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So I'm not a dumbass to sit on my 2009 Roth contribution money until sometime between Jan1 and April 15 2010? I hope so, because I've been watching this shit run up since late summer and I don't believe it at all. Wall Street wants bonuses, Obama wants to have a State of the Union where he can talk about the stock market returning, and everyone wants to believe that all the money we threw at the meltdown actually solved the problem.Quote:
Originally Posted by 4matic
Not the doom and gloomers. They want you to believe businesses will cease to exist and all businesses should require internal growth, and therefore will fail because people arent going to buy any more cars or people will cease to use toothpaste. Was the problem in the economy something that will lead to a 4200 Dow? More than half of the current economy will disappear? Isnt that a little drastic especially considering the drop it already has taken in March? And that was helped in large part to forced selling, not shitty businesses.Quote:
Originally Posted by Platinum Pete
Quote:
Originally Posted by Platinum Pete
No, you are not a dumbass. I wouldn't chase this thing unless you can trade it. The risk reward is too big right now. What's your equity/income/cash ratio? I'm 65/35 equity to income.
Quote:
Originally Posted by Benny Profane
"Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary." - Alan Greenspan, July 30, 1998.
And oil keeps climbing, climbing, climbing. I love it. Nothing will kill any perceived economic "recovery" quicker like a return to the good ole' days of $100+ a barrel oil. Keep printing that money Benny!
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Originally Posted by ass-to-mouth
Oil has been in a sideways pattern for months. It might be resuming the uptrend but the increase in front month pricing due contango has skewed the chart.
For the stock market to continue we need oil under $100.
BING BING BING
10,000
Just like a lot of other things going on, it's hard to find historical analogies for this rally, although there was quite the rally in 1930 before the deep slide.
This is interesting, though, and supports my argument that it's just a bunch of traders and funds acting among themselves. The shoeshine boy with the tip just ain't in the game.
ANNANDALE, Va. (MarketWatch) -- Mutual fund investor behavior just gets curiouser and curiouser, as Alice in Wonderland might say.
From the stock market's low in March through the end of this past August, as I noted in a column a month ago, mutual fund investors invested virtually no new money in the stock market. This suggested that there remained a high level of skepticism about that rally and, from a contrarian point of view, that skepticism was bullish. ( Read my September 18 column.)
Just as contrarians anticipated, the stock market turned in a strong performance during September.
Well, guess what: Despite September's unexpected strength, fund flows actually went negative during the month -- investors pulled more money out of domestic equity mutual funds in September than new money they put in.
Consider the data from TrimTabs Investment Research. The net outflow for the month of September from domestic equity open-end mutual funds was $11 billion -- the biggest monthly outflow since March, the month in which the bear market hit bottom. This trend continued for the first five trading sessions of October (through this last Wednesday, in other words), over which time an additional $4.1 billion was pulled out.
Such a pronounced outflow is really quite amazing. Imagine if, last March, I asked you to imagine what fund investors' reaction would be if, over the next six months, the stock market would undergo one of its strongest rallies since the 1930s -- one in which the S&P 500 index would rise by 59% and the NASDAQ Composite index would gain 69%.
My guess is most of us, myself included, would have predicted that a rally of such proportions would, later if not sooner, seduce skeptical investors back into the market.
How wrong we/I would have been!
This is of more than just passing historical interest. Contrarian analysts argue that major market tops are more often than not accompanied by exuberance and optimism, not the pessimism and despair that is evident in mutual fund investors' recent behavior.
This contrarian perspective doesn't constitute a guarantee that the rally will keep going, needless to say. But if the market were to turn down from here, it would be one of those extremely rare occasions in which such a move was widely anticipated by the typical mutual fund investor.
By the way, the other trend I mentioned in my mid-September column appears to be alive and well and, if anything, getting stronger: I am referring to mutual fund investors' love affair with bonds. According to TrimTabs, open-end bond mutual funds in September had their strongest month of the year in terms of net new cash invested in them. And, if we extrapolate on the data for the first five trading sessions of October, October might be a month of even bigger net inflows.
This is why, as I pointed out a month ago, contrarians are far more worried about bonds right now than stocks.
So far, at least, that worry has proven to either be ungrounded or premature.
But the mutual fund flow data for the last month does nothing to reduce contrarians' concern and, instead, actually heightens it.
People are getting into bonds a bit late...High Yield is up 50% YTD, Investment grade has come back and made up a lot of its ground (around 11% over the 1 year). If the economy is so bad, and these stocks are going to crumble, why point to an article showing people are hopping into bond funds and out of domestic stocks? I dont get why the traders are doing this and the shoeshine guy isnt factoring in...wouldnt these debt-laden companies get hit first?
Also, it isnt a secret the emerging market funds are getting a ton of play lately. The US is in a rut and will take time no get out of...nothing that the govt will let permeate, but there are other sectors of the market that deserve the attention, not just the DOW. Check out China, Brazil, other commodity-based markets (AUST) that serve larger countries needs for growth.
I sold around 9500 and got back in around 7000. Considering taking some profits at this point.
