What to buy in this market?
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Let me finish. Great story…I had a member of a family who has owned a foundry for 100+ years, stop by my office Tuesday afternoon to comment on an article I wrote. He and I talk a few times a year about different stocks. I knew he had mucho money in the market…but didn’t know exactly how much. His assets are with a small regional b/d for 30+ years.
He started the convesation by saying, "You know you've been invited to a wonderful party and it starts at 6pm." I said...OOOOkaaaYYY. He said the reason, and I've never told anyone outside my family, I have 4 mil invested is because in 1973 I made a decision to do something that seemed just fundamentally wrong. I asked what that was. He said he took his and his wife's savings, all of it..51k, and bought stocks in the middle of one of the worst markets in history. His wife cried. He'd never invested before, other than cd's at the bank. The reason he did was because a old timer told him to, and explained to him why. He gave me these stocks that he is in...DOW, D, VZ, PG, MMM, GE, JNJ, SO etc (or companies that eventually turned into these). I never took a dividend and I never sold. I never sold, but man there's times in which I needed to, but I didn't. He has 1/3 of his money in 30 year treasuries that he purchased in the early 90's in the 8-12% range. He said.."your invited to a party and its 6pm, you need to go. Its 2:30am for me and the party is about over...but for you, its a time when the real money can be made. I had about 24k in a jt acct in cash and I bought DOW, VZ, GE, SO and ACAS. Man I'm excited, I hope the market goes down further.44 years in the business in itself only illustrates one thing to me...the guy is a good salesman. Aside from that, he's just an old guy that's discouraged. 44 years doesn't automatically make him smart, or wise (nor does it make him stupid or unwise).
ice (you haven't earned the right to have your surname capitalized)-
You are a fool. Or at least your responses are one of a very young inexperienced adviser. Maybe even you could learn from a 44 year vet in our biz. You would have to get out of the way and I doubt your ego would let you.
Why don't you spend a little more time in the biz, and maybe a little less time on these forums. Who knows you might actually be humbled and learn something.
Come on now, foot, that’s the beauty of a fee-based business.
Stick the $$ into a model portfolio of mutual funds with auto-rebalancing and then hit your favorite forums all day and all night. Ice has it figured out. My dumb a$$, however, has to start every month looking for new cash to shovel into A shares.[quote=footsoldier]
You are a fool. Or at least your responses are one of a very young inexperienced adviser. Maybe even you could learn from a 44 year vet in our biz. You would have to get out of the way and I doubt your ego would let you. Why don't you spend a little more time in the biz, and maybe a little less time on these forums. Who knows you might actually be humbled and learn something. [/quote]Foot, I know a lot of guys with 30+ years. I know a lot of them with 10+ years. Any way you shake it, people are depressed. I had never seen my OSJ so visibly shaken as he was last week (31 years in the advising business). But you know what? I'm willing to bet that the world economy doesn't grind to a halt.
I may have misinterpreted your attack on Ice for being inexperienced, but it seemed that you were suggesting that because of the way the elders are responding to this situation, that things are different this time. You know the story from there though...
Ice, you profess to be all knowing in the investment arena so I won't advice you there.
For your golf game - take a lesson!this is the easiest money I’ve ever made in my life
Ice- Congrats on making it this far. I'll lay odds you are out of here in less than 5 years. No way any clients with a brain would want you for an advisor. Maybe you should consider running for politics. Since you know everything about portfolio management why don't you consider a position on Wall Street. The firms need more sanctimonius pricks like you. Or better yet just join their country club. Might improve your game...but it could damage what little matter is between your ears. I have been on these forums for two years. My time here is dwindling....there is no substance any longer just ego gratification.I may have misinterpreted your attack on Ice for being inexperienced, but it seemed that you were suggesting that because of the way the elders are responding to this situation, that things are different this time. You know the story from there though…
GVF- The context of his concern was there was no safe haven. Typically a flight to quality would occur and bonds, cash alternatives were a viable alternative. That hasn't been the case this time and with money markets in peril (before the govt bailout) and banks failing it has caused many who aren't brilliant asset allocators (like my good friend ice) to question where to go. Even though the 44 year vet lost 600K of a 2.8M portfolio over the last year, he still remains invested so clearly he continues to believe the market will out peform like it has historically. My attack as you put it on the little rich man ice is intended to get him to STFU. He knows very little and it shows in all of his 1500+ posts over the last year. He is very inexperienced and someday when he doesn't perform better than American Funds or the S&P or whatever benchmark he'll be eating crow, assuming he hasn't left for greener pastures by then. I might be inviting trouble....I wonder if we could get boy wonder to illustrate his asset allocation model, then the rest of us could compare his brillance to the rest of the world.Ice-
Peace brother. Just show some value instead of puffing your chest. You aren't any better than most or you would be annointed by now. Get over yourself. You don't have to PM me, just tell all of us how brilliant you are. Oh and by the way since you ask, I just turned 50.............AARP has been calling for awhile.Look, I know everyone’s shit is a little emotional right now, but listen up, I have a 3 point plan on how we can all be friends again.
