Condition of the market

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Mar 15, 2007 2:37 am

[quote=Rugby]

A couple signs the top is in and we are heading lower:

1)  "Fast Money" on CNBC.  Trading gurus with he most perfect white teeth, telling its viewers how to make "fast money" in and out of U.S. equities.  They make it seem so easy, and they have all the answers.  Much better than Cramer though...

2)  CNBC Million Dollar challenge.  Contest rules are you can only go long U.S. equities with market cap of greater than 500MM.  LOL

3)  UBS and BSC upgrades of NEW.  Same old, same old dirty tricks...This time they telling us to buy companies that are built on a deck of cards...versus sales growth of Internet gear.  To me this recent monkey business seems a little more sinister and at least incompetence at the highest level.

4)  A certain poster on here who happens to be a CFP with Dow 13,000  as his signature.  Hasn't posted much lately....

[/quote]

Funny I was having similar thoughts about #2 yesterday...especially when they also bring in the "trading with the stars" feature....
Mar 15, 2007 3:09 am

IndyOne, I took Penn over A&M in the first round (but I got 6 points).

Anyone take a look at ^VIX lately? Oh my----

Mar 15, 2007 5:47 am

[quote=OhioAdvisor]

I think that advisors that ignore market cycles and tell there clients that everything will be fine and not to worry are doing a severe injustice to them.  it took clients six years to make back what they lost in the tech bubble and many advisors and clients alike just buried there heads in the sand.  Newsflash many of your babyboomer clients an't afford to go through another wreck like we just came out of. 

Stop following the advice of your b'd's and invesmtment sponsors who's life depends on you keeping your clients money in the market. 

[/quote]

Great advice.  One problem though.  Unless you are a hell of a lot smarter than Warren Buffett, Peter Lynch, the guys at Capital Research, insert one of thousands of people here, you don't know when the market is going down or up.  Sure, a few people got lucky and pulled their clients out in 2000.  Probably even more pulled their clients out in 94 or in 97 and left a bunch of money on the table. 

I'm not a big fan of EDJ's dumbing down of our job (check my previous posts), but they have this one right.  The time to invest is when you have the $$ available.  If you have some great insight that is smarter than that, why the hell do you bother with clients?  You could turn $10m of your personal money into $10mm in a year using S&P futures contracts.

Mar 15, 2007 9:35 am

[quote=blarmston]

"Enlighten us. What strategies are you employing? How are you handling your clients phone calls?

[/quote]



Firstly, I try to not work with hysterical people. I shoot out an email
describing what is going on, and a range of possible outcomes.



For clients with customised portfolio’s you give em a run down position
by position, and describe how different stocks are not affected by any
of this.



The recent buyout of SFC was most helpful for breaking the stream of  bad news.



EDJ is right, the right time to invest is when you have the money.
Mar 16, 2007 12:30 am

[quote=ymh_ymh_ymh]IndyOne, I took Penn over A&M in the first round (but I got 6 points).[/quote]

So how much did that one cost you?

Mar 16, 2007 3:18 am

More than a 6 pack of micro-brew.

I should have asked for 16 points instead of 6!

I am 7 for 9 so far though which isn't bad. Old Dominion's the other one I messed up.

Mar 16, 2007 3:43 am

[quote=ymh_ymh_ymh]

More than a 6 pack of micro-brew.



I should have asked for 16 points instead of 6!



I am 7 for 9 so far though which isn’t bad. Old Dominion’s the other one I

messed up.

[/quote]



None of that matters…the Gators are comin’ to town!
Mar 16, 2007 3:51 am

I am now 9 for 11 if Gonzaga can't rally. I did take Xavier over BYU and it was most sweet tonight!

I am long the Gators, too.

Mar 16, 2007 3:55 am

[quote=mikebutler222] Our job is to not share the fears and

emotions that drive our client’s actions. I put talk of a “mortgage debt

bubble” in that category. [/quote]



Mike, I have never heard it stated that way, but it’s very true. In fact, just

tonight a had a new client ask me what I thought of the pending “baby

boomer market implosion”. He heard this story on CNBC or one of those

other “docu-dramas”. You would have thought the sky was falling by the

way he interpreted the story. All the baby boomers are going to start

selling all their investments next year and the market will crash and burn.

I almost didn’t know where to start.

Mar 16, 2007 3:56 am

8 for 11, Zags let me down.

Mar 16, 2007 11:32 am

[quote=Broker24] [quote=mikebutler222] Our job is to not share the fears and
emotions that drive our client's actions. I put talk of a "mortgage debt
bubble" in that category. [/quote]

Mike, I have never heard it stated that way, but it's very true. In fact, just
tonight a had a new client ask me what I thought of the pending "baby
boomer market implosion". He heard this story on CNBC or one of those
other "docu-dramas". You would have thought the sky was falling by the
way he interpreted the story. All the baby boomers are going to start
selling all their investments next year and the market will crash and burn.
I almost didn't know where to start.[/quote]

There used to be a guy, Harry Dent, who had been saying this since back in the nineties. Of course this is the same Harry Dent who said that the crash would be coming after the market had run up to20+thousand (anticipating 15% per year returns every year on average).

