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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
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Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! Chapter 12.......... 181 comments
    Jun 19, 2013 6:13 PM

    Where do commodities go from here? are stocks and bonds still sound investments? Oil. ETF'S, Physical metals..

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I expect they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I would like to start up a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S are talked about as being safer then others. (NYSEARCA:PSLV) is the silver ETF.

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "?, are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other commodities? Here is where most of us are uninformed and relish an education.

    Stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (NASDAQ:PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk (NYSEARCA:GLD) or (NYSEARCA:SLV) that is fine.

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure well be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol you use so that I can include that in the topic forum. It also allows a reader to click on it and get some data as well.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as well. Tom, Eric, Hebba, Tack, to name a few in no particular order. I am sure they will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion as well.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well.

    As you see I have stopped adding any new symbols as they were growing way too fast for me to keep up !!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Everything is open for discussion..

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Comments (181)
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  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Opinions on Bernanke's plan....Does it make sense?
    19 Jun 2013, 06:14 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    IT

     

    In my opinion, Bernanke's speech is more government talk; there is no way out of the perpetual QEs since nothing has been fixed; giving low rate mortgages to people who can not still afford it and letting the bankrupt banks use mark to whatever they wish for their junk bonds instead of mark to market on the balance sheets, has not solved anything; the problem is not liquidity but rather solvency; believing otherwise is fooling ourselves; how can we expect problems to be solved with the same people in charge who created the problems to begin with?
    19 Jun 2013, 09:26 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » RIN

     

    Any reaction to gold and silver dropping in price today?
    19 Jun 2013, 09:29 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    IT

     

    Right now gold and silver are down big times; I think another smackdown is in the works since less phyzz available for JPM to juggle around with more and more miners shutting down production...but call me crazy, I won't be surprised to see gold and silver paper prices go down to zero
    20 Jun 2013, 07:32 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » RIN

     

    I am not buying the metals drop as some have suggested . Pricing it into the markets isn't what is happening. Panic selling like everything else is what is happening.

     

    Time will tell what bounces back first. The markets have to deal with QE'S coming to an end, if they do, plus consumer confidence. Make no mistake the average Joe opening his paper and reading this will react by being more conservative with their buying if this continues.

     

    Families are still struggling and this won't help if the slide continues. Some never recovered from 2008 yet .Just look at the entitlements like SNAP, DISABILITY, TRUE UNEMPLOYMENT, ETC.

     

    Like most of what this administration is good at , a cover up, we might be seeing that come to an end here as well. DOJ, IRS, BENGAZI, NSA, etc...

     

    You can only fool the people for so long. I know plenty don't believe in this but I am fine with my position. Stocks are in trouble and BB'S big gulp of water was the sign for me as I posted that yesterday !
    20 Jun 2013, 12:49 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    It does not behoove anyone for the government to fool the people with bogus stats. The economy is far too serious for those kind of childish shenanigans. I think they just report what they think are important and viable stats and some of us disagree with them. So, we say they're being deceitful. (Okay, its possible some numbers are messaged for key elections in bull pit speeches. But, I think the Fed plays by it's stat book.)
    20 Jun 2013, 09:43 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    First Jimmy Hoffa and now TWA flight 800
    http://cbsn.ws/14KHfn1
    What are we being steered away from?
    Maybe O's bad showing in Germany?
    http://nyti.ms/14KHfDf
    19 Jun 2013, 06:45 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @BDU

     

    Did you see the tapes of him talking in Germany? I don't know who looked more uncomfortable. BO or BB...

     

    I probably am more uncomfortable then both of them right now !!
    19 Jun 2013, 06:49 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Yes he looked uncomfortable that's for sure. I noticed that he was working off paper and not the teleprompter. The bullet proof glass kind of spoiled his JFK moment.
    Five thousand specially invited guests... Hmmm either show up happy or we will have NSA flag your name for special treatment.
    19 Jun 2013, 07:14 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Now I know why BB had to take that big gulp of water before he spoke. He KNEW this carnage was coming !! The easy days of making money in the market are over..

     

    Now it will go back to the ole fashion way.. You have to earn it by doing DD. But this selloff is not over yet for sure..

     

    My 2 cents.
    20 Jun 2013, 12:13 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    Krusty,

     

    Curious minds want to know, did you hang in there with INTC and WAG?
    Wondering...
    19 Jun 2013, 07:05 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Morning tampat:

     

    Yes my friend! I may even add more. :-) I am pretty confident on these 2.

     

    Kruatyman
    20 Jun 2013, 07:52 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @KRUSTY

     

    What time frame are you looking at to actually make money on those trades?? Just curious to learn here..
    20 Jun 2013, 12:51 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Hi IT:

     

    I wanted to keep these stocks only for a couple of days for a quick $1 but if the markets keep on going down and we have a real correction, I will simply buy more of these 2 and then hold until they break their 52 weeks high.

     

    Curiously, the more I read, the more I change my plan lately!?

     

    Krustyman
    20 Jun 2013, 01:33 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    krusty,

     

    That may be 2014.
    Or 2015.

     

    :)

     

    Just kidding
    20 Jun 2013, 01:59 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Alcatel Lucent (ALU) made a nice move up today but failed to break $2.00. I have held and followed the stock since last fall. Originally bought in at $1.10 added more then took some profits. My cost bases is $1.23. So I am up 59% right now.
    The move today was the result of much anticipated meeting by new CEO Mr Combes. To me the meeting was really a non event in that nothing new that hasn't been reported or speculated about. The news that could really drive the stock up is a profitable earnings report, next earnings report is 7.31.13.... Stay tuned
    19 Jun 2013, 07:24 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Ben's plan ... Looks like they are trying to hit the sweet spot for a "soft Landing". Tapering bond buys with improving economy. Personally I think something on the fiscal side might be needed. Maybe a easing of the burden of government or a long term deal on taxes. Seems nobody knows what policy is going to be from year to year how can one plan for that?
    19 Jun 2013, 07:30 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Bd4: Nothing is going to happen on taxes for at least three more years and probably much longer.

     

    For as long as I can remember, tax rates have been giggled up and down.

     

    I could not look at a long term chart of the DJIA and tell you anything about tax rates over that period, nor would I know from the chart the identity of the party in power either in the executive or legislative branches, if I did not already know that information which I do:

     

    Long Term DJIA Chart:
    http://bit.ly/vLHnKP

     

    I can look at that chart and identify long term bull and secular bear markets however.

     

    I know that it is hard for those much younger than me to realize how lucky you are in many ways compared to those in my father's generation and my own.

     

    My Dad built a business starting in 1951 when tax rates were much higher than now. In 1954, the marginal tax rate over $12,000 (equivalent to $100,000 now) was 43%:

     

    Historical Tax Rates 1862-2013 (Nominal and Adjusted for Inflation)

     

    http://bit.ly/10nR70Z

     

    I will not highlight the Great Depression and the fact that he married my mother just in time for WWII (married out of high school in late November 1941 having borrowed $2 to buy a wedding wing made out of base metal)

     

    Dividends were taxed at the highest marginal tax rate for as long as I can remember until the qualified dividend rate came into existence during Bush. Long term capital gains were taxed higher too compared to now, most of the time around 25%.

     

    The WWII generation was able to generate very good GDP numbers at much higher tax rates, and produced a long term secular bull market in stocks lasting until January 1966 that returned 14.4% annualized in the S & P 500, AFTER ADJUSTING FOR INFLATION, and with dividends reinvested starting 1/1/1949 and ending 12/31/1965:

     

    Plug in the Dates and Check Box Adjust for Inflation:
    http://bit.ly/vFOfUm

     

    There are far more fundamental and powerful forces at play than taxes and political parties.

     

    In those earlier periods, there were no retirements plans like regular IRAs or 401K, no 529 plans to help for a kid's college education, no earned income tax credit, etc. or so on that are routinely used now to reduce tax obligations. Most folks had a mortgage interest deduction and that was it. I at least had the IRA when I started to earn back in the 1970s.

     

    Mortgage rates were higher for my entire adult life compared to the last few years. When I built my home in 1982, the 15 year mortgage rate was over 14% and is now slightly over 3%.

     

    In 1980-1981, I was paying a 50% federal tax on earned income plus another 7.5% state tax to Montgomery County, Maryland and to that state. My marginal rate was higher on dividends and interest but there was fortunately a 50% cap on the tax rate for earned income.
    19 Jun 2013, 08:16 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    I think we are of similar generations, but different backgrounds. I am from a single parent family and raised on SS. Started working at 15 and been at it ever since. Mostly blue collar jobs but one lasted me 25 years then this last two part time jobs almost 10 years.

     

    Seems to me the tax rates were higher but deductions were more plentiful. Interest on loans I believe deductible. Before the great inflation you could get by on a low wage job. Things were cheaper and we didn't have all of the amenities we have today. When I started working I thought if I had 20,000 I could live off the interest in todays world thats only 6 months living expenses. I had some of my money in treasuries for awhile $50,000 they sent me a statement interest was about 45 cents it cost 47 cents just to mail the envelope. We have no choice any more but to put our money at greater risk.
    19 Jun 2013, 09:02 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    This is interesting...
    "Austrians argue that continually expanding bank credit can keep the borrowers one step ahead of consumer retribution (with the help of successively lower interest rates from the central bank). In the theory, this postpones the "day of reckoning" and defers the collapse of unsustainably inflated asset prices.
    Austrians argue that the monetary boom ends when bank credit expansion finally stops - when no further investments can be found which provide adequate returns for speculative borrowers at prevailing interest rates. They further argue that the longer the "false" monetary boom goes on, the bigger and more speculative the borrowing, the more wasteful the errors committed and the longer and more severe will be the necessary bankruptcies, foreclosures, and depression readjustment."

     

    "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency."

     

    http://bit.ly/13U5T3s
    19 Jun 2013, 09:20 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    "Austrians argue that the monetary boom ends when bank credit expansion finally stops - when no further investments can be found which provide adequate returns for speculative borrowers at prevailing interest rates."

     

    That's probably true, if no one is spending or investing there is no economy. If banks can't encourage a money supply expansion, like they are supposed to do, there there is insufficient money in circulation to drive prices upward. But, it sounds like Austrian theory predicts perpetual QE to keep borrowing rates low and yields low, as well. On the other hand, even if prevailing interest rates rise, there should be investments worth the spread in a growing and healthy economy. Its just a matter of price.

     

    In my understanding, such Austrian theory is applicable in sovereigns that Adhere to Austrian thought. And it has a lot of good things to say about the Austrian condition within those sovereigns. But, the US is Post Keynesian - not Austrian - so post Keynesian monetary and fiscal policy should dictate policy and our mindset. This is basically the difference between, and the big experiment within, the US and the EMU.
    20 Jun 2013, 09:53 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Bd4: Inflation has been a disruptive force since I started to invest in the late 1960s. The 1966-1982 period was far more difficult to navigate than the last 12 years. Inflation was rampant and both major asset classes failed investors in a major way over an extended period of time.

     

    When I started college in 1969, the tuition was $2,200 per year and is now close to $50,000, rising far faster than the rate of inflation. The equivalent amount in 2013 dollars would be much lower at $11,542.32.

