What about base metals like iron ore?
[quote]Headhunter wrote:
THIS IS BAD.
The Chi-comms ordered the guys in charge of their trillions to pull in their horns and only buy US gov’t guaranteed debt instruments. This means that extremely intelligent people in charge of trillions (who probably get shot if they fuck up) are bailing.
http://www.marketoracle.co.uk/Article17217.html
"When the worldâ??s biggest investor turns risk-averse, that is something you take notice ofâ?¦â??
â??China orders retreat from risky assetsâ??. Ambrose Evans-Pritchard, Telegraph.co.uk, 2/10/10
Indeed! Investors and Traders should take note! Chinaâ??s Funds Managers are very savvy. The Chief Investment Officer, Mr. Zhu, was until recently head of hedge fund operations for U.S. financial giant PIMCO.
As well, China just increased bank reserve requirements resulting in a worldwide tumble in Equities Markets. The Powerful Chinese Dragon is sending a clear signal: if The West does not cut back on its borrowing and spending binge, The Dragon will push them to do it."
[/quote]
Almost everyone is Risk-averse, nice try.
[quote]PB Andy wrote:
[quote]JEATON wrote:
[quote]PB Andy wrote:
Seems like a good thread for economic advice. For awhile I wanted to invest 3k in a mutual fund over at Vanguard, is that not a smart thing to do anymore? I know that the economy is not ‘fixed’ and before this crisis happened, I was more optimistic about investing. Is investing in gold the answer now?
Granted, I wanted to invest in a mutual fund mainly for retirement, so 30+ years or so. Does that even work with gold? Does gold “grow”?[/quote]
Andy,
I will give you one man’s opinion.
$3000 dollars is no small some of money. It is a good start.
However, from an investment standpoint, it is not a big sum either. If this was speculative money, meaning you don’t want to loose it but would not be hurt is it happened, I would give you some suggestions. I do not get the impression this description fits you right now.
My advise, keep it in cash in a safe bank or in a large, safe home safe. The market just came off one of the biggest one year runs ever, based on predictions that have not come to pass. I do not see a repeat in the near future. Hold on to you money. Save it. Don’t touch it. There will be a time in the future to put it to work. Not now.
Good luck.[/quote]
Could you explain ‘speculative money’ again, I didn’t quite understand from your post. The reasons for my investment is basically long-term growth, i.e. retirement. So 30+ years, get my hand in some international markets, and actually invest around $4100 instead. I was looking at my Vanguard account and I actually had $3,100 in the Money Market (which is pointless for long term growth), and $3000 in the Vanguard Total Stock Market (which has no int’l stocks). So I went ahead and put all of the money of the Total Stock Market in the Vanguard LifeStrategy Growth fund (15% int’l markets, overall it is 80% stocks/20% bonds), along with $1000 from the Money Market.
My reason for posting this is I am not looking for short-term growth, so why not just leave it in? I may not expect a big jump in growth in the next year which has happened recently, but as long as it steadily goes up (which I’m not sure will happen in the next 5 years).[/quote]
If you are looking for long term and have time to investigate I would suggest picking up either Applied Value Investing and Security Analysis. I have both, the first one is an easier read, but the second is going to get you further.
First:Applied Value Investing: The Practical Application of Benjamin Graham and ... - Joseph Calandro - Google Books
Second: Security Analysis: Sixth Edition, Foreword by Warren Buffett - Benjamin Graham, David Dodd - Google Books
[quote]JoeGood wrote:
[quote]Headhunter wrote:
[quote]JoeGood wrote:
[quote]Headhunter wrote:
The Case for Japanese Small Stocks (world’s cheapest stock market):
Div 2.36% Price to Book .83 Price to Sales .4
These numbers are far better than any other market in the world. May I also add that a price to book of .83 means that you can buy $1 of assets for 83 cents?
http://www.marketoracle.co.uk/Article17629.html
Although very leery of stocks right now, I did just put a goodly chunk into Fidelity’s Japan Smaller Companies fund, to ameliorate risk.
[/quote]
The Japanesse econmy is a trainwreck and has been moribund for years.
Sometimes things are cheap for a reason.
[/quote]
My best friend told me the same thing in 2001, when I loaded up on gold and mining stocks. Gold was $270 per ounce.
Buy when the blood is running in the streets.
[/quote]
Thats actually a good axiom for investing but in this case there has been blood in the streets for two decades. Even more importantly, you think the US is in terrible shape and it makes up around 16% of Japanese trade. The EU is in far worse shape than the US and Japan also gets a large amount of trade from there. China’s issues are just starting to emerge so who are the Japanese copmpanies going to be selling to if thigns are as bad as you say.
In any case why would anyone who claims to know anything about investing buy into a mutual fund and let someone else do their stock picking?
