irondoor91

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    • Tue Aug 5th 23:54 PM | Rating: 0 0
      Commented on:
      Bill Miller's Value Trust Fund Runs Into a Tough Market
      To a value investor lower prices can only mean one thing; "Buy More"! The lower the price goes, the better the bargian it looks. It's also called insanity in a big bear market like the one we have now.

      Occasionally there are time when one should pay attention to where the market is actually going and the message that it is giving you. This is one of those times and cash is the place to be. One of these days, it will be opportunity time. But that day is a long way off; perhaps several years from now. In the meanwhile, you'll enjoy life, forget about CNBC and obsessing over your portfolio and get some goood sound sleep. Try it, you'll like it.
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    • Sun Aug 3rd 13:00 PM | Rating: 0 0
      Commented on:
      Economic Outlook: Cut Out the Noise
      The Dow is down more than 70% in gold/CRB terms since the top in 2000. It's just that nobody seems to care and assumes we can borrow ourselves out of the hole.

      Ain't gonna happen and deflation (that's right) is coming. The metals and commodities are the last bubble of the recent lifetime bubbles of tech stocks in the late 90's and real estate from 02-07. There is nothing left but a few little "green" bubbles for the masses to suck on.

      Consider that it is over. The life of leisure and the digital age are at an end for a few years.
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    • Sun Aug 3rd 12:39 PM | Rating: 0 0
      Commented on:
      Retirements on Hold
      There does not exist a time in history that the stock market earned an 8% return each year for 10 years. There are 10-year stretches when the average return over the 10 years was 8%, but it was usually made up of some down years and a few up years. While the world would like to see "steady" returns, they can't happen because the market is the mirror of the psychological state of all investors, which is never "steady" as it moves from greed to fear and back again. Forget the fundamentals, as they are only there to justify the mental state of buyers and sellers.

      The social mood of the country (and most of the rest of the world) changed in mid-2007. The positive psychology that had existed for many years led individuals, corporations and governments to willingly take on more and more debt (called "credit" by most). As long as borrowers were optimistic, lenders were too and lent more and more dollars. All is fine as long as asset values and incomes are rising and the mode is expansionistic. Interestingly, inflation was low as the global marketplace expanded and foreigners were satified to place their increasing horde of dollars in our debt markets. Something had to be done with this river of cash flow, and the only asset that could be sufficiently levered up to absorb it was the US housing market, which is the largest single asset value in the world.

      4 million excess housing units were built, and most were sold, many to real estate "investors and speculators". Many of those who didn't buy the ever more expensive and far too large housing units extracted the maximum equity from their own homes. Now this has all come to an end and the owners and borrowers are facing reality. Most banks have as much of as 50% of their assets in real estate loans, with the collateral for those loans going down roughly 2% per month. Most of these loans are now under water and the borrowers are having difficulty making their payments as other living costs for fuel, food, insurance, property taxes, repairs, etc. continue to increase.

      Americans are stretched like a rubber band. It has started to break and the country is drowning in a sea of mortgage debt, credit card debt, automobile debt, etc. This is being reflected in bankruptcies and foreclosures and is naturally spreading to bank failures. The federal government cannot put its finger in all the dikes and most will be allowed to fail, except for a few such as FAN and FRED and the large NY banks and brokerages.

      We are facing a 4-6 year downtrend in the markets and in the economy. There is a probability that the stock market will decline to the level that it was in 1974, or below 500. While this seems impossible for all those who have experienced the past 25+ years of a generally uptrending market, it can happen. Cash has been the best performer since 2000.

      Face reality. Its not going back to the old highs. Stay away and be very afraid of the stock market if you do not know how to short it.
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    • Wed Jul 30th 13:10 PM | Rating: 0 0
      Commented on:
      Options Trader: Tuesday Outlook
      Jack s:

      Right on Art. He is the only CNBC commentator who actually is connected to the floor and who knows what is going on. Hate to say it, but Art is the only floor commentator who I have ever heard use the term "Fibonacci". This is the real clue to his understanding of the markets.

      Since Dennis Kneale and the other bimbos know nothing but screaming the latest oil price, housing number and Fed announcement, you can count on them to be out to lunch.

      Kneale actually rolled his eyes a couple of days ago when Art mentioned our old pal Fibonacci again. Of course, the market only trades on earnings.

      Gasparino is worth watching just for the behind-the-scenes rumor entertainment.
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    • Wed Jul 30th 12:29 PM | Rating: 0 0
      Commented on:
      News Flash: Forecasting Ain't Perfect
      "Even the collective wisdom of the marketplace has been wrong time and again. The stock market, that weathervane for corporate profits and the economy, keeps swinging from fear to greed and back. A glance at the major stock indexes over the past year reveals a host of false bottoms and fools' rallies."

      The stock market is a "weathervane"... of the collective social mood of millions of investors, which reflect what they see and feel going on around them. If it was a "weathevane" of the economy or of corporate profits, it would merely just flatline until profit announcements come out, make the necessary few cents adjustment, and then go back to hibernation until the next quarter.