     

    http://1.usa.gov/tj5h8X

     

    The most troubling rise over the past several decades has been in medical and health insurance costs. Fidelity calculated that it would cost a 65 year old couple retiring now $220,000 to pay for medical and health insurance costs during their retirement:

     

    http://reut.rs/13U7UN0

     

    While the rate of growth has slowed some recently, I seriously doubt that the slower pace will last for long.

     

    You could put a million dollars in a money market fund now and earn about $100 in a year. We all know that it not going to cut it.

     

    The main enemy has been and will most likely continue to be inflation which is the norm.

     

    Chart CPI 1913 to Present:
    http://bit.ly/13QQArt

     

    When my Dad was paying me $2 per hour during my 1965 summer vacation for labor work on a construction project, that $2 would have the same buying power as $14.79 today, much higher than the current minimum wage.

     

    http://1.usa.gov/tj5h8X

     

    If I was young now, I would have already bought a home after the plunge in home prices and the extremely low financing costs. I would look for one in a good neighborhood and be content to live at the same location for the entire loan period, expanding and improving the home over time particularly if mortgage rates return to historical averages or rise to higher than normal levels.

     

    My point in the previous comment is that the current abnormally low mortgage rate remains fixed and constant for 30 years as wage income increases for most families, and that compounding effect of more disposable income each month, plus prudent spending and investing, will give that family a fighting chance to have a well funded retirement. I hate to think what costs are going to be like 30-50 years down the road. Whatever a young person thinks may be enough is not going to be anywhere near what they will ultimately need.
    19 Jun 2013, 09:43 PM Reply Like
  • extremebanker
    , contributor
    Comments (1721) | Send Message
     
    SG51:

     

    Low cost government student loans have driven up the cost of education and reduced the value of a liberal arts education in the marketplace.

     

    Medicare and Medicaid and now Obama care have driven up the cost of healthcare for insurance companies and those who pay the premiums.

     

    Fannie and Freddie, FHA, USDA and Farm credit have driven up the cost of housing with weak underwriting standards and low artificial interest rates. This is contradictory to their original intent which was to help low to moderate income families. Driving up housing prices does not help low to moderate income families.

     

    Does anyone see a trend here?
    19 Jun 2013, 10:32 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Extreme: I would agree only with paragraph two. The other points are far more complicated in my opinion. Perhaps, we can discuss them at another time.

     

    As to medical costs, the mere existence of widespread health insurance, both private and government subsidized, contributes to spiraling healthcare costs. With insurance in its current form, there is no incentive for either the patient or the provider to restrain costs or to even be concerned about the relationship between costs and effective treatment. There is no meaningful restraint on healthcare spending due to all forms of insurance in their present forms, which would exist in the absence of insurance. Doctors and patients would need to be far more circumspect in ordering that MRI or CT Scan, or prescribing multiple pills that may end making the patient worse off, just as examples.

     

    And needless to say, if a patient could only pay the doctor in chickens or fresh tomatoes in a world without insurance, the cost of that MRI scan would have to come way down.
    19 Jun 2013, 11:29 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Yes, it has been going on for decades. Unintended consequences. It all sounds great when it is getting the votes. As usual with government the execution is sub par.
    19 Jun 2013, 11:35 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    "Does anyone see a trend here?"

     

    Yes, government spending into a sector drives up prices. Forcing the private sector (employers and insurance companies) to foot the bill will mean prices will fall a bit.

     

    This is already happening with Obama care, they are deflating the health care industry. My mother works in the industry and they are already under wage pressure. It's a shame some folks cannot get care with less government spending at current prices. But costs have to come down in that, and other industries.

     

    There has been too much inflation in some sectors. Some inflation is good, however, because high prices drive technology and pay higher wages for highly skilled workforce.

     

    "... there is no incentive for either the patient or the provider to restrain costs..." Southgent, that's correct. I think the health care industry realizes, as does DoD, the US government has very deep pockets so they line up with a 10 gallon hat in hand. I personally know simply skilled technicians who simply removed their uniform, put on a tie, and nearly tripled their active duty wages for (essentially) the same work.
    20 Jun 2013, 10:05 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Asbytec: Over the past year, I have read at least twenty major stories along the lines of this story published today in USAToday:

     

    Title: Doctors perform thousands of unnecessary surgeries

     

    http://usat.ly/14NbA4l
    20 Jun 2013, 10:24 PM Reply Like
  • CKCoinsPlus
    , contributor
    Comments (39) | Send Message
     
    SG MY Dr.is a good trustworthy man. He would NEVER perform an unnecessary surgery on me. Not unless he REALLY needed the money !
    21 Jun 2013, 12:08 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @CK

     

    WELCOME..I have the same Dr, as you !!
    21 Jun 2013, 01:16 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    "Not unless he REALLY needed the money !" Thanks for the chuckle.

     

    South, personal experience. An X ray revealed a spot on my lung. Before I left the doctor's office, she had me scheduled for a thoracic needle biopsy and a consultation for a lobectomy (from her husband, a thoracic surgeon.) After much research, taking my own health care and risk of death in hand, both turned out to be totally unnecessary. Scary, tough.

     

    My mother rants over big pharma all the time. As a veteran, seems many of my peers are sent boxes of medications for this or that ailment. I am sure there is no DoD conspiracy, they are really just prescribing the best care they can or know how, surely. But they do buy and issue a lot of pills. Guys have half used and unopened jars of them cluttering their shelves. A few have so many prescriptions they can't keep track of their scheduled dosages.

     

    "An apple a day...", they used to say.

     

    On the other hand, it's good to know our returning wounded are getting the best care we can give them. Those guys and gals are often scared and disabled both physically and sometimes mentally. They deserve the best despite the cost. It would be nice if it cost less, however. But for some reason, I find cost secondary in cases involving our war wounded.

     

    Prolonging life when a patient is terminal, now that's a heart wrenching subject, eh?
    21 Jun 2013, 01:55 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    "Prolonging life when a patient is terminal, now that's a heart wrenching subject, eh?'

     

    Asbytec,

     

    Eh indeed!
    That debate would fill a whole blog page by itself.
    21 Jun 2013, 02:05 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    Man, it might take up a page. I'd be afraid to comment. It boils down to personal choice on one end and who knows what on the other. Cost?

     

    Harley C, lets call him, swore he was ready to go. He had ALS disease and was bed ridden, immobile, and totally dependent at age 61. The look in his eye reassured me he was bluffing. His wife told me he cried out for help in his final minutes as his heart finally gave way one last time. They pulled the plugs. Really sad. In those times money just seems inconsequential.
    21 Jun 2013, 02:23 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @ASBYTEC

     

    Some of us had to make that decision in our lives and all I will add is that you NEVER stop questioning your decision. NEVER...
    21 Jun 2013, 02:26 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Asbytec: One of those spots showed up in my lung X-Ray, taken as part of a physical a few years ago. My doctor sent me to have a CT scan which revealed that the spot was calcified, meaning a tiny piece of lung tissue had departed this earth and joined its maker. End of story.

     

    Lung Nodules - Symptoms, Causes, and Diagnosis
    http://bit.ly/14nt2dw

     

    Another recent article on costs was a front page story earlier this month published by the NYT:

     

    http://nyti.ms/14nt2dx
    21 Jun 2013, 02:41 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » I know it is early but the futures are down already !!

     

    Any thoughts where we are heading tomorrow?
    19 Jun 2013, 10:49 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    IT:

     

    Down and then up. Guessing about daily moves will get me nowhere. The only important questions are the Big Picture ones that drive asset allocations and trading strategies.

     

    I do not play the game that way so I am not concerned about it. I do a lot of trading of non-core positions, more piddling than anything, but I am not a day trader.

     

    For example, today I had one trade, an order to sell 100 XRX for about a $200 gain that I had bought in two odd lots, one in September 2012 and the other in October 2011.

     

    Yesterday, I had added 50 shares of Royal Dutch.

     

    Tomorrow, I may buy 50 or 100 shares of a bond CEF, a category that is getting crushed, creamed and sautéed, and their yields and discounts are attractive in the low inflation environment predicted by the FED today (lowered forecasts) and embodied in the pricing of the ten year TIP.
    19 Jun 2013, 11:10 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    Like South says, probably gapping down at the open, then, maybe, going even lower before reversing. Because ht ecollapse today occurred late, well after Europe's close, they'll probably have their own panic attack tomorrow, negatively influencing our open.
    19 Jun 2013, 11:13 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    All,
    Just might be the start of the correction we have been waiting for ..
    Let the crowd panic if they want.. As Tack said yesterday , time to open the watchlist file and keep a watchful eye. We'll test the resilliance of the market again here as we approach the 50 day MA..

     

    Buckle up !
    20 Jun 2013, 09:20 AM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    I plan on just reading my book till the last of trading. Then going to see how things shake out. For a couple of weeks now the last hour has been the big deciding factor every day. I don't think things have change that much, yet.
    20 Jun 2013, 09:32 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @NOT

     

    The last hour of trading have been telling for more then a few weeks now. I posted that over 3 months ago!!

     

    I noticed that and read a quote from Art Cashin stating exactly what we both feel. "The last hr is when the true trading happens, everything before is gambling"

     

    I am paraphrasing here.. Don't have the exact quote ..
    20 Jun 2013, 12:56 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » "Like South says, probably gapping down at the open, then, maybe, going even lower before reversing."

     

    So did we get that bounce up? Or does that now happen tomorrow?

     

    Is the Panic Attack over yet or do we still have a ways to go?

     

    Serious question..
    20 Jun 2013, 04:16 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    IT: There is a good reason why I do not try to guess the market on a daily basis.

     

    I try to remained unemotional, focused and disciplined, using objective criteria to make decisions, and continually trying to cut down the number of inevitable mistakes and errors by acquiring relevant information and then making reasonable judgments based on my knowledge and experience.

     

    I refrained from buying any bond CEFs today since I can see individual investors fleeing, and they will likely continue to do so, causing discounts to expand well beyond five year highs and yields to increase even higher as prices plummet. The rate of decrease in net asset values per share has been far lower than the percentage declines in prices, a common phenomenon during periods of stress and turbulence.

     

    I have a number of blue chip companies that I will consider buying at lower prices. I mentioned one in another comment, which was General Mills. I would prefer to buy more shares as close to a forward P/E of 15 as possible.

     

    I will primarily use forward P/Es for consumer staple stocks given the reliability of their earnings, particularly when we are close to the start of that forward year. The GIS 2013 F/Y ends in May 2013 so I will use definitely use the forward estimate of $2.93 per share for the fiscal year that has already started.

     

    Multiply 15 times 2.93 and I arrive at $43.95.

     

    That is not a hard and fast rule and I will go higher but not that much higher. I will simply wait until I like the price. My last buy was not that long ago at around $35.
    20 Jun 2013, 04:43 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    IT:

     

    Unfortunately, no bounce, and not a good sign that we just stair-tepped down all day without a huge quick plunge on volume. When one sees those V-like spikes down, and bounces off the nadir, then reversals can be guessed.

     

    My instinct is that Asia and Europe go further nuts, and we open down again and sell off more, at least early. We need a believable upward-rising close to think this is over.

