Market Sucks

Sep 5, 2008 4:44 pm

Is anyone else feeling the heartburn from this market?  I'm not getting many client calls, but I know some of them have to be a little scared.

Money that was put in within the last year has just taken a beating, even in things that were supposed to be more on the conservative end.

It feels a little like all hope is lost, which should be when things turn around, but given what's going on, I for one do not see what will help stablize markets and turn them around.

Sep 5, 2008 5:05 pm

Deleveraging.  That’s why nothing is working right now.  Capital is evaporating everywhere, and there is nothing to replace it , ESPECIALLY at the institutional level.  All of the major players are shedding assets, and their is no ability to leverage assets anymore.

  The only thing that is going to cure this market is time.  Dead CDO assets have to find their way to new lucky owners.  It's not about asset classes or earnings, or equity valuations.
Sep 5, 2008 5:13 pm

So what are you doing with cash that’s been parked on the sidelines?  Stay in cash?  Bonds?

  I'm tired of seeing accounts slowly bleed, then yesterday gush blood.  It's just a ton more painful than a sharp drop.   When was the last time something like this happened historically to reference?
Sep 5, 2008 5:20 pm

2000-2002.  If you think this is painful, you should have been an advisor then…

Sep 5, 2008 5:28 pm
Indyone:

2000-2002.  If you think this is painful, you should have been an advisor then…

    No Thanks.   Here is a good article from Bill Gross.  This is what all the talk was about on CNBC yesterday if you caught that:   http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/Investment+Outlook+Bill+Gross+Sept+2008+Bull+Market.htm
Sep 5, 2008 5:55 pm

You know…Bill’s a smart guy, but he also called a 5-6000 Dow pretty much at the bottom of the last bear market.  I remember it well, and I remember thinking, “What’s a bond guru doing making calls in the stock market?”  For sure, he makes some excellent points, but while I pay attention to his calls on bonds, I heavily discount whatever he says when he discusses effects on equity markets.

  No doubt, it's been a tough 12-15 months, but I don't see us repeating 2000-2002.  We simply started at a much lower valuation than we did in the last bear market.  My advice would be to wade in slowly with new money, but be patient with the money that's already in the market.  Some of the worst damage is done by investors and their advisors that give up just before the bottom.
Sep 5, 2008 6:02 pm
Indyone:

Some of the worst damage is done by investors and their advisors that give up just before the bottom.

  I'm at that point. 
Sep 5, 2008 7:04 pm
snaggletooth:

[quote=Indyone] Some of the worst damage is done by investors and their advisors that give up just before the bottom.

  I'm at that point.[/quote]   To be honest, I'm not far behind you.  It gets pretty tough to keep your emotions in check when all you see is down, down, down, down.  It's harder yet when you start having those tough client reviews (I just signed about 40 annual review letters, so my next month is going to be lots of fun).  Despite the difficulty, we have no choice but to set our emotions aside and talk our clients off the ledge.  This is when we really earn our money.   About eight years ago, I had to sit down with a client and keep him from heavily skewing his portfolio to tech stocks (he was 55 at the time).  I remember him saying, "Wow, you sure are pessimistic about things."  I told him that I only looked pessimistic from his optimistic POV.  I told him, "you're 55 and you've made some good money in this market.  In a few years, you'll want to retire and it's my job to make sure that you have something when you get there."  We stayed the course and he survived the downturn with much less damage than he would have had we made his desired changes.   Last year, he semi-retired and started taking social security.  Between that and his part-time income, he draws very little from his retirement funds.  Even so, last month when we met to review his accounts, he was determined to completely withdraw from the stock market, and he actually said something to the effect of "Boy, you sure are optimistic about the stock market."  I reminded him about our conversation some eight years back and then told him that I held roughly the same POV that I did eight years ago.  I told him, "Eight years ago, you were way over here at the left and I was in the middle.  Today, you are almost all the way to the right, and I'm still here in the middle.  Part of my job is to, regardless of the market outlook, try to keep you somewhere here in the middle...neither too optimistic nor too pessimistic, as both emotions can do a lot of damage to your portfolio."   It was a good conversation and he left the office in a much better frame of mind, but if I'd known eight years ago what I do today, I would have just put him in a VA and been done with it.
Sep 5, 2008 7:29 pm

My own opinion…the next few months are going to be really ugly…The bank of China is looking for a bailout from their gov because they invested in…US Govt backed bonds and Fannie and Freddie bonds, which have declined significantly (to the tune of 1 trillion). Lehman is teetering…Merril is having trouble moving the ugly discounted debt…From 5.7% to 6.1% unemployment.  Hell, theres Ice sheets the size of Manhattan breaking off up north AND to top it off, I think I read Miss Jones is engaged.  Why do we continue to live?

