Stock Market blues

dragon1952

danger boy wrote:

Where on the OR coast are ya? I love the OR coast... you picked one of the most beautiful coastlines to live on.

Around Newport/Depoe Bay area...very cool :cool:


As for diversification, that's the safe way but if you can jump in the right fund at the right time you can make a bundle fast. Very few times have I got whipsawed like this. I usually try to buy low and then not get too greedy before moving back safe. This time I got out too early and the next drop never came so I gambled and jumped back in high...just didn't follow my 'don't get too greedy' rule. Good thing I left the old lady's account safe;)

jdhdiggs

Good point Sami with the % thing. Depending on what someone has invested, a person losing $25K might have done better than someone losing $600 in the recent selloff.

Worst thing you can do at this point is sell. Not many have made money buying high and selling low, but for some reason people keep on doing it....

Sami

Slowly getting back where it was, delta between now and then is only 3%. And the AMX stock got back up from $42 to $45 (that's ~7% in 2 weeks, not too shabby).

What blues?

MSALLA

My advice is to NOT look at the market today (3-13-07) This could lead to a massive stroke.

AndyGwis

OY, I was just getting back close to where I was before the 400+ point loss the other week. Oh, well, it's bound to happen here and there.

I'm more pissed about being cut off from my 401K plan for the second year in a row. Anyone else get notices that "highly compensated employees" can only contribute a couple percent, or does my company's plan just blow?!!?

Polkitup2

Hmm... Didn't get that notice.:eek:

Sami

That's it, I raised my 401k contribution by 4%. Even if it's a continuing trend going down it's the date 15 years from now that I'm interested in. Retirement at 50...I do hope so.

shack

AndyGwis wrote:

I'm more pissed about being cut off from my 401K plan for the second year in a row. Anyone else get notices that "highly compensated employees" can only contribute a couple percent, or does my company's plan just blow?!!?

Your problem is not the company or the plan...it is the non participation of the lower compensated employees. There are formulas mandated by the government that says the ability of the higher compensated employees to contribute is directly linked to the contributions of all. The reason is to make sure the employer is not somehow discriminating against the rank and file for the benefit of management for retirement benefits. It sucks, because not only will you have a tax liability for those funds that were treated as tax deferred...that is money is not earning tax deferred income...a double whammy! :mad:

PolkWannabie

cfrizz wrote:

WHAT THE HELL ARE YOU DOING LISTENING TO GREENSPAN? HE LEFT!!!:eek:
He is now trying to make a buck like everyone else! Besides he is careful in what he says, you just jumped to the wrong conclusion & are trying to time the market which ALWAYS fails!:eek:

You mean unlike Buy & Hold ?! ... If that's what you really believe then keep in mind that the depressions of the 30's that followed the crash of 29 are not one time events ... They occur with relatively regular periodicity ...

If one was on Buy & Hold in 29 then you didn't get above water again until 1957 ... Assuming of course that the stocks you had weren't of companies that just disappeared.

If you want ~ 8% / year and can live with the drawdowns that you'll get then that's the method for you ... Personally I'd rather exercise control and be able to sleep at night.

shack

PolkWannabie wrote:

You mean unlike Buy & Hold ?! ... If that's what you really believe then keep in mind that the depressions of the 30's that followed the crash of 29 are not one time events ... They occur with relatively regular periodicity ...

If one was on Buy & Hold in 29 then you didn't get above water again until 1957 ... Assuming of course that the stocks you had weren't of companies that just disappeared.

There will always be market "corrections" and the economy will experience slow economic growth, downturns or even recessionary periods. The chance of ever seeing anything like the crash of '29 and the following "Great Depression" is virtually non-existant. Too many safeguards, it would have to be a "world" depression and the whole structure of the market has changed. The Crash was not caused by economic problems...it was caused by out of control margin buying, cooked books (bad accounting) and corruption...ON A LARGE SCALE! While you see examples of the latter 2 issues (World Com, Enron) they are not widespread. The margin issues are controlled very strictly and that was the primary cause of the Crash.

Buy and hold is not "Buy and FORGET". It requires watching the stocks and being prepared to sell when certain buy or sell thresholds or issues occur. It is a time tested, good long term investment strategy. There are more people that have accumulated wealth with a B&H strategy than "market timers".

cfrizz

Thank you Shack!:D

I certainly don't forget it. I go in at the end of the year & rebalance everything, and as I get closer to retirement I will shift more into my fixed account & less risky investments. It's about being smart & not greedy!

PolkWannabie

shack wrote:

There will always be market "corrections" and the economy will experience slow economic growth, downturns or even recessionary periods. The chance of ever seeing anything like the crash of '29 and the following "Great Depression" is virtually non-existant.

You can say what you like about the 29 crash and the depression that followed ... It wasn't the first and likely won't be the last ... Typically however, the reasons for them change for each subsequent one ...

