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Mark Bern, CFA  

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  • How Low Can This Market Go? [View article]
    Franklin - What you say does apply to many, but certainly not all, large US companies. Think about UNP, CSX and NSC. One has a few miles of track that cross the Canadian border, but I don't think you would include that in your list of companies with international ops. Then we could also consider all the utilities. Let's see, there are 28 utility companies also listed among the S&P 500 Index components. So, they must be big. Then there are regional banks also included in that Index that only operate within the US like ZTS, US REITS usually hold only US assets and there are 15 REITS within the Index components, also. Among health insurance companies, Aetna pops to mind since it sold off its international biz in 2000. And there are other large health insurance companies in the index that offer product only in the US. Altria, since it spun off its international operations and Kraft is pretty much a US company. There are also sizable energy companies in the index that have operations only in the U.S. such as Cabot Oil & Gas, among others. Then there are coal companies that operate only in the US, like Consol Energy.

    I think I'm over 5 now.

    Having said all that, you point is well taken, as it applies to the majority of large U.S. based companies, but not all.
    Aug 28, 2015. 10:55 AM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    Maybe "the major drop already happened."

    Or was is just the first leg down and now we are seeing the first of a series of lower highs and lower lows that will set up the longer lasting big leg down? No one knows for sure. We just need to be prepared for either possibility. I remain well invested but am hedged against catastrophe. My portfolio will survive intact, or nearly so, no matter what. That is why I said in the article that I have no horse in this race. Of course, I would like an even better sale in stocks so I can add to some positions with the cash that is building from dividends over the last year and a half. It's not a lot, but I can certainly improve my income a bit by catching a few bargains.
    Aug 28, 2015. 10:04 AM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    Franklin - In a normal interest rate environment I would completely agree with you. But what we are in cannot be described that way. How can rates become inverted when the short-term rate is held at zero? So, throw that one out. Most leading indicators are also skewed by central bank activity, imho. So how does one anticipate a recession these days? I don't think we can.

    Usually a fall in the price of copper of the magnitude we have experienced would indicated falling demand and an imminent recession. Usually, when the DJT (transportation Index) trends down for several months it indicates that the economy is on the verge of a recession. Often, but not always, when inventory builds nearly every month without a few months of significant draw down it indicates that the economy is oversupplied and is susceptible to falling recession until the excess can be worked off. Usually when profit margins hit record highs and then begin to fall it marks the end of a cycle and a recession often occurs. If you look at unemployment initial claims as a cyclical indicator, whenever claims reaches a multi-year record peak and then flattens the economy falls into a recession. I could go on.

    But the fact is that these have proven to be reliable indicators in the past. All of these conditions exist now. The one indicator that is considered tried and true, the inverted yield curve, is being pointed to as the one that "must" happen before we should worry. But that is the one that the Fed is manipulating so that it cannot flash a signal. This is what has me thinking that the next one will "come out of nowhere" again.

    But there needs to be an event that the Fed cannot control. I think that it could be something off my radar or it could be one of two (or both). My first fear is that the Chinese real estate market begins to crumble if Chinese investors lose confidence. The second is that the price of oil falls much lower and remains there for several months forcing many of the smaller companies in the energy patch that are over burdened with debt to file bankruptcy which leads to a wave of fear surrounding junk bonds.

    Both of those are being set up now and could feasibly happen either in the fall or spring. We shall see.
    Aug 28, 2015. 09:57 AM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    MFITZ - Makes me wonder about BoA.
    Aug 28, 2015. 09:39 AM | Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    Thanks, Freya. Good insight.
    Aug 28, 2015. 01:05 AM | 5 Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    Yield is good, but make sure the company meets all your other requirements, too. Then again, it did have a nice bounce today! Good luck!
    Aug 28, 2015. 01:02 AM | Likes Like |Link to Comment
  • Swine Flu, MERS, Ebola And Medical News Concentrator May 23, 2015 To ?? [View instapost]
    Maya - I got distracted so I missed it. Good for you! I hope it turns out to be a great bargain!

    Of course, OTOH, I wouldn't mind if it got down there again just once more!
    Aug 27, 2015. 09:05 PM | 2 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    Maya - Such a hard thing to hear about. I'll pray for him and your family. Thank him for his service for me when you see him next. Let him know it is from another Vietnam vet who served two tours and was hospitalized seven times as a result.