Sep 5, 2008 7:47 pm
Indyone:

[quote=snaggletooth][quote=Indyone] Some of the worst damage is done by investors and their advisors that give up just before the bottom.

  I'm at that point.[/quote]   To be honest, I'm not far behind you.  It gets pretty tough to keep your emotions in check when all you see is down, down, down, down.  It's harder yet when you start having those tough client reviews (I just signed about 40 annual review letters, so my next month is going to be lots of fun).  Despite the difficulty, we have no choice but to set our emotions aside and talk our clients off the ledge.  This is when we really earn our money.   About eight years ago, I had to sit down with a client and keep him from heavily skewing his portfolio to tech stocks (he was 55 at the time).  I remember him saying, "Wow, you sure are pessimistic about things."  I told him that I only looked pessimistic from his optimistic POV.  I told him, "you're 55 and you've made some good money in this market.  In a few years, you'll want to retire and it's my job to make sure that you have something when you get there."  We stayed the course and he survived the downturn with much less damage than he would have had we made his desired changes.   Last year, he semi-retired and started taking social security.  Between that and his part-time income, he draws very little from his retirement funds.  Even so, last month when we met to review his accounts, he was determined to completely withdraw from the stock market, and he actually said something to the effect of "Boy, you sure are optimistic about the stock market."  I reminded him about our conversation some eight years back and then told him that I held roughly the same POV that I did eight years ago.  I told him, "Eight years ago, you were way over here at the left and I was in the middle.  Today, you are almost all the way to the right, and I'm still here in the middle.  Part of my job is to, regardless of the market outlook, try to keep you somewhere here in the middle...neither too optimistic nor too pessimistic, as both emotions can do a lot of damage to your portfolio."   It was a good conversation and he left the office in a much better frame of mind, but if I'd known eight years ago what I do today, I would have just put him in a VA and been done with it.[/quote]   Yet another example of sage advice and wisdom from Indy.   I got a bit of much-needed encouragement this morning when a lady called to get a couple thousand from her American Balanced Fund. She invested $40,000 in August 2002 (Yes, I realize that was the bottom) and has since withdrawn just over $22,000. Her account balance, ever after yesterday's bloodletting, is $35,000.   The market works, dang it. It really works.    
Sep 5, 2008 8:10 pm

It’s friday and I am checking ourt shortly… last night I attended a formal event sponsored by the Muncipal Government of Hangzhou, China. Hosted by the City and the People’s Republic of China. I will post Monday some very interesting observations of what the Chinese are doing immediately after the spotlight from the Oylmpics in Bejing. In attendance was Ambassador to Canada , Vice - Mayor of Hangzhou and a nine member delegation.

Interesting evening and should give we in North America some thoughts to ponder.
Sep 6, 2008 3:56 am

Every time we go thru this, we say, this time its different. Long Term Capital Management, the Asan Contagion, 14% cd's in a 20% inflation world, 9/11. And each time, it IS different. But its the same. We come out of it. We are coming to the end of a 10 year period of virtually no return in the equity markets, very unusual. But if you believe that the world is coming to an end, you have to believe that this is  not going to continue for another year or two. Yes we will probably see more days like yesterday that are really tough to take. But i really believe much of the damage is behind us.  Dont ever forget that the market will bottom long before the economic fundamentals do.  Throw in the towel, then try to be right in deciding when to get back in. It just aint gonna happen.

