Gone Nowhere in 8 Years 59 comments
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Eight years have now passed since 9/11, and the Dow is essentially unchanged since that horrible, sad day. On 9/11/01, the Dow was at 9,605. The index is currently trading just 15 points below that level at 9,590. [SA Editor update: the Dow closed at 9605 on 9/11/09.]
The stocks that made up the index that day have had big moves, however. Hewlett Packard (HPQ) is up the most with a gain of 157%, while General Motors is bankrupt. Caterpillar (CAT), McDonald's (MCD), United Technologies (UTX), Exxon Mobil (XOM), and Procter & Gamble (PG) are all up more than 50%, while Alcoa (AA), General Electric (GE), Eastman Kodak (EK), and Citigroup (C) are all down more than 50%. Coca-Cola (KO) and Microsoft (MSFT) are currently trading the closest to where they were on 9/11/01.
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This article has 59 comments:
Average Americans have no idea just how corrupt and manipulated the stock market is now.
Where the FED, its partner banks, money center banks only have one goal: Keep the market in a never ending series of market bubbles and market crashes.
We have had 2 since 1999 and we are working on number 3 right now.
S & P should be at 750 right now to be at its 30 year long term uptrend line. That is a fact.
For those that know and understand this, you will always make money buying low and selling high.
For those average Americans and Cramericans out there who are waiting anxiously for Cramer's soon to be releases new book titled:
"Getting back to even", you continue to deserve to lose all your money, year in and year out, because you put your trust in people who in turn dont give a damn about you.
compdivplan.com
But is it even that good? Since 2000 real inflation has averaged 100% across the board so it's down 50% in real value, what you can buy with it. It's not investing, it's gambling with the odds stacked badly against you.
Investing in the stock market is a fool game with brokers, CEO's, directors, hedge funds, etc getting the gold mine and stockholders, those doing actual work, production, getting the shaft.
Along with the myth of how we'd save for retirement in our 401Ks, the next most damaging falsehood IMO is that notion of index funds guaranteed to grow your money.
You would do better to compute what $1,000 dollars invested in those stock would be worth now. This would shed light on the importance of dividend investing over price appreciation.
There has been very little progress and a lot of harm done in the last 8 years financially and socially.
The only reason we are clamoring for government support these days is because government has completely failed at insuring economic security, regulatory honesty, and fiscal restraint. That which is destroying us is that which we have asked to save us.
I think we need to take a good long hard look at ourselves and what we are doing or not doing to insure domestic teanquilty. Certainly, being beholden to the rest of the world for oil, commodities, cheap labor, etc. is not a good way at protecting our safety erconomically or otherwise. Needlessly running up our debt to levels where we must beg China and others to buy our bonds also weakens the US. Economic strength more often proves more valuable than military strength. Without a strong economy it doesn't matter what you spend in defense, as proven by the fall of the USSR. We should wise up now and stop thinking government can solve everything by printing more money. This only leads to crippling our free market economy which is the source for our past economic resliency.
On Sep 12 02:54 PM funfun wrote:
> Driven by stunningly incompetent and unethical Management, DuPont
> has gone rigourously nowhere for more than 11 years! DD traded in
> the mid-eighties in May 1998; it now trades for 31 and change on
> much fewer outstanding shares. The total market value of the much
> shrunken DuPont has collapsed from $110 billion to $29 billion today!...funfun..
There is a lesson in there for those of us who cherish fredom and
democracy.
> Without a strong economy it doesn't matter what you spend in defense,
> as proven by the fall of the USSR. We should wise up now and stop
> thinking government can solve everything by printing more money.
> This only leads to crippling our free market economy which is the
> source for our past economic resliency.
graham
======================...
quote.bloomberg.com/ap...
April 12, 2005 (Bloomberg) -- Fifteen New York Stock Exchange specialists, the traders responsible for keeping an orderly market on the world's biggest stock exchange, were indicted for fraudulent and improper trading.
In the biggest federal crackdown on illegal trading at the NYSE since 1998, the U.S. Attorney's Office in Manhattan will announced the charges this morning with representatives from the FBI and Securities and Exchange Commission. Indicted are current and former employees of firms including LaBranche & Co., Van der Moolen NV, Bear Wagner Specialists, Goldman Sachs Group Inc.'s Spear Leeds & Kellogg and Banc of America Specialist.
The charges stem from a two-year probe of specialists, who match by and sell orders on the floor of the exchange and trade for their own accounts. The NYSE's seven specialist firms last year agreed to pay $247 million to settle allegations that they profited on trades at the expense of their customers.
