I agree. Here's a great related read from one of my daily "musts" (along with PrudentBear.com) : Invalid Link Removed Note that this article "A Bull Market in Fools" will be off the front page soon so this link won't be relevant to this post for long
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Beginner Financial Investing.
- Thread starter MCBTunes
- Start date
I agree. Here's a great related read from one of my daily "musts" (along with PrudentBear.com) : Invalid Link Removed Note that this article "A Bull Market in Fools" will be off the front page soon so this link won't be relevant to this post for long
does anyone think that the market will break thru 12600? this would be 10% off the high. I myself was thinking that 12600 meant sale time (time to buy) but maybe not..........
Congratulations ! Sincerely. To come out ahead and have sold last month is a great result.
As for funds, well, the best thing about this thread is people that think differently. I'm not keen on funds. Read my posts of the last couple weeks. It was experts that invested fund money - billions of it including retirement funds - into the lending stocks that collapsed to nothing. Diversity? Sure, that's best. International? Much better. Ultimately I'd rather sink or swim of my own accord so I'm no funds fan. Over time I think you're hard-pressed to beat inflation as is the overall market.
So, I *never* think it's a good time to invest in the stock market. Al always think it's a good time to think about what you believe in, get some good soruces and do some research, and buy good companies at a discount or make smart speculations.
That said, the most important thing - in funds or stocks or real estate - is to preserve your capital. If things turn against me, I get out of the way. That's tough to do in funds and often costly, and I guess that's why I see people who are convinced a downturn was/is coming being happy to stay in funds. I couldn't do that (why not at least hedge with this? - [Invalid or Expired Link Removed] ), but we're all different and a key thing to know is that you have to find what works for you and what allows you to sleep at night.
If you're coming out ahead, I don't think you need my input and that's especially true of funds so I wrote the above to draw that line. There are some very smart fund fans here who will help you out. I like the Coffeeshouse approach in that it features active participation in re: reallocations and such. That's actually how I started out (not Coffeehouse, but a similar method of trading funds I kinda came up with before I could really afford stocks).
=======
Last post from me for now on the general housing/collapse topic. I rehash from another thread in which I posted this today ... actually I'll just post the link (the relevant part is halfway down the post) : http://www.talkbass.com/forum/showpost.php?p=4566111&postcount=53
does anyone think that the market will break thru 12600? this would be 10% off the high. I myself was thinking that 12600 meant sale time (time to buy) but maybe not..........
For me, a good barometer of tops or bottoms has been 5-7% one-day declines in markets, sectors, portfolios, individual stocks, etc. I think I might adopt this much smarter rule-of-thumb though (another daily must-read, and note this article "A Matter of Life and Death" will be off the front page soon so this link won't be relevant to this post for long) - http://www.growthstockwire.com/
I felt really good about my buying yesterday when overnight I noted :
Japans Nikkei index shed a whopping 5.5%. Blue chip Japanese exporters have taken a beating as the yen continues to rise against the dollar and Japans market has reacted. Shares of Toyota and Sony -- perhaps Japans most stable exporters -- fell 7% overnight.
In time I think you can and will see much lower than 12600 in real money terms, but not in the short term and maybe not at all in USDollar terms. Realistically though, the DOW could go to 11000 and still be on its 5-year uptrend. There's plenty of downside but I think we've seen the end of the slide for awhile.
From today's Agora 5-minute Forecast email :
How low can it go? repeats Byron of our query. Reminds me of an old submariners joke!
Question: How deep can this submarine dive?
Answer: All the way to the bottom.
MR. HOT STOCK TIP GIVER OUTER
Bud Light Presents Real Men of Genius
(Real Men of Genius)
Today we salute you Mr. Hot Stock Tip Giver Outer
(Mr. Hot Stock Tip Giver Outer)
Why go to a professional analyst when we can get inside information from your brother-in-law's, sisters fourth cousin's stepfather.
(On your mother's side)
Sure, you may know absolutely nothing, but we know even less.
(Big, big, big old dummy)
Your motto, buy low, sell low.
Get other people to buy low and sell low.
(Keep hope alive)
So crack open an ice cold Bud Light O Titan of the Tip.
Although you're always wrong, you'll always be our Mr. Right.
(Mr. Hot Stock Tip Giver Outer)
But seriously...after spending 3 years as a financial advisor I realized it's not something I ever feel like doing again. There are a LOT of variables and a billion and five different strategies for each one. So...my FRIENDLY suggestion: invest in a managed portfolio that suits your financial goals. It's a cheap and easy way to have someone invest your money for you according to how the market is performing and how aggressive you want to invest. And typically reliable since there are hundreds of thousands of people with shares.
Bud Light Presents Real Men of Genius
(Real Men of Genius)
Today we salute you Mr. Hot Stock Tip Giver Outer
(Mr. Hot Stock Tip Giver Outer)
Why go to a professional analyst when we can get inside information from your brother-in-law's, sisters fourth cousin's stepfather.
(On your mother's side)
Sure, you may know absolutely nothing, but we know even less.
(Big, big, big old dummy)
Your motto, buy low, sell low.