Most important, clients dont need us if we are depressed and if we cant take it anymore. I dont feel much differently than a lot of people posting here. But clients (and prospects) need our leadership. They need to hear from us and the need us to ask them questions like, when do you need the money? Are we properly allocated? Are we properly diversified?   I spent part of my morning calling clients today, figuring i need to talk to them before their August statements get opened. Every one of them, without exception, and they were all pretty much down 10-15%, every one of them at the end of the conversation said some variation of "thanks for calling, i really appreciate hearing from you"   I dont mean to be a pollyanna about whats going on. I know its serious, and i know its tough not only for clients but for us. But we need to rise above it, for the sake of our clients and for the sake of our businesses.   On another, not so related note, I was pretty encouraged to see the market hold near support, after the horrible numbers that came out this morinng. There is some underlying strenght taking hold here, whether its for the long term or not. Just my two cents
Sep 6, 2008 4:22 am

[quote=Sportsfreakbob]

Every time we go thru this, we say, this time its different. Long Term Capital Management, the Asan Contagion, 14% cd's in a 20% inflation world, 9/11. And each time, it IS different. But its the same. We come out of it. We are coming to the end of a 10 year period of virtually no return in the equity markets, very unusual. But if you believe that the world is coming to an end, you have to believe that this is  not going to continue for another year or two. Yes we will probably see more days like yesterday that are really tough to take. But i really believe much of the damage is behind us.  Dont ever forget that the market will bottom long before the economic fundamentals do.  Throw in the towel, then try to be right in deciding when to get back in. It just aint gonna happen.

Most important, clients dont need us if we are depressed and if we cant take it anymore. I dont feel much differently than a lot of people posting here. But clients (and prospects) need our leadership. They need to hear from us and the need us to ask them questions like, when do you need the money? Are we properly allocated? Are we properly diversified?   I spent part of my morning calling clients today, figuring i need to talk to them before their August statements get opened. Every one of them, without exception, and they were all pretty much down 10-15%, every one of them at the end of the conversation said some variation of "thanks for calling, i really appreciate hearing from you"   I dont mean to be a pollyanna about whats going on. I know its serious, and i know its tough not only for clients but for us. But we need to rise above it, for the sake of our clients and for the sake of our businesses.   On another, not so related note, I was pretty encouraged to see the market hold near support, after the horrible numbers that came out this morinng. There is some underlying strenght taking hold here, whether its for the long term or not. Just my two cents[/quote]   Thanks Bob for your insight.  It's pretty sad that sometimes other advisors need to be calmed at times too.  A lot of my clients are down in the 10-15% range too, so I'm glad to hear I'm not the only one (although sometimes it feels that way).   I'm just not trying to take extra, unneccessary risks.  But nothing is working very well, so it makes it a little more painful.  What I am really worried about are my clients looking to retire in the next year or so.  Fortunately though, two of my larger clients about to retire just said their companies want to keep them for an extra year or two.  So at least for them, we won't have to crack the egg for a couple years...huge benefit.   Regarding the market, it will be interesting to see what news comes out about FNM and FRE.  I can imagine those holding the preferreds or common shares won't be having a fun weekend.
Sep 6, 2008 5:40 am

Wow… after reading this thread I guess my world is very different from your world.  I started to toot my horn, but decided that wasn’t going to help you or your clients (I moved it to the end of the post).  You are focusing on the bad news and not the good.  Sure there are some tough times ahead for some segments of the economy and some firms may fail.  We’ve also had a few economic mismanagements which have helped get us to where we are now.  Real estate likely will drop for at least another 9 months to a year, at which time most of the excess should be taken out of the market and prices will stabilize and then resume to their historic 4% annual appreciation rate. 

  More banks will fail, many more will fail and the taxpayer will bail out the depositors.  It's going to be nothing like the bank/thrift/savings & loan failures in the late 80s.  We had over 500 banks fail in a single year!!  And guess what?  Life went on.   The Fed has quit lowering rates, the dollar has likely bottomed out with the consequence of lower oil prices.  The market has had a nice correction after 5 straight years of up (don't you all think we were over-due for some profit taking?).  We are going to get rid of the deadweight of a president which should further boost confidence in the US globally and likely will cause some further strength in the dollar.  The continued focus on alternative energy will create US jobs and develop technologies to export to the rest of the world.    I've had a whole two "worried" client conversations this year.  Sure people are down a bit, but generally down about half as much as the market as a whole.   My revenue is up for the year and we have unsolicited prospect appointments coming in at about 3 a week.  I'm working harder than I'd like to.  We are averaging into this market.  I've always been a fan of using true guaranteed principal investments (CD or bond ladders, fixed annuities) as part of the allocation model, instead of just cash or bond funds (managed bonds are in this same category).    My first ugly in the market was Black Monday in 1987 - which was a hell of an exposure to the raw panic of markets.  I had been registered about 3 1/2 years.  I remember watching the TV thinking that if the markets went belly up, what kind of job I'd try to get.  For those of you whose market history is a little weak, we lost 20% of the market value in a single trading day.  As we went through the sell offs and momentum panic of 2000, 2001 and partially 2002, it made '87 look like a walk in the park.  The US & the economy will survive the current problems. 
Sep 7, 2008 4:27 pm