Metals have done okay since 2001 but no where near as good as other things. Now buying Apple in 2001 would have been something to brag about and no I didn’t buy it then either.[/quote]
My wife has a boatload of Apple in one of her trust funds. I also am not familiar with Japanese small stocks.
Japanese small stocks have the added benefit (besides being very cheap) of selling more to a home market. Japanese consumers prefer all things Japanese.
And if I can buy $1 for 83 cents, I like that. I’m not a gambler or short seller.
Continue on…
[quote]Headhunter wrote:
[quote]JoeGood wrote:
[quote]Headhunter wrote:
[quote]JoeGood wrote:
[quote]Headhunter wrote:
The Case for Japanese Small Stocks (world’s cheapest stock market):
Div 2.36% Price to Book .83 Price to Sales .4
These numbers are far better than any other market in the world. May I also add that a price to book of .83 means that you can buy $1 of assets for 83 cents?
http://www.marketoracle.co.uk/Article17629.html
Although very leery of stocks right now, I did just put a goodly chunk into Fidelity’s Japan Smaller Companies fund, to ameliorate risk.
[/quote]
The Japanesse econmy is a trainwreck and has been moribund for years.
Sometimes things are cheap for a reason.
[/quote]
My best friend told me the same thing in 2001, when I loaded up on gold and mining stocks. Gold was $270 per ounce.
Buy when the blood is running in the streets.
[/quote]
Thats actually a good axiom for investing but in this case there has been blood in the streets for two decades. Even more importantly, you think the US is in terrible shape and it makes up around 16% of Japanese trade.
The EU is in far worse shape than the US and Japan also gets a large amount of trade from there. China’s issues are just starting to emerge so who are the Japanese copmpanies going to be selling to if thigns are as bad as you say.
In any case why would anyone who claims to know anything about investing buy into a mutual fund and let someone else do their stock picking?
Metals have done okay since 2001 but no where near as good as other things. Now buying Apple in 2001 would have been something to brag about and no I didn’t buy it then either.[/quote]
My wife has a boatload of Apple in one of her trust funds. I also am not familiar with Japanese small stocks.
Japanese small stocks have the added benefit (besides being very cheap) of selling more to a home market. Japanese consumers prefer all things Japanese.
And if I can buy $1 for 83 cents, I like that. I’m not a gambler or short seller.
Continue on…
[/quote]
The Japanese home demographic is horrible. I am very fond of value investing which is why the mutual fund thing makes no sense. If you believe the market there has values then finding a few good ones is not rocket science. But with a fund you are also going to get the dogs as well.
On a thread related note, I’m interested to see if the DOW holds 10500 today. If it holds for 2-3 days I think it becomes a new temporary bottom.
Day ? (lost track)
Sorry for the long delay. I started a new job last Monday, and I still do not have either computer back. I went out and bought my wife a netbook yesterday, and I am using it now. Feels like I’m typing on my Blackberry.
My theory has been tested over the last two weeks. The retracement, if that is what it is, has been far stronger than I anticipated. The good news is that we are at a make or break point. The NAS has reached a new high. The DOW and S&P have not. If they do run to new highs, I have to step away until a new pattern emerges. I still have about 10 put contracts on the SPY. I am watching the previous highs. If we surpass them I’m out. I need a tun down roughly immediately. The next few days will be telling.
It is important to note that the market is very overextended. A sell off from this point will not make me leverage in further. I will look at the “shape” of any sell off and evaluate from there.
Hey JEATON,
I agree that the market is overbought on a short term basis.
Its funny that our analysis of the market is very similar yet we come to opposite conclusions. Until, there is another crisis event, I am betting on the trillions of liquidity continue to power all asset classes higher. You are secure in your deflationary viewpoint. I believe that you are fighting the primary trend in the market.
Take Care.
The S&P 500 PE is still above 20 and the dividend yield is < 2%. I’m amazed that the market is holding up so well.
Its true that there aren’t many alternatives, but if and when interest rates go above the near zero rates we have now, those rates will compete with dividends.
I just don’t see what’s holding up this market.
[quote]Headhunter wrote:
The S&P 500 PE is still above 20 and the dividend yield is < 2%. I’m amazed that the market is holding up so well.
Its true that there aren’t many alternatives, but if and when interest rates go above the near zero rates we have now, those rates will compete with dividends.
I just don’t see what’s holding up this market.[/quote]
The S&P 500 trailing PE is a shade over 20, the forward PE is around 14.5. Thats a big difference.
[quote]Headhunter wrote:
The S&P 500 PE is still above 20 and the dividend yield is < 2%. I’m amazed that the market is holding up so well.