      Markets trade on the second or third derivative of what most investors think other investors are going to do about the latest "news", such as oil prices, write-downs, or especially the potential arrival of the next round of multi-billion $ Fed delivery.
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    • Wed Jul 30th 12:21 PM | Rating: 0 0
      Commented on:
      CAR Median Home Prices Down Sharply; Expecting Another Wave Lower
      bonderman:

      Nothing is "impossible"... What makes you think so? Its not just the vacancy rate. Commercial lease renewals, especialy anchored centers, are being negotiated down (lower rates, 3 years instead of 5, much higher thresholds before percentage rents begin, etc.).

      Look at the bankuptcies going on all around you (Bennigans, Steak and Ale, Mervyns, etc.) There is a slow implosion and the job losses are going up. Where are all of those GM/Ford/Chrysler salesmen, mortgage brokers, real estate agents, bartenders, waitresses, cooks, and others who depend on people driving/commuting at $4.00 gasoline going to find work? Maybe watering plants at the repossesed homes or washing repossessed SUV's.

      The great financial unwinding is just beginning. How may "lifestyle" centers do we need, for cripes sake, and just what kind of "lifestyle" is it that everybody is striving to achieve these days?

      Get real.
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    • Tue Jul 29th 16:50 PM | Rating: 0 0
      Commented on:
      Making Profits Through Understanding Market Psychology
      Since the mid-70's a long-term buy and hold strategy has worked out for virtually any investor. Merely buy Berkshire and let Warren do the work. Vector Vest is a good place to start for those who want to own individual companies rather than mutual funds.

      In other words, up until 2000 stock investing worked just fine as a way to create long-term value. Real estate did too up until last summer. The point is that it has been a generally declining inflationary environment and a credit-induced asset-bubble based marketplace. Almost any asset and diversification strategy does well then.

      Things changed last fall, and everyone knows it. The credit boom is over and individuals, businesses, banks and investors are de-leveraging. The only one levering up are governments as they create credit out of thin air to try and stop the deflation and potential depression that is coming. They can't, because they can't force people to borrow, invest, hire and increase incomes.

      The Dow is down over 70% on a gold/commodity adjusted basis since March 2000. When the market and the economy catches up to the fact that the high-wire act is over, we may see the Dow priced in 3 digits, not 5 by 2016.
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    • Sat Jul 26th 13:41 PM | Rating: 0 0
      Commented on:
      The Dead Cat Returns to Earth
      99% of investors today have never seen anything but a general up market since the 30's. For the first 30+ years of that run, America and its corporations were running hard to build industries and people who knew how to build things, like steel, automobiles, airplanes, appliances, machine tools, computers, etc, and to export them to the rest of the world. We had a strong dollar and a growing, confident knowledge base.

      Since the late 60's what have we had? Social unrest, political scandal, a lost war in Vietnam, the rise of terrorism and intolerance around the globe. We became a nation of "servicers", pushing paper and real estate in the era of digitization and ease. Where a family of 4 could live comfortably in a 2,000 sq ft home, now childless couples demand 5,000 sq ft for their primary residence, three cars, boats, a "place at the beach" on and on ad nauseum.

      It was all built not on hard work and sacrifice, but on a mountain of credit at the personal and governmental level (FAN and FRED). Literally Trillions of dollars of paper that were sliced and diced and handed out all over the world to "reduce risk". Well, that debt requires something: cash flow and debt service. The holders of that debt want to be paid both interest and principal. They do not want the underlying homes that nobody can afford to pay for, insure, furnish, pay taxes on and commute 2 hrs per day at $4.00 a gallon in their Hummers and other SUV's.

      Just when housing had a chance to become affordable again due to 50% discounts, the Treasury steps in a says "no, we got to put a stop to that". Can't have the marketplace setting prices!

      We are in the process of turning the clock back to an earlier era. Not 1929, but 1974. That is the Dow at the 4th wave of lesser degree. Unbelieveable, but it will be DOW 400 by 2016.

      If not, give me your case for the DOW returning to new highs with the credit engine out of gas.
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    • Fri Jul 25th 11:54 AM | Rating: 0 0
      Commented on:
      The Lost Decade: S&P Annual Return Just 2.5% Since 1998
      The Dow is worth less today in gold-adjusted terms than it was in 1928. The Dow is down over 70% in gold/commodity adjusted terms since the top in 2000. If you remained invested in the same asset allocation for the past 8 years, you have gone nowhere in nominal terms, but you can't buy crap with your money today. Try paying your property taxes, insurance, fuel, power, college tuition, etc, etc with the same dollars as you had in 2000.

      With respect to income taxes, you pay based on your nominal income, not your inflation-adjusted income. The masses and the Democrats are interested only in your nominal income, and your capital losses in this market are not going to do you any good. All investors will be taxed at the highest possible marginal rates and I expect that Obama will somehow figure out how to extend the SS tax to dividends, interest, and cap gains.