Ice - what am i missing. Yes the common and i think i read pfd holders will be skanked on this. But it should help provide liquidity to the mtge market, make it easier to get a mortgage for folks on the cusp, slow down the foreclosure rate. Anybody who didnt know the govt was going to take over these two companies was living in zimbabwe.

  After hours Friday, all the big banks were trading up 3-4 % on the news I'm not saying that this takeover is going to solve all of our problems by any stretch, but its all been anticipated, and isnt going to f*** things up anymore than they already are.   What i REALLY dont want to see, is the market trade up on this news in the morning, and then give it all back, which is what we have become accustomed to.
Sep 8, 2008 2:20 am

S&P Futures up 33 and Dow Futures up 248. Lets hope it holds thru the day tomorrow. If it does, this will be the first time that i can recall in this bear mkt, that we've bounced off a higher low than the previous low. We ARE overdue for a decent rally, lasting a week or a couple of weeks.

Sep 8, 2008 4:53 pm

Here’s something you can use:

  On October 9, 2002, the market hit its bottom with close to a 3% drop in the day.  Over the next 12 months, the market returned almost 33%.   If you waited just 1 month to return to the market, November 8, 2002, by October 9, 2003, you would have only gotten about 16%.   So half of the return for the next year after the bottom in 2002 occured in the first month.
Sep 8, 2008 5:14 pm

Good point Snags, How easy it is for us (ME) to forget.

Sep 9, 2008 5:53 pm

I wonder how American Funds will hold up due to their heavy exposure to FNM common in their portfolios. Surely they unwound some of their positions in anticipation of the equity being worthless before the fed announcement.

Sep 9, 2008 8:04 pm

Does anyone else find themselves just sitting and laughing at this market?

  A 300+ point "up" day doesn't affect me in the least anymore because I know we'll give it all back the very next day.
Sep 9, 2008 8:09 pm

[quote=Borker Boy]Does anyone else find themselves just sitting and laughing at this market?

  A 300+ point "up" day doesn't affect me in the least anymore because I know we'll give it all back the very next day.[/quote]   I don't laugh.
Sep 9, 2008 9:04 pm

it’s not very funny after 10 months of this horse sh!t!!

Sep 9, 2008 9:06 pm

However there is nothing better after a big market loss than driving home in my new Mercedes Benz E350!

Sep 9, 2008 9:08 pm

Or my big Ford F250.  Unless I have to hit the gas station on the way home!!

Sep 10, 2008 1:45 am

This is worse than 2002. In 2002 , deep down, even tho investors blamed it on their broker, they knew they were being aggressive and speculating.

Today, old people and conservative investors are losing their safe money, in the form of FNM PFD and LEH PFD. Its really horrible. Brokers who felt they were doing the right thing for their clients are being destroyed, and the clients are getting crushed without even investing for growth. Lets hope the Lehman announcemnt tomorrow turns things around. This is just a really bad situation with no winners, and plenty of lawsuits to come.
Sep 10, 2008 2:06 am

[quote=Sportsfreakbob]This is worse than 2002. In 2002 , deep down, even tho investors blamed it on their broker, they knew they were being aggressive and speculating.

