Bye, Bye, Bear Stearns?
Today, is a pivot point.
I've again increased allocations to funds specializing in US companies with significant overseas operations and markets, foreign dividend-paying stocks, and precious metals. The reason? An internal alarm bell went off when news came out about Bear Stearns and their liquidity problem. Though shocking enough, that wasn't the trigger for the alarm. What was the trigger was that CNBC had interviewed Bears' CEO 2 days ago and he indicated that all was well (generally speaking). I agree with the announcer (a rare event in itself), that the CEO appeared to have no prior knowledge of this problem during the interview. That's what scares me. How many others (ML, SB, Wach, etc.) are sitting on ticking time bombs and they don't know it? The major banks could also be sitting on ticking time bombs, but they have access to the Fed to bail them out without making headlines. Many of you know that I am generally bearish on the US for fundamental reasons. However, I haven't built the bomb shelter (yet) or dumped all my clients' assets into precious metals funds. To do so, at this stage of the game, would be foolish (in my humble opinion) and would incur the wrath of my clients, as well. My game plan is to look for significant sign posts along the way that tell me which way to shift a percentage of assets. It's not a science, it's an art. Right or wrong, it makes logical sense to me and many of my clients. My primary fundamental reason for being bearish on the US is that many of the economic stats the market relies upon are flawed...on purpose: CPI, GDP, unemployment, etc. I say "on purpose" because politicians have changed the way econ stats are measured, relying primarily on computer models and whatever was politically expedient at the time. For comparison purposes, employing the old way of measuring the economy says that we are now experiencing a CPI of 10+%, a negative GDP (for 3 quarters in a row), and an unemployment rate of over 10%. (Which stats seems closer to the truth to you, the new or the old?) Relying upon these "flawed" indicators gives a distorted view of the economy, causing all kinds of foreseen and unforeseen problems. However, to panic and dump everything into precious metals now would be a mistake, in my opinion. The market is based on perception, not reality. It could be years before "reality" sets in. So, I've chosen to make defensive allocations as these periodic sign posts pop-up, lending credence to my theory that the economy is fundamentally flawed and unless we come to grips with the "reality" of it, the pain will only continue. Hey, I could be wrong! Do your own due diligence![quote=iceco1d]
Dobe, good post, but I do have a few questions:
1. I understand the argument for allocations to precious metals, and foreign dividend paying stocks. My question is, "U.S. companies with significant foreign operations and markets" - doesn't that category include just about every large cap, most mid cap, and many small cap companies? I don't know of (off the top of my head) too many major U.S. companies in the past 5 - 10 years that do a majority of their business in the USA (or even in North America, for that matter). Just curious about types of companies you are referencing here.
I use funds that specialize and/or have a significant portion of their portfolio in such companies. I'm not an analyst, so I use funds that offer a "conservative" approach to picking such stocks. I use those funds that employ all three market caps for investment. I'm getting pretty darn bearish on the dollar, that's for sure (say it aint so!)...it's a shame that our entire economy, and all of our markets, are going to have to suffer because of the stupidity and irresponsibility of a small percentage of the population and unscrupulous lenders. Agreed. 2. There is much talk on the forum as of late, about the changes in the way economic indicators are measured. I read a great deal of allegations about the political conspiracy of changing those measurements to mask the reality of 10% inflation, negative GDP, etc. Could someone please elaborate on this? With cold, hard facts, that is...what exactly has been changed, and when? Suggest you go to www.shadowstats.com . They offer a free archive that explains the history and shows you everything but current stats (that requires subscription). Note: you'll need a basic understanding of economics to get their point. Yeah, I don't care for the website name (too conspiratorial), but wha' cha' gonna do? I'm not saying I doubt it, and I'm not saying I concur...I'm just wondering what's changed.[/quote] I could be wrong....I grow tire of your Bear’istic views Doberman. Look back at your 1100+ posts…its grows tiresome
Are we to the point of maximum pessimism yet? Perhaps, perhaps not. I think we are getting close either way.
I’ve been moving people to more aggressive allocations for about 2 - 3 weeks now. A little early to be sure, but I don’t think it’s too early. The research I’ve done suggests that when you believe you’re past halfway to the bottom, you make a lot of money by doing so.
Jonzed,
We'll, be prepare to get much more tiresome..as it spreads to the main stream media...years and years to go my friend
doberman,
Lehman is next...Anyone hear that UBS is selling its brokerage. An advisor in my office announced it yesterday as I was leaving the office but I cannot find confirmation. If true, that would be a very bad sign for UBS.