``To see criminal activity on the floor is really astounding,'' said Jacob Zamansky, a New York lawyer who represents investors in arbitrations against brokers. ``This occurred under the watch of the NYSE. It raises questions about whether the NYSE can properly supervise the people there.''
If convicted, the specialists face a maximum of 20 years in jail on each count of securities fraud and fines of $1 million to $5 million.
``These defendants broke the rules repeatedly,'' U.S. Attorney David Kelley said at a press conference.
Indicted Specialists
Former Van der Moolen Senior Managing Partners Joseph Bongiorno and Patrick McGagh Jr., Frank Delaney of Bear Wagner and LaBranche's Freddy DeBoer are among the specialists indicted.
The NYSE's other specialist firms are SIG Specialists Inc. and Performance Specialist Group. The exchange first said in April 2003 that it was investigating the firms to determine whether they illegally traded stocks ahead of their clients.
Kelley, the SEC and the NYSE have been investigating individuals in connection with the violations.
In a statement, Kelley said the indicted specialists violated federal securities law ``through patterns of fraudulent and improper trading over approximately four years.'' He didn't name the individual specialists or the firms they worked for.
The U.S. Department of Justice first targeted illegal trading on the NYSE in 1998, when it charged eight floor brokers and two executives of Oakford Corp.
Has everyone forgotten that stocks FLUCUATE?
They did indeed go somewhere. They went down alot from 2000-2003. Then they went up hard in 2003. Sort of flat 2004-2005 or so. Then nice long rally up to October of 2007. Then another long decline until the bottom fell out in fall 2008 and spring 2009. Then a rally of major proportions from March 2009 until now.
I'd say that is what you call "going somewhere" instead of going nowhere. You just need to know when to be in and when to take some off the table. If you have the time to visit websites like this one then you should have the time to keep an eye on your stocks and take necessary action as needed.
I'll go ahead and tell you what to do next for free. Get bearish in 2010 until Obama gets booted out of office in the next election. I can't imagine any sort of good scenario for stocks with high taxes, high inflation, and high gas prices. Maybe some gun stocks and Dollar General might be ok. Otherwise, we're screwed.
Richard
On Sep 12 03:21 PM untrusting investor wrote:
> The market have been manipulated for many decades, just like they
> are now. It is just much larger scale now and moving into the billion/trillion
> dollar ranges from the million/billion dollar ranges previously.
> See for example the article from 2005 below.
> ======================...
> quote.bloomberg.com/ap...;sid=as_5ShkZcKx4&...
>
> April 12, 2005 (Bloomberg) -- Fifteen New York Stock Exchange specialists,
> the traders responsible for keeping an orderly market on the world's
> biggest stock exchange, were indicted for fraudulent and improper
> trading.
>
> In the biggest federal crackdown on illegal trading at the NYSE since
> 1998, the U.S. Attorney's Office in Manhattan will announced the
> charges this morning with representatives from the FBI and Securities
> and Exchange Commission. Indicted are current and former employees
> of firms including LaBranche & Co., Van der Moolen NV, Bear Wagner
> Specialists, Goldman Sachs Group Inc.'s Spear Leeds & Kellogg
> and Banc of America Specialist.
>
> The charges stem from a two-year probe of specialists, who match
> by and sell orders on the floor of the exchange and trade for their
> own accounts. The NYSE's seven specialist firms last year agreed
> to pay $247 million to settle allegations that they profited on trades
> at the expense of their customers.
>
> ``To see criminal activity on the floor is really astounding,'' said
> Jacob Zamansky, a New York lawyer who represents investors in arbitrations
> against brokers. ``This occurred under the watch of the NYSE. It
> raises questions about whether the NYSE can properly supervise the
> people there.''
>
> If convicted, the specialists face a maximum of 20 years in jail
> on each count of securities fraud and fines of $1 million to $5 million.
>
>
> ``These defendants broke the rules repeatedly,'' U.S. Attorney David
> Kelley said at a press conference.
>
> Indicted Specialists
>
> Former Van der Moolen Senior Managing Partners Joseph Bongiorno and
> Patrick McGagh Jr., Frank Delaney of Bear Wagner and LaBranche's
> Freddy DeBoer are among the specialists indicted.
>
> The NYSE's other specialist firms are SIG Specialists Inc. and Performance
> Specialist Group. The exchange first said in April 2003 that it was
> investigating the firms to determine whether they illegally traded
> stocks ahead of their clients.
>
> Kelley, the SEC and the NYSE have been investigating individuals
> in connection with the violations.