Today, old people and conservative investors are losing their safe money, in the form of FNM PFD and LEH PFD. Its really horrible. Brokers who felt they were doing the right thing for their clients are being destroyed, and the clients are getting crushed without even investing for growth. Lets hope the Lehman announcemnt tomorrow turns things around. This is just a really bad situation with no winners, and plenty of lawsuits to come.[/quote]   That's how I feel about it...in that the safe money isn't so safe.  What might go down 7% in a bad market is down 15%.  It does suck, big time.   What feels really bad too is when clients wanted to be in CD's in their late 50's about to go into retirement.  And us, advisors, convinced them to have some equity exposure to keep pace with inflation, so we put them in a balanced portfolio of mutual funds and they're down 10-15%.  It makes my stomach churn. 
Sep 10, 2008 2:13 am

Just as an added comment, I personally own MF’s that were flat in yesterdays three hunded point up market and today with the market down 280, were down 4.5% and 6% respectively. I repeat that - Mutual Funds that are down 6% in one day. Surely, the world is upside down, something is very wrong.

   
Sep 10, 2008 4:09 am
Sportsfreakbob:

Just as an added comment, I personally own MF’s that were flat in yesterdays three hunded point up market and today with the market down 280, were down 4.5% and 6% respectively. I repeat that - Mutual Funds that are down 6% in one day. Surely, the world is upside down, something is very wrong.  

  Likely had big positions in Fannie Mae or Freddie Mac - care to tell us what funds?
Sep 11, 2008 1:01 am

The funds were FSLAX - Fid Adv Leveraged Company Fund, and Janus Forty.

I called the funds  - wasnt fannie and freddie, that hit would have occured on Monday. They are both heavy in commodity stocks, energy, ag, materials. Both still believe longer term they go higher. One of them said they dont see as much of a slowdown in China as people believe, and a slowdown in China is what would make them cut back on those areas.
Sep 11, 2008 1:04 am

Generally speaking, its going to be tough doing business the next couple of months. People are scared shitless of the stock market, and while many are pissed at their current advisor, that will be an opportunity to bring in assets, but it will be tough putting a lot of the money to work.

In addition, the whole pfd business is shot for a while. Thats big busienss for a lot of us.
Sep 11, 2008 2:58 pm

Sportsfreak … on a persoanl note , I am not as confident in the growth in China as we have seen in the past. In addition , politics are always a Wild Card in China. I agree that they ( Chinese ) have a vested interest in maintaining the staus quo BUT with their government it does pose some unique challenges.

Sep 11, 2008 3:13 pm

This will be a great thread to look back on in about two or three years. Hope fully sooner as I to am getting very sick of this market!

Sep 11, 2008 3:57 pm

I know it would be going against what we shouldn't do, but would anyone consider re-allocating some equity funds to bond funds for your clients within a couple years of retirement at this point in the market? 

Currently they are at about 70/30, but a 10 or 15% higher allocation to bonds might take out some of this volatility, especially as things just don't look very good anywhere.   One of the clients I'm thinking about is down around 12% YTD, which is close to my threshold for them and I'm pretty sure it is for them too.  Problem is he'll be retiring at 59 in 2 years so he needs some equity exposure.    Any perspective on this?  It's just a terrible time right now and doesn't appear to be getting any better anytime soon. 
Sep 11, 2008 4:26 pm

Snags…I would definitely be contemplating a reallocation. I do admit many of my clients are typically in Conserative Funds , Commons , Preferreds and Bonds. I/they may have missed some of the big moves upwards but have not experienced the big moves downwards. Just my approach. BTW two years is not a long time.

Sep 11, 2008 4:33 pm

[quote=snaggletooth]Here’s something you can use:

  On October 9, 2002, the market hit its bottom with close to a 3% drop in the day.  Over the next 12 months, the market returned almost 33%.   If you waited just 1 month to return to the market, November 8, 2002, by October 9, 2003, you would have only gotten about 16%.   So half of the return for the next year after the bottom in 2002 occured in the first month.[/quote]   Snaggletooth,   Great info, where did those statistics come from?  I'm looking for a source to quote.   Even though we all know how we should be acting, human nature is going to let the fear emotion win out over the greed emotion in situations like this.  But, we have to remember the advice, " The way to make money, is to be greedy when other people are being fearful."    I'm not saying we are at the bottom of the market, but I'm willing to make a bet that we are much nearer the bottom than we are to the top.    
Sep 11, 2008 4:37 pm

Buying opportunities!!! A quality company down ie. 20- 25% screams " look at me ". You and everyone else knows that the quality company has the resources and market to continue.