Its true that there aren’t many alternatives, but if and when interest rates go above the near zero rates we have now, those rates will compete with dividends.
I just don’t see what’s holding up this market.[/quote]
The S&P 500 trailing PE is a shade over 20, the forward PE is around 14.5. Thats a big difference.
Lots of inter market divergences going on. NASDAQ at new high while DOW is still below the high it set two months ago. We are definitely overbought, and the Dow Theory just gave off a non confirmation yesterday, indicating that we are in a bear market retracement rather than a new bull market leg.
What concerns me most about this view is the action of this past Friday. The NYSE advance/decline ration was the strongest since July. This is not typical behavior for a market top.
However, the charts look as though the dollar is ready for another move up, and gold looks ready for a leg down. These two actions would support a sell off from this level.
So, what is going to happen? Hell if I know. My money is still short, but will not be for long if a sell of does not begin very soon from these levels.
We will see what happens tomorrow.
[quote]JEATON wrote:
Lots of inter market divergences going on. NASDAQ at new high while DOW is still below the high it set two months ago. We are definitely overbought, and the Dow Theory just gave off a non confirmation yesterday, indicating that we are in a bear market retracement rather than a new bull market leg.
What concerns me most about this view is the action of this past Friday. The NYSE advance/decline ration was the strongest since July. This is not typical behavior for a market top.
However, the charts look as though the dollar is ready for another move up, and gold looks ready for a leg down. These two actions would support a sell off from this level.
So, what is going to happen? Hell if I know. My money is still short, but will not be for long if a sell of does not begin very soon from these levels.
We will see what happens tomorrow. [/quote]
Don’t forget about all those commercial RE re-sets coming due in the next few months. Banks are going to be very reluctant to re-fi a property they made a loan on of $10,000,000 when that property is now worth $6,000,000.
They will call those loans in, the ownwers will walk and the banks will be goat fucked.
Shorting regional banks might be one helluva good play (which I would never do).
I think the market is topping out on a short term basis. The non confirmation of the dollar and weakness in Gold are definite signs. I think we will retest the February lows within the month.
Sold about 50% of my long positions and took some short positions.
What are guys meaning by non-confirmation of the dollar?
And thanks Brother Chris, just picked up Security Analysis.
I took some profits in tech yesterday, will be buying puts on Brown Forman, and put some tight stops under my spec bank plays. I think we might see 10% up from here but I think its equally likely to see 10-15% down.
Hello everyone,
Sorry to have bailed on this thread for the last two weeks. After vacation, losing two computers for a while, and starting a new job, my attentions have been elsewhere.
Some scattered thoughts…
The DOW has not achieved a new recovery high, but the S&P and NASDAQ have. I have spent a little time looking over current and past charts and have noticed some similarities with past events. In the double top of 2000 the Dow did not make a new high, while the S&P and Nasdaq did before experiencing large sell offs. In 2007 both the DOW and S&P double topped before the BIG sell off.
What does it mean? Maybe nothing. But the charts, volume, advance/decline ratios, nothing looks “right.” It all looks forced with little substance behind the rise. You all know that I did not expect to see these same highs again when I began this thread. I was wrong, and usually have no problem stepping away when a trade goes against me. This time I am having difficulty believing in this current rally.
I will look some more and try to add something substantive tomorrow.
Oh yeah…
Gold has really taken off the last day and a half. Oversold bounce or new bull? Dollar not really supporting the move.
Strange action indeed.
[quote]JEATON wrote:
Oh yeah…
Gold has really taken off the last day and a half. Oversold bounce or new bull? Dollar not really supporting the move.
Strange action indeed.
[/quote]
Very soon Treasury yields will have to rise to get the world to continue to finance Washingtonâ??s spending spree. So whether or not Bernanke wants it, or even likes it, interest rates are heading higher. That is bad news for the economy and for President Obama who will almost certainly not be re-elected.
Rising rates are, however, good news for the nation and for gold investors. Rising rates ensure falling stock and bond prices and a rush to gold. It happened during the Carter administration and it has already begun during Obamaâ??s term.
Action to take: Sell all bond instruments and Big Board stocks and use the funds to buy bullion, either in physical form or blue-chip gold mining stocks.
PPI numbers were down yesterday, I reset my stops under my spec banks a touch higher. I also bought the June(I think ) 65 puts on Boeing. I’m also pretty sure my next move is to go short on the British pound. I’m thinking a 10% correction is pretty close at hand. If I’m right I’m going to use it to pile into energy stocks, particularly those that derive most of their income from outside the US.
So far this year I’m up big and it might be time to get a touch more defensive.
I had to retighten my stops under my spec bank stocks as they keep increasing. My puts are down a little but I’m content to hold them. I’m thiking about buying Boeing puts because I think the run up has been over done.