Bye Bye Market
 

Sold it all. If it crashes there will be buying opportunities. If it doesn't... Oh Well.

I'm having this debate in my head right now... Is this a buying opportunity, or should I stop the bleeding now?

My wife thinks the market is going to tank and I can't think of a good reason to disagree with her. If I don't sell and it tanks I'll never hear the end of it. And I just can't see as big an upside as a downside. So I just decided to get out and watch from the sidelines.

You've got Big Brass Ones John. While I've had hunches, I've always been shy of trying to time the overall market.

I think John is right on. If it goes up, it's not going to break 13k overnight, it'll hover in the 12s. Most likely as the new November deadline for these government cuts comes and the bickering happens again then we'll have another drop. Remember historically October and Sept is a bad month for the market.

Jobs report out Friday. Insiders know it's going to be bad so they're selling off now.

I sold all my stocks and liquidated my 401K, etc... about 8 years again. My old accountant was a Marine, he actually was the only person in the history of the US to run a Federal Prison (he was the head CPA) on a balanced budget. He ran Leavenworth! He changed my life.

I had a small residential appraisal company and he was my accountant. One day when I went to see him he wrote something down on a piece of paper, slid it across his desk and said, "think about it, I'll see you again in a week." The paper said "BHAG" which I later learned meant Big Hairy Audacious Goals.

He sort of steered me into privately owned natural gas and oil wells and a company called Atlas Energy. I buy shares of an individual private owned wells, and actually own part of the well. I am now heavily invested with them and have done amazingly well. I used my profits to bank roll my logging and real estate developments and to pay for my first masters degree.

Sam, you have no idea what people could do with that. :D

From where I'm at in life - LET IT DROP!

I'm young and love what I'm seeing... just means my 10% (+5% match) to 401k is going much much further as long as things keep tanking. Since I'm barely in as it is, I won't be taking any real hits and my money is buying more.

On another slightly different note the housing market is great for me too! Young with some money in the bank for a down payment, which is worth 2x more than it would have been in 08' (based off of our local real estate).... its insane some of the deals out there that I would have never had a shot on a few years back.


... sucks for most people though and I would be pissed if I was one of the other guys in my dept. at work who have 25/30 years of money sitting in the market.

Hmmm what do you know, the market ended up today.

Personally I'm with Nick, I've got nothing but time and wish I had more $ to invest right now. For my clients, no one is calling because they are balanced based on their goals and tolerances. There is money to be made and the power of time and reinvested dividends overwhelms the negative short-term news. Good luck to all and happy investing!

Here's a resource I use when things are looking bad. It talks about the largest market declines in the S&P 500's history and the years that followed.

http://tinyurl.com/3272nmm

Written like true broker or financial planner... I will make a note to revive this thread on 11/6/2012.. that is when the market will either crash or make a huge rebound...

I'll just enjoy getting stocks cheaper while the market is down now rather than trying to time it. It seems most people don't do well when trying to do so. There are a LOT of people who lost out by dumping all their investments when the market was way down this last time. Who knows where the market will end up in 1 or 2 years or further out. I'd say nobody. I'm sure hope we see decent returns over the next 10 to 20 years. Like any investment, I just wouldn't put all your money in one place, whether it's the market, real estate, or somewhere else.

John has it bang on IMO, the market is going down down down over the next year at least.

I see nothing perking up the economy anytime soon. No more false moderate economy through massive deficit spending. Just reality biting.

i sold everything too. i took too big of a hit a few years ago just letting my money ride. ill see how things play out in the next couple weeks before jumping back in.

I went ahead and dumped all my stock funds into cash before the bell yesterday. My wife decided to let hers ride, so we're still pretty balanced. We'll see!

Knock on wood but I've actually had some success with market timing in the last 3 years. The market's daily and weekly fluctuations are so big these days, and it's affected so greatly by daily good/bad news, that I think it's a bit easier to time it somewhat. No professional asset manager will ever tell you this is a good idea. I speculate that's because it makes for more work for them. Back in the day, a 1% move in a day only happened a few times a year; now it's a few times a month. A 2% move was practically considered a boom or crash, but now it's just a pretty good or bad day.