Get other people to buy low and sell low.
(Keep hope alive)
So crack open an ice cold Bud Light O Titan of the Tip.
Although you're always wrong, you'll always be our Mr. Right.
(Mr. Hot Stock Tip Giver Outer)
But seriously...after spending 3 years as a financial advisor I realized it's not something I ever feel like doing again. There are a LOT of variables and a billion and five different strategies for each one. So...my FRIENDLY suggestion: invest in a managed portfolio that suits your financial goals. It's a cheap and easy way to have someone invest your money for you according to how the market is performing and how aggressive you want to invest. And typically reliable since there are hundreds of thousands of people with shares.
I have been speculating (not investing) in the stock market since 1987 research, 1990 with real money and making solid returns with a strategy and tactics I developed myself since 1993. My annual returns are around 60% ROI.
This is great advice. Stock market speculation is only one facet of financial management. My problem in financial management is I get so preoccupied on stock market speculation, I can neglect other facets of my financial management.
Before you start buying books and mags on this, check out your local library. Im not against buying books! You can get your initial education through the library for free. Once youve read half dozen books on the stock market, youll be in a better position to peruse a book and decide if its worth pursuing.
+! I did this for three years. Until you can make money playing with monopoly money you are not ready!
This is great advice. Stock market speculation is only one facet of financial management. My problem in financial management is I get so preoccupied on stock market speculation, I can neglect other facets of my financial management.
Before you start buying books and mags on this, check out your local library. Im not against buying books! You can get your initial education through the library for free. Once youve read half dozen books on the stock market, youll be in a better position to peruse a book and decide if its worth pursuing.
+1. Even though I am NOT a value investor, this is essential reading and an excellent book!
+! I did this for three years. Until you can make money playing with monopoly money you are not ready!
Awesome! Care to share?
Some have been putting their ideas and plays out here, and I'd love to read about some of yours.
Why'd you quit? Those that I know that are passionate for investing couldn't quit any more easily than they could quit breathing.
Maybe that explains it. I doubt the many people and "experts" who went broke recently in managed funds that were "too big to fail" would agree. Good customized portfolio management is never cheap or easy. However, learning what's really going on is - Invalid Link Removed , Link Removed , Link Removed
[EDIT] I guess the State of Maryland is an expert too. LOL. This will get sooo much worse before it's over. From Stansberry today :
Speaking of the insane... reading the local paper I found this:
"Nearly 4,000 homebuyers turned to the state [of Maryland] for their home loans last fiscal year, a record for Maryland's 28-year-old loan program... The state made about $767 million in low-interest loans to buyers." That's about three times more than the previous - 1995 - record of $250 million in loans. Why the huge jump in mortgage issuance by the State of Maryland? They're now offering 40-year, interest-only loans, loans equal to 99% of appraised value and 'down payment assistance,' which nine of our ten borrowers required to close. Stephen Silver, the CFO for Maryland's department of housing, says of last year's 4,000 borrowers: 'I'm sure we are picking up some people that were being steered toward subprime...'"
So... the State of Maryland... in all its infinite wisdom... has decided to use some of the 7.5% of my income it taxes each year to compete in the deadbeat mortgage market. Wonderful.
The story of one hard-working man and part-time musician, and something to think about when it comes to investing in funds and where your 401 money is and how safe it may be.
How Safe is Safe?
By Mike "Mish" Shedlock
Consider the plight of Raymond Przybilinski:
"He socked away $521,000 from a lifetime of driving trucks, working overtime when he could, and playing the piano or accordion late into the evenings at weddings, hotel bars, and social clubs…
"The money was destined for his five children. But that was before more than half of the family nest egg disappeared on Feb. 2 as state banking regulators seized Metropolitan Savings Bank in Lawrenceville, citing 'unsafe and unsound' operations. When Mr. Przybilinski tried to take his money out, the man in charge of Metropolitan Savings' assets informed him that there was only $200,000 left to withdraw -- the amount protected by the federal government."
Here are some school-of-hard-knocks lessons from Raymond Przybilinski's misfortune:
1) If a bank is offering above market rate interest on CDs and deposits, there is a reason behind it. That reason is risk. And with excessive risk comes eventual disaster.
2) With credit spreads widening, margin calls being issued, and absurd lending to build condos in Florida and other places smack in the face of record inventories, there are going to be more bank failures like this.
3) Know and understand the FDIC limits, or your life savings can be wiped out.
4) If you have money in a bank in excess of the FDIC limits, do something about it now, while you can.The above material was written on Aug. 8…Flash forward to Tuesday, Aug. 14, 2007:The USA Today headline reads "Sentinel Freezes Assets of $1.5 Billion Fund."
What the headline does not say is that Sentinel is a money market fund. On Tuesday, Sentinel Management Group froze assets in a $1.5 billion fund, saying too many investors are trying to withdraw their money. "We have never experienced a situation quite like this one," Sentinel Management said. "Liquidity has dried up all over the Street."