I’ll admit this past 6 weeks have been the toughest I can recall. Probably because I am not nearly as intelligent as Ice to be able to predict and time the market. Dorsey Wright and all those technical chartist types are much much smarter than little old me.
I have never seen a market timer stay in this business for very long. They make hay for awhile, or they claim they do (Hello... 108 holes of golf last week!). If that is not puffing your chest what the hell is? All I can surmise is if his precious few clients don't need him then his options are either go play golf, surf the web, or prospect for new clients. Now which do you think he's ignoring?You think I’m a “punk” and an “egomaniac” because I’m too opinionated for a 2nd year guy in your eyes.
Ice- Thanks again for getting the old boy's blood boiling and getting me to respond. I'll close with the thought that your comments above say it all.Just for the record, footsoldier…
From the contacts i’ve had with Ice, both on the boards and via PM’s , my impession is that he is way more knowledgeable about running money than his years in the business call for. (I am not saying you are not smart, so don’t go ballistic on me too…i’ve got enough shit on my mind these days just like we all do)
He is far from a market timer, and he brings a clear strategy to the people he works with.
I dont even know why i’m jumping in, just a diversion i guess, but just thought i’d fill you in on my experience thru my contacts with him, you might have the wrong impression. (not saying he doesnt think highly of himself, if he didnt he shouldnt be doing what we do for a living).
Just my two cents. P.S. - I’m older than both of you
Peace!!!
I'm sorry you are so stressed out about the market.
If you aren't yet you will be especially if you have older clients who rely on their assets for income for the rest of their life. What percentage of your clients are in retirement now?
Don't get pissed at me for being prepared.
I'll take Bob's response above at face value. I'll ask nicely this time, could you please identify for us what you are doing.
There is no reason a 4 or 5 year long bear market should cause you, or your clients, to lose any sleep and/or not be able to reach their financial goals, MUCH LESS a year long bear market.
Have you been to arbitration yet? I have twice, both times it was not my fault, it was the market. Both times I was brought before three strangers who admitted I did nothing wrong. Even the best strategies aren't perfect. Please tell us what you do that is different during market downturns (are you into shorting the market?).
If you aren't capable of coming up with an investment strategy that will get your clients to meet their financial goals regardless when the market hiccups, then perhaps you need a new career.
This is usually where I get a little testy in my responses. After all I have been in the biz since 94, actually started part-time in 92 and to have a 2 year rep tell me its time for a new career because I can't find a strategy that works well in bad markets irks the shit out of me. Assuming I elect to stay in the industry after 14 years, please help me and others understand what exactly your strategies are? If the 44 year vet is all wet about there being no safe haven, help all of us understand where you are finding that comfort?
Where did you get your education about investing. Did you buy a system or did you create it on your own. What qualifications do you currently have besides being successful in your previous industry? Are you a CFA?
Bob indicates you have a clear strategy. Could you please help us understand how your strategy is so different?
I hope to learn something and become a NON-DICK as you put it. I am old enough to admit my mistakes, so please prove me wrong. It is far better to become more educated on any subject, especially in our industry.
I find it curious that you aren't compelled to share with the masses? Any particular reason why? Do you sell your strategies to other reps?
You needed to have a plan in place for this BEFORE it happened - now is a little late for implementation.
I'm buying. And in 5 years, I, and my clients, will be happy that I'm buying (intelligently, of course) with the DOW @ 10K, rather than sit on some CDs and T-Bills for 3%, and then get back in @ 12,500. That's not to say you shouldn't have a healthy dose of CDs/Treasuries/Money Market/Savings/etc. for those clients that are in, or near, retirement. But you should have that in place because of age/risk tolerance, not because the market scares you all of a sudden. Sorry for the rant, but you don't get paid to get as scared as the clients. You get paid to build an intelligently designed portfolio, and take emotion out of the investing process. I'm gonna meditate today on this earlier quote from Ice. These (free) words are worth - I don't know - more than the $1200 some guys charge for a "plan".If people wait to back in @ 12,500 they will be able to sit it out for awhile…Do not see getting back to that for 5-7 years. Think unless there is some miraculous recovery for stocks we will be stuck a new trading levels for awhile, and if we do take out the lows sometime next year and take it down to 6000 or so, it is the end of stocks as a popular asset class for longer. Nikkei was at 40000 in 1990 and never recovered at all, now down to 8000+. Anyone who needs a history lesson pull up some long term charts from 1973 on…great stocks traded flat for many years with PE ratios around 5-6.