     

    Of course, I'd love to be wrong on this short term. However, i remain resolute that this is just setting up huge buying opportunities for those who had professed to be seeking them.
    20 Jun 2013, 04:46 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » TACK

     

    Did Oracle's earning have any effect on the psyche of the market?
    20 Jun 2013, 04:48 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    IT:

     

    No
    20 Jun 2013, 04:49 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    After watching the last hour of everything. I am a happy camper. The SP 500 is down 5% from it's highs. And, now I have nothing close to being exercised on my covered calls.

     

    I will spend from now till earning season (July). Looking for bargains. I love it when EVERYTHING sells off. That means people are dumping the good with the bad. Now I have to do the work to find the good.
    20 Jun 2013, 04:50 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @NOT

     

    Happy that your covered calls are protected. Now when you find those gems would you be kind to pass them onto us??

     

    I agree some good ones always get thrown out with the bad ones..
    20 Jun 2013, 05:02 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    No:

     

    One recommendation: BDC's

     

    Apparently, the market has chosen to be completely oblivious to how most of these firms operate. Many are now set up with equity and fixed-rate debt capital, and they lend on a variable rate basis. Not only will they not be hurt by higher rates, their profits will increase substantially.

     

    After the carnage, PSEC, FSC, TCRD, TCAP, KCAP and ACAS all look more interesting, among others.
    20 Jun 2013, 05:05 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Notrub,

     

    Good for you, Same here, but I have one on the fence (BBBY) 70 is the strike price,, it closed @ 69.52. -- if it goes so be it, if not i sell another call on Monday .....

     

    Yes , time to find the "good" , but I think we have plenty of time to accomplish that.
    20 Jun 2013, 05:07 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Thanks F&G,
    I had forgotten tomorrow is the last day for June contracts. Guess I know what I'll be doing Sunday...:o)
    20 Jun 2013, 05:10 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » TACK

     

    You won't believe this but we agree.. The BDC'S are completely misunderstood..

     

    Tempted to add to my position in PSEC after seeing how it reacted today!
    20 Jun 2013, 05:14 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » The selloff in BDCs (BDCS -1.9%) in response to higher rates should not be "uniform across the...

     

    The selloff in BDCs (BDCS -1.9%) in response to higher rates should not be "uniform across the sector," says Fifth Street Finance (FSC -1.9%) in its June 2013 newsletter. As of March 31, 74% of FSC investments were floating and 90% of capital was not tied to rate movements. A small bump in rates should make the portfolio more profitable, but - because floors will be breached - a large rise would "dramatically" boost profits. Other BDCs today: Prospect - which claims to be in the same position as FSC - (PSEC -0.4%), Ares (ARCC -1.7%), BlackRock Kelso (BKCC -1.9%), Main Street (MAIN -3.2%), Solar (SLRC -1.4%), TICC (TICC -1.8%).

     

    (PSEC) held up well today and solidified my adding to it soon. Does anyone disagree or agree who own it? Or others in the same group?

     

    Thanks!
    20 Jun 2013, 05:33 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » TACK OR ANYONE..

     

    Not sure if there is an absolute answer to this. However does a % exist where you have to worry about margin calls ?? If we have another 200 point drop tomorrow as an example would that ignite margins??
    19 Jun 2013, 11:18 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    IT:

     

    I doubt that margin issues will be significant unless the market goes a lot crazier than we're seeing presently.
    19 Jun 2013, 11:46 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    IT,

     

    200 points down, I doubt would cause any big issues.
    It would take a rapid, large decline to ignite mass margin calls but I dont know how large it would need to be. A slow decline allows people to exit in a more orderly fashion.
    500-1000 down might generate some fireworks.
    20 Jun 2013, 06:43 AM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    @ IT Why do commodities drop in a parabolic move when the Stock market has a large drop ?Recently the answer for that was "Liquidity".I don't think that's the issue though. The commodities got killed overnight. That's not because of liquidity.It's possible that it's by design.At least some will say that .
    20 Jun 2013, 07:14 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    IT

     

    Margin debt is at the highest it's been in a few years but hedge funds will be selling since they use margin most for leverage, in my opinion.
    20 Jun 2013, 07:16 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Folks , thanks for the thoughts on margin. That was a question I had not knowing when those calls start coming because I never did trade on margin..
    20 Jun 2013, 12:16 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Most of industrial commodities dropped because of China not the FED.

     

    http://bit.ly/121ZAef

     

    If you go through the list of overnight articles it pretty much shows stocks are lower, interest rates are up from yesterdays FED.

     

    Commodities are down because of slowing growth in China.

     

    For gold specifically. India has put a tax on purchases. China has slowed it buying. And, a lot of speculation because of the unwinding of the Yen carry trade. And, the dollar has shot up:
    http://on.mktw.net/122...
    20 Jun 2013, 07:25 AM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Notrub:

     

    Also keep in mind that commodities do not like a real positive interest rates environment. And we are heading there IMHO.

     

    Krustyman
    20 Jun 2013, 08:00 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Krusty ,

     

    Agree we are "eventually" heading there but my take is that the commodity markets are starting to "price in" that scenario in. IMHO we are a long way off from "real' rates.. but markets get jumpy & irrational all the time..

     

    20 Jun 2013, 09:07 AM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Thanks for the info and the links .The 1st link wouldn't open for me ,but I'll check it later. The highest Gold coins I have in inventory are at the $1460 .00 level. I have 5 oz. at that price. The good news is they are "Slabbed" numismatic coins so I could probably break even if I had to sell today(I don't ).I will need to move some Gold by the end of July probably because I will need to get about 20K in cash for a deal. Buy some sell some,or when it's high SELL some wait for a drop and then buy some :)
    20 Jun 2013, 09:32 AM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Fear&Gread:

     

    ''the commodity markets are starting to "price in" that scenario in''

     

    Yep! :-)

     

    Krustyman
    20 Jun 2013, 10:55 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    F&G

     

    Why the correlation about commodities going down and staying down with higher real interest rates?; before real interest get to 8%-10% to get real, in my opinion, mines will shut down because of lower prices and this is supply destruction; how can commodities prices stay low for long with real rates? people need nat gas for heating, cooking, and manufacturing processes and the same with crude oil; it takes money to extract nat gas and oil and supply and demand law will kick in and prices will rise; low commodities' prices should not last for a long time unless the economy collapses
    20 Jun 2013, 08:27 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Wells Fargo CEO .... http://bit.ly/1220WWd

     

    What does he read your blog IT.

     

    Maybe the Fed has waited too long to taper?
    20 Jun 2013, 07:37 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Isn't it great being a monday morning QB.. hindsight is 20/20
    20 Jun 2013, 10:57 AM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Rates will normalize.

     

    A different issue is whether they "need to" normalize.

     

    I view rate normalization as a long term positive for the economy as it will increase income substantially for the tens of millions who are part of the Savings Class, who currently have almost $7 trillion in savings accounts earning nothing, and who were the only cow available for milking by the FED since the advent of ZIRP and QE over five years ago.

     

    When stripped of the fancy labels and scholarly babble, the FED's policies are nothing more or less than the forced wealth transfer from those who acted responsibility to those who did not, including the Wall Street Masters of Disasters.

     

    Those doofuses concocted a multitude of satanic CDO creations for their own personal aggrandizement. The large financial institutions, including the investment banks, funded the mortgage companies who extended credit to clearly unqualified borrowers, many of whom lied about their incomes and had no business buying a home (let alone at inflated prices), with none of the above including the rating agencies who assigned AAA ratings to the CDO toxic trash having any skin in the game.
    20 Jun 2013, 12:07 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @BDU

     

    We do have some smart people here posting for sure...
    20 Jun 2013, 12:18 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    south:

     

    I have to take issue with this populist view of "transferring wealth."

     

    The Fed took the only action it could in the face of massive deflation and illiquidity to try to prevent devolution into a repeat of the 1930's deflationary depression. Bernanke, mostly, has succeeded.

     

    I always get a laugh when many average folks rant about the "wealthy," the banks and the banksters and suggest that the entire system should have been allowed to implode, as if the people who would get hurt in such an event would be that class. In fact, it's the working man and mortgagers who get annihilated in deflationary depressions, as they lose their jobs, money becomes very scarce, and many lose homes and other assets to bankruptcy. It's the rich who are gobbling these assets up for pennies on the dollar in such times.

     

    And, there's nothing particularly noble or societally beneficial about hoarding ("saving") dollars. If money doesn't circulate through society, commerce stops.

     

    Society, in general, can tolerate a little inflation and low returns much better than it can financial devastation. It's fortunate that Bernanke sought to prevent the meltdown. If the present hysteria were to pick up steam and result in a new massive deflationary hoarding of dollars, despite his efforts, then many of the same people complaining about "wealth transfers" will be complaining about being jobless, homeless, and worse.
    20 Jun 2013, 12:58 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    "to prevent devolution into a repeat of the 1930's deflationary depression. Bernanke, mostly, has succeeded."

     

    How is it the Fed, BB, and QE can have virtually no affect on the economy, but yet save it from a doom and gloom, armageddon scenario of financial devastation that only the hysterical believe in.
    20 Jun 2013, 01:08 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Sorry but I don't think I can entirely agree. How has the Fed succeeded? The only way to truly hoard dollars is burying it in the back yard. If you hoard your money in a bank it is leveraged into the system. The "Banksters" get special treatment because of their size and connections. The rich gobbling up assets. Are you talking about the Fed? To the tune of 85 billion per month.
    20 Jun 2013, 01:13 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Time will tell if the meltdown was averted or delayed!! You might have the last laugh but you never lived through QE'S before either.

     

    For all of us I hope you have that last laugh because it you don't then were all in trouble..

     

    We do have jobless, homeless, higher SNAPS, etc.. Then ever before !!
    20 Jun 2013, 01:25 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    "How has the Fed succeeded?"

     

    They've transferred wealth from the general populace to concentrated interest in the financial markets. This is supposedly to save us all from financial ruin, but this is a con inculcated deep in the public pysche by the gov schools. This "wealth transfer" is precisely what Morgan, Warburg, Aldrich, Rockefeller, et al wanted it to do. It is essentially getting people to purchase financial assets they did not want to via the coercive power of the gov. This forced purchasing made the victims poorer, and those receiving the purchases (like the large banks and those controlling those interests) richer. Its a cartelist power, which is exactly what guys like Morgan and Rockefeller wanted, but couldn't achieve in a free market, so they turned to gov to make it happen for them.

     

    Now this doesn't mean that a real economy can't keep churning along and produce growth and keep our standards of living generally increasing, but it does mean it can slow that process down. It also means that it won't totally destroy an economy, but it can slow it down severly. It will all depend on how much gov intervention into prices is allowed. You can have something like a Cuba and N Korea on one end and a totally free market on another, and somewhere in between is the US.

     

    However, you can point to no period in history where there hasn't been some gov price fixing (intervention). As such, you can never say a free market has produced a bubble, because we have never had a period where the gov was solely protecting property and even then, we have never had a period where gov was not compulsory. Thus you can say there were periods of less gov involvment, and in those periods you will have greater growth. However, even in those periods there were wars and subsidies, so you can't say a free market caused a bubble, because you never had a period of a gov creating a market that was totally free of coercion, which is what a free market is - it is free of coercion. As long as you have some coercion interjected by gov not doing its job, you will have wealth transfer and asset price distortion.