Sep 11, 2008 4:39 pm

[quote=exEJIR][quote=snaggletooth]Here’s something you can use:

  On October 9, 2002, the market hit its bottom with close to a 3% drop in the day.  Over the next 12 months, the market returned almost 33%.   If you waited just 1 month to return to the market, November 8, 2002, by October 9, 2003, you would have only gotten about 16%.   So half of the return for the next year after the bottom in 2002 occured in the first month.[/quote]   Snaggletooth,   Great info, where did those statistics come from?  I'm looking for a source to quote.   Even though we all know how we should be acting, human nature is going to let the fear emotion win out over the greed emotion in situations like this.  But, we have to remember the advice, " The way to make money, is to be greedy when other people are being fearful."    I'm not saying we are at the bottom of the market, but I'm willing to make a bet that we are much nearer the bottom than we are to the top.    [/quote]   I had read that Oct. 9, 2002 was the bottom, so I plugged in the dates in historical quotes on BigCharts for the different timeframes.  I don't think it includes dividends, but you get the point.
Sep 11, 2008 6:00 pm

Snags - I certainly wouldn’t be moving into bond funds at close to the bottom of interest rates, that could be jumping right into the fire .  Is he going to need to start drawing upon the portfolio for income at 59 or will there be some time before that’s needed?  I typically have someone within 2-3 years of retirement in a 50-50 allocation if they are going to need to draw from the portfolio.  I like lots of protection in a down market and lots of ability to provide funds without having to sell into a down market.  Unless there were unusual circumstances (client doesn’t plan on ever needing funds from the portfolio and will leave it basically intact to heirs) I wouldn’t have a 57 year in an allocation any higher than 53% equities. 

  With new clients who are too heavily invested in the market right now, I'm having them ride it out for now and when things are a little better in the market, THEN we'll make the changes to the allocation, assuming the equity portion is diversified and not in scary or crazy stuff.    You may think it's a terrible time now, but I'm starting to get funds invested over the next 3-6 months that we've had sitting on the sidelines for the past 6-8 months.  I like to buy when there's a sale
Sep 11, 2008 6:13 pm

Good observations OldLady. On a personal note, I had one of my own Strips just come due about two months ago and sitting in Money Market. Parking in the Short Term Parking Lot…and I am convinced some good opportunities will present themselves near term. Likewise for my clients.

Sep 11, 2008 6:22 pm

OldLady …correct 25% Off For Quality Companies.  My Kind Of Sale

Sep 11, 2008 7:54 pm

Is it possible that, because there is SO much cash sitting on the sidelines, that when this crap eventually subsides (in like 50 years…kidding), that the markets will really take off?

  Any takers on this?
Sep 11, 2008 8:18 pm

Yes…I will take that bet and I don’t gamble. I invest. At some point Cash will need to move ( sooner or later ) and not in 50 years 

Sep 11, 2008 8:50 pm

man, I just checked out a client of mine, fairly aggressive, down 20% or 105k. That makes my stomach turn. American world g&I down 25%!!

Sep 11, 2008 8:56 pm

[quote=ezmoney]man, I just checked out a client of mine, fairly aggressive, down 20% or 105k. That makes my stomach turn. American world g&I down 25%!!

[/quote]   How's the new Benz?  Maybe you should drive by the client's house a few times for shits and giggles.     Seriously, a lot of funds are down around there if they've got international exposure.  It sucks.  What sucks even more is that people don't want to talk much about it.
Sep 12, 2008 1:07 am
norway401:

Sportsfreak … on a persoanl note , I am not as confident in the growth in China as we have seen in the past. In addition , politics are always a Wild Card in China. I agree that they ( Chinese ) have a vested interest in maintaining the staus quo BUT with their government it does pose some unique challenges.

You might be right, i was just echoing the opinion of the money manager. But from all i;ve read, there are an awful lot of people who still havent moved from the rice paddies to the cities.
Sep 12, 2008 1:12 am

snags, my opinion is its not a good time to be reallocating out of equity. Besides which if he is 59, he either needs an awful lot of assets or a decent amount of growth.

