raising4daughters

Four Reasons We're Headed Even Higher

Nice commentary.

Are we still allowed to say bad things about GE or Immelt? Not sure if that right was recently suspended.


On Aug 29 12:53 PM ArtfulDodger wrote:

> JS and Fellow Investors:
>
> I personally don’t spend five minutes a year trying to figure out
> which way markets are going and don’t really relate to doing it.
> I don’t really care either—for the most part. Crashes such as we
> saw last year are few and far apart; as a rule they simply don’t
> come piling on top of each other.
>
> As I’ve written before on this site, I was once a very foolish boy
> (now I’m a foolish man), and back in the 1980s when the CBOT began
> futures trading on indices, I jumped in thinking I could predict
> the day to day machinations of markets. After only a few days I realized
> my vew was fallacious. I continued to trade for about four years,
> but never again grew the hubris to think I could predict market direction.
>
>
> Therefore, I don’t usually read articles that predict market direction,
> but there are so very many negative articles on this site that I
> decided to read this positive one.
>
> I will say that Mr. Schwarz’s points are valid, especially this one:
> The DOW was around 8400 when Geithner came stumbling out of the blocks
> and Obama was strafing the economy every time he wagged his tongue.
> The DOW dropped 2000 points before Geithner could find his tongue
> and Clinton told Obama to nix the negativity—this was indeed a move
> that had nothing to do with the economy or business. That 2000 point
> move was thus no more a move back to normalcy.
>
> That said, let me also say that at this point the majority of stocks
> I’ve checked out recently do not fit my criteria for buying—but I’m
> a picky, tight son-of-a-batch. So because I can’t find something
> to buy doesn’t mean there’s a crash coming.
>
> I am invested mostly in China and Brazil, with only a few US companies
> in my coop. The problem I see with most businesses in the states
> is too much debt. This came about in my view mainly because of high
> corporate taxes—which
> are not going down.
>
> Some companies are indeed working their debt down. Others, such as
> GE, have added massive amounts of new liability to their books. This
> is why GE’s boss, Jeffrey Immelt, is pushing for a bailout of sorts—urging
> the government to pass the Cap & Trade Bill which will strongly
> benefit GE.
>
> Three of the US companies I own, GD, FWLT, and FLR have stable long-term
> contracts that guarantee them gracious earnings for years out from
> here. Shareholders should be well rewarded, in my view.
>
> The other two, JCOM and GRMN, have pristine balance sheets, keep
> bringing the bacon home to momma year after year, and have products
> and/or services with potential world growth.
>
> I have reasonable profits in all of these, but I’m not selling them,
> shorting them, or putting stops in on them—not matter what anyone
> says, unless there is drastic monetary or fiscal policy change.<br/>
>
> I urge investors (particularly new and young ones) to learn to search
> and find companies of this type, buy them when they’re down (or out
> of favor), and give them a chance to make you some money.
>
> You’ll be much the better off doing this than trying to pick market
> direction.
>
> Thank you for this article, JS, and your work.

Five Reasons the Market Could Crash This Fall

For all of you that are CERTAIN and KNOW that a 50% retracement is coming, I wonder if you've shorted SPY.

I get the sense that you're nothing but bizarro-world equivalents of the CNBC cheerleaders. One side is pump, pump, pump while the other is dump, dump, dump.

I lightened the US equity portion of my portfolio this week, but am still 40% US equities. When we go back down to S&P 700-800, I'll sell some treasuries and corporates to buy more US equities.

It's really not that hard.

Added Debt Won't Rescue the Great American Ponzi Scheme

Eventually? If the gub'mint ran a $100B surplus every year (over and above interest payments) for 100 years, it could pay down a national debt of $10T. Surplus of $100B? Not likely any time soon. 100 years? Our unborn great-grandchildren will still be paying.


On Mar 23 06:47 AM etbob wrote:

> The economy will eventually recover. Growth will be slower than in
> the past, as debt needs to be paid down, by both gov't and individuals.
> This should lead to a sustained, gradual, recovery.

Rubin Deserts a Sinking Citi

Rubin is scum. They should push him out the corner office onto the ground below.

Here Comes a Consumer Killer

So how is this a bad thing? The news today seems to be noting good news as bad. Saving rates are finally positive and growing, credit card rates are increasing, and mortgage lenders are (horrors) requiring that the borrower have a down payment and decent job prospects. I've also heard that banks are increasing interest rates on deposits so they can have greater reserves. What a concept? Actually earning interest on your savings account, a concept killed by the Greenspan fed.

I agree with you that these trends will not support a consumer-led buying spree recovery. But, let's face it.....with so many discretionary consumer goods being made in China, the multiplier effect is no longer what it used to be. Consumers no longer have the ability to shop the US out of recession, even with easy credit.

The consumer needs a few years to fix his balance sheet. The feds need to realize this and stop encouraging wasteful spending. Consumer savings should help recapitalize banks (unless that's overwhelmed by their toxic waste CDOs).

Yes, this will be a muted recovery, and the feds need to prime the pump with job creators through accelerated depreciation, investment tax credits, and other policies that will help manufacturers.

To Avoid Failure, Get Really Big; Everybody Else, Watch Out

I wish Paulson and Bernanke and Bush and the other criminals would at least attempt to explain why it's bad for weak and poor performing banks to go out of business. They allow it in every other industry and explain that it's important to rid industry of weak companies. I guess capitalism applies everywhere but in banking. Good riddance.

Wall Street, R.I.P. Now What?

Crocodile tears. These guys have been making gobs of money for many years, skimming off the top of the wealth generated by REAL wealth-creating industries like mining, manufacturing, fishing, and the like.

In a weird sort of way, to me, this looks like the first step toward re-establishing sanity in this country. Maybe with the vampires on Wall Street gone, large manufacturers and conglomerates can actually make decent returns and reinvigorate the real wealth creating sector of our economy.