     

    What this means, is that part of your analysis includes fundamentals (because the natural state of any economy is to grow, because human nature is to survive and improve the standard of living) and part of your analysis is the very real affects of coercion (which is the only tool gov has) and how that coercion will lead to bubbles and busts.

     

    Once you figure this out, you can improve your chances of not panicking by better understanding the environment you are in. In other words, you can understand where you economy is on the spectrum between free and coerced, thus you can determine its potential for real productivity and how coercion (especially from gov) can distort asset prices at that point of productivity on the spectrum.
    20 Jun 2013, 01:34 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Tack: I know that you have read my positions on QE in SA comments. Again, and this is just the way I view all of your criticisms of my statements, you simply inaccurately summarize my position first before criticizing it and will continue to do.

     

    I have been consistent for years now in statements made in my blog since March 2009 and in comments here at SA that I viewed QE to be necessary.

     

    One of the foundations of my long term secular bull thesis is in fact the increase in disposable income due to the refinancing wave at historically low 15, 20 and 30 year mortgage rates. I obviously view that as beneficial.

     

    I have also consistently stated that the benefits of QE were rapidly diminishing and the negative impacts were now and have always been clear.

     

    The primary negative impact is on those who had no responsibility for creating the problem that needed ZIRP and QE, mainly senior citizens and other savers that have now been denied income from their savings for over 5 years now.

     

    About a third of households do not have a mortgage on their homes
    and have not received any benefits of refinancing. Almost half of those are seniors who are understandably not inclined to borrow money on their homes to invest in the stock market:

     

    Census Bureau Summary Statement:
    "Thirty-two percent of owner-occupied units were owned free and clear, 66 percent had a regular and/or home equity mortgage and 2 percent had only a line-of-credit."
    http://1.usa.gov/UBkUDi

     

    The savers have lost just about all of their income from risk free savings due to the FED's monetary polcies. This can not be disputed by any informed person.

     

    The beneficiaries of that wealth transfer were the tens of millions who became over leveraged during the consumer Age of Leverage that culminated in the excessive acquisition of leveraged during the housing bubble, frequently with little or no skin in the game. There can be no informed dispute of that fact.

     

    As shown in this chart, and discussed by me many times, the Age of Leverage started around 1985 and culminated in 2007:

     

    Household Debt, 1955-2011 | pgpf.org
    http://bit.ly/12dTHpV

     

    I frequently discuss in my blog that the build up of excessive leverage as a reason for the prior long term secular secular bear market in stocks:

     

    E.G. "The Importance of Identifying the Underlying Causes of Long Term Bull and Bear Markets" (June 2011 Post)

     

    http://bit.ly/VxKIwo

     

    The actual effect of the increase in debt is not even properly understood until one considers that the increases in the debt charts originates from just a segment of the population, a large segment but still just a part of the population.

     

    The transmission mechanism for the wealth transfer was the abnormal monetary Fed monetary policies. That is just a fact, though I understand that you view the facts as a populist sentiment.

     

    The harm to the U.S. economy from continuing QE now outweighs the benefits from discontinuing it in my opinion. Recoveries from the past 9 recessions have been quicker and more robust with the average risk free interest rate being 5% rather than close to zero.

     

    Study Summary at the Big Picture Blog:
    http://bit.ly/YF81Ij

     

    I have said again, many times, that there are still benefits to be achieved by continuing it, primarily for about 2 million households who will be able to refinance this year with the anticipated increase in home prices. I have referred to this article in comments from Bloomberg:

     

    http://bloom.bg/11wH8Ls

     

    Since I am concerned about those who are being punished by the FED, and am far and away from a blue blood, I know that my arguments sound like populist rhetoric to some.
    20 Jun 2013, 02:11 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    south:

     

    In this post you return to a recitation of factual information, with most of which I concur. I was taking issue with your editorializing in the last post, where it's clear that you were making value judgments about what was done and why.

     

    My point was/is, simply, that policies were put in place to prevent deflation. It's been expressed too many times to count in SA that "wealth was transferred," as if this was some nefarious plan of the fed to actually move money from seniors and other "victims" to greedy bankers, et al. This simply isn't true. The apparent benefits to some and not others is just the outgrowth of interest-rate policies placed in effect to stem deflation. People can react accordingly or not. Not a single dime was removed from anybody's account.

     

    Now, lots of people who hold high-yielding investments are getting killed in this new market panic. Is that the result of some new nefarious plan by the fed to "transfer wealth?"

     

    In any case, one some matters we agree; on others, we don't. That's fine.
    20 Jun 2013, 02:21 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    "Is that the result of some new nefarious plan by the fed to "transfer wealth?" "

     

    No, its the result of their incompentence. Folks like BB are like a guy whos been told to stick a spear through a hole in the wall for the good of the economy. So, that's what he is doing. What BB doesn't realize is that there is a human being on the other side of the hole that he has been jabbing with his spearpoint.

     

    Our job is to recognize that BB is only acting from his ideological standpoint, and that this ideological standpoint is wrong, AND to not be the person on the other side of that hole. So once you realize that gov intervention can only transfer wealth and not create it, you figure out where the wealth is going to be transferred to and be there when it gets there.

     

    Sorry, for the reality check, but this is the only world we have and semantics won't change it, so its best to find out how to use it to your advantage as best you can.
    20 Jun 2013, 02:27 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Tack: And I did not say it was part of a "nefarious" plan. That is just another one of your many mischaracterizations of my statements. The effect of the FED's policies is transfer wealth from those who did not contribute to the problem to those who did, which is not editorializing. I am simply describing a fact which has occurred and continues to happen.
    20 Jun 2013, 02:35 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    tack

     

    so with your logic it is ok to bailout people and corporations making bad economic decisions with taxpayers' money; not everyone suffers with a depression when prices go down and for people working it is like a pay raise....I hear that during the depression people where moving up from eating chicken to beef instead because of lower prices...what's wrong with that?
    20 Jun 2013, 02:35 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5028) | Send Message
     
    I'm going to add my personal experience. I was home shopping as prices were climbing. I opted not to buy because I didn't want to go over 27% of my income. At that % I could buy only even slummier than my already bottom rung neighborhood.

     

    Meanwhile, my neighbor moved into a lovely home. Went upside down mortgage, & got out with benefit from..... MY TAX MONEY. Furthermore, my -responsible- sense of self-care savings is now unable to earn a reasonable rate relative to inflation.

     

    I'm getting poorer, & other people are getting away with irresponsible behavior.

     

    Then there was all the energizing stimulus money (can't remember what it was called), that went to random projects. Meanwhile our country's infrastructure needs a lot, & that's -not- where it went. That would be where we -all- could benefit.

     

    You can reasonably argue that the Fed (it's not Bernake, it's a whole group) had to do this to avoid depression, & there was no choice. You can also reasonably argue that it's had unfair consequences to responsible people who looked to take care of themselves instead of being greedy at the time of cheap money. Even if there was no choice, it's penalized the more responsible in society.

     

    On saving, I would say it is a moral positive. Being able to survive & take care of yourself, is desirable & preferable. If you have to use a social support service, that's okay, but it is an admirable goal to want to be self-sufficient.

     

    Along the same lines, I'm tired of paying a 3-4% tax to credit card companies to float money to people who don't save. Finally legislation is catching up & giving better rates for debit cards. If I want to pay 3-4%, I'd like to pay my own gov't to pay down our debit, not pay for banks & CEO bonuses.

     

    @Jhooper, Bernake talked about this negative consequences of ZIRP in interviews (I heard him say it). He is aware & is unhappy about it. He's making a judgement call on priorities, according it his own statement & is frustrated with these harmful side effects. So just an fyi, though it changes nothing much :).

     

    I'm looking forward to getting out of this rescue & back to having more options for my money than an irrational stock market bull.
    20 Jun 2013, 07:42 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Curls,
    I hear your pain ,, but to put it bluntly , you have to play the cards that you were dealt or sit on the sidelines and wait for that to happen. Some have now waited 4 years , they chose not to play the cards , instead they chose to blame the Fed for what has turned out to be their mistake..

     

    No malice intended here , i just call it as i see it .. I hear it everyday ...
    20 Jun 2013, 07:56 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5028) | Send Message
     
    F&G
    My complaint is valid. It has nothing to do with the choices I've made. My money has grown all right, though my folks have zero places to put their money. I'm still frustrated & have every right to be infuriated that my money paid for other people to be slobs about their lives. Being mad about that has nothing to do with taking responsibility for dealing with what is & making the best choices at every moment within that in my life. ... after all I'm a responsible person!

     

    Your admonishment to me doesn't reflect what I said or why I said it :). It's falsely negative at me. Having read you're comments now for a while, this has to be a miscommunication glitch.

     

    "they chose not to play the cards "
    That's not a fair statement. They weren't obligated to play roulette in the market because they had no other choices. There is an unfairness here & it should be called for what it is. That's not "blame," it's appropriate labeling of what is. Also the complaint isn't that money couldn't be invested, it's that money went from people who sacrificed to be responsible, to people who were self-absorbed spendthrifts. Same with companies.
    20 Jun 2013, 08:23 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Curls: The primary speech given by Bernanke to justify the FED's monetary polices was given last October. In that speech, he acknowledges the adverse effects but maintains that the positives outweigh the negatives. One of the positives in his view is the increase in asset prices.

     

    Five Questions about the Federal Reserve and Monetary Policy

     

    http://1.usa.gov/WdOMqu

     

    The discussion on the impact on savers starts with this title and the following acknowledgment:

     

    How Does the Fed's Monetary Policy Affect Savers and Investors?The concern about possible inflation is a concern about the future. One concern in the here and now is about the effect of low interest rates on savers and investors. My colleagues and I know that people who rely on investments that pay a fixed interest rate, such as certificates of deposit, are receiving very low returns, a situation that has involved significant hardship for some.

     

    I would call that last sentence remarkable, particularly the use of the phrase "hardship on some". He is really trying to minimize the damage in a factually unsupportable manner in that paragraph.
    20 Jun 2013, 08:24 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    " Some have now waited 4 years , they chose not to play the cards , instead they chose to blame the Fed for what has turned out to be their mistake.. "

     

    Yeah, you have to realize that there is always a real economy out there. Gov action can severly distort it, and alot of people can be hurt, but if you recognize what is going on, then you can not be one of them.

     

    The history of gov intervention is boom and bust. Severe gov intervention can create a Cuba or N Korea, but even in these places there is still a rich ruling elite. The US doesn't really face that extreme, so what we have here is a monetary system that will go to the mattresses to protect equities markets.

     

    As long as the US economy is the highest deck on the sinking ship, the world will come to us. This doesn't mean we will be as prosperous as we could be, but it does mean that some sort of collapse into a Mad Maxx scenario is highly unlikely.