If you're looking for the source of the problem, here it is: "We have never experienced a situation quite like this one…Liquidity has dried up all over the Street." What happened is that Sentinel thought that just because it has not seen something yet, it could not happen. This is, in essence, the same thing that happened to the models at Moody's, Fitch, and the S&P, and various quant models. On Tuesday, Sentinel asked the U.S. Commodity Futures Trading Commission for permissions to halt redemptions. The request was denied.
Check out Sentinel's letter to clients:
"Dear Client:
"As you undoubtedly know, the credit markets, along with most other markets, have experienced a liquidity crisis in the past several weeks. Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade. We've all read the stories about one hedge fund or another suffering losses related to subprime exposure and closing down or being rescued. This fear, while warranted in some cases, has spilled over into the rest of the credit market, and liquidity has dried up all over the Street…
"This liquidity crisis has caused bids to disappear from the market and makes it virtually impossible to properly price securities or to trade them. High-grade securities are trading like junk bonds as panicked investors dump names like General Electric at Tyco-like prices.
"We had previously thought that the market would return to some semblance of order and that our clients would not join in the panic. Unfortunately, this has not been the case…"
There were some interesting frequently asked questions on Sentinel's Web site. (Note: the above link may have been yanked by the time you read this):
1. "How can Sentinel consistently earn high yields on short-term investments without taking excessive risk?"
2. "How can I be sure my money is safe at Sentinel?"
3. "That is history. How can Sentinel ensure that such a record will continue?"
4. "Exactly what happens to the cash invested by Sentinel?"
Proposed New Answers
1. We can't. No one else can, either. That is what risk is all about.
2. You can't. Liquidity has dried up and we just got caught. That's why we halted redemptions.
3. Part of our original answer was: "Sentinel is registered with three regulatory agencies: the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Congressionally chartered self-regulatory body, the National Futures Association (NFA)." You can easily see that now does not mean much.
4. "Sentinel clients have an indirect, undivided pro rata ownership interest in a pool of high-quality, liquid securities. Sentinel's Treasury Only Portfolio (TOP) consists of direct obligations of the U.S. Treasury. The 125 Portfolio and Prime Portfolio consist of money market securities issued by U.S. government agencies, corporations, or short-term bank time deposits, all of which meet Sentinel's requirements for liquidity and low risk." Those most at risk put their faith in the "125 Portfolio," and that's where the big problems are.
One part of the Sentinel letter complained: "We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients."
Excuse me, but doesn't the market determine "fair value"? Apparently, Sentinel thinks it knows what fair value is, but the market doesn't. Recall that Bear Stearns thought the same thing. Bear Stearns locked out clients who wanted to redeem all the way back in January. Those investors would have gotten something back, perhaps as much as 70 cents on the dollar. Bear Stearns locked those clients in, and the hedge fund went to totally worthless.
While Sentinel does not like the current offer for those assets, there is no guarantee (or even likelihood) that the market is going to think more of those assets tomorrow than it thinks of them today. Should Sentinel have seen this coming? I think so, or at least it should have been alert to the possibility. Instead, it stuck with a now failed model that offers these excuses:
· Investor fear has overtaken reason
· The market would return to some semblance of order
· Our clients would not join in the panic
· Securities are at deep discounts to their fair value.
[...]
Individual investors need [...] to examine the safety of the investments that they believe to be safe. They need to read the fine print on their "guaranteed" investments. They need to read (or, at least, to understand) the statements on their money market accounts that stipulate in their prospectus very clearly that they can LOSE money and that NAVs (net asset values) can fall below a dollar?
Unfortunately, most folks don't care about "the fine print" until it's too late?
Free Tips
· Make sure you do not exceed the FDIC limits in any account. Just ask Raymond Przybilinski about the consequences.
· Do not panic over this. Just calmly make sure you know where your money is and that it exceeds no limits.
· Also make sure that any money markets you are in are not heavily invested in "junk-rated" securities.
· The higher the yield, the more excessive the risk is. Don't become another Sentinel victim.
How Safe is Safe?
By Mike "Mish" Shedlock
Consider the plight of Raymond Przybilinski:
"He socked away $521,000 from a lifetime of driving trucks, working overtime when he could, and playing the piano or accordion late into the evenings at weddings, hotel bars, and social clubs…
"The money was destined for his five children. But that was before more than half of the family nest egg disappeared on Feb. 2 as state banking regulators seized Metropolitan Savings Bank in Lawrenceville, citing 'unsafe and unsound' operations. When Mr. Przybilinski tried to take his money out, the man in charge of Metropolitan Savings' assets informed him that there was only $200,000 left to withdraw -- the amount protected by the federal government."
Here are some school-of-hard-knocks lessons from Raymond Przybilinski's misfortune:
1) If a bank is offering above market rate interest on CDs and deposits, there is a reason behind it. That reason is risk. And with excessive risk comes eventual disaster.
2) With credit spreads widening, margin calls being issued, and absurd lending to build condos in Florida and other places smack in the face of record inventories, there are going to be more bank failures like this.
3) Know and understand the FDIC limits, or your life savings can be wiped out.