Hmmm.....we made it so far without the forecasted October implosion, so I am cautiously optimistic through end of the year. However, I would never discourage anyone from taking profits. Ed O Neil once suggested that if you had the good fortune to double your money in an idea, to sell half and then let the rest ride until it had a 20% pull back from it's high. Advise I follow.Quote:
Originally Posted by Rontele
I just got kinda nostalgic reading the first couple pages of the thread again after all this time. Those were the days.
Yeah, we're all gonna sit down for a couple hours and read that.Quote:
Originally Posted by Benny Profane
More like 20 minutes (unless you have to sound out the words). Well spent 20 minutes, I'd say.Quote:
Originally Posted by iceman
It's affecting the markets. Caution is the word.. I still think November has a chance to be a good month but I'm rebalalancing some today. More cash heading to Mr. Gross.Quote:
Originally Posted by wcf3
Warren Buffett's Berkshire Hathaway on Tuesday said it is spending $44 billion to buy out railroad operator Burlington Northern Santa Fe, sealing the biggest acquisition in the company's history in what the famed investor called "an all-in wager on the economic future of the United States."
"Our country's future prosperity depends on its having an efficient and well-maintained rail system," Buffett said in a press release. "Conversely, America must grow and prosper for railroads to do well."
He added, "Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets."
I figured the market would rally on that news.
Shows what I know
Lots of cross currents this week. Aussie raised rates. 5 central banks have announcements and employment on Friday. Also, gold is rallying in the face of a strong dollar. That's pretty bearish for equity.Quote:
Originally Posted by Rontele
http://www.gmo.com/websitecontent/JGLetter_ALL_3Q09.pdf
Grantham's Q3 letter. Worth a read, particularly for his continued call-outs.
What's he saying there? Does he think he's the president? Advocating infrastructure spending? Or, is the essence in what he isn't saying? How much money is he going to make? Did he get a spectacular deal? Did the other side have to sell, and, for what reason?Quote:
Originally Posted by 4matic
Before the bust it was private jet time sharing, now it's railroads. I scratch my head. I thought he was an insurance salesman.
He's not a "doomer" like you. That's all.Quote:
Originally Posted by Benny Profane
Yeah, but what is he saying? What's his game?
I agree with what he has to say except that Bernanke had to play the bad hand he was dealt. This mess is not his fault. Would a Volker style unwinding have been efficient? Yes.. but the consequences would have been dire in the short term.Quote:
Originally Posted by JimmyCarter
"Bernanke, the most passionate cheerleader of
Greenspan’s follies, is picked as his replacement,
partly, it seems, for his belief that U.S. house
prices would never decline and that at their peak
in late 2005 they largely just refl ected the unusual
strength of the U.S. economy."
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Originally Posted by Benny Profane
He bought a $100 a share public company for $44 billion to make money..
Right, that's what I think. So just say that. Don't go talking from the mountain top.Quote:
Originally Posted by 4matic
SAN FRANCISCO (MarketWatch) -- Warren Buffett's $44 billion bet on the Burlington Northern Santa Fe railroad is the kind of big, bold move any 19th century American capitalist would have loved -- and understood.
http://www.marketwatch.com/story/buf...der-2009-11-03
Clever move, fighting cut-and-paste with cut-and-paste!
You see? There you go. Our country's "future prosperity" depends on the average American having a decent job producing a livable wage so that their kids can get a decent education, not enriching Goldman Sachs with commodity plays and covering all those deals with derivatives, Mr. Buffett.
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Originally Posted by iceman
It was a short comment. Mea culpa..
dumbass:Quote:
Originally Posted by Benny Profane
"after nearly a generation of feasting on derivatives, appears to be acquiring an appetite for core industrial assets right here at home"
Oh, and do you think Mr. buffett has suddenly become a 19th century railroad magnate and turned his back on 21st century financial manipulation? He has a ton of money invested in Goldman, too, smartass.Quote:
Originally Posted by 4matic
I see no point with this comment. Buffett used an investment partner to broker the deal. You want a depression so you can say told you so. Dirivatives and investment banks are not going away.Quote:
Originally Posted by Benny Profane
No, I want a depression so that everything I buy will be much cheaper than it is today, and i won't have to chase returns with my money because deflation is giving me that return in spades.Quote:
Originally Posted by 4matic
But I don't see what that has to do with Warren.
Benny wants a depression because the ex took all his money and he wants everybody else to be as broke as him.
And she bought a bunch of thongs, knowing I'd be tortured every night dreaming of how she looked in them.
That would be depressing.
He's going "double or nothing" Benny. Make sense now? Oh wait...Quote:
Originally Posted by Benny Profane
Buffett sees a huge barrier to entry into the RR biz. How many RR's are left in America? Look at the economies of scale to move a ton of freight on steel tracks over concrete and asphalt. He sees a future of Americans buying cheap Chinese garbage, and America selling commodities on a weak dollar. It's a win-win for Buffett. Of course if what Benny sees comes to fruition, then Buffett has a high priced RR that he can play with at Christmas time.Quote:
Originally Posted by 4matic