     

    Don't get me wrong, I'm not defending anything here, I'm just saying it is what it is. Look at it this way. Imagine an equity market as an index for aristocracies. If you don't push the peasants too far, the aristocracy index will reflect the rising wealth of the aristocracy. If there is a dip, the aristocracy via their central bank can keep tapping the general productivity of the peasants and transfer that to themselves. The equity index (the aristocracy index) will reflect that transfer and show a recovery.

     

    This is very similar dynamic to what is going on now. If you recognize this, you can invest in the aristocracy index and share in their gains.
    20 Jun 2013, 08:32 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    south

     

    I agree with you that the bankers are crooks but our Congress passed laws to make housing affordable to low income people, including Clinton and Cuomo; there are many people to blame
    20 Jun 2013, 08:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Curls,
    as I Stated no malice intended , I apologize if you took offense to my remarks,,

     

    However, you are right its not fair,, well many things in life and the markets and the world aren't fair.. never will be ..

     

    Maybe i view the market differently , i don't view a company with a 3-5% yield that grows dividends for 20 + years as playing roulette .

     

    What I'm trying to project for those that i hear complain about the fed and policy is ---make lemonade from the lemons..

     

    as for the people who work hard pay taxes and do things right paying for the self absorbd spendthrifts,, - well again, life isnt fair
    but i dont see how that plays into investment decsions
    All the Best to you ...
    20 Jun 2013, 08:38 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Being as I have spent most of my life working with or for the government I can say from experience incompetence is rewarded. That flows out to everything that government touches. Which is why I can't wait for the government to get out of the market and peoples lives. Though from what I have observed since 2008 the latter is not likely to ever happen until the majority of people in the US get fed up and have their own "Spring" moment. I don't see it happening at the polls.
    20 Jun 2013, 08:53 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5028) | Send Message
     
    Thank you. I know you didn't mean offense.

     

    "i don't view a company with a 3-5% yield that grows dividends for 20 + years as playing roulette ."

     

    There is always a chance of 50% decline in principle. That's why all the warnings on investments that "there is risk." It is roulettle to my folks in their late 70's. It's much less for me with a 15 year horizon. It's why they should be 50+ in bonds or CDs.

     

    "make lemonade from the lemons"

     

    That's a reasonable ADD ON, but the first part stands. There's still some lemons we're squeezing. And we're trying to find cane sugar to replace the high fructose.

     

    "i dont see how that plays into investment decsions"

     

    The topic under discussion wasn't investment decisions. It was monetary policy's effect. That's what I was commenting on. Maybe that's where the misunderstanding. Maybe you were expecting a comment on my personal investing policy. It wasn't commenting on that. No amount of "wise" investing by me changes that the monetary policy rewarded the less responsible.

     

    In my view that has a lot more an an impact on me. It's bad for a country to help the less responsible thrive instead of the most responsible... in many many ways who you grow, effects your country's future. I'm not a blanket supporter of all aspects of the entire monetary policy.
    20 Jun 2013, 08:54 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    curls

     

    I sympathize with your struggles;
    Here is what I think the Fed and Bernanke did wrong; the financial collapse of 08-09 was treated as a liquidity problem instead of as a solvency problem; the banks needed to be broken down and let them swallow all of their toxic mortgages bonds instead of the Fed printing money (Liquidity) to buy bonds with taxpayers' money; the same with homeowners who are getting mortgage help even when they can't still afford it. Bottom line bad debt needs to be repudiated..no ifs, ands, or buts
    20 Jun 2013, 09:06 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Unfortunately, all that bad debt still hasn't been work off. It could take decades. To make it worse the US taxpayer has been put on the hook for a lot of it. I don't know if I will still even be alive to see all the MBS's unwound. Last I checked the FED is still buying them 5 years later.
    20 Jun 2013, 09:21 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5028) | Send Message
     
    @Rin

     

    Interesting. I'm not macro knowledgeable enough to have an opinion yet. I do think the stimulus should have been spent on more core needs we were going to have to pay for eventually anyway. What you say makes sense to me, but I don't know how it plays out, so I'll stop there.

     

    General Clarification on this topic:

     

    I was making it personal to give the topic a personal touch, a real example. So the effect isn't imaginary. I wasn't making it about me.
    20 Jun 2013, 09:24 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    South, "A different issue is whether they "need to" normalize. I view rate normalization as a long term positive for the economy..."

     

    I agree, too, but add it's a sign of getting away from the drug induced new normal. That should be good news, too, even if markets adjust badly in the short term. Its portfolio re-balancing going into a crisis and extensive easing. The same happens when it unwinds.

     

    I also fully agree with Tack's comment below.
    20 Jun 2013, 10:13 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    Curls, "...with benefit from..... MY TAX MONEY."

     

    Maybe it will some consolation to realize the government can issue dollars with a simple nod from congress - which seems harder to achieve these days. It does not need tax money to fund bailouts. (See some of the MMT/MR writings.) Taxes are a drain on the money supply to offset government spending and a transfer mechanism required in our monetary system to prevent a Greek condition. Yes, it's a bit socialist, but folks have to have money to spend to drive the economy and benefit the everyone in the free market.

     

    In any case, taxation funds nothing in the government which is why the debt rises continually - adding net financial assets. Those assets increase the money supply (some of it locked up in timed Treasury savings accounts) to keep it roughly in check with our capacity to produce and a stable inflation rate. Extra "outside money" also helps the often heard critique that money created at interest can never be repaid. That's true, so additional government deficit spending eases that impossible math.

     

    I concur, however, that the reckless did seem to get over. But, hey, that's the great moderation model of low rates, low inflation, and heavy reliance of consumer debt. The latter helps offset low or stagnate wages, and we call it (our FICO score, home equity, and other asset prices) the wealth effect.

     

    Sometimes I fantasize about a time where we earn wealth investing in the markets and will have no need for a wage at all...LOL
    20 Jun 2013, 10:26 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    Hi Hoop. Free markets crash and require some rules to play by. Government intervention, especially severely socialist ones, can distort badly. But, the government is part of the economy. They can simply set the rules and buy what they need as a huge consumer.
    20 Jun 2013, 10:34 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    Notrub

     

    yes, I agree with you; to give you an example, do you remember the S&L crises of the late 80s and early 90s that deal also with housing? the gov't set up an entity shutting down and restructuring S&L with good SL buying bankrupt SL and foreclosed houses were sold; this whole process took a few years and housing took off again; why the gov't doesn't do the same way again? to big to fail
    21 Jun 2013, 07:45 AM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Remember the advice that Rodney Dangerfield offered in Caddyshack?

     

    “Buy, buy, buy! Oh, everyone's buying? Then sell, sell, sell!"
    -- Al Czervik (Rodney Dangerfield) to his stock broker while playing golf.
    22 Jun 2013, 04:20 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Obama meets expectations in Europe... http://bloom.bg/14LMEtQ
    20 Jun 2013, 07:47 AM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    An interesting article by Eric Parnell:
    http://seekingalpha.co...

     

    For reference the 10Y went to 2.44% this morning.
    20 Jun 2013, 08:30 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @NOT

     

    Some of us follow Eric as he is one of the best. Great post for all and maybe others will follow him as well!
    20 Jun 2013, 12:26 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    I noticed this morning that both gold and silver prices were plunging with the gold spot market price down $57.7 or 4.27% to below $1,300 as of 9:27 EDT.

     

    I read this morning the following article published at Kitco regarding gold and silver prices:

     

    http://bit.ly/19kIj1X

     

    I would agree with that author that "serious technical damage" has been done and "more downside" pressure is to come.

     

    While the past is not always a prelude to the future, I am aware of how long bear markets have lasted in precious metals.

     

    I discussed earlier passing on an opportunity to sell my junk silver coins, taken out of my change back in the 1960s, when silver was selling over $40 per ounce in 1978. My next opportunity to sell at over $40 came in September 2011.

     

    Based on the London P.M. fix, gold topped out at $850 on 1/21/1980. The subsequent bear market lasted until 2002. This is not an arguable point. The bull move started in January 2002 when the price was hovering around $280 per ounce.

     

    Year End Gold Prices London P.M. Fix:

     

    2002-$347.2
    2003-$416.25
    2004-$435.6
    2005-$513
    2006-$632
    2007-$833.75
    2008-$869.75
    2009-$1087.5 (parabolic move underway- QE underway)
    2010-$1,405.5
    September 5, 2011 $1,895

     

    The spot price did cross over $1,900 in early September 2011.

     

    20 Jun 2013, 09:29 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    As the price of PM's drop it's less and less a percentage of my portfolio. I don't know if that makes me feel better or not. Three of the holdings pay a dividend. I am in for the long haul on them. I just don't see a long drawn out bear market.
    It's kind of like having a crazy aunt locked in the attic of the portfolio. You know she's there but just can't stand to have her committed.
    20 Jun 2013, 10:39 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @BDU

     

    I am not worried about the PM'S. I am convinced they will bounce back as I see others here feel the opposite. Now were going to find out if the recession that I believed was covered up pretty nicely with lowering the bar on earnings and kicking the can down the road with QE'S was indeed a recession or I am wrong.

     

    But make no mistake if the average consumer just opens the paper and sees this sell off and gets spooked about the markets this slide might continue. I am sure a ton will post that I am wrong and am looking forward to them

     

    People are hurting still and this might make it worse!!
    20 Jun 2013, 12:30 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    IT: I have never been able to assign a fair, intrinsic value to gold. I do not believe that there is one.

     

    I know how to assign a value to stocks and bonds or to value a business or U.S. farmland.

     

    General Mills, a stock that I own, is down 71 cents or so today to $48.47 as I type this comment.

     

    I know that a buyer at that price will receive a dividend yield in excess of 3% and will in all likelihood receive dividend increases for years to come. I know that the P/E on TTM is 17.78 and 16.57 on estimated 2014 earnings, with a forward 5 year estimated P.E.G. at 2.34.

     

    Key Statistics at YF:
    http://yhoo.it/RDQ2Cu

     

    I can look at the GIS dividend page and see the rate of growth:

     

    http://bit.ly/TTlbQB

     

    I consumed two of their products so far today: Cheerios and Yoplait yogurt.

     

    Brands
    http://bit.ly/11pK10d

     

    I know that the company is increasing revenues, currently near $27 per share annualized, and has a solid balance sheet.

     

    I am not interested in buying at that price after looking at all of those criteria but I am closer to my add range using time tested criteria for making valuations.

     

    What do I know about gold. I know that it produces no income or earnings and costs me money to store in a bank lock box. Its value is determined only by supply and demand from individuals, none of whom can assign a value to it based on objective like P/E or P.E.G. ratios, P/S, P/B, return on equity, free cash flow, or anything concrete.

     

    I do view gold as a form of money but the value of that money is uncertain unlike the $20 bills residing in my wallet. I know that the $20 bill in my wallet had a great deal more buying power than it did in 1965, and I can calculate the approximate amount that it would take now to purchase goods now that cost $20 in 1965.

     

    Answer: $147.9
    http://1.usa.gov/tj5h8X

     

    I was just curious what gold would be worth now for a purchaser at $35 price in January 1970, using only CPI to increase the value.

     

    Answer: $201.3

     

    I am not saying that the increase in gold price is tied to the increase in CPI. I am saying that it is not tied to anything concrete.