That is the rumor…although we have:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZ_.7LAjh04wIt would be interesting if this rumor is in fact true due to the fact that UBS tried to buy AGE before Wachovia. If the rumor is true, that would highlight how fast the mighty have fallen.
Ohhh gee, well uhhh, how 'bout I run'em by ya before I post'em, sport? Seriously though, agree / disagree whatever. I try to be realistic by determining the facts of a situation and then applying my opinion as to the outcome. That's what your clients pay you for. Simply selling your clients on your optimism for the future is doing them a disservice. You're optimistic, fine. Now, tell me why, using facts and figures that back-up that opinion. (Refer to Indyone's posts as examples.) Now, why is this important to you? Because if I ever met one of your clients and you're a "gee-whiz"-type of broker, you'd lose the account. "Gee-whiz" brokers are a dime-a-dozen and will lose their accounts to brokers who have facts to back-up their opinion, everytime. Besides, having a factual, logical reason for doing what you did for a client, might save your b*tt in arbitration. Just sayin'....I grow tire of your Bear’istic views Doberman. Look back at your 1100+ posts…its grows tiresome
Thanks, Dobe…you’re my favorite bear…
You at least aren’t in the “we’re in a depression” crowd yet, and you do tend to stay factual, which I also appreciate. What Bear and others are going through right now will end up serving a valuable lesson, much as the internet bubble did. The only question here is how deep do the problems run and how quickly will they be behind us. I’m probably more optimistic than you in that regard, due to P/E retios and the number of industries that remain relatively unaffected at this point.
As the number two posting junkie here, I hereby grant you unlimited posting privileges to act as my counterbalance.
Thank you. (Knowing Indyone is posting from some swanky penthouse, beachfront hotel room overlooking scantily clad spring breakers frolicking on the sand. "Wanna play a little volleyball broker-boy?")Thanks, Dobe…you’re my favorite bear…
You at least aren’t in the “we’re in a depression” crowd yet, and you do tend to stay factual, which I also appreciate. What Bear and others are going through right now will end up serving a valuable lesson, much as the internet bubble did. The only question here is how deep do the problems run and how quickly will they be behind us. I’m probably more optimistic than you in that regard, due to P/E retios and the number of industries that remain relatively unaffected at this point.
As the number two posting junkie here, I hereby grant you unlimited posting privileges to act as my counterbalance.
This just in: Bear Stearns is history and their shareholders are getting a shower. JP Morgan is buying Bear for $2/share. (No misprint) Bear closed at $30 on Friday and on Monday JP Morgan is buying it for $2/share. WOW!!
The link says it all: http://www.foxnews.com/story/0,2933,338306,00.htmlAmazing is the only way I can describe that.
Asia’s down only 2%… Let’s see how we do tomorrow. 2 - 3% down day?
Wow…just wow!
Bear closed at $30 on Friday. JP Morgan bascially says we’ll pay $2 a share and Bear agrees. This is unbelievable. Because Bear agreed to this you have to think they weren’t just having short term liquidity problems.
ice - are you thinking that businesses will invest the cash on their balance sheets if they’re told their WACC’s will increase soon? While I respect this thought process, it’s nuts because Bear’s failure(and the current financial crisis in general) is caused by tight credit markets. An increase in interest rates is necessary to support the $ and to slow inflation, not to cause investment. There’s not a direct correlation.
While I prefer these term credit facilities & discount rate cuts to lowering the fed funds rate - I don’t think we need lower cd, mmkt, credit card & HELOC rates - I support fed cuts, and strongly believe they need to get to wherever they’re going & to indicate that they’re done cutting. This will support investment and will also loosen the credit markets.
Yeah, I’m not going to attempt to fix that run on sentence.
Im glad with your 4 month in the industry, you went from bull to bear. Congrats!
Well, this morning’s open should be interesting to say the least. Perhaps this is the event that gives us enough capitulation to bring the last sellers to the market.
[Quote] my call for higher interest rates is grounded in my belief that much of our real economic problems are hinged upon the dollar.