>
> In a statement, Kelley said the indicted specialists violated federal
> securities law ``through patterns of fraudulent and improper trading
> over approximately four years.'' He didn't name the individual specialists
> or the firms they worked for.
>
> The U.S. Department of Justice first targeted illegal trading on
> the NYSE in 1998, when it charged eight floor brokers and two executives
> of Oakford Corp.
In short, we ourselves generate the swings, perhaps with more than a little "leadership" from the houses and their traders. We all need the swings to play our games and hopefully make some money. The buy and hold guys, those too busy to pay attention to their 401k plans, the folks who target on income and dividends, the mutual fund guys and the index fund holders are the ones who go nowhere fast and who can afford gains for the rest of us because if we were left to play by ourselves in the same time frame, it would be a simple zero sum game, and even at times, that is what it is.
The Fed does its part to generate swings in the economy to aid this Wall Street game, inducing bubbles and then in false efforts to save the busts, planting the seeds for yet new bubbles.
In short, as the old song put it, "It don't mean a thing if it don't have that swing." Its the steady state, flat, changeless world that we can't stand.
Your points are more or less on the right track. However, the bigger point is that the US is not and has not been primarily a free market economy for many decades now. The US is dominated by oligarchs, a small weatlhy elite, lobbyists, special interests, and politicans beholden to them and willing to legislate virtually whatever they want to keep themselves in political power. It makes no difference whether they are Republicans or Democrats, both parties are an integral part of the support system for further enriching the elite class.
It is true that the elite class, such as Rockefeller, Morgan, Kennedy, et. al. were dominant forces in the early 1900's as well, but they were also heavily taxed. However significant changes in the US tax code since the mid 1980's have enabled the elite class to once again expand their wealth and influence and essentially re-establish oligarchical practices, nullify regulatory influences, and recapture the upper hand in economic control. Both personal income tax and corporate income tax rates on the top income tax brackets have declined very significantly since the mid-1980's. Thus the wealthy have been able to accumulate ever increasing shares of national wealth and power. Further taxes that impact more heavily on the other 99% of Americans have been steadily rising (payroll taxes, workers compensation, sales taxes, etc.).
The incidence of massive fraud, gross misrepresentation, large scale theft, and numerous other wealth accumulation schemes just continue to build .... with little negative repercussions for the elite who initiate them and skim off ever increasing amounts of the national wealth for themselves. For example, Pfizer just agreed to a $2+ billion "fine" for their 4th fraud in something like the last 10 years for illegal practices. Nobody from Pfizer went to jail and Pfizer will easily more than make this fairly small fine back with other fraudlent practices in a year or two. Tens of thousands of similar examples and companies and elite individuals have done similar things which have enriched themselves by billions/trillions of dollars. If that is a FREE MARKET, then we would like to know what a rigged/captured/unfree market looks like? It could hardly be any worse than a free market.
On Sep 12 02:32 PM Moon Kil Woong wrote:
> The index is not the only thing that hasn't changed much. The Trade
> Center hole in the ground is still sitting there. What a shame and
> embarassment.
>
> There has been very little progress and a lot of harm done in the
> last 8 years financially and socially.
>
> The only reason we are clamoring for government support these days
> is because government has completely failed at insuring economic
> security, regulatory honesty, and fiscal restraint. That which is
> destroying us is that which we have asked to save us.
>
> I think we need to take a good long hard look at ourselves and what
> we are doing or not doing to insure domestic teanquilty. Certainly,
> being beholden to the rest of the world for oil, commodities, cheap
> labor, etc. is not a good way at protecting our safety erconomically
> or otherwise. Needlessly running up our debt to levels where we must
> beg China and others to buy our bonds also weakens the US. Economic
> strength more often proves more valuable than military strength.
> Without a strong economy it doesn't matter what you spend in defense,
> as proven by the fall of the USSR. We should wise up now and stop
> thinking government can solve everything by printing more money.
> This only leads to crippling our free market economy which is the
> source for our past economic resliency.
the good news is that the bad returns of the last 8 to 10 years set's us up for better returns in the future. Returns are mean reverting. Go back 100 years and check it out. 0% nominal returns cannot last. So all this says is that we are in for a period of above average growth. If you are market time now is the time t be in. If you are a buy and hold the same applies.
--Dividends have to be accounted for. Total return = Price appreciation + Dividends. The DJIA (as well as the S&P 500, etc.)are price-only indexes. Dividends can be accounted for as if they were just bled off in cash, or reinvested, but they have to be accounted for.