4) If you have money in a bank in excess of the FDIC limits, do something about it now, while you can.The above material was written on Aug. 8…Flash forward to Tuesday, Aug. 14, 2007:The USA Today headline reads "Sentinel Freezes Assets of $1.5 Billion Fund."
What the headline does not say is that Sentinel is a money market fund. On Tuesday, Sentinel Management Group froze assets in a $1.5 billion fund, saying too many investors are trying to withdraw their money. "We have never experienced a situation quite like this one," Sentinel Management said. "Liquidity has dried up all over the Street."
If you're looking for the source of the problem, here it is: "We have never experienced a situation quite like this one…Liquidity has dried up all over the Street." What happened is that Sentinel thought that just because it has not seen something yet, it could not happen. This is, in essence, the same thing that happened to the models at Moody's, Fitch, and the S&P, and various quant models. On Tuesday, Sentinel asked the U.S. Commodity Futures Trading Commission for permissions to halt redemptions. The request was denied.
Check out Sentinel's letter to clients:
"Dear Client:
"As you undoubtedly know, the credit markets, along with most other markets, have experienced a liquidity crisis in the past several weeks. Investor fear has overtaken reason and has induced a period in which most securities have simply ceased to trade. We've all read the stories about one hedge fund or another suffering losses related to subprime exposure and closing down or being rescued. This fear, while warranted in some cases, has spilled over into the rest of the credit market, and liquidity has dried up all over the Street…
"This liquidity crisis has caused bids to disappear from the market and makes it virtually impossible to properly price securities or to trade them. High-grade securities are trading like junk bonds as panicked investors dump names like General Electric at Tyco-like prices.
"We had previously thought that the market would return to some semblance of order and that our clients would not join in the panic. Unfortunately, this has not been the case…"
There were some interesting frequently asked questions on Sentinel's Web site. (Note: the above link may have been yanked by the time you read this):
1. "How can Sentinel consistently earn high yields on short-term investments without taking excessive risk?"
2. "How can I be sure my money is safe at Sentinel?"
3. "That is history. How can Sentinel ensure that such a record will continue?"
4. "Exactly what happens to the cash invested by Sentinel?"
Proposed New Answers
1. We can't. No one else can, either. That is what risk is all about.
2. You can't. Liquidity has dried up and we just got caught. That's why we halted redemptions.
3. Part of our original answer was: "Sentinel is registered with three regulatory agencies: the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Congressionally chartered self-regulatory body, the National Futures Association (NFA)." You can easily see that now does not mean much.
4. "Sentinel clients have an indirect, undivided pro rata ownership interest in a pool of high-quality, liquid securities. Sentinel's Treasury Only Portfolio (TOP) consists of direct obligations of the U.S. Treasury. The 125 Portfolio and Prime Portfolio consist of money market securities issued by U.S. government agencies, corporations, or short-term bank time deposits, all of which meet Sentinel's requirements for liquidity and low risk." Those most at risk put their faith in the "125 Portfolio," and that's where the big problems are.
One part of the Sentinel letter complained: "We are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients."
Excuse me, but doesn't the market determine "fair value"? Apparently, Sentinel thinks it knows what fair value is, but the market doesn't. Recall that Bear Stearns thought the same thing. Bear Stearns locked out clients who wanted to redeem all the way back in January. Those investors would have gotten something back, perhaps as much as 70 cents on the dollar. Bear Stearns locked those clients in, and the hedge fund went to totally worthless.
While Sentinel does not like the current offer for those assets, there is no guarantee (or even likelihood) that the market is going to think more of those assets tomorrow than it thinks of them today. Should Sentinel have seen this coming? I think so, or at least it should have been alert to the possibility. Instead, it stuck with a now failed model that offers these excuses:
· Investor fear has overtaken reason
· The market would return to some semblance of order
· Our clients would not join in the panic
· Securities are at deep discounts to their fair value.
[...]
Individual investors need [...] to examine the safety of the investments that they believe to be safe. They need to read the fine print on their "guaranteed" investments. They need to read (or, at least, to understand) the statements on their money market accounts that stipulate in their prospectus very clearly that they can LOSE money and that NAVs (net asset values) can fall below a dollar?
Unfortunately, most folks don't care about "the fine print" until it's too late?
Free Tips
· Make sure you do not exceed the FDIC limits in any account. Just ask Raymond Przybilinski about the consequences.
· Do not panic over this. Just calmly make sure you know where your money is and that it exceeds no limits.
· Also make sure that any money markets you are in are not heavily invested in "junk-rated" securities.
· The higher the yield, the more excessive the risk is. Don't become another Sentinel victim.
Ok guys I'm deciding that while I'm investing $50 a month post tax, and $3000 per year pre-tax, its time to be a little risky with my post tax and as such, here goes my venture into the stock market!
I'm going to be doing Dollar-Cost averaging purchases of $50 / month with an initial $200 purchase of Silex Systems Limited, an Australian stock.
Symbol : SLX.AX
Currently trading at $6.78 US.