[/quote]
I agree we need a strong - or at least stronger - currency. This will be taken care of in the next year, though. I strongly believe this is a financial rather than an economic crisis & will be over by year’s end. So, while the drop in the dollar is scary, it will be reversed in short order. Also, it’s highly likely that other countries will move to support the dollar or decrease their rates to stay competitive. I read the ECB & Bank of England’s reluctance to lower rates as an indication that they see this weak dollar as a short term event.
Well, this morning’s open should be interesting to say the least. Perhaps this is the event that gives us enough capitulation to bring the last sellers to the market.
I sure hope it will. Is that going to be at 11,200 or 10,200, though?
Ice, Oh…sorry…7 months experience. I’ve read your posts. You have no clue. A permanent member of this forum…one should be so proud.
Lay it on the table...AUM.....toys......come on...bring it on.[quote=fastcar] Ice, Oh…sorry…7 months experience. I’ve read your posts. You have no clue. A permanent member of this forum…one should be so proud.
Lay it on the table…AUM…toys…come on…bring it on.[/quote]
Are you going to post pictures of your F430 or Shut the FU<K up?
WOW...for a 26year old overweight boy...lots of toys...go ahead and post up all your pictures first!
STFU=Ferris Bueller
more like 1.5mm..as I hear through the grapevine.
Good question, Ice. I think the dollar’s fall has been overdone. The world is pricing in a long-term financial decline that I don’t believe the US is in for.
Please see http://www.metaquotes.net/forex/eurusd
Other examples of mispricing:
Oil prices in the early 1970’s.
http://inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
That spike in the 1970’s was very scary because it was expected to last forever, but it didn’t.
Mortgage rates just this year(I locked in btw!!!)
http://www.bankrate.com/brm/graphs/graph_trend.asp
There’s talk on CNBC World(I’m an insomniac & watch that crap if I can’t sleep) that the Euro is 30% overvalued against the $.
The second reason the dollar will increase is that world sells to the US as it has never before. Other central banks will be put under a great deal of pressure to stabilize the currency by lowering their interest rates.
Both of these arguments have circumstantial evidence at the moment. I think there will be a confirmation of this by the third quarter of this year. Confirmation being a drop in rates at the ECB & Bank of England as well a loosening in the credit markets that will lead to greater US business investment.
Crossing fingers because I’m buying for clients right now while the rest of you are freaking…
Don’t feed the troll.
ice - I emailed a question into CNBC World this evening in regards to the dollar. The response the two gents gave was that the US has seen significant bear markets in the dollar in the past & this is not beyond the pale. Also, that the current decline in the US dollar is very helpful to trade balances which will be one of the catalysts for us to get out of this mess.
I agree that it’s killing consumers. You suggested that people are filling up their gas tanks & a lot of the folks who are putting their $$ into their V8 trucks are the same who can’t pay their mortgages & cards. Well, of course that’s true. Will we see a realignment in demand this year? Does this mean we sell short automakers & discretionary goods? Maybe. Do we finally see big investments going into alternative energy? 10 - 15 yr solution, but I’d guess that will happen.
An interesting factoid - China has higher fuel standards than the US & the US’s plans to increase CAFE standards is less ambitious than China’s.
I'm no Phd candidate like Ice, but it seems to me that the $ like all markets, is overshooting its mark. Good thought in an earlier post on this thread (don't recall who posted it) that the other central banks will bring their rates down and that should help the USD. Its in their interest to do that, to help the U.S. With all this said, I think it will be a long long time, before we see dollar levels back to what we had been accustomed to until a few years back, simply because we are no longer, and probably wont ever be, THE dominant global economy of the world. We are still a strong player (obviously) but the weak dollar is just a result of us no longer being the be all and end all in the world economy.
As far as the markets to, and Bear Stearns/JPM news, if this isnt leading to the washout we've all been waiting for, I dont know what will. I wouldnt be surprised if we ended the day flat to up. (I'll probably come back here tonight with egg on my face)I would like to make the point tht I was not bragging about anything. One of the forum participents asked me why my log in is fastcar. I just honestly answered the question. And then things were completely blown out of proportion. I apoligize for going off thread.
We have huge financial issues in the country. I cannot answer for icecold, but I own everything outright, have positive net worth and am prepared for this global crisis.[quote=fastcar]I would like to make the point tht I was not bragging about anything. One of the forum participents asked me why my log in is fastcar. I just honestly answered the question. And then things were completely blown out of proportion. I apoligize for going off thread.