     

    I have no idea how far up or down gold/silver will go from here, nor do I know whether or not the current bear market will last as long as the last one which was 22 years. No one knows the answer in my opinion because there is no ascertainable value using objective criteria.

     

    When faced with that uncertainty, my approach is to own some but not a lot. I will pick my spots to buy and to sell which may end up being decades apart. It has been about 18 years since I made my last purchase and my first ever sales started in September 2011.
    20 Jun 2013, 01:23 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Something is worth what ever somebody else is willing to pay for it.
    20 Jun 2013, 01:33 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Bd4: Yes, but what is the rational price. I know rational price ranges for stocks, private businesses and income producing farmland using objective criteria (revenues, earnings, free cash flow, predicability of the foregoing, and so on)

     

    I know that the prices of internet stocks in 1999 had no foundation based on those criteria.

     

    The mere fact that someone was willing to pay 175 times pro-forma earnings (excluding all of those expenses that companies want you to overlook), for Cisco in 2000 says nothing about the price other than one party to the transaction was unfamiliar about how to establish a reasonable price for a pro-rate share of the business. That was an under statement to be sure.

     

    I have no idea what a rational price range is for gold and silver and neither does anyone else.

     

    That is a major difference in attempting to assign a value to gold/silver as distinguished from assets that generate earnings and/or income.
    20 Jun 2013, 02:25 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    SG ... I guess that is the purpose of the market to determine price. What is rational to one might not be to another.
    20 Jun 2013, 03:43 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Bd4: That is true. There are many irrational investors. The entire efficient market thesis is based on what I would call a ludicrous "rational man' hypothesis that must humans actually acquire relevant information and then make an objective, unemotional decision about value before making an investment decision. Price is not made rational by combining the opinions of several million frequently irrational humans in making that determination.

     

    For me, there is only one reasonable price range that can be objectively determined based on known information and reasonable forecasts for the future.

     

    Those who do not follow those time tested criteria for determining a rationale price will eventually crash and burn. They will look like geniuses in 1999 and then less so in 2000-2002.
    20 Jun 2013, 03:58 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    bd4
    what do you consider rational? do you consider rational when the Fed interferes in the markets when efficient market theory should determine stock prices?
    20 Jun 2013, 09:14 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Right now I see the market as very distorted as a result of the years of unusually low interest rates. It lends to much mischief in the political area. I am a supporter of term limits but I don't think we will ever see it.
    20 Jun 2013, 10:35 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    bd4

     

    I agree with you about market being distorted; term limits? i can only dream
    21 Jun 2013, 12:41 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Looks like a good day to go outside, cut the grass and get away from the screen for awhile. Give this a couple days to shake out. There seems too much money out there to make this a long drawn out realignment.
    20 Jun 2013, 11:03 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    bd4,

     

    agree its good day to get away from screen for a while, but maybe we can figure out something better than cutting grass - LOL
    20 Jun 2013, 11:51 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Me thinks some are smoking it today ..just sayin
    20 Jun 2013, 12:31 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    Well IT, smoking it before cutting might make the cutting process a little more enjoyable!
    20 Jun 2013, 12:35 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Not me but if this keeps up... Bought a cheap used motorcycle going to pick it up after work. That will get my mind off things.
    20 Jun 2013, 12:35 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @TAMPAT

     

    This is exactly why I am in dry powder for a year now. This day had to come, so now I sit back and see who is right. Is it a short term buying opportunity or a long drawn out correction?

     

    Most have posted their positions as to this. I built a plan with my limited funds after 2008/9 and plan on sticking to it ! But like a few have posted this will need time to shake out as well.

     

    A stronger dollar has some nasty side effects as well for this debt we carry. Are we painted into a nasty corner for a while??

     

    Ok, back to cutting the grass.. Or whatever others are doing with it! lol
    20 Jun 2013, 01:05 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    IT:

     

    "This is exactly why I am in dry powder for a year now. "

     

    Let's examine whether that was a clever strategy:

     

    June 20, 2012 - SPX 1356
    June 20, 2013 - SPX 1604 (1PM)
    Gain/Loss - +18.3% (not including dividends)

     

    In order for you to just break even, not make one slim dime, by sitting in cash, the market would have to decline over 20% from its recent highs (considering distributed dividends).

     

    The odds of sitting in cash for the past year turning out to be smarter than being invested appear rather low, but one can always hope.
    20 Jun 2013, 01:14 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » TACK

     

    Some just don't have your money to risk. I am one of them. You can maybe shake off a loss easier then others. I am assuming your one of the 1% ers. Great for you. Quite frankly I started this blog for the other 99% ers.. Now I will post a quote from Tom Luongo's article.

     

    "If Bernanke is confused by rising bond yields then the man is not fit to be Fed Chairman and he seriously does not know what he is doing. There is a massive run on liquidity happening now even though the Fed is not tightening... that was the point of the article. What's happening in the gold futures market is irrelevant at this point.

     

    Watch the bond markets and the liquidity shocks coming out of China and SE Asia. Bernanke will wake up to the flow argument too late.

     

    He's playing a stock management game in a world of flow."

     

    I could care less how much I may have lost in the last year being out of the market to be honest. I need every dollar to survive, just like the other 99% of the population. Now lets see how far this falls. I will stay in my comfort zone , but thanks for your concern for my financial position.

     

    I could care less about making a dime or breaking even. I care MORE about protecting what little I have. If you don't have those concerns good for you. Others do !!
    20 Jun 2013, 01:34 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    tampat:

     

    LOL
    20 Jun 2013, 01:36 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    IT:

     

    There's no point to participating in an investment site if, a priori, one's position is to justify why one has taken certain actions, even if these didn't prove beneficial. Making smart investment decisions, or incorrect ones, is the same whether one is investing $100 or $10,000.

     

    I doubt I'd qualify for "once-percenter," but I have done well enough. But, all of that was done via my own savings and investment, not by being born rich or inheriting a trust fund. That's the whole point, one arrives at better finances by making choices. It's important to make good ones.
    20 Jun 2013, 01:43 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » TACK

     

    Everyone is welcome to participate, as I have not deleted ONE comment yet. That is wonderful. But sometimes people post things that don't take into account what lives other lead. You have posted that you weren't born rich once before, and honestly I am happy you built up whatever you have in your lifetime, but other aren't so lucky.

     

    Most post here during the day because they are either full time investors, full time unemployed, full time disabled, full time retired, etc. So one has to understand were all not in the same boat.

     

    I made a good living until a guy decided to run a red light and almost killed me and my wife. We now live a much different lifestyle forced onto us . I lost my business and now try to make conservative decisions just to get by. So you just need to understand your audience isn't all in your category.

     

    I get the PM'S from people afraid to post because they are just learning about investing, or a deceased partner, or a new unemployed person seeking opinions. My goal is to have them learn or listen to those who have the battle scars already.

     

    If you post here I am assuming you want to HELP those folks out. Or if I am wrong then please explain why you do it. But make no mistake some here aren't that well off and either want to invest to leave it to their spouse, or want to invest because the last 4 years was like taking candy from a baby.

     

    Yes, I got out a year too early. but I did sleep better to be honest not worrying about when the other shoe might fall. I think the stomping might have started. If this is just a blip I was wrong. But I am ok with this, and so is my spouse.

     

    You have to play with the hand you were dealt. Hopefully this rant will help you understand where some are coming from. If not then I don't know what else to say. Except that I see a big difference in a person investing 100 or 100 thousand dollars to be honest. I bet that guy who invest 100 bucks feels more real pain then the one who invests the 100k.
    20 Jun 2013, 02:02 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    We need more blood in the street so I can add more (WAG) and (INTC). At least a Dow to 14,000 would be nice. :-o

     

    Krustyman
    20 Jun 2013, 11:56 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @KRUSTY

     

    Be careful what you ask for. Sometimes those days might end up lasting a decade to recover from. Some who post here might not have that time horizon to deal with. If someone is in their late 50's or early 60's might not like it one bit!
    20 Jun 2013, 12:33 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    S & P Holding above last weeks intraday low,(1598) , a break there, might give us a good "swoosh" down .. As stated earlier the last hr will be interesting ..
    20 Jun 2013, 01:31 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    IT:

     

    It is very unlikely that this correction will take a decade to recover for IMHO. I am not even sure we will be able to go to the 14,000 level. The lower we go, the stronger the next bull up leg will be. Buying when the market goes down and selling when it goes up makes sense to me.

     

    I totally understand your point on people in their late 50s or 60s, though.

     

    Krustyman
    20 Jun 2013, 01:41 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » F&G

     

    This sell off might not have that *swoosh* down. It can be a much longer slower process. Am I correct?

     

    It also can be longer then the last hour as well today..
    20 Jun 2013, 01:41 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    IT,

     

    yes if it is the correction we have been waiting for it wil run its course. my point about the "swoosh" down is that the if those levels I mentioned break , many "sell" programs my be initiated ,exacerbating the move down.. Conversely if the support holds , many 'buy" programs could be initiated..

     

    All of this is inconsequential in the long run.. Krusty's comment on the correction and the next leg up is a scenario that i will agree on and currently planning for..
    Nothing has changed -----except emotions..
    20 Jun 2013, 02:03 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » F&G

     

    Thanks for the explanation. I ask some of these questions because I KNOW some that follow would like a more detailed answer. I appreciate taking the time.

     

    I might know what your answer will be but it is better coming from the poster !! :)
    20 Jun 2013, 02:10 PM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    I don't believe he has a real concern about time ,it's not part of the equation for some people .OTOH it's devastating for some if it takes 5 years for a market recovery after a crash. :)
    20 Jun 2013, 05:23 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @COINS

     

    Thanks for the link to your coin store. The interview was great. Your state seems to be big on collectibles. Any reason why??

     

    Even shows on TV originate from there. The Coin Vault is one I watch regularly. Their prices have gone up but at least I learn what I want as a hobby, not an investment!
    20 Jun 2013, 05:27 PM Reply Like
  • CoinsK
    , contributor
    Comments (3681) | Send Message
     
    Your very welcome. Thanks for the kind remarks.I didn't think about you watching the Fox interview when I sent you the link. yea ,Coin Vault is done here in Tn. I sell quite a bit to them,that's why I need to get people to sell me more of their coins :)
    20 Jun 2013, 07:27 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Bd4: Cause and effect is always uncertain but it appears that a large part of the rise in precious metal prices was due to QE.

     

    The FED went into overdrive on QE with an announcement made on March 18, 2009:

     

    " To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months."

     

    http://1.usa.gov/11BsBgz

     

    The P.M. London fix was $893.25 on March 18, 2009.

     

    At that time and for slightly over 2 more years, the market believed that QE would be inflationary. I was in that camp but eventually one has to come to terms with the facts as they are rather than what one believes will be the facts.

     

    After more than two years of low CPI numbers that have been trending further down this year, investors had to come to grips with the hard data and the descent thereafter started in September 2011.

     

    I will start to use the proceeds realized from sales in September 2011 and in January 2012 to buy Silver Eagles, the pretty Walking Liberty design, when and if the price falls below $15 but only in small amounts, possibly accelerating the purchases when and if the price falls below $10. I will be patient and see no reason to be in a hurry.