Summary:
Silex Systems Limited is engaged in research and development of the laser isotope separation technology, namely SILEX. In addition, research and development into wafer scale semiconductor technologies, such as silicon planar lightwave circuits (SPLC's) and advanced electronic materials has been conducted by Translucent Inc in Palo Alto, California. Translucent has also begun research work for a solar energy conversion cell and thermoelectric materials. Silex has a 70.3% interest in Translucent. The Company's technologies are in the development stage and have not been commercially deployed. The controlled entity Fiberbyte Pty Ltd (Fiberbyte) is developing data acquisition equipment utilizing its USBinSync technology. Silex has an 89% interest in Fiberbyte.
The have signed a licensing agreement with GE to create a pilot plant for uranium enrichment, which could theoretically cut 30-40% off the cost of uranium, giving GE a monopoly in the nuclear energy market. I would say that if you plan on buying this company to stay in it until GE commercializes this technology. Silex stands to get 12% of GE's revenues when the technology is commercialized.
Intel is looking into their Silicon technology as well.
They also stand to take quite a chunk of the Solar Power industry by making the manufacture of solar panels much less expensive.
I'm going to be doing Dollar-Cost averaging purchases of $50 / month with an initial $200 purchase of Silex Systems Limited, an Australian stock.
Symbol : SLX.AX
Currently trading at $6.78 US.
Summary:
Silex Systems Limited is engaged in research and development of the laser isotope separation technology, namely SILEX. In addition, research and development into wafer scale semiconductor technologies, such as silicon planar lightwave circuits (SPLC's) and advanced electronic materials has been conducted by Translucent Inc in Palo Alto, California. Translucent has also begun research work for a solar energy conversion cell and thermoelectric materials. Silex has a 70.3% interest in Translucent. The Company's technologies are in the development stage and have not been commercially deployed. The controlled entity Fiberbyte Pty Ltd (Fiberbyte) is developing data acquisition equipment utilizing its USBinSync technology. Silex has an 89% interest in Fiberbyte.
The have signed a licensing agreement with GE to create a pilot plant for uranium enrichment, which could theoretically cut 30-40% off the cost of uranium, giving GE a monopoly in the nuclear energy market. I would say that if you plan on buying this company to stay in it until GE commercializes this technology. Silex stands to get 12% of GE's revenues when the technology is commercialized.
Intel is looking into their Silicon technology as well.
They also stand to take quite a chunk of the Solar Power industry by making the manufacture of solar panels much less expensive.
My forte is Canadian exploratory mining companies trading for under $0.20 / share with under 25 million shares outstanding. (SMASH, I see you are from British Columbia... you folks call this "Vancouver Stock Exchange poker"
The professional analyst stay out the penny stock market as they deem it too "irrational". This gives me an edge because part of what I do is outanalyize other players. I also get into the pyschology of teh market and (try to) out think them as well.
Damn I miss the VSE and those Howe Street dayz....
Interestingly enough I was looking at some exploratory Mining companies that were trading at pennies.
My forte is Canadian exploratory mining companies trading for under $0.20 / share with under 25 million shares outstanding. (SMASH, I see you are from British Columbia... you folks call this "Vancouver Stock Exchange poker"
The professional analyst stay out the penny stock market as they deem it too "irrational". This gives me an edge because part of what I do is outanalyize other players. I also get into the pyschology of teh market and (try to) out think them as well.
Damn I miss the VSE and those Howe Street dayz....
There are some good analysts in the pennies game - several good letters out of publishers such as Agora and one in Richmond BC I believe called Keystocks, as well as Stansberry.
I've often done the same as you though, with great success especially in the late 90's on the OTC. Are you local? Would be nice to share ideas either way if you're into it. Cheers.
--
joelb79, how are you able to get an Australian stock $50 at a time? I'd imagine a broker would be costing you more than that in commissions, or do you have an online brokerage that gives you Australian market access? Still seems like it'd cost too much in commissions unless you've got a bunch of free trades with a new account.
Best of luck with that one.
I'm not a fan of newsletters for two reasons. First, they have their own axe to grind. How objective can they be ? AT teh very least, they want to convice their readership of their intelligence so that they will keep subscribing.
As mentioned I'm into really small companies. (I wrote before, I like companies trading under $0.20 / share and outstandign shares under 25 million. If you mutliple these numbers, you'll see that the market capitalisation of companies that I liek is under $ 5 million.
Such companies trade sporadically and have a huge spread between bid and ask price. If a newsletter was to recommend them, a few idiots would buy "at market" instead of putting in a bid.
There is not a lot of money to made in this area. I buy all the stock in all the companies that meet my criteria and spend $60,000 - $100,000 a year on buys. As mentioned, my ROI average is just over 60% / year for every year I'm in. Not enough to get rich but it's better than an office job
There are some rocky times and times of famine.
In 1996 the market was overpriced as junior minigns were through the roof! I had everthing in cash and couldn;t find anything to buy
1997 was Bre-X and the market colpased. I was glad I was all in cash. In 1998 The market was still suffering from the previosu year.
2001 was horrible as all stock buyers wanted was "high tech dot coms". For the last three months of the year 9/11 occupied people's thoughts.