We have huge financial issues in the country. I cannot answer for icecold, but I own everything outright, have positive net worth and am prepared for this global crisis. [/quote] Fastcar, you told us you owned a Ferrari. And not just any run of the mill Ferrari, but an F430. Now, personally, when you were asked about your car my money was on you coming back with a Lamborghini Reventon or maybe a Gallardo. Either of which would be much more fitting to your seeing red blood in the streets perspective. Your credibilty here is serverely damaged. Posting a pic would help. On the other hand Ice comes off as very credible and his higher interest rate theory carries some weight. Whether he's right or wrong about that at least he can back it up with some solid reasoning. And by the way, he's right on one point, we're not coming out of this until we get the dollar headed in a different direction. All and all, not bad for a kid who drives a pick up truck and counts wide screen's as toys.I hate these my dck is bigger than your dck posts anyway, but when it devolves to bragging about toys, this board drops to a new level of stupid.
While we're bragging about our spending habits, I've got a 27 incher that is pretty fuzzy for about 5 minutes until it gets warmed up. It's kinda like HD, except with a thin layer of vasaline smeared on the screen. I've also got enough in my checking account to by 4 HD tv's, quite a bit more than that in my "bad month cushion account", invested about 20% of last year's pay between retirement and other accounts, and have a net worth in my mid 30's exceeds that of many of my clients in their 50's. It's not that I can't afford the toys, I just think it's stupid to buy them. Who would you rather have as a client, me or ice?Don’t feed the troll.
[quote=EDJ4now]I hate these my dck is bigger than your dck posts anyway, but when it devolves to bragging about toys, this board drops to a new level of stupid.
While we're bragging about our spending habits, I've got a 27 incher that is pretty fuzzy for about 5 minutes until it gets warmed up. It's kinda like HD, except with a thin layer of vasaline smeared on the screen. I've also got enough in my checking account to by 4 HD tv's, quite a bit more than that in my "bad month cushion account", invested about 20% of last year's pay between retirement and other accounts, and have a net worth in my mid 30's exceeds that of many of my clients in their 50's. It's not that I can't afford the toys, I just think it's stupid to buy them. Who would you rather have as a client, me or ice?[/quote] Well, hmm, tough one? I'd pick Ice. He's younger and has more earning years ahead. And I could always hit him up to borrow his truck if I need to run down to Home Depot to pick up a new refridgerator or something. And while were loading the truck he could lay some of that MBA karma on me and I might learn a thing or two. Seriously, I didn't take Ice's post as a brag. Nor do I look at him as a spendthrift, which is how you're trying to paint him. Most of us have at least the bare essentials, house, car/truck/ furniture. As for Widescreens, not really toys. They are the only real option today when buying televisions. That said, I do think he responded unnecessarily with that post. As for posting toys etc, Ok. This is a tough biz and toys are one form of reward. It pains me that so many find some of the toys posted ridiculous. Ok, you come on here as a 20 something claiming to own a Ferrari, even while possible, you deserve to get shot down. On the other hand ice claimed a Tundra, so why shoot that down? I'm the king of toys. My wife calls our garage " Bondguy's toy chest." and that doesn't count all the crap I've bought and sold over the years. I've blown a lot of money over the years and in hindsight I wouldn't mind having most of that dough back. But it is up to you how you spend your paycheck. Waste it or invest it. But what ever you do enjoy it. I tell you that to tell you this, nobody cares. Outside of a few close friends and your family, nobody cares. Got a Tundra, nobody cares. Got an F430, nobody cares. Got a Rambow Pool Cue, nobody cares. Nobody cares what "stuff" you've got. That doesn't mean don't buy it. Only that you should buy it to enjoy it, not to inventory it. Having an inventory of "stuff" is a poor measure of a life well lived. Lastly, there is a price for owning all this "stuff." Boats, a popular waste of money, for example, come with seasonal bills for docking and storage. There is annual maintenance. The total bill just to show up at the dock is between $100 and $125 a foot. That doesn't count the direct operating cost of the boat or the fact that you're getting crushed on depreciation. And then, if you financed it, there is the note. Want a hot car? Get ready to pony up big time for the annual service bills. Some exotics could easily come with $3000 oil change bills attached. Wanna do some grass roots racing, with cheapie Dodge Neon or something, could top 5k a year to race. How about racing sail boats? That's gotta be cheaper right? Wrong! Even something small, like a J 22 will cost over 10K a year to campaign. Up that to a J35 and you're looking easily looking at over 15k. Rip a chute and write a check for 7k before the next race. Ok, you're stayin on dry land and decide to become a member of the Ironbutt Association. The good news is it's really cheap to join, under $100 bucks. The bad news is the only way in is to ride a motorcycle 1000 miles in 24 hours. If you're serious about advancing within the associaton, not counting the 15 to 25k cost of the bike, the additonal 6 or 7k in gear you'll need, it will cost you at least 4 or 5k a year to run a few rallies and do a few IBA rides. That doesn't count the massive depreciation that putting 25k to 100k miles on that bike every year will do. Of course sleepling at the Iron Butt motel will help cut down on costs. Still, there are plenty of ways to blow your money. And there is nothing wrong with blowing it on any of these things. Look before you leap and like I said, enjoy it. Because nobody cares.Leaving my Kawasaki Vulcan aside and getting mostly back on topic, are there any bears here that are completely out of US equities?
