MauDib

Is the Market Going Lower? Silly Question!

Good comment - the market predicts the cash will go to the other interest -holders in the company, probably the execs, maybe the govt - but not the investors. This is why it is discounted to zero - the investors abdicated their power in the long bull market. So, the cash will be wasted - sort of like AIG.


On Mar 03 10:47 PM Deepv wrote:

> Also, are the retained earnings accumulated from 1997 to today worth
> nothing? S&P has $300/share net cash and interest rates are near
> zero. Seems overdone unless we are in a genuine depression.

Oracle of Omaha Warns of 'Onslaught of Inflation'

Every U.S. war since 1900 has been paid for with equity, not income (excl. Kuwait War paid by Japan Inc). Example, did WWII bonds retain their value 5 - 10 -15 years later? Post-Vietnam 1973 - look at inflation for the next 10 years as govt prints more money to monetize the debt. Iraq war: average cost per soldier per year $800,000 - give OPEC and China bad paper for their good oil and products.

Also, how do you get non-manuf workers and govt workers to take a pay cut in hard times? Answer, inflate away their fixed salaries: teachers, police officers, SS retirees - print 10% more money = pay cut of 10%.

The feds have a strong incentive to inflate as the world's largest debtor.

Is 'Buy and Hold' an Antiquated Theory?

Buy and hold works in only one case: businesses increase dividends, not cut them, to encourage investment in their company. Like buying a CD, that encourages families to save now because of increased consumption in the future, not just a hoped for promise of capital gains.

Of all the stakeholders in a business, e.g. govt taxes, employees, etc., the distant owners get the least and the last, meaning after everyone else gets their cut - the poster child is GM.

During this decade, I read financial commentators talking about a "mouth-watering" 3 % dividend - you have got to be kidding! Give the shareholders a real return on their investment since mgt does not need the cash for growth (and growth for its own sake - questionable benefit). How about a real return: spendable cash to me of 7% on my stock price!