Sam, I'm not trying to sound like anyone, I am a financial planner and I am telling the truth. I literally have had zero calls today with folks concerned about the markets. At this point they've done it before and know how they benefit in the long-term. It really comes down to what is the money for, retirement, college, play, etc etc.

I'm not telling anyone to ride out the market regardless to what it does. I just espouse sound financial decisions that are based on their time horizon, aversion to risk and comfort level. Hedging and moving to a conservative allocation should be a calculated decision not based on the emotions of a decline.

Also, historically presidential elections have little bearing on the markets. I don't think there has been a single crash or boom following an election. So we may want to visit after the new president (or old one) is in office for a year after being elected.

We have never had a president like the one we have now... In my business there is literally billions of dollars sitting on the sidelines waiting for the outcome of the next presidential election. If Obama loses, they will buy, buy, buy.. if he wins they will take their money to China and probably never come back.

"Also, historically presidential elections have little bearing on the markets. "

Hmm? I would have thought the reverse was true.

Ok, maybe not markets, but apprehension over the direction of the economy and jobs. I always heard conventional wisdom was that, presidential elections have significant bearing over the apprehension over those factors, especially after an 8 year president (which is not the case this year).

Indeed, conventional wisdom is that, such apprehension is likely to subside (at least in the short term) regardless which party is elected after an 8 year president.

You are bright young guy, Stephan, and the only limit to your brightness on this matter, I believe, is your youth.

My source for this conventional wisdom is long deceased. He was a wealthy lawyer and investor, 86 years old when he told this to a collection of summer law students at the law firm I interned at, in 1988.

I appreciate the compliment. I may be young-ish (just turned 30), but I like to think my experience is the source of this "brightness". I've been licensed for 7+ years and working at my firm for 13, all I can speak for is what I have seen. Clearly not a 40 year career, but I have certainly seen volatility.

I had a woman in the other day who was 99 years old. Her portfolio looked nothing like mine but she was happy with her performance and stability. I just want to make sure you folks don't think I am telling you guys what to do. I tell my clients to, despite market volatility, keep perspective and make sure short-term volatility doesn't derail them from their long-term goals.

I'm not much older than Stephan, but I like history, so I read probably 75 books on history and economics a year. What is currently happening in the market seems very similar in many ways to what happened during the S&L crisis (different, but very similar). What we did with the Resolution Trust Corporation seems almost identical to what we are now doing.

Several of our clients are RIET's and several have well over a billion dollars liquid sitting on the sideline, mostly those specialized in medical, retirement, and office sectors, but retail is right there too...

Boooooom, 4% drop today.

Just a different and interesting perspective...

"The media is selling you exactly what you don't want to buy."
http://www.cnn.com/video/#/video/bes...cnn?hpt=hp_mid

Not really an interesting perspective because he didn't say anything except... @ 3:12 "They couldn't point to a solution" and "there is no easy solution".

You can't find a solution if you fail to identify the problem. Our economy lost $50B of it's money supply in May alone due to the trade deficit. That doesn't include the money supply lost to govt spending overseas. The number 1 contributor is the purchase of foreign oil.

I hope it crashes because I made a pretty penny last time. Also, get the gas prices back down to $1.50 like in 2008 so we can continue to contribute to warming the earth with our big v8 trucks and wake boats without going broke.

Another 4% today. Do you think it will crash through 10k again?

Anyone got some gold?? Thats up about 4% today.

... good news is oil should drop below $80... so we'll see cheap gas in 3 months, until of course someone sneezes in the middle-east and it pops back up the next day.

Now comes the guessing game as to when to get back in.

If you're a trader then you should get back in first thing in the morning. It'll bounce back but be ready to jump. Market is like a woman - it can't stay mad for long.

The stock market could usefully crash itself a long ways down to get rid of all the ills it causes in the jobs market.

The composition of a big corporation might be reckoned as 3 communities:-- (1) chief officers with substantial stock incentives, (2) domestic workers other than # 1, and, (3) shareholders other than #1 and #2.