[quote=Indyone]Leaving my Kawasaki Vulcan aside and getting mostly back on topic, are there any bears here that are completely out of US equities?[/quote]
Think we need a(nother) motorcycle thread.
I stopped short of calling BS on the 15-25k required for the IronButt, I know some morons have tried it on souped-up mopeds and 20 yr.-old 'Wings.
[/quote]
Think we need a(nother) motorcycle thread.
I stopped short of calling BS on the 15-25k required for the IronButt, I know some morons have tried it on souped-up mopeds and 20 yr.-old 'Wings.
[/quote]
I wouldnt be surprised if we ended the day flat to up. (I’ll probably come back here tonight with egg on my face)
SOOO... What's going to happen tomorrow, Pratoman? Nice call!
OK BG, I concede, no moped here.
The ST would be my choice just cause I’m a sportbike-type of guy but it’s probably not the best choice. I really can’t fathom someone trying the IB with a RoadKing though, that’s an awful long way for the less-than-dependable hog.
I hear ya. The ST is one of the best choices in the non Winnebiko category. And the truth is "ride what ya brung." Any bike you can get comfortable on will work. The list I provided is what experiece has taught us works best. As for Harley's and the IBA, they are building a solid reputation where as BMW's reliability has taken a serious hit. During last year's IBR there were multible BMW final drive failures. I sold my long of tooth K1200LT and I'am looking for a replacement. It was time. The reliabilty thing has got my attention, but man, do I love those bikes. Relevent thread content: So, any news in the markets today? We're all good, no worries, right?OK BG, I concede, no moped here.
The ST would be my choice just cause I’m a sportbike-type of guy but it’s probably not the best choice. I really can’t fathom someone trying the IB with a RoadKing though, that’s an awful long way for the less-than-dependable hog.
Ashland - I thanks for the kudos, but I’ve been around long enough to know, I got lucky today. I have no intention of pressing my luck. My opinion is tho, that we are way oversold and due for some kind of rally (duh). I think today showed that there is a lot of money coming in at around SPX 1280. The market is trying to find a bottom here, and IF we can hold and move higher frm these levels, it looks like a classic double bottom
Ice, we all get off topic once in a while. I did think the whole car thing, and how we got so far off the subject of markets and business building, was an asshole-ism;. But we all do it once in a while. And you and BondGuy are allowed, you've both got plenty of currency on this board. Lets hope for a good day tomorrow.[quote=joedabrkr] [quote=BondGuy]
And while I could run an IBA ride on my Honda Reflex NSS 250 scooter it would be ill advised to do so. [/quote]Ahhh....if you were really a tough guy you'd put on your Gore-Tex Gloves and electric vest and give it a try at least once!
[/quote] When it comes to riding motorcycles, I'm the biggest sissy out there! Actually, riding a Reflex scooter in the Iron Butt Rally has already been done. The Iron Butt rally for those who don't know, is an eleven day around the country motorcycle rally where riders try to get bonus points by riding to certain locations and either performing a task or answering a question. The rally is run on odd numbered years and has a different starting location each time. There are time controlled check points that the riders must hit to stay in the rally. And to give you a flavor of what it's about, the rally might start in say Birmingham Alabama with the first check point in San Diego Ca 57 hours later. There are bonus locations spread between Al. and Ca. but the biggest point grab is Key West Florida. Which happens to be almost 1000 miles in the wrong direction. Is it a leg winner or sucker bonus impossible to make? It's a sucker bonus, but as the rally goes on and fatigue starts to take hold obvious decisions like that aren't so simple. It's chess on a motorcycle. Most finishers will log over 10,000 miles with some over 12,000. The Reflex was ridden in the Hopeless Class , in fact, from Birminham to Alaska and back to Birmingham. The rider finished but was beaten by riders who had ridden from Birm to Dead Horse Alaska (Prudoe Bay, end of the haul road), then to Key West, thus hitting both the northern most part of the U.S. and its most Southern point as well, and then the thousand miles back to Alabama. All within the alotted time window. Sounds like fun doesn't it? Let's all do one.