I'm close to Toronto but for what I do all the action is in BC. If you want to correspond on this topic, send me a PM.
I have an IRA account, and my broker for that (Edward Jones) allows me to do $50 a month and forgoe some of the commission expenditures.
From today's "Smart Profits Report". Link Removed
The Smart Profits Report
Friday, August 31, 2007
We've Reached A Tipping Point... Get Out Now
By Marc Lichtenfeld
Senior Analyst, Mt. Vernon Research
In July, existing home sales fell for the fifth straight month.
The number of homes on the market hit a 16-year high. Since June alone, supply has risen by 5%.
The National Association of Realtors says if no more new homes were built, it would still take over 9 months to sell all the existing houses on the market.
To put it mildly, this is one tough environment. The word on the street is that buyers and sellers have been engaged in a fierce faceoff.
Buyers: These folks know they have the sellers over a barrel and are simply waiting for the price to come down.
Sellers: Those looking to sell still remember the astronomical prices that their neighbors received in 2005 – and are refusing to budge.
Until now...
From $505,000 To $395,000
In July, the median home price in the U.S. slid by 0.6% to $228,900, compared with July 2006. It was the 12th straight month that home prices fell. In the second quarter, home prices fell 3.2% – the biggest drop since the S&P began its Case/Shiller National Home Price Index in 1987 and news that sent the index to its lowest point ever.
And with prices dropping fast, the e-mail below tells the story of increasingly desperate sellers. In many previously hot real estate markets, investors bought houses and assumed they could then swiftly sell them for a quick n' easy profit.
But that isn't happening any more. Sellers are now stuck with houses and need to dump them fast, before the market drops any further. The e-mail below is from a Florida realtor to his client, letting him know of other similar houses on the market. The client's house was listed at $469,000.
Here are the details of your closest competition. There are 4 that are definitely "Deals."
#1: 06XX Old Ham: Your model: Was 505K now pre-foreclosure @ 395K OUCH!!!!
#2: 105XX Galleria: New on Market 5-bed Turquoise + Pool @ 425K
#3: 105XX Galleria: Turquoise Model @ 420K, dropped from 480K
#4: 104XX Galleria: Your Model @ 450K
The recipient of the e-mail, along with seller #4, probably expected to get around $450,000 for their home. But now, a seller headed toward foreclosure has taken them out at the knees by pricing $55,000 below the current market. And keep in mind... an interested buyer will smell the desperation like a shark smells a bleeding dolphin. Will the seller accept $375,000? What choice do they have? That drives the price of the other houses down even more.
The rest of the sellers in this community will have to wait until house #1 closes and hope that the market returns to more rational prices, otherwise they will have to come down even lower. But that could be a long time coming.
This type of scenario is playing out in many parts of the country, too.
Think Real Estate Always Goes Up? Think Again...
Perhaps you're lucky enough to own a home in a strong market like Austin, TX or Asheville, NC. But if you're not, you can still sleep soundly, clinging onto the conventional wisdom that tells you to hang on for a few years if you don't have to sell and that real estate always goes up, right? Not so fast...
If you look at the history of real estate in this country, you'll be shocked at the numbers. According to Robert Shiller in his book "Irrational Exuberance," the real price increase from 1890 to 2004 was a paltry 0.4% per year. Sure, we've seen several price spikes, such as after World War II, the late 1970s and the current decade. But after the post-war rise in the late 1940s all the way through to the late 1970s, real estate prices barely budged.
Want To Sell? With Metro Areas Sinking, Do It Now
So what's the bottom line here? If you're in the home that you plan to be in for a long while, there's likely nothing to worry about. However, if you expect to sell your house in a couple of years "when prices come back," you may be out of luck.
As Shiller soberly states: "The pullback in the U.S. residential real estate market is showing no signs of slowing down." And in most parts of the country that had previously hot markets, sellers now have little choice but to slash prices if they want their house to move. Of the 20 U.S. metropolitan areas in the National Home Price Index, 17 showed a decline in their annual growth rates from May's figures.
But unfortunately, the real estate market isn't like the stock market, where you can employ sell-stops. So with house price declines likely to continue over the next few years, if you're thinking about selling, I suggest you try to do so now. If you wait for a couple of years, hoping for a price rebound, you'll be disappointed when you may have to settle for substantially less.
Hoping your longs go up and your shorts go down,
Marc
Over the first half of the year, foreclosure filings rocketed up 58% to 925,986, compared with the same period in 2006. And the second half of 2007 has started in similarly ugly fashion. RealtyTrac said July foreclosure filings jumped 9% compared with June's figures. Year-over-year, the number rocketed up by 93% to 179,599. This puts the U.S. well on track to exceed two million this year, which would put even more houses on the market and further erode values.
The Smart Profits Report
Friday, August 31, 2007
We've Reached A Tipping Point... Get Out Now
By Marc Lichtenfeld
Senior Analyst, Mt. Vernon Research
In July, existing home sales fell for the fifth straight month.
The number of homes on the market hit a 16-year high. Since June alone, supply has risen by 5%.