    I was lucky and I know (clap your hands).

    Sorry, that just kinda came out and I couldn't help it. If you have ever listened to children's choirs at Church you'll understand.
    Aug 27, 2015. 07:46 PM | 4 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    LT - Back at ya, buddy. Hang in there! You are in my prayers.
    Aug 27, 2015. 07:42 PM | 3 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    DG - Love the photos! Looks very peaceful and beautiful. I hope it helps lift your wife's spirits and that you can both enjoy the splendor!
    Aug 27, 2015. 07:39 PM | 3 Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    copywryter - It is really a matter of style. Your investment style lead you to a great ride in appreciation and a spectacular gain. Congrats!

    Buying momentum stocks is your style and you may be very good at it. From my point of view that style carries too much risk for me. My style is long-term, buy and hold, collect the rising dividends and add when the price and valuation gets low enough from time to time. I don't add all the time. I build cash when valuations get rich and invest when valuations get cheap (by my calculations). So, one might call me a value investor. But I admit I do some things around my core holdings with the cash to add income and return so, the value moniker doesn't quite fit either.

    The point is that what works for you doesn't work for someone else and vice versa. My style would probably bore you do death! But I like it and I do very well over the long-term. I wish you very well in what you do and how you do it! Happy investing!
    Aug 27, 2015. 07:37 PM | 1 Like Like |Link to Comment
  • How Low Can This Market Go? [View article]
    Namron - I totally agree with the student loan problem. I have two kids; one graduated last year and the other is in here second year. Fortunately, they both received partial scholarships. My son also received a research grant that provided a decent income for working 10 hours a week. But he still ended up with $23,000 in student loans. My daughter got hired on as a residence assistant her sophomore year (this year) and picks up some extra income doing some small acting gigs in the local professional theaters. She will probably graduate with with about $20,000 in student loans. I'm lucky that my kids turned out responsible.

    I make principal payments twice a year for my son and will do so for my daughter after she graduates. But they will need to make the monthly payments as part of their financial education. Each should be able to pay off the loans within five years after graduation if not sooner with my help. I want them to understand how great it feels to get out from under a significant debt!
    Aug 27, 2015. 07:28 PM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    Namron - Please don't confuse my statements to mean that I believe they could "manage" the economy from inside the beltway. I think, as you say, the Fed does the best it can to hold things together against terrible odds since Washington is not doing anything to help fiscally. And I think that the Fed is running out of options to keep us on track. But where my uncertainty comes from is that I don't know how much longer the Fed can keep it together. I get a sense that many investors believe the Fed can still be effective with QE4 and I also know that perception plays a big roll in investment decision-making. Thus, whether what the Fed does or does not do, at least for the short term, and whether or not it is effective does not really matter. Initially, perception will drive investment decisions until the date begins to prove the perception wrong. So, that is the hard part. And I know that nobody is going to be able to figure that one with certainty very far in advance, so I'm not going to try.
    Aug 27, 2015. 07:17 PM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]

    I have been considering the same thing! So, my answer must be yes. But be sure you really, really like the ETF! I might even consider more than one support level to allow myself to average down, just in case.

    For those who like trading in and out, not for myself, it seems like a relative low risk trade. When the ETF gets mispriced temporarily it will always come back to its internal value once the market settles down. I don't think many ETFs went down on Monday and stayed there all day long. Right about now, on this bounce, one would be felling pretty good for having bought on the cheap.

    That is the thing to remember. There will often be more volatility in a bear market, especially at the beginning. If you look back to 2007-08 before the market fell apart completely, we had huge swings up and down. Same thing in late 1999 to early 2000.

    This isn't me recommending anything. But some folks like to trade so the best you'll get from me on the subject is a comment, not an article.
    Aug 27, 2015. 07:09 PM | Likes Like |Link to Comment
  • How Low Can This Market Go? [View article]
    SHoffm - Thanks for relating the concurring experience. And thank you for sharing the article with others. If you have not yet read my latest piece on XOM you may want to give it a perusal.
    Aug 27, 2015. 06:47 PM | Likes Like |Link to Comment