My argument then was "Yeah Right, boomers, who will have had a lifetime experience with stocks of 15+% per year are going to sell those investments and buy 6% bonds. That makes a ton of sense!"

Makes more sense now with recent returns having been in the mid single and low double digit returns. But with bonds in the 5% range, most can't afford not to take on additional risk to chase the higher returns.

Mar 16, 2007 2:12 pm

[quote=Broker24] [quote=mikebutler222] Our job is to not share the fears and
emotions that drive our client's actions. I put talk of a "mortgage debt
bubble" in that category. [/quote]

Mike, I have never heard it stated that way, but it's very true. In fact, just
tonight a had a new client ask me what I thought of the pending "baby
boomer market implosion". He heard this story on CNBC or one of those
other "docu-dramas". You would have thought the sky was falling by the
way he interpreted the story. All the baby boomers are going to start
selling all their investments next year and the market will crash and burn.
I almost didn't know where to start.[/quote]

I think there are two routes to consider.

1) You might decide right out of the box that this is the sort of guy you don't want to deal with based on his attitude. Some people are more trouble than they’re worth.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

2) You could consider telling him about the results Harry Dent (the guy behind the "the baby boomers will cash out of the equity market and ruin it" logic) achieved when he put his wallet where his mouth is and tried to run a mutual fund based on his theory. I haven't looked recently, but last I did it was pretty dismal.

Mar 16, 2007 3:25 pm

[quote=mikebutler222]

I think there are two routes to consider.

1) You might decide right out of the box that this is the sort of guy you don't want to deal with based on his attitude. Some people are more trouble than they’re worth.

[/quote]

I tell clients to strap in, enjoy the ride, and stop disturbing the maestro.


Mar 16, 2007 3:39 pm

ahhh, harry dent. MS paid him to speak to us when I was there. I keep his book on my desk. here is his prediction.

dow will reach 21500 and possibly 35000 by the year 2008

i wish i still had my copy of the great depression of 1990.

Mar 16, 2007 3:41 pm

Mar 16, 2007 11:36 pm

[quote=Broker24]


Mike, I have never heard it stated that way, but it's very true. In fact, just
tonight a had a new client ask me what I thought of the pending "baby
boomer market implosion". He heard this story on CNBC or one of those
other "docu-dramas". You would have thought the sky was falling by the
way he interpreted the story. All the baby boomers are going to start
selling all their investments next year and the market will crash and burn.
I almost didn't know where to start.[/quote]

Simple, ask them who they know or have read about getting rich from watching CNBC....(Hint: No one.) If need be, shift a small portion of their investment into stocks poised to take advantage of the aging of the boomers.

Mar 17, 2007 3:36 am

[quote=Indyone]

Bring on the volatility.  I'll say Dow 13,000 by September and Texas A&M to win it all.  Wisconsin doesn't even escape the 2nd round.

[/quote]

Indyone-

What happens to you and your book if the DOW is at 10,000 by September?

Mar 18, 2007 4:12 am

The day the dow lost 500 points, I took a $100K hit on a $32 million+ book.  You can extrapolate that to see what might happen if we take a larger hit.  If the Dow is at 10K by Sept, I'll be surprised, but I'll certainly survive.  I took a bigger hit than that a few years back and I think I'm better positioned today than I was then.  I may not get full market participation, but at the same time, I won't lose my or my clients' shirts.  I'm not going into a shell either.  The market WILL make my clients money...it's just a matter of when.  No way am I sitting on the sidelines due to fear.

Don't worry about me...I'm here to stay...

Mar 18, 2007 10:25 pm

[quote=Rugby][quote=Indyone]

Bring on the volatility.  I'll say Dow 13,000 by September and Texas A&M to win it all.  Wisconsin doesn't even escape the 2nd round.

[/quote]

Indyone-

What happens to you and your book if the DOW is at 10,000 by September?

[/quote]

What will happen to yours if the Dow's at 13,000 in three months?

Mar 18, 2007 11:38 pm

[quote=Indyone]

The day the dow lost 500 points, I took a $100K hit on a $32 million+ book.  You can extrapolate that to see what might happen if we take a larger hit.  If the Dow is at 10K by Sept, I'll be surprised, but I'll certainly survive.  I took a bigger hit than that a few years back and I think I'm better positioned today than I was then.  I may not get full market participation, but at the same time, I won't lose my or my clients' shirts.  I'm not going into a shell either.  The market WILL make my clients money...it's just a matter of when.  No way am I sitting on the sidelines due to fear.

Don't worry about me...I'm here to stay...

[/quote]

I refuse to call you a liar in public.