural resources.   

Mar 2, 2006 12:55 pm

or concentrate in VA's with the principle protection and guaranteed income riders. This is where future is with most average baby boomers. Compared to the cost of managed money. they're outstanding values with the guarantees.

Mar 2, 2006 7:29 pm
Revealer:

Ah, the mantras and platitudes of "Buy and Hold" Why, just look at this Ibbotson chart showing stocks have returned 10%+ (Or whatever the hell the # is) for the last 77 yrs. Well I'm here to ask the question, "Who here has a 77 yr horizon?". The fact is that most of the wealth in this country is controlled by those 50+. 77 yr horizon for those 50+??. The S&P has shown +.54%/yr. for the past 5 yrs. Let's "financial plan" around those #'s. Well? Go ahead and do the "plan". Running 12 inflation #'s are @ 4% (not counting FOOD & ENERGY!) Why not disclude water and air while we're at it? Go ahead and do the "plans" @ 8% growth (conservative enough don't you think?) and using inflation @ 3% (pretty conservative historically isn't it?) This whole thing we do is ENTIRELY flawed if you/we accept these mantras and platitudes. How about THIS fact. The baby boomers are JUST STARTING to liquidate their positions accumulated in the last 10/20 yrs. MORE TO COME. This market is not going to embark on a new bull from these valuation levels. Don't agree? OK, go ahead and do the 77 yr "thing". I'll do something else with my $$.   


Thanks for the comments Revealer.  What are you doing to address this issue? 

Mar 2, 2006 7:38 pm
skeedaddy2:

BankFC makes a good point.  I would add that "innovation" will always create investment opportunities.  Areas that I'm find attractive are:  nanotechnology, biotechnology, anything wireless, alternative energy and natural resources.   


I'm there with you.  My portfolio is up 5% YTD vs S&P of about 1.7% (I also smoked the S&P last year) because of concentration in tech, precious metals and emerging Markets, although my PIMCO commodity real return fund is sucking wind this year.  I'm resisting the urge to sell it, since I still believe that long term there will be upward pressure on commodity prices, I hope I'm right.

Mar 2, 2006 10:04 pm

What am I doing to address these issues? In the inimitable words of Sgt. Esterhaus on Hill Street Blues, "Let's be careful out there." #1 SAVE MORE. How do y'all like the US personal savings rate? #2 Realize that we are going to see less than normal rates of return for the forseeable future.(Refer to #1) #3 Use non-correlating assets such as Pimco Commod.Real.,etc. I would ask all who read these boards and advise folks to "Quit using the (magic wand) of irrational expectations." It will be a sad day when everyone who is using poor assumptions come up WAAAAY short come college day and/or retirement day. It ain'ta gonna be pretty. Keep asking yourself if 4-5% (current bond rates) are ALL we can expect for the forseeable future? If us advisors cut most of the BS out of the equation, it'll all work out. By the way, I don't want anyone responding that THEY are earning 12,14,20% or what ever using some magic elixer portfolio manager. I don't believe it, and if you REALLY are, the Oracle of Omaha wants your name.