--Apples must be compared to apples. The list should consist of the stocks that were in the DJIA on 9/11/01, not the ones that are in it today. That's if you're looking at it stock-by-stock.
--On the other hand, if you're looking at it as an index, then it is valid to compare index value then to index value now--and drop the list of individual stocks. That is because mutual funds or ETFs which track the DJIA literally sell the stocks that are deleted from the index and purchase the ones that are added. So their performance (less expenses) mimics the index's value.
For the DIA, the 10 Yr TOTAL Return is 5.91% (0.58% annualized), that's probably been the cheapest index choice.
It's CONSIDERABLE WORSE for investors in S&P500 index mutual funds: 10 Yr TOTAL Return for the Vanguard 500 Index Inv (VFINX) is -8.5% (-0.88% ann.) ; Fidelity Spartan 500 Index Inv (FSMKX) is -8.54%; etc. Higher fees = greater negative return.
Meanwhile, 2000-2008 inflation was 25.1% (2.26% ann.)
From today forward, JUST TO BREAK EVEN the average US market index investment needs a +40% TR on an inflation-adjusted basis. (Taxes not considered!) OVER INFLATION, that's +3.2% avg. ann. return for the next ten years, +6.5% for the next five years or +11% for the next 3 years. Just to break even!
Playing catch-up forces equity investors further out on the risk-return curve. Beyond the Dollar's inflation, taxes, liabilities and any economic dysfunction in the near term, this reality should make a higher allocation to Emerging Mkts and alternative investments even more appealing.
Stocks have gone no where and are going nowhere. If you are not trading your are not making money.
Managing investments, homework, and trading are essential.
What we saw in the last ten years with Ernorn, Mci,the financial system collapose (or near collapse), Maddof and etc are just the tip of the iceburg and a symptom of what's wrong with the system.
I for one, I don't have stock market passion as once I did. I am slowly avoiding stock market and getting into commodities and other tanagable investments. I have been investors since 1998 (right after college) and quite honestly I've learned that the system is not designed to make money for small investors.
DAY CYCLE: 1923* DJIA @ 75.23 - 1929 DJIA @ 331.65: Positive 400% - Positive 67% per year.
NIGHT CYCLE: 1929 DJIA @ 331.65 - 1947 DJIA @ 175.66: Negative 47% : Negative3% per year.
DAY CYCLE: 1947 DJIA @ 175.66 - 1965 DJIA @ 854.36: Positive 386% : Positive 22% per year.
NIGHT CYCLE: 1965 DJIA @ 854.36 - 1983 DJIA @ 1045.07: Positive 22%: Positive 1% per year.
DAY CYCLE: 1985 DJIA @ 1045.07 - 2001 DJIA @ 10,604.59: Positive 915%: Positive 51% per year
CURRENT NIGHT CYCLE: 2001** DJIA @ 10,604.59 - 2019: (through 2/09 DJIA @ 7850.41): Negative 26%: -3% per year.
* Could not find DJIA prices back to 1911.
** Current deflation from 2001 to February 2009. Have not undated further. Will update in 2019.
This study simply shows that his strategy is 100% correct. The study add credibility to the fact that Investors should be "Trading" and not Buying & Holding.
I, for one, do not care which way the market moves...just as long as it moves. Dividend investors will always eek out a small gain and be happy. Buy & Hold investors will always wonder why they can't gain any ground - but the Traders make the real profits and are extremely thankful for the other two groups.
My sincere thanks to Dividend and B&H investors!
AS FAR AS THE OTHER STOCKS, CEO'S AND RESEARCH FIRMS WHO ALWAYS HAVE A GOOD THING TO SAY ABOUT STOCKS AND THE HIGH TARGET PRICES THEY ATTACH TO EACH STOCK, IS TOTALLY MISLEADING TO INVESTORS.
EVERYONE SHOULD JUST STICK TO BASICS AND NOT LET
ANYTHING INFLUENCE THEM ONE BIT.
I STICK TO MANAGEMENTS PERCENTAGE OF OWNERSHIP OF STOCK, REURN ON EQUITY, AND SERIOUS REVENUE.
SIMPLE!
There are also other new buildings in the area, some quite near completion.
On Sep 12 02:32 PM Moon Kil Woong wrote:
> The index is not the only thing that hasn't changed much. The Trade
> Center hole in the ground is still sitting there. What a shame and
> embarassment.
stockcharts.com/h-sc/u...:$GOLD&p=D&en=...
The Dow is in a secular downtrend against gold, with a loss of about 80% since 1999.