Hope I am wrong, but the perfect storm may have hit, complete confidence crisis on the system and financial markets, poor bank lending, new regulation on the brothels (brokerage houses), and people losing 25-50% of their money, even in safer instruments like corperates and munis. I think if there is a rally coming maybe Nov/Dec absence of news might be the window for it, can not imagine what earnings will look like in Jan and cant imagine too much great news coming then, realize that when it looks darkest too late to get bearish, but think this time its the kind of bad that will linger for awhile.Ice-
My AF clients are from my Jones years. Since I became independent 2 years ago, the same time you joined our industry, I have implemented much of what you are doing. I too believe in alternative investments and I embrace some static funds like DFA. It will be interesting to see 12-24 months out how well the static portfolios perform. I however am not convinced that efficent markets theories that were conceived in the 40's hold true today. It still comes down to trust. Currently the companies that make up our markets (efficient or otherwise) have to earn it back. How do static portfolios reflect government intervention. Let's not forget that the US government now owns a piece of insurance companies and banks and soon Americas largest car companies. What happens if re-regulation occurs. What happens if we have run away inflation. The market itself doesn't scare me. What scares me, just like the 44 year vet is where do you turn for safety without getting killed. A bond portfolio today probably has as much risk as an equity portfolio did a year ago. If we do have runaway inflation after this crisis won't that decimate the bond values? (Interest rates will have to rise just like they did in the 70's...I was in my teen years then when I made my first investment 14% money market rates and inflation was at 21%). History has taught us that the 70's may in fact be back. g So Ice, a little fear is warranted and those that have lived through the tough times in this industry can teach us volumes more than most MBA's. My closest friend has his MBA in Finance. And I manage his portfolio and have for the last 10 years.Your quoted statement above is, I'm assuming, a passive-aggressive attempt to keep me engaged in this nonsense. I'm not sure what your friend is thinking...maybe he just doesn't have the time/care to do it himself (I doubt that). Maybe he is bs'ing you. Maybe you are bs'ing me. I don't really care either way.
Ice-
My friend has been an entrepeneur since college and chooses to spend his time doing other things where he excels. Finance stuff bores him. No BS. And no passive-agressive thoughts on my part at least. Too bad I hadn't taken the time to read your posts in the past.
I don't have time to read 1500 posts.
Not a single income-taking client of mine has yet had to sell a depreciated asset yet for income during any of this "crisis."
You deserve props for this. Reverse dollar cost averaging in down markets is a recipe for disaster. The next wave of arbitrations (people sue for anything today) are going to be from people who outlive their money.
Since you are in the 403B market or your firm is, do you have an opinion about guaranteed income products such as annuities. I am noticing more and more fund companies coming up with guaranteed income riders on mutual funds. I think even Vanguard announced a product recently. Any thoughts?
[quote=iceco1d][quote=footsoldier]this is the easiest money I’ve ever made in my life
Ice- Congrats on making it this far. I'll lay odds you are out of here in less than 5 years. No way any clients with a brain would want you for an advisor. Maybe you should consider running for politics. Since you know everything about portfolio management why don't you consider a position on Wall Street. The firms need more sanctimonius pricks like you. Or better yet just join their country club. Might improve your game...but it could damage what little matter is between your ears. I have been on these forums for two years. My time here is dwindling....there is no substance any longer just ego gratification. [/quote] You name the wager, and you are on. Put up or shut up on this one. As far as clients not liking me - do you suppose that I interact with clients in the same manner that I interact with you? So little between my ears, eh? If I recall correctly, you are usually the one calling me out for no reason, and name-calling...you are what? In your 40's? You should be so proud of your maturity. You think I'm a "punk" and an "egomaniac" because I'm too opinionated for a 2nd year guy in your eyes. That's your problem, maybe it's jealousy. Get help. Quickly.[/quote] This has probably been the nth time I've seen you accuse others of name calling amidts posts like [quote=icecold]If you ever become a rational, non-dick[/quote] [quote=icecold]Market timing is for morons.[/quote] ..plus many more. Dude, seriously, chill out. Why are you always getting defensive?
I did read the entire thread and none of it clues us in to your upbringing, self esteem or past to reason out why you get defensive. People call you a name ON A FREAKING MESSAGE BOARD and you wig out instead of opting to ignore it. Nothing in this thread suggests why you go that route.
You don't always have to get roped into something you don't like ONA FREAKING MESSAGE BOARD. I expect this kind of attitude in an xbox forum or something, not some guy who is a one of a kind genius adviser who takes his clients to golf and wins over "easy money" in one of the worst economical crisis in our history.
So what if he calls you a fool? Is your honor ON A FREAKING MESSAGE BOARD at stake or something? Don't complain about getting into a slug fest ith the same four people when you do your part to participate in the exchange. You think you're going to really change how people choose to think or treat you on here?You expect everyone on the planet to worship you after you name call them while criticizing them for their name calling abilities?
Ana-
I am beginning to think Ice isn't a fool. He just makes some foolish statements from time to time. And that in my humble opinion is indicative of a younger more naive advisor who thinks they have all the answers and doesn't have the tenure (yet) to understand that you can't learn everything in our industry from a textbook or college. There are many MBA's at DFA and Wall Street that are shaking their heads in amazement at the magnitude of what has happened in the last 6 weeks. Ice will learn over time....I hope.