The National Association of Realtors says if no more new homes were built, it would still take over 9 months to sell all the existing houses on the market.
To put it mildly, this is one tough environment. The word on the street is that buyers and sellers have been engaged in a fierce faceoff.
Buyers: These folks know they have the sellers over a barrel and are simply waiting for the price to come down.
Sellers: Those looking to sell still remember the astronomical prices that their neighbors received in 2005 – and are refusing to budge.
Until now...
From $505,000 To $395,000
In July, the median home price in the U.S. slid by 0.6% to $228,900, compared with July 2006. It was the 12th straight month that home prices fell. In the second quarter, home prices fell 3.2% – the biggest drop since the S&P began its Case/Shiller National Home Price Index in 1987 and news that sent the index to its lowest point ever.
And with prices dropping fast, the e-mail below tells the story of increasingly desperate sellers. In many previously hot real estate markets, investors bought houses and assumed they could then swiftly sell them for a quick n' easy profit.
But that isn't happening any more. Sellers are now stuck with houses and need to dump them fast, before the market drops any further. The e-mail below is from a Florida realtor to his client, letting him know of other similar houses on the market. The client's house was listed at $469,000.
Here are the details of your closest competition. There are 4 that are definitely "Deals."
#1: 06XX Old Ham: Your model: Was 505K now pre-foreclosure @ 395K OUCH!!!!
#2: 105XX Galleria: New on Market 5-bed Turquoise + Pool @ 425K
#3: 105XX Galleria: Turquoise Model @ 420K, dropped from 480K
#4: 104XX Galleria: Your Model @ 450K
The recipient of the e-mail, along with seller #4, probably expected to get around $450,000 for their home. But now, a seller headed toward foreclosure has taken them out at the knees by pricing $55,000 below the current market. And keep in mind... an interested buyer will smell the desperation like a shark smells a bleeding dolphin. Will the seller accept $375,000? What choice do they have? That drives the price of the other houses down even more.
The rest of the sellers in this community will have to wait until house #1 closes and hope that the market returns to more rational prices, otherwise they will have to come down even lower. But that could be a long time coming.
This type of scenario is playing out in many parts of the country, too.
Think Real Estate Always Goes Up? Think Again...
Perhaps you're lucky enough to own a home in a strong market like Austin, TX or Asheville, NC. But if you're not, you can still sleep soundly, clinging onto the conventional wisdom that tells you to hang on for a few years if you don't have to sell and that real estate always goes up, right? Not so fast...
If you look at the history of real estate in this country, you'll be shocked at the numbers. According to Robert Shiller in his book "Irrational Exuberance," the real price increase from 1890 to 2004 was a paltry 0.4% per year. Sure, we've seen several price spikes, such as after World War II, the late 1970s and the current decade. But after the post-war rise in the late 1940s all the way through to the late 1970s, real estate prices barely budged.
Want To Sell? With Metro Areas Sinking, Do It Now
So what's the bottom line here? If you're in the home that you plan to be in for a long while, there's likely nothing to worry about. However, if you expect to sell your house in a couple of years "when prices come back," you may be out of luck.
As Shiller soberly states: "The pullback in the U.S. residential real estate market is showing no signs of slowing down." And in most parts of the country that had previously hot markets, sellers now have little choice but to slash prices if they want their house to move. Of the 20 U.S. metropolitan areas in the National Home Price Index, 17 showed a decline in their annual growth rates from May's figures.
But unfortunately, the real estate market isn't like the stock market, where you can employ sell-stops. So with house price declines likely to continue over the next few years, if you're thinking about selling, I suggest you try to do so now. If you wait for a couple of years, hoping for a price rebound, you'll be disappointed when you may have to settle for substantially less.
Hoping your longs go up and your shorts go down,
Marc
Over the first half of the year, foreclosure filings rocketed up 58% to 925,986, compared with the same period in 2006. And the second half of 2007 has started in similarly ugly fashion. RealtyTrac said July foreclosure filings jumped 9% compared with June's figures. Year-over-year, the number rocketed up by 93% to 179,599. This puts the U.S. well on track to exceed two million this year, which would put even more houses on the market and further erode values.
That's it- I'm buying a motorhome. If I don't get what I want out of it when I go to sell, I can just drive to the best market conditions! 
LOL!
LOL!Bassic83, that's damn smart man !
It's nice to see what a strong turn this thread has taken, well off the "Beginning" level at this point, but still a discussion anyone can follow and I suggest learn a great deal from. Kudos to all.
Per previous posts, I'd gotten out of uranium luckily not far off the top and am now taking positions again at what I expect (and hope!) will be not far off the bottom.
A good cheap one we already hold is BAY.v and we have some uranium exposure via FRP.v and RH.v I'd add some BAY, but there's no cash in the kitty of the example portfolio and nothing I'm quite prepared to jettision to free up funds. For those keen though, other good uranium grabs have been previously discussed in the thread and they include LAM.to , PNP.to , MGA.to , FRG.to , etc.