All I'm saying is that the USD is a poor instrument in which to price investments, given a government that is devaluing its currency to manage escalating debt. 2001 is a good comparison year, as the USDX hit its peak in that year.
In my opinion, trading ones way around this is a weak rationalization for engagement in a market in secular decline. Surely the better gains exist in ascending markets (raw materials and precious metals). Granted, there is an argument for trading the secular bull markets due to their marked volatility.
Pick a Hewlett Packard but not a General Motors. But that means you have to diversify after all....to avoid wipe out.
I agree with the observation by Naidle, Juliet and others that the impact from dividends was omitted, but then so was the impact of Federal Reserve inflation, which offsets that (as Jerrydd and others noted).
So a person who wisely invested in a broad basket of DOW stocks overall stayed even, except for losing ground in terms of real inflation.
But the billions paid to stock market order takers and price fixers is where the real action is. They buy the yachts.
Maybe the DOW price performance should be compared with the annual bonus pools paid in this same time frame to investment bankers who "service" the investors..
One could infer in the case of DOW stocks that the investment bankers have added no value over all. But the money they extract from shareholders through the relentless price fluctuations is just a form of what conservatives and libertarians call redistribution of wealth.
If Investment bankers redistribute the wealth to themselves, it is good and un-American to attack it.
This chart also points out that investing is totally obsolete. Just trade trade trade.
Nothing quite like a government that sells it's citizens down the river.
King George would be proud, or laughing, or both while the Founding Fathers are likely rolling over in their graves.
AT&T: It's different from the others in the group because although it's in the same market, it was acquired by SBC in 2005 which adopted AT&T's Ticker symbol. So it's not really fair to say it's the same company. www.att.com/gen/press-...
Alcoa: Relatively low volatility, although not much gain either since 2000. Most of the drop was in 2008 due to the housing and commercial market crash, i.e., low demand for building materials including aluminum. See chart: www.google.com/finance...
On Sep 12 03:07 PM TLassen wrote:
> Not sure if you are old enough to know, but it was exactly the escalating
> arm's race that caused the break-up and demise of the Soviet Union.
> When they ran out of cash to keep their military strong, and they
> could no longer build 'walls' to contain their people who wanted
> freedom and democracy, they crumbled quickly.
> There is a lesson in there for those of us who cherish freedom and
> democracy.
www.rollingstone.com/p...
I see the opportunity to buy in at around 9,000 in 2003, then to sell around 13,000 in 2008. Then if you were skilled enough, a chance to short at 13,000 in 2008 and cover at 9,000 in 2009. The 200 day MAs were there staring you in the face the whole time.
Now there is a chance to buy in at 9,000 in 2009 and...
On Sep 13 11:26 AM Laurence Hunt wrote:
> Reading some other comments more carefully, I might add that the
> current excesses of the market amount to shareholder exploitation
> by a combined troika of upper management (awarding themselves bonuses
> and raises in all circumstances), labour unions (sharing the carrion
> with managers), and governments (failing to regulate, promoting bubbles,
> and zeroing out shareholders). I think a case could be made for shareholder
> exploitation by almost everybody. This will kill the buy and hold
> investor, already a dying breed.
When the attacks happened, and because of how close the World Trade Centers were located to Wall Street, trading wasn't even started. Everyone that had shown up to work that day was told to stay inside until it was safe. Many people inside the exchange reported feeling the ground shake as the two towers collapsed, and the exchange became a refuge for those fleeing the giant cloud of dust, smoke and debris that appeared once the towers fell.
The buildings that hold the New York Stock Exchange were not damaged during the attacks, but a major telephone bunker than held the phone system for the entire area located near the World Trade Center was severely damaged, hence making communication on the floor of the exchange impossible.
The stock market remained closed until September 17. It would turn out to be the longest that the market would remain closed since 1933 and the Great Depression. During it's first day of trading after the attacks, the market lost over 680 points, the single biggest one day drop in the exchanges history. While the drop only accounted for a little over 7 percent, it is still considered a major event. By the end of that first week back open, the Dow Jones had lost over 1360 points or 14 percent of its value. It would go down as the worst week in market history. The total money losses during that time were estimated to be around 1.2 trillion.
The events of September 11 led to a dramatic increase in security around the exchange, as many feel it could be a target in future attacks. The events of 9/11 will live on in the minds of everyone who lived through it. For those who had shown up for a day at work on Wall Street, the event is difficult to forget. The NYSE came through it stronger and so did the nation.
----------------------...
Money without intelligence is like a car without a road.
www.intelligentinvesti...