     

    My last silver eagle buys were when silver was at less than $7 an ounce, back in 1995, when I could buy a silver eagle roll (20 coins) for $140 from a dealer:

     

    See, e.g. snapshot of Purchase:
    Sold Some Junk Silver Coins Yesterday (9/13/11 Post)
    http://bit.ly/VI9gEr

     

    I kept my silver eagle rolls and sold all of my junk silver coins in September 2011 and completing the disposition in January 2012. For a 1964 or earlier half dollar (90% silver), the price was $13.05 for one on 9/12/11($26.1 for $1 face value with .8% of an ounce of silver), which would be the price of silver at that moment when the dealer checked it minus a theoretical melt cost to extract the silver, which is how those old 90% silver coins with no numismatic value are bought and sold.

     

    Bill of Sale Copy:
    http://bit.ly/XqU0Bx

     

    As a general rule, I will always sell into parabolic price moves in any asset class (e.g stocks 1999; oil 2008; gold and silver 2011; bonds 2012 to present). The only exception is my house which I own free and clear and only thought about selling briefly in 2007 after a compounded multi-year increase greater than 10+% annualized when I knew that the historical rate was 3.75% to 4% annually

     

    Parabolic moves have a nasty tendency to burst into substantial price declines.
    20 Jun 2013, 11:56 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Thanks for the response and advice. There is just something about the physical demand that just doesn't square with me.

     

    I have about 15% of portfolio in PM's and related. It was a big drop today but no panic here.
    20 Jun 2013, 12:12 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Many of my regional bank stocks are bucking the downtrend today. I noticed rises in HBAN, KEY, CBU, HCBK, FNB, BRKL, BHB, ANCX, PBCT, PCBK, TRMK, UBSI, UMPQ, VLY and WASH.

     

    While cause and effect is always tricky, many investors may view the rise in the yield curve to be a positive for these banks, particularly as short term rates remain anchored near zero and the banks can consequently continue to pay their depositors next to nothing while lending at higher rates, thereby improving their net interest margins.
    20 Jun 2013, 12:22 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Southgent,

     

    Good pick up-- I noticed that also,, not the case for the Big Boys, (JPM) etc, But as they come down , i believe they will also present an opportunity for future gains
    20 Jun 2013, 01:38 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    F & G: It is easy to pick up when most of my green arrows today were in that sector.
    20 Jun 2013, 04:44 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Hmm Looking at the bottom of the page I see your Number 4. Silver lining in all dark clouds. Too bad the silver is not worth as much today.
    20 Jun 2013, 12:22 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » No, silver will come back. But my (PSEC) seems to be holding up just fine!
    20 Jun 2013, 12:36 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    Other then PM holdings mine is holding up well too. The speculative portfolio is only down $7.96.
    20 Jun 2013, 12:39 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1945) | Send Message
     
    "King" dollar ... http://bit.ly/11QakJo
    20 Jun 2013, 01:20 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    bd4uandu:

     

    Be careful with the ZeroHedge articles;

     

    ''Or will the market remember that traditionally a soaring USD is a very bad thing for the market,''

     

    A statement like that one is simply erroneous.

     

    The $USD was in a strong bull market from 1980 to 1985-86 and also for the period 1994 to 2000-01. The stock market performed extremely well during these two periods.

     

    Krustyman
    20 Jun 2013, 01:54 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    That's because those two periods saw a great increase in the US's economic ability to produce real assets. In other words, the ability of the US economy was increasing with regards to improving the standard of living. This reveals the whole fraud of the mercantilist's approach (and why a central bank is not really necessary, and in fact more of a liability than an asset), and it just goes to show, that what really matters to human beings is the ability to produce assets that can be consumed at ever increasing rates of efficiency.

     

    For instance, let's say Germany left the Euro, got rid of its social welfare state, and tied Marx creation to GDP sans the gov component, had the central gov only deal with issues among the political subdivisions, and the political subdivisions only dealt with issues of coercion between individuals, the economy of Germany would become the haven of capital and labor for the entire world. They would become the wealthiest nation on the face of the planet, and the Mark would soar in value in relation to all other currencies. Their stock markets would be off the charts, and the standard of living would be the envy of the entire world. It would also be quite possible that they imported far more than they exported. So, contrary to the convetional, mercantilists conventional wisdom that exports must be subsidized to gather a hoard of money mediums for the economy to grow, what you would find is the exact opposite would occur. The economy would explode, the currency would soar in value, every day consumables would deflate in price, production assets that made that possible would inflate in value (as reflected in a stock price), and people would be lined up at the German border ready to get in and the Germans would be happy to have them.

     

    As such, the only role for a gov is to protect property, and what eventually what really needs for happen is for humans to make the advance to noncompulsory gov (gov becomes more like Disney). When people, on a large scale, can figure out that the only thing holding them back is coercion in their markets, then they will make a great leap forward such that the world has neve seen before. The US has given us a small glimpse of this. As the US fades over the upcoming decades, you have to wonder what other group of people on the planet might figure this out? I doubt it will be the Germans, though.
    20 Jun 2013, 02:15 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    krusty

     

    Just a reminder, even if the market performed well during times mentioned with a strong $, that is when manufacturing started moving overseas to cut cost effect of a strong $ ...are we better off today?
    20 Jun 2013, 02:43 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    jhooper,

     

    Excellent points, though I doubt anything of that nature will come to pass, at least in most of our lifetimes.
    I'm not sure if it has been an intended goal, but the govt has done a very good job of creating dependence on them. It seems an increasing number of people want free stuff. They feel they have a right to free health care and many social services and benefits. They want the govt (or the wealthy) to take care of them.

     

    Getting rid of the social welfare state would require an upheaval that would likely turn into blood shedding for a while.

     

    A politician espousing what you say would be lucky to get enough votes to even get into the primaries, unfortunately.
    20 Jun 2013, 02:58 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    " though I doubt anything of that nature will come to pass, at least in most of our lifetimes."

     

    Agreed. Its just an exercise to understand where we could be, and thus to be able to measure where we are and where we are going.

     

    "I'm not sure if it has been an intended goal, but the govt has done a very good job of creating dependence on them."

     

    To some degree it is, but mostly its a result of the incentives that develop. Its like running a nonprofit from which you draw a salary. If you nonprofit ever actually solved the problem you claimed you were trying to solve, then you salary would be over. Thus there is an incentive to never solve the problem.

     

    We can apply this to the markets. We can recognize these incentive structures, and realize that the solutions that are needed will never be applied (at least probably not in our lifetimes), so the best we can do is recognize the damage they can do and find some ways to utilize the wealth transfers to our advantage.
    20 Jun 2013, 03:06 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Isn't there another problem in that the government has been picking the winners and losers since 2008? There are a lot of companies that should, at best, be in the same boat as Kodak.

     

    I understand the banks. The government has been bailing them out since the early 1800s. That was the crux of getting the FED in 1913. The bank of last resort. It was also the reason I hated seeing congress changed the laws that kept them somewhat in check since the depression in the late 1990s. Now we have too big to fail. And, still no law in effect on proprietary trading or trading derivatives.

     

    My personal opinion is that they will be a drag on the economy just like they have been for Japan the last 30 years. A lot of what has happened since 2000 is reminiscent of the beginning of Japan's lost decades.
    20 Jun 2013, 03:29 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Hi jhooper:

     

    ''That's because those two periods saw a great increase in the US's economic ability to produce real assets''

     

    Why this time should be different?

     

    "Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world,"

     

    This has been predicted by the global business strategy firm The Boston Consulting Group (BCG) in May 2011.

     

    Since then, Whirpool, Apple and GE did so.

     

    I have no doubt the US will produce real assets again. :-)

     

    Krustyman
    20 Jun 2013, 03:35 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    "And, still no law in effect on proprietary trading or trading derivatives."

     

    Nor would you want one. What you want is to remove the taxpayer liability from the banks via the FDIC, and to begin to reduce the FDIC's control over the banks.
    20 Jun 2013, 03:37 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    What's interesting is that we were told that letting the Fed cartelize the banks would result in letting the experts be in charge. As such, we wouldn't be in a place to challenge the "experts".

     

    Here's a quote from BB, one of these so called "experts". Interestingly we see the "expert", BB, being questioned all the time.

     

    "I think Glass-Steagall is not the solution, because as we saw in the crisis, investment banks, commercial banks separately got into serious trouble."
    20 Jun 2013, 03:42 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Rinascimento:

     

    I am not sure I understand your question.

     

    It appears to me that, yes the US economy was better with a strong dollar. The US economy suffered a long 10-11 years (approx) weak dollar and almost stalled at the same time. Not a coincidence in my view.

     

    Krustyman
    20 Jun 2013, 03:48 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    krusty

     

    If I remember correctly, the developed countries held a meeting and allowed the US (Reagan adm) to devalue the US $ because the strong $ was making our exports too expensive and contributed to a big trade deficit; before this time, the US $ was strong because interest rates were very high (up to 21% rates); I think that the strong $ started the manufacturing moving overseas
    20 Jun 2013, 09:42 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    jhooper,
    In a perfect world with truly free markets I would agree with you. Unfortunately, history has not born that out. In US history alone it has been a running scenario of banks overextending themselves essentially gambling to make profits. Eventually, the scheme dejur goes bust and the banks along with it. Up until 1933 the everyday person took the hit by losing whatever they had deposited at the bank. And, then taking the hit again as a tax payer while the government cleaned up the mess. Since 1933 (the creation of the FDIC) at least they only take the hit once unless they are foolish enough to keep more than the maximum on deposit with one institution.

     

    In all honesty, considering their history, I would have no problem with a nationalized system of banking. It would remove the need to increase profits. It would make banks function in the only way they are really needed as lending institutions. Then banks such as JP Morgan or Goldman Sachs becoming the hedge funds that they really are.
    Unfortunately, I also know the history of the government. And, even in a nationalized scenario they would find a way to screw it up. Mainly by finding a way to personally profit from the system like they do now. If congress was subject to the same laws that they hold everyone else to most would be in jail for insider trading.
    21 Jun 2013, 07:02 AM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    krusty:

     

    You raise a very good point. In fact, we've been living in an upside-down world lately, where equities have risen on a weak dollar, as if we were an export-dependent country, and Europe has had a strong euro, as if it were the consumption country. In fact, this reversal of roles has been bad for both parties, as dollars have tended to pile up in the U.S. and European exports have stagnated.

     

    Global economies are going to improve, not get worse, with a stronger U.S. dollar. We have far too much liquidity and money hoarded in all forms of cash accounts, on balance sheets, in bonds, you name it. Since the U.S. holds the world's reserve currency and is viewed as the safest place to invest, dollars are headed here all the time. It's vital for the U.S. to keep those dollars in motion by "re-exporting" them in the form of overseas consumption and foreign investment. A strong dollar promotes both.
    20 Jun 2013, 02:02 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Tack:

     

    I cannot agree more on your statement ''You raise a very good point. In fact, we've been living in an upside-down world lately, where equities have risen on a weak dollar, as if we were an export-dependent country, and Europe has had a strong euro, as if it were the consumption country. In fact, this reversal of roles has been bad for both parties, as dollars have tended to pile up in the U.S. and European exports have stagnated.''