For old-line manufacturers over at least the last three decades, such corporations have programs in which the #2-workers are encouraged if not pressured to accept corporate stock in lieu of some pay. In return, the #1-CO’s focused not on the job security or job creation for the #2-worker community but the stock price alone ... which disproportionately enriched the #1-CO and #3-SH communities.

Such focus of the #1-CO’s included outsourcing the #2-worker community’s domestic jobs. Good thanks that was.

Agreed 100%. My take is that CEO's should not be able to cash out for 10 years. Yes things can happen but the "drive by" CEO that's in for 2 or 3 years, cashes out and watches the company go down in flames is the problem.

I spoke too soon, actually close 5.4% down..... 10k barrier not unrealistic IMO

Each day the market will do one of two things, go up, or go down.

If you moved to cash the other day start thinking about a plan to get back in. John, how are you planning on choosing when and how to do it?

I predict large swings over the coming days. One could argue buy on weakness and sell on strength during this oscillating period.

For me it's peaks and valleys. I'm at an age where I can still be aggressive with my investments knowing I have a while before retirement. I'm a huge believer in the power of compounding interest and dollar cost averaging. I think there are some really strong companies that have been beaten down that are good buys right now.

No plan. Just wing'n it.

Decided to test the water by picking up $10K of Coke. It's a solid stock with decent dividends.

Good work Brad, IMO you've got the right idea. One that can carry you through to retirement with subtle tweaks as you go along. When markets are volatile a good dividend paying stock or fund can work well as long as you are reinvesting. And dollar cost averaging is a good plan to get back in without trying to time things.

John, make sure you diversify. You wished to protect yourself by getting out of the market, might as well protect yourself now that you are getting back in. Hopefully you didn't miss yesterday's up tick.

Party at your house then? Dividends are good until the po po gets ya.

Went down another 1/2 point so I doubled down.

$10k worth of coke!!? Now thats a real party. May have to replace our noses and not sleep too much though lol jk

Gold is making a nice run. Silver is next.

:DI'm not a user. But willing to profit off other people's vices.

I heard an astrologer on the radio today say dump all stocks and go into gold. To me, that says it's time to sell gold. Just like when my cabbie told me to invest in real estate in 06'.

I'm fortunate enough to be young enough to just ride this out. I haven't made any moves in what I own and will prob sink some more cash into the market before too long. The thing I do know is that being in the mortgage buisness, I will be busy for the next 2+ years...

I heard an astrologer on the radio today say dump all stocks and go into gold. To me, that says it's time to sell gold. Just like when my cabbie told me to invest in real estate in 06'.


Hahahahahaha.... Buying gold right now sounds like a good way to throw some money away. I think it's time to stuff the mattress again.

Evan, you're better off with gold/silver at any price. Gold/Silver follows the cost of goods and services and if you're looking for a way to maintain your wealth, metals.. commodities are the way to do it. Stuffing your mattress is the slowest possible way you can go broke.

crash
 

"that says it's time to sell gold"
thats right Evan, its going to crash and alot of people are going to lose their money, right around 2000 the" pros" are going to go short on the gold, make a mint!,and people are going to sell, gold is the bubble right now and it is going to pop!
Looks like alot of people forgot to buy low, now is not the time to buy gold.
When everyone else is buying, sell!!! If I see another buy gold commercial, I'm going to puke

Joe,
The cost of Gold is largely irrelevant. It's not that gold prices are way up... It's that the dollar is way down. Gold values don't change- there is no "gold bubble", it's a myth.
There is a difference between value and cost and that's something you're missing. Cost is related to its medium of exchange, in this case, the dollar. Value is it's exchange for goods or services and that doesn't change.

Do this little exercise and it will all make sense to you.

Pick any 3, 5 or 20 points in history and calculate breadbasket items.. gas, whatever. What you'll see is that one ounce of gold/silver buys the same amount of breadbasket items even though the cost in relation to the dollar changes.

If one ounce of silver/gold buys 5 gallons of gas in 1900 and one ounce of silver/gold buys 5 gallons of gas in 2011, how is it overpriced? It's not.. the dollar s simply losing value...