[quote=iceco1d]
Our economy needs a strong dollar because, well, we don't build chit here. Most of the people I know are hurting right now because too much of their budget goes to put gas in their car and heat in their house. Strengthen the dollar, and those problems ease (gas would be under $2/gallon if the dollar went back to its value at the turn of the century). And if you ask me, $1.75 gas would put a heck of a lot of money into other sectors of the economy. So would sub-$2 heating oil. [/quote] It's a good post but I notice none of you ever talk about the fear that drives this stock market. Logic can only go so far in our market, imo. I still do not get the mind set of the American cnonsumer. They'll spend thousands purchasing nice cars but bail on their stocks everytime someone farts out news that is overblown.[quote=anabuhabkuss]
[/quote] It's a good post but I notice none of you ever talk about the fear that drives this stock market. Logic can only go so far in our market, imo. I still do not get the mind set of the American cnonsumer. They'll spend thousands purchasing nice cars but bail on their stocks everytime someone farts out news that is overblown.[/quote] I respectfully disagree, but first a question: You speak of the American consumer as if you are not one. Are you American? I disagree with your assessment because the American consumer is not the major driver behind day to day stock price movement. The maket is institutionally driven. At least it is on a day to day basis. It isn't the average American citizen bailing on stocks, it's the major hedge funds, pension plans, insurance companies etc whose managers are judged on a quarterly performance basis. Most of these managers will only get a one quarter of sub par performance free pass before they get the hook. Thus the frenzy you see. Jobs are on the line, futures are at stake. That's not to say that individual consumers are not a part of this. Of course they are. They just aren't the driver. My own book of clients is a prime example. I can count on one hand the number of clients who have said take me out. I sure the same holds true for most here. And I could be wrong. But if I am, who could blame consumers for wanting out? In 2001-03 while the experts said stay to course, anyone who did was worth 40% less when the dust settled. Of course those experts still got paid for rendering completely wrong advice.“In 2001-03 while the experts said stay to course, anyone who did was worth 40% less when the dust settled.”
That's only true if the same experts then told them to get out of the market in 2003. The dust doesn't settle until the investments get sold.Hi Bondguy,
I think I was mainly referencing a post by Ashland (I think) earlier who said he was moving his clients' cash into more aggressive funds. I was just wondering where he finds these clients. And yes I am American :) I was just generalizing the majority of my and the other brokers in my branch who ARE bailing no matter how much logic you spew at them but you're right we are very institutional driven (was tired and a tad drunk when I posted that last night).[quote=anabuhabkuss]Hi Bondguy,
I think I was mainly referencing a post by Ashland (I think) earlier who said he was moving his clients' cash into more aggressive funds. I was just wondering where he finds these clients. And yes I am American :) I was just generalizing the majority of my and the other brokers in my branch who ARE bailing no matter how much logic you spew at them but you're right we are very institutional driven (was tired and a tad drunk when I posted that last night).[/quote] Tied one on last night? Bear Stearns employee? I'm kidding of course. After the last few trading days tipping a few was probably a good idea. St. Patty's Day was well timed this year. On your post, what really caught my attention was the nice car comment. I really could care less about the market, but when you when you brought nice cars into it, well... As for going aggressive, different strokes a market make. If we all thought and did the same I guess you and I and a whole bunch of other folks here would be doing something else for a living. Personally, I've always wanted to give Bikini Waxing a try. Ah, I digress. Apologies to the ladies.[quote=anonymous]“In 2001-03 while the experts said stay to course, anyone who did was worth 40% less when the dust settled.”
That's only true if the same experts then told them to get out of the market in 2003. The dust doesn't settle until the investments get sold. [/quote] "Hey, Mr Client, I've got good news and I've got bad news. First the bad news. The life savings you entrusted to me is worth 40% less than when we started. The good news is we need only a 60% gain to recover those loses and get you back to even." Yeah, I see your point.BG I made no mention of cars on this forum whatsoever.