I guess you also have to look at the client you are dealing with. Maybe ask him the question (unless you already know the answer) - what would make you feel worse, losing more money, or selling stocks today and seeing a market rally next week. Then he makes the decision.\ Reality is its a tough call, i;ve struggled with it myself, but i gotta say, the pessimism on this thread is very encouraging. The air in my branch is so thick you could cut it with a knife. This is what happens at market bottoms. And it was very encouraging that with all the crap going on about Lehman and WAMU, the market went from down 150 to up 150 in short order. (although the breadth wasnt so great)   Just my humble opinion.
Sep 12, 2008 1:13 am

[quote=snaggletooth]Is it possible that, because there is SO much cash sitting on the sidelines, that when this crap eventually subsides (in like 50 years…kidding), that the markets will really take off?

  Any takers on this?[/quote]

Precisely.  Look at the sentiments being expressed on here.  Do you think folks can be much more pessimistic?
Sep 12, 2008 1:17 am
I am all over that. When this thing does turn, its going to turn really really hard.   Is it possible that, because there is SO much cash sitting on the sidelines, that when this crap eventually subsides (in like 50 years...kidding), that the markets will really take off?   Any takers on this?  
Sep 12, 2008 1:19 am

[quote=HymanRoth] [quote=snaggletooth]Is it possible that, because there is SO much cash sitting on the sidelines, that when this crap eventually subsides (in like 50 years…kidding), that the markets will really take off?

  Any takers on this?[/quote]

Precisely.  Look at the sentiments being expressed on here.  Do you think folks can be much more pessimistic?
[/quote]   Much more pessimistic?  I don't know, I hope not.  However, if it just goes on and on and on and on and on and on and on, that won't be fun either.
Sep 12, 2008 1:26 am

OK so for those of you who think the time has come, what are you buying? What funds, stocks, etf’s ideas, sectors, etc.

Some nibbling in beaten down materials and commodities (steel, potash, etc) but very selectively, the leaders of the past tend to not lead when the bear goes back to the cave. Buying healthcare, mid cap, Financials (big banks), consumer, and UUP (Bullish USDollar ETF)
Sep 12, 2008 1:32 am

t-bills, been buying them for 8 months now.

Sep 12, 2008 1:38 am

No Primo, i said for those of you who think the time has come TO BUY.

   
Sep 12, 2008 1:40 am

[quote=Sportsfreakbob]OK so for those of you who think the time has come, what are you buying? What funds, stocks, etf’s ideas, sectors, etc.

Some nibbling in beaten down materials and commodities (steel, potash, etc) but very selectively, the leaders of the past tend to not lead when the bear goes back to the cave. Buying healthcare, mid cap, Financials (big banks), consumer, and UUP (Bullish USDollar ETF)[/quote]

I started picking up some large cap tech today.

Staying away from banks right now, other than one large bank in Texas.  Too much toxic waste still on their balance sheets.
Sep 12, 2008 4:02 am

[quote=Sportsfreakbob]No Primo, i said for those of you who think the time has come TO BUY.

   [/quote]   I know, I heard you.  I am buying t-bills.  Flight to quality will drive yields down hard.  This mess has a ways to go IMO.  Did a review today with one of my biggest clients.  80 eq/20 fi on 12/31/2007.  Down 2.2% ytd, of course he does not own 80% equities anymore, hasn't for a long while.  It is always time to buy something.
Sep 12, 2008 3:42 pm

[quote=Sportsfreakbob]OK so for those of you who think the time has come, what are you buying? What funds, stocks, etf’s ideas, sectors, etc.

Some nibbling in beaten down materials and commodities (steel, potash, etc) but very selectively, the leaders of the past tend to not lead when the bear goes back to the cave. Buying healthcare, mid cap, Financials (big banks), consumer, and UUP (Bullish USDollar ETF)[/quote]   I've come to find out that I don't know much about anything, but I personally don't think financials will be good for several years or more.   Back in the tech bubble and crash, it took like 4 years for the new tech companies to come along with new products to make the sector look good again.   Where are financials going to derive their revenues from?  It will be years before their "new" products come about that bring the sector back again. 
Sep 12, 2008 4:37 pm

I put some clients money into DUG…to counter my clients exposure to xom etc…I personally have been calling other advisors and gaging THEIR desire to be in this market/industry.  Good way to pick up some assets by buying a book when the value and the confidence of an advisor and is down.  Someone said we need to act like businesss owners…EXPANSION…

I like the tried and true method of DCAing money over 12 months...for new money. 
Sep 12, 2008 10:09 pm

Where are financials going to derive their revenues from?