I'm in a hurry, so forgive me if i made a bunch of typos

oh, I see, so there is know way if I bought gold at $800.00 an ounce(1980) that it could lose more than half its value in two years(1982) because I know for a fact that gasoline prices continued to rise during that time. Barry, if someone listened to you and been unlucky enough to buy gold at $800, they would have to wait 28 YEARS to see it hit $800 again. Also, the street value of an ounce of gold is about $200, gold is way overpriced.

Jo,
Fair enough, let's use the year you picked, even though it's an extreme.

The average cost of gold for the year in 1980 was 615.00 and the average price of gasoline was 1.26... That means you can get 492 gallons of gasoline for every ounce of gold you owned.
Let's use numbers from today- Gold is at 1854.00 and the average price of a gallon of gasoline is 3.76----- hold on now.. how much is that? 493 gallons of gasoline! Amazing! That trick works all throughout history. One may lag the other a slight bit as the market plays catch up, but it's very marginal. That is why I suggested that the price you pay for gold/silver is largely irrelevant.

Gold is not overvalued, inflation is destroying our dollar. It's nearly worthless.
Your rate of exchange into the dollar may increase/decrease, but you're not losing any purchasing power which is really what matters.


Really? 200.00 for an ounce of gold street value, huh? I'll pay you a 1000.00 finders fee for every ounce you can find me for 400.00. :)

Jo, if people listened to me they would at least maintain their wealth as purchasing power never changes. Gold/silver is inflation proof....

The historical purchasing power is the same with silver- I suggest using silver rather than gold as the ratio to breakbasket items is closer.

"It's nearly worthless(dollar)" "you're better off with gold/silver at any price"
Barry you sound like an investor thats setting everyone up to lose alot of money!
You do not use averages to buy and sell gold and silver, and you cannot say that silver will never go back down to 5, 10, or $20 an ounce.
The time to buy silver was back in 2009 after the market crashed around $10 an ounce, two years later you would have a 400% increase in your money. Ride the market out? Hell No! Sell, wait for the price to go to 50 and short silver while it takes a dive.

Jo,
You're not getting it. :)

I never said use averages to buy gold/silver. I simply used an average cost vs. value for the year.
You're not seeing the difference between cost and value and until you grasp that concept we're going to be spinning our wheels here.

Let's try it this way:

In 199x you work one hour and get paid 10.00...You need a gallon of milk and a loaf of bread that combined cost 10.00.
fast forward to 201X
You work one hour and get paid 20.00.. you need a gallon of milk and a loaf of bread, but it now costs you 20.00.
The cost increased, but the value stayed the same. So, without getting into why inflation exists or it's hidden taxation..the cost is largely irrelevant- you worked one hour to be able to afford the same items even though the cost increased and you're out more 'money'.

Gold/silver work the same way.. If I have one ounce of silver that I purchased at 4.00 and a gallon of gas cost 4.00, or I have one ounce of silver that i purchased at 30.00 and a gallon of gas cost 30.00. It's cost is irrelevant as the value doesn't change(with a slight lag as either factor seeks equilibrium).

I'm really not trying to argue with you here, Jo. I'm not trying to sell you anything... I am truly trying to help you.

ok, lets try it this way,
The highest gold value for your precious little basket of goodies was back in 1980, in inflationary numbers gold has never been so high, probably will not reach that level this time either, it would have to reach $2,391 in adjusted dollars to be the equivalent to $800 back in 1980. I am truly trying to help you Barry -Do Not Buy GOLD! period. Wait for the crash, just like the .com's and just like the housing market, everyone knows its gonna crash. Your dollars are worthless? Your gold is worthless! or, it is going to be worth half the value it was before the crash. Remember, buy low, sell high, its time to sell the worthless golden material that you find in the dirt!

Jo,
take care of yourself. I wish you the best. :)

(edit)You're a teacher?!

bye bye Barry, Don't forget to sell all of your gold!

"I am truly trying to help you"
can anyone explain to me how he is trying to help me???