Perhaps you forgot or missed the 80% tanking of the NDX and similar losses in the full Nasdaq composite that began 3/00 ... Since then it's recovered about 25% of the loss but even for the companies that survived it may well be somewhere between years ( already 4-5 ) and decades before most of those stocks recover to their highs. Many investors and traders of those relatively recent times were convinced bear markets were a thing of the past ... i.e. "It's the New Economy" ... The fact is that those who don't learn from history are doomed to repeat it.

shack wrote:

The Crash was not caused by economic problems...it was caused by out of control margin buying, cooked books (bad accounting) and corruption...

Crashes are never caused by economic problems ... However economic problems are quite often caused by market meltdowns ... The economy trails markets, it doesn't lead them ...

shack

PolkWannabie wrote:

You can say what you like about the 29 crash and the depression that followed ... It wasn't the first and likely won't be the last ... Typically however, the reasons for them change for each subsequent one ...

Perhaps you forgot or missed the 80% tanking of the NDX and similar losses in the full Nasdaq composite that began 3/00 ... Since then it's recovered about 25% of the loss but even for the companies that survived it may well be somewhere between years ( already 4-5 ) and decades before most of those stocks recover to their highs. Many investors and traders of those relatively recent times were convinced bear markets were a thing of the past ... i.e. "It's the New Economy" ... The fact is that those who don't learn from history are doomed to repeat it.


Crashes are never caused by economic problems ... However economic problems are quite often caused by market meltdowns ... The economy trails markets, it doesn't lead them ...

Actually the Nasdaq "crash" of 2000 was merely a correction that was overdue. The NDX was loaded with highly speculative tech stocks some of which were trading on P/E ratios of infinity since a very large number had no earnings or even sales. It was a pure speculative market that started in '97 peaked in '00 and retuned to the 97 levels in '03. A true 6 year spike and not that unusual. Most of your good investors had a small piece and got out way before any real damage was done. Also don't confuse "paper loses" to loss of capital. The value of some of those stocks SHOULD NEVER return to their highs because they were artificially inflated well beyond any reasonable value.

There have only been 2 true crashes of the American markets. '29 and '87. There was no depression after '87 (which btw was caused to a great extent by encomic conditions - primarily tax law changes and a real estate decline similar to what we have now). The economy actually recoved very nicely and investors have continued to make money.

Investor capital markets are speculative, risky ways to make money...which is as is should be. Risk vs reward. They go up and down...sometimes significantly. I do not think there will be another crash similar to the on in '29 where the market lost 90% of it's value in 4 years. As I said....there are too many safeguards to allow that to happen. I also don't believe you will see another "Great Depression". Will SOME people lose significant amounts of money? Maybe...probably...but not like '29.

PolkWannabie

You can call it whatever you like ... The number of outstanding shares for the companies that didn't go belly up didn't decline so there were more than a few people holding them, some no doubt some still are ...

As far as '87 was concerned it wan't a crash, it was a two day event with very little if any economic after affects. However there were several crashes followed by depressions prior to 1929 ... Middle 1850's and late 1780's as examples ... As far as safe guards go they only serve to delay the inevitable ... The "Plunge Protection Team" really has very little control.

With regards to risk .vs reward ... I agree completely ... Which is why imho timing is as important an element as selection ... In any case to each his/her own methodology.

shack

PolkWannabie wrote:

As far as '87 was concerned it wan't a crash, it was a two day event with very little if any economic after affects.

Most financial market experts will disagree. A crash has to do with the market...not the ecomomy.

TroyD

Man, shack just continues to go yard on these softballs.

BDT

shack

This thread is too much like work. I'd rather talk about gear, music, basketball, babes, golf and cars. (not necessarily in that order)

jwhitakr

shack wrote:

There will always be market "corrections" and the economy will experience slow economic growth, downturns or even recessionary periods. The chance of ever seeing anything like the crash of '29 and the following "Great Depression" is virtually non-existant. Too many safeguards, it would have to be a "world" depression and the whole structure of the market has changed. The Crash was not caused by economic problems...it was caused by out of control margin buying, cooked books (bad accounting) and corruption...ON A LARGE SCALE! While you see examples of the latter 2 issues (World Com, Enron) they are not widespread. The margin issues are controlled very strictly and that was the primary cause of the Crash.

Buy and hold is not "Buy and FORGET". It requires watching the stocks and being prepared to sell when certain buy or sell thresholds or issues occur. It is a time tested, good long term investment strategy. There are more people that have accumulated wealth with a B&H strategy than "market timers".

Thumbsup for shack. Buy and hold does not mean you are buying a stock, letting it sit for a long period of time (e.g. 10 years) and then coming back to check on it 10 years later. Buy and hold just means you aren't making trades every day. Active management of your investments does not mean you are trading every day, it just means you are keeping a close eye on each of your investments.

shack - Do you do financial advisor work for a living?

shack

jwhitakr wrote:

shack - Do you do financial advisor work for a living?

Sort of....

jwhitakr

Very cool. I have a bro-in-law who works at UBS as a financial advisor. He's a good guy - lots of nuggets of wisdom to share. What are your favorite stocks to own right now? Or can you tell us?