    At some point all these toxic assets will start to move again.  At that point, all of these write downs will come back on the balance sheet as earnings as the assets appreciate in value.  The million dollar question is when.
Sep 15, 2008 7:14 pm

For those of you who survive this, a market like this is good training and valuable experience. Just don’t become part of the problem.

  Take a look at your accounts. Pit in your stomach huh?   That's the bad news.   Here's the good news:   It's no different for any other financial advisor, broker, or RIA in your town. Get on the phone and start prospecting!   Hard times build big books!   Smile and dial! Forget about all the problems, you are the answer!   And the only way people are going to get that messege is if you tell'em.   What are you waiting for?    
Sep 15, 2008 7:57 pm

I live in a town of roughly 10,000 people that is home to an independent firm that sells fixed and equtiy indexed annuities exclusively, and naturally, we have many mutual clients.

  Right now, I'd imagine they're earning 4-5% on their money and will seldom exceed that, BUT their principal is "safe." Of course, they pit my and the indie firm's statements against each other, and for the past year or so, I've lost hands-down.   I realize we're talking apples to oranges here in terms of investments, but most of the folks I deal with have to be taught what a mutual fund is before we open the account, so all they know is that their money is going down and they don't like it.    How would you address this ongoing challenge to compete with the indie annuity sellers?
Sep 15, 2008 8:14 pm

Yeah, but we’ve got that state guaranty fund that covers up to $100k per account, and those guys open numerous accounts and watch the balances closely. If they get to $100k, they take out the free withdrawal and open another annuity contract.

  Are annuities the way to go from here?
Sep 15, 2008 8:20 pm

LPL just sent around an email telling reps to excercise the free-look clause on all AIG annuities, and not to sell any more contracts.

  It did say not to exchange out of contracts at this time.   Sucks to be an AIG annuity wholesaler.
Sep 15, 2008 8:22 pm

How about this...If a client has $10,000,000 in a mutual fund with it's biggest holding being 2% of AIG stock, if AIG goes bankrupt, the value of their holdings in this mutual fund becomes $9,800,000.

If a client has $10,000,000 in a fixed (either traditional or EIA) annuity with AIG and AIG goes bankrupt, the value could become $0.  (ignoring state guarantees that can't be discussed)
Sep 15, 2008 8:29 pm

What other annuity entities does AIG sell through?

Sep 15, 2008 8:42 pm

[quote=anonymous]

How about this...If a client has $10,000,000 in a mutual fund with it's biggest holding being 2% of AIG stock, if AIG goes bankrupt, the value of their holdings in this mutual fund becomes $9,800,000.

If a client has $10,000,000 in a fixed (either traditional or EIA) annuity with AIG and AIG goes bankrupt, the value could become $0.  (ignoring state guarantees that can't be discussed)[/quote]   I appreciate your help, but just because something can't be discussed doesn't mean that it doesn't exist.     And as I said previously, my competition doesn't let the accounts exceed $100k.
Sep 15, 2008 8:51 pm

Borker, what was that saying…if you can’t beat em…join em…good way to go indy and keep your upfront costs low. 

Oct 22, 2010 7:33 pm

There you go....Idiots like this spammer, just can't even get ON to the other site. There are mechanisms in place to prevent it

Oct 23, 2010 2:34 am

The only possible conclusion to this dilemma is that the post count is so low that RR must allow these spammers in to increase overall post count on the forum or RR will be in violation of their advertisement contracts which will release Schwab, Red Cross, RJ et al so they can actually  pursue profitable marketing avenues.

Oct 26, 2010 3:38 pm

So now that this topic is bumped, how are you guys doing...2 years later?

(man, I can't believe it's been 2 years already!)

Feb 23, 2011 4:19 pm

We're in a "New World Order" boys!

The whip-saw roller coaster last ten years proves the point...

Mar 25, 2011 4:50 am

This is worse than 2002. In 2002 , deep down, even tho investors blamed it on their broker, they knew they were being aggressive and speculating.

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