[quote=pratoman]Ashland - I thanks for the kudos, but I’ve been around long enough to know, I got lucky today. I have no intention of pressing my luck. My opinion is tho, that we are way oversold and due for some kind of rally (duh). I think today showed that there is a lot of money coming in at around SPX 1280. The market is trying to find a bottom here, and IF we can hold and move higher frm these levels, it looks like a classic double bottom
Lets hope for a good day tomorrow.[/quote] Good call.Or a relief rally… I’m more concerned this week than I was last week & am going to postpone my next move into stocks w/ clients. I don’t see this lowering mortgage rates & it’s near impossible to qualify for a new loan right now. I don’t think we’re going to see the necessary reductions in housing inventories this summer & may have lower prices that will push back sales further. Not turning bearish… just think we’re in a trading range & think 12,000 may be in the middle of that range.
Technically, it sure does look like a double bottom, though.
Joe has it right. When I took over my book I moved people towards model portfolios & then stepped them 10 - 15% back on stocks each. The argument I used is that there’s an efficient frontier(didn’t use that word), and why wouldn’t they want to be on it? I also explained to them it was easier to manage a portfolio that I was constantly touching for various clients. Essentially, if the market moved south, they would receive better service & have a higher likelihood of maintaining their account balances because I could easily monitor their holdings. Just wish I had a TAMP & discretion for more of my clients.
Now when I call I can tell them I’m adjusting my model for them & they go along with less of a fight. More importantly, they know I have a disciplined process and a specific strategy to manage money. That alone I think has held the scared phone calls down.
Ashland,
I am moving toward a similiar model. As new money comes in, I am putting it into discretionary accounts, on a platform my wirehouse has that allows me to use stocks, bonds, etf's and mutual funds. I am using the firms strategic models, on a macro level, but tweaking them a bit in an attempt to be tactical. I am using some traditional style box MF's, along with go anywhere, lower volatility and/ or absolute return funds like Ivy Asset Strategy, Long/Short funds, Rydex Mgd Futures, etc. I am using these non traditional funds in combination with traditional Large Cap funds as a core. I am realizing the clients I want to work with, are people who can ignore the upside hype, in return for a solid plan to manage volatility (risk).On another note, I heard something amazing tonight. I did a seminar that I ran for the FA's in my branch. I had a guest speaker come in - our firms Fixed Income Strategist. Bright young guy.
Here is a tidbit he offered. Right now, the yield spread is WIDER on U.S. Corporate AAA debt, than it is on the debt of Lithuania, Slovenia, and Croatia. WTF. If that isnt illogical panic/fear, what is.Pratoman - I don’t have the flexibility that you have in your program. I sure wish I did, though. I’m building a long term business through fee-based & UIT’s & expect I’ll hire an associate next year to take more responsibility for day-to-day on commission products and smaller relationships so I can prospect business owners more like a wirehouse broker does. I’ll also be eligible for a full time assistant in 2009. Until then I’ll continue to slog away at it…
Very interesting re the debt. BondGuy, what do you know about that?
Holy crap I must have been REALLY drunk and tired.
Ah, what I've been saying all along "Just buy bonds!" Usually the case when you can drive a freight train through the spread.Pratoman - I don’t have the flexibility that you have in your program. I sure wish I did, though. I’m building a long term business through fee-based & UIT’s & expect I’ll hire an associate next year to take more responsibility for day-to-day on commission products and smaller relationships so I can prospect business owners more like a wirehouse broker does. I’ll also be eligible for a full time assistant in 2009. Until then I’ll continue to slog away at it…
Very interesting re the debt. BondGuy, what do you know about that?
[quote=Ashland] Or a relief rally… I’m more concerned this week than I was last week & am going to postpone my next move into stocks w/ clients. I don’t see this lowering mortgage rates & it’s near impossible to qualify for a new loan right now. I don’t think we’re going to see the necessary reductions in housing inventories this summer & may have lower prices that will push back sales further. Not turning bearish… just think we’re in a trading range & think 12,000 may be in the middle of that range.
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I hope you used this post as an indicator that we had hit bottom!
Ash,
Hit bottom??? No doubt!!! Which means we most likely have not!!!???%$# What a perverse business this must seem like to the general public laymen.!
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