Despite the markets tanking recently, the example portfolio is not that far off its highs (down only 16% from its highs). That's largely thanks to moving a greater amount than the original amount we started with into a quality stock such as HPS-A for the stated purpose of weathering an expected downturn. You can look back to posts I made in 2005 and find me calling for a big market setback in the middle of '07 and often naming the credit/housing bubble bursting as the expected reason for it. In the regard of markets crashing and economic malaise in the West, we ain't seen nothin' yet. For now though, I think we're due for a bounce and for a run on gold, oil, and uranium which will see those related stocks counter any market slide I hope. I still think we'll see a much lower US dollar, which affects everyone and which everyone should overstand [sic] whether they live and spend in the US or not. A key read, sooner than later, is "Empire of Debt" by Bonner and Wiggin.
I also suggested in the past that friendly Western nations should form an OPEC of sort for uranium and nuclear technology if we're at all serious in the West about homeland security and not being addicted to "Axis of Evil" oil. And here we go - http://ca.news.yahoo.com/s/capress/070903/national/harper_apec
Note too that the slight slide we've seen vs the markets deeper tanking of late has been despite holding some of these stocks much deeper into the red than I normally would, and even deeper than I stated previously I would, but I'm trying not to affect too much trading in this example especially not when the markets are very volatile as they have been of late. One should trade proactively, not reactively.
I did once say, and will say again, that one should as a rule *never* add to losing trades. The concept of averaging down is not a good one. Buy winners, not losers. In the case of the BAY.v example I made above in which I said I'd add to it, it's a matter of observing the trend, markets, and sector. In that light, it's not a contradiction - there are no absolutes - but in general people should absolutely avoid "averaging down", which itself is a different concept than "averaging in" to a full position over time. More on that if anyone cares. Much of what I write might not be that clear at first, as it's off-the-cuff but can always be elaborated on by me or others and also contradicted whenever possible.
Anyway,
As always, these are just example of some of my trading. Could be yours, or not, but that's up to you to live and learn and not just copy what you see on a message board.
It's nice to see what a strong turn this thread has taken, well off the "Beginning" level at this point, but still a discussion anyone can follow and I suggest learn a great deal from. Kudos to all.
Per previous posts, I'd gotten out of uranium luckily not far off the top and am now taking positions again at what I expect (and hope!) will be not far off the bottom.
A good cheap one we already hold is BAY.v and we have some uranium exposure via FRP.v and RH.v I'd add some BAY, but there's no cash in the kitty of the example portfolio and nothing I'm quite prepared to jettision to free up funds. For those keen though, other good uranium grabs have been previously discussed in the thread and they include LAM.to , PNP.to , MGA.to , FRG.to , etc.
Despite the markets tanking recently, the example portfolio is not that far off its highs (down only 16% from its highs). That's largely thanks to moving a greater amount than the original amount we started with into a quality stock such as HPS-A for the stated purpose of weathering an expected downturn. You can look back to posts I made in 2005 and find me calling for a big market setback in the middle of '07 and often naming the credit/housing bubble bursting as the expected reason for it. In the regard of markets crashing and economic malaise in the West, we ain't seen nothin' yet. For now though, I think we're due for a bounce and for a run on gold, oil, and uranium which will see those related stocks counter any market slide I hope. I still think we'll see a much lower US dollar, which affects everyone and which everyone should overstand [sic] whether they live and spend in the US or not. A key read, sooner than later, is "Empire of Debt" by Bonner and Wiggin.
I also suggested in the past that friendly Western nations should form an OPEC of sort for uranium and nuclear technology if we're at all serious in the West about homeland security and not being addicted to "Axis of Evil" oil. And here we go - http://ca.news.yahoo.com/s/capress/070903/national/harper_apec
Note too that the slight slide we've seen vs the markets deeper tanking of late has been despite holding some of these stocks much deeper into the red than I normally would, and even deeper than I stated previously I would, but I'm trying not to affect too much trading in this example especially not when the markets are very volatile as they have been of late. One should trade proactively, not reactively.
I did once say, and will say again, that one should as a rule *never* add to losing trades. The concept of averaging down is not a good one. Buy winners, not losers. In the case of the BAY.v example I made above in which I said I'd add to it, it's a matter of observing the trend, markets, and sector. In that light, it's not a contradiction - there are no absolutes - but in general people should absolutely avoid "averaging down", which itself is a different concept than "averaging in" to a full position over time. More on that if anyone cares. Much of what I write might not be that clear at first, as it's off-the-cuff but can always be elaborated on by me or others and also contradicted whenever possible.
Anyway,
Code:
ticker.exchange # of shares held price paid current price % gain
RH.v 100 .44 .69 57
FRP.v 200 .46 .59 28
BAY.v 100 1.61 .69 (57)
HPS-A.to 100 11.90 13.00 9
NEM.to 100 4.08 4.45 9
ER.to 200 .85 .70 (18)
RSG.v 400 .15 (12)
Cash $8
[b]Net Gain to date per the trades in this thread is 121% in 18 months.[/b]As always, these are just example of some of my trading. Could be yours, or not, but that's up to you to live and learn and not just copy what you see on a message board.