     

    A stronger dollar will indeed help Europe corporations in their exports as US consumers will be able to buy for less and the US corporations will invest abroad with a stronger dollar that will buy good foreign businesses on the cheap, thus being able to invest in the US in several forms and creating jobs/stimulating the economy.

     

    Am I getting the picture correctly? :-)

     

    Krustyman
    20 Jun 2013, 02:26 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    krusty:

     

    "Am I getting the picture correctly? :-)"

     

    Well, sort of.

     

    Economies are driven by money being kept in motion. It's that simple.

     

    Because the U.S. is a magnet for dollars to flow here, it's vital for us to "re-export" those dollars abroad, so the process can stay in motion. However, when our dollar is weak, relatively, we stop buying and investing abroad. One would think that the weak dollar might slow down money coming here, too, but it really doesn't, as we still do export much, especially agricultural goods, and we are always seen as the "safe haven." Therefore, when we don't buy enough abroad, dollars languish in accounts here, which is deflationary on global economies.

     

    Often, we see some observers cheering on "better" export/import balances, but this is mistaken because, as the dollar magnet we already are, we don't want to be running export surpluses, or even close to export-import parity. We want and need to be a net consumer. A stronger dollar promotes that.
    20 Jun 2013, 02:37 PM Reply Like
  • jhooper
    , contributor
    Comments (6128) | Send Message
     
    "We want and need to be a net consumer."

     

    Yeah, what this means is that the foreign economy is taxing its domestic populace to sell us cheaper goods. I say if they are stupid enough to do that, then let them. Think about the ultimate manifestation of this, they could tax their domestic population enough to send us FREE goods. So, yeah, if they are stupid enough to do that, then let them.
    20 Jun 2013, 03:08 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Tack:

     

    Got it! Thanks for the clarifications :-)

     

    Krustyman
    20 Jun 2013, 03:23 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1111) | Send Message
     
    IT

     

    10 yr 2.43% I think JP Morgue has lost control of the interest rate swaps..... another whale event?
    20 Jun 2013, 02:52 PM Reply Like
  • tampat
    , contributor
    Comments (998) | Send Message
     
    The mREITS are sure getting their clocks cleaned.
    WMC dividend now up to 22%.
    20 Jun 2013, 03:01 PM Reply Like
  • Notrub
    , contributor
    Comments (621) | Send Message
     
    Rin,
    It will actually need to go higher. This is the level it was at in 2011 and 2012 when rates came back down again.
    20 Jun 2013, 03:03 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @RIN, TAMPAT, NOTRUB

     

    Could you guys kindly start a discussion on this in Chapter 13?

     

    It is important and I don't want it to get lost at the bottom of this link, Thanks!!
    20 Jun 2013, 03:43 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » You guys are moving along at a great clip!! Lots of information on a really interesting day..SO ONTO THE NEXT BLOG..I POSTED A QUESTION ALREADY TO GET US STARTED??

     

    http://seekingalpha.co...
    20 Jun 2013, 03:22 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    I is really unfortunate that our senior citizens have gotten clocked with abnormally low interest rates on their savings since 2008 and are now getting clocked again in their bond investments. As I have noted, I see no good outcome for bonds in this interest rate normalization process.

     

    At least we have acquired one piece of new information today. Stock investors will not react rationally, at least initially, to the end of QE and an improved economy with low inflation.
    20 Jun 2013, 04:02 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Southgent1951:

     

    Well, good for us. We will have great stocks at bargain prices.

     

    Krustyman
    20 Jun 2013, 04:15 PM Reply Like
  • South Gent
    , contributor
    Comments (3919) | Send Message
     
    Krustyman: The Fed's ZIRP and QE policies have cost me a lot of money since I always maintain a significant cash allocation.

     

    One reason has to do with my dynamic asset allocation process, where cash becomes a repository of funds used to buy risk assets that become attractive in significant selloffs and as a temporary holding pond for proceeds resulting from paring positions, as I wait for better opportunities which is what I am doing now.

     

    The other reason is that I am retired, with no earned income and no pension. Needless to say, I want a cash reserve to meet expenses for a long time without having the need to sell risk assets at an inopportune time. Situational risks can disrupt the best laid plans.

     

    Unfortunately, there is far more market risk now than there was in March 2009, and that fact alone causes me to be more cautious and to raise my cash allocation.

     

    I have paid a dear price for the FED's monetary policies.

     

    If a government official knocked on my door and asked for a $100,000 check to help some family in San Jose who put no money down on a $800,000 home purchase in 2006 using some funky Countrywide mortgage product (worth $400,000 in 2009), the wind from the door slamming in their face would have knocked that person to the ground.

     

    I can offset that damage to my finances by buying risk assets so it has pluses and minuses for someone in my position. Most seniors and retired folks can not risk their money in the game that I have been playing for over 4 decades now; and events over the past 12 years have probably reinforced their lack of interest.
    20 Jun 2013, 04:55 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @KRUSTY

     

    Not so sure where near bargain prices yet, ARE YOU?

     

    You watch these way more closely then I do.

     

    Thanks!
    20 Jun 2013, 05:05 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    IT:

     

    Near bargain prices, no.

     

    Near interesting prices, yes.

     

    Once we reach the 14,000 on the Dow, which is 10% from the last top, we will have interesting prices. The bargain shop will open its doors at 13,000-13,500 in my book.

     

    My strategy is simple for long term investment. I will start adding onto existing positions at 14,000. Then I will add more after each drop of approximately 15% in price. It is not a perfect strategy but I was able to buy (WFC) at $13 and (SBUX) at $12 in 2009.

     

    Krustyman
    20 Jun 2013, 06:40 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @KRUSTY

     

    So you think the markets can breach 14k??
    20 Jun 2013, 06:42 PM Reply Like
  • Tack
    , contributor
    Comments (14044) | Send Message
     
    krusty:

     

    You may be be sitting on a lot of unused cash.

     

    Talking about progressive additions at successive 15% drops below 14,000 is fatuous. It's not 2009. Conditions are radically different. Liquidity is radically different. The current momentary market hysteria isn't going to last all that long, I suspect. The reversal will likely be sharp, too.

     

    Bargains are better determined by assessing the prices of individual issues, relative to their recent prices and ongoing businesses, rather than looking at market indices in the aggregate. Some things will be bargains; some will not.
    20 Jun 2013, 06:54 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Tack:

     

    What I said is that I will start adding more onto my existing positions once/if we reach the 14,000 level. Then, I will need a 15% drop in prices to buy more and so on. This is for long term investments. I also trade on a short term basis.

     

    You are correct, I have a good chunk of unused cash. It is sitting at 1.1%.

     

    Finally, I have other investments that could be used if I need to buy stocks. No problem here.

     

    Regarding 2009, I realize that the conditions are different. However, I learned that the markets could stay irrational longer than people can stay solvent, so I am prudent. :-)

     

    Krustyman
    20 Jun 2013, 08:09 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    By 1.1% I meant, the return on the money sitting in that account. :-)
    20 Jun 2013, 10:24 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    IT:

     

    No, I really don't think it will but I am ready if it does.

     

    Except for the little stock I have in natgas on the Toronto Stock Exchange, all my stocks are what I consider solid US stocks so I have no problem adding more.

     

    Krustyman
    20 Jun 2013, 06:47 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Krusty,

     

    As of now I'm planning to start deploying cash around 1550 on the S & P , assuming as Tack indicates the individual stocks I'm tracking have dropped to levels I'm comfortable with.. I think they will based on the reactions in the last 2 days..
    20 Jun 2013, 07:05 PM Reply Like
  • Krustyman
    , contributor
    Comments (938) | Send Message
     
    Fear&Gread:

     

    I would wait another 80 points on the SPX. People are not nervous enough :-)

     

    Krustyman
    20 Jun 2013, 08:12 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6078) | Send Message
     
    Krusty,

     

    another 80 will definitely spike the fearful gauge,, -- ;)
    20 Jun 2013, 08:19 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » Guys

     

    WE DO HAVE A CHAPTER 13 NOW !!!

     

    POSTED ABOVE!! THE ABOVE CONVERSATION BETWEEN KRUSTY, TACK, AND FEAR WHO HAVE BEEN GREAT ON TOP OF THAT BLOG instead of getting buried below here !

     

    Just sayin,..
    20 Jun 2013, 07:17 PM Reply Like
  • Asbytec
    , contributor
    Comments (6234) | Send Message
     
    IT, I don't normally post on metals, but if monetary easing is getting back to normal over the next two years and beyond with rates possibly rising toward the end of 2014 or into 2015, I might think precious metals will normalize back toward pre crisis levels. Gold was a speculative, temporary bid somewhat based on fear of inflation or a safe asset to hold when the crisis ensued. If those conditions are the reason and no longer the case, how can gold price be supported. Gold could level off around $1000 and stay there for a long time, who knows.

     

    "Will we be "CYPRUSED "?," Well, I would not think so. Cyprus was Cyprused, along with government bailout, as part of a deal to recap it's banks. The Fed did that for us, so I see no reason to tax US deposits. The government can issue Federal reserve notes at will, unlike Cypriot government or national bank. At any time during the crisis in the US, was the US government bailed out and needed to raise revenue to do so?

     

    As I posted before, I think all asset classes are taking a hit with the likelihood of tapering easy money. When he crisis ensued, the Fed eased driving portfolio re-balancing. It's natural to see those trades unwind when the free money stops flowing. Eventually, the drug induced prices will ween out of the markets and real values can be had based on fundamentals. Sure, the economy is muddling along, but it seems to have some momentum. It's that momentum, Fed projections, that drove the taper talk. The Fed wants to ease up on the peddle before extraordinary monetary policy overshoots the economy. If momentum stalls, it will be back to the new normal for a while.

     

    My views, anyway. Lot of comments to get caught up on.
    20 Jun 2013, 09:37 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » @ASBYTEC

     

    Thanks for joining us. Yes we have a ton of comments from all different points of view. If you notice above a link to Chapter 13. This is a running blog and ALL are welcomed. Any ideas you have please throw out for all.

     

    Pleased you accepted my invitation as I am sure you will bring plenty of support to this thread !!

     

    WELCOME ...
    20 Jun 2013, 09:48 PM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » http://seekingalpha.co...

     

    Here is the link to Chapter 13 !!!
    20 Jun 2013, 09:57 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5031) | Send Message
     
    China is crashing.
    http://bit.ly/1a6rtqi
    24 Jun 2013, 04:31 AM Reply Like
  • Interesting Times
    , contributor
    Comments (12510) | Send Message
     
    Author’s reply » OG

     

    WELCOME..

     

    Glad to see you posting here. We can use your thoughts on what is happening. So please don't be a stranger. This blog mover pretty fast right now !

     

    Were up to chapter 14 right now>>Most likely will be 15 by end of day>>
    24 Jun 2013, 10:34 AM Reply Like
  • TruffelPig
    , contributor
    Comments (4097) | Send Message
     
    I have a commodity related question - when will they reopen the pipelines from Canada that were switched off after the rain and flooring in Alberta? My son is in Calgary right now and the flooding is basically over there (luckily).
    25 Jun 2013, 01:09 PM Reply Like
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