      How else can they pay for the coming $1 trillion housing bailout?
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    • Fri Jul 25th 11:30 AM | Rating: 0 0
      Commented on:
      Setting a New High Mark for the Next Housing Bubble
      Arnold, this sounds good in a market where everyone is closely watching home prices, rents, mortgage rates, the ever-changing qualifying requirements, down payments, etc. But, they don't. What you fail to take into account is the overall cost of home ownership which includes taxes, maintenance, etc. Also, the cost of commuting from that house in the suburbs is significantly higher with $4.00 gasoline. I agree that the allure of owning one's own home is strong enough to encourage many of those renters who qualify now vs three years ago when prices were much higher. But, they may have learned a thing or two about the direction of home prices. There is no assurance that prices will not continue to fall and fail to even begin to recover until 2014 or later.
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    • Thu Jul 24th 11:21 AM | Rating: 0 0
      Commented on:
      Ignore the Press: Hedge Funds Still a Viable Investment
      Notsosmart,

      Bitch all you want and question anyone's motives, but hedge funds, mutual funds, banks, Fannie and Freddie and all the rest of the giant sucking sound of finance is not going away. They all serve the purpose of passing risk around to one another until the music stops.

      Of course, the music never stops in Congress, which is busy passing all of it along to the US taxpayer, who is the risk-receiver of last resort.

      Poor dumb Joe six-pack hasn't got a clue as to why gas is $4.00 to fire up that monster pick-up, the bass boat, the motorcycle, the snowmobile, etc. or why his 401-k is bleeding dollars.
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    • Tue Jul 22nd 14:01 PM | Rating: 0 0
      Commented on:
      Financials: How - And When - We Reached the Bottom
      Debtacid:
      Let me add one more up-to-date quote to your wonderful list.

      "This is far and away the strongest golbal economy I've seen in my business lifetime".


      -Our esteemed Treasury Secretary Paulson, Fortune Magazine, July 12, 2007

      (This couldn't have been much closer to the top and he neglected to mention the mountain of unservicable debt the "global economy" had been built on over the past decade)
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    • Mon Jul 21st 11:11 AM | Rating: 0 0
      Commented on:
      Options Trader: Monday Outlook
      "When that stock drops from $50 to $17 and everything they hear in the media is "SELLSELLSELL&quo... and they get out at $17, those people can’t afford to get back in at $21 a week later".

      Hmmm. In looking at the chart of C, I notice that it took just about a year to go from 50 to 17. Has anyone ever heard of a stop-loss order? No, I guess they were out on the golf course with their $2 Nassau, just before stopping by the mail box to collect their C dividend checks.

      Get real. Are the advisors and owners of those retirement portfolios you speak of so incredibly stupid that they have not heard the "rumor" that Citi has been in deep shit since the light of day was shed on their sludge that masquerades as a balance sheet?
      First, there was smoke; then there was fire. Finally, there was meltdown. Better get out now while you've got a few naked shorts that have to buy.
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    • Sun Jul 20th 13:20 PM | Rating: 0 0
      Commented on:
      The Butterfly Effect and the Uptick Rule
      As usual, everyone has their eye off the ball. The SEC, as part of the Plunge Protection Team, indicated that it would inforce an already existing rule against "naked shorting" in order to prop up the the equity positions (stock prices) of financial firms that the Government cannot afford to bail out. Since the shorts did not want to get caught out potentially in violation of the SEC, they very quickly began to buy back shares, thus providing previously non-existent demand for the stocks. The real question is, what is the market's true opinion of the value of these companies shares? It may take some time, by we will ultimately find out through rational price discovery. What is now missing is the overhang of "demand" for these stocks that existed in the shorts. Current holders of long positions have three choices: Hold, Buy more or Sell. The naked shorts are out of the game and the stocks will be left to their own devices, and their ultimate fate will depend on what the "owners" discover when the value of the assets on their balance sheets is exposed for what it isn't. They will be looking for someone to sell to, and it may be Helicopter Ben and his merry band of printing press operators.
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    • Fri Jul 11th 11:40 AM | Rating: 0 0
      Commented on:
      Who's to Blame for the Current Economic Situation?
      All booms and busts are caused by the continued and overblown expansion of credit. There is no way that the stock market, housing, commodities and other historical bubbles can sustain themselves by just the honest cash purchases of humanity. No, it has to be credit, and once credit is provided in excess of that needed for normal business activity and consumption, the additional credit at the margin will be used to purchase assets (stocks and bonds on margin, houses on massive margin, commodities on margin as credit is expanded to those who normally lived on a cash basis). When the musical chairs game stops and the realization hits home that the credit bubble was built on absurd asset valuations rather than the ability to service the debt, the chickens come home to roost.

      The coming move is extreme asset deflation, bank failures and governmental intervention in ways never before seen. As usual it will be done by cranking up the printing presses and firing up the helicopter.
      View article »
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