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  #21  
Unread 02-22-2010, 05:34 PM
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JMo87 JMo87 is offline
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Originally Posted by Myles.Buckley View Post
Toyota stocks were on sale two weeks ago.... and GM last year.... and Chrysler.... and so on.
Exactly, which is a great argument against picking stocks. Who could've foreseen the troubles Toyoda is facing today just a few weeks ago.

Why expose yourself to that kind of risk when you can hedge your bets by buying a little piece of everything and riding the rising tide? It's all about reducing your exposure to unnecessary risk and keeping expenses low.

The Automatic Millionare is a good read, as is A Random Walk Down Wall Street.
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  #22  
Unread 02-22-2010, 06:31 PM
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Originally Posted by Elf View Post
I said this about retirement money invested in mutual funds. Not stock market in general. With mutual funds you have zero control,
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suppose now the market will recover and in 20-30 years there is another crash? Goodbye retirement? If you look at the past, saying we have another 30-40 years until a next crash is pretty optimistic. And putting money in a "safe" plan will usually lead to money made even when inflation is factored in because of tax
and (well in my country) the employer will match whatever you put in.

Investing in the stock market short term is a good thing, long term it's a disaster waiting to happen.
You're drawing a distinction between investing in mutual funds vs. stocks....you're splitting hairs and its not worth it. If the downside your talking about is a crash, then your screwed if you're in the market, period....be it a mutual fund or your own picks. Given the choice, don't try to be a stock picker, unless you want to do it w/ a small portion of your money as a hobby.

In reality a crash is a risk. But its the exact same as, say, a plane crash. If it happens, yeah its bad for everybody...but whats the alternative? Driving everywhere? Some risks you just have to stomach. And if you know something about markets you'd agree being in stocks right now is an amazing risk/reward.

Think about what your saying....so there's another crash within the next 20 years...hell, even ten....you're basically making a bet that the stock market will return zero for 20 years? or 30 ect? What I'm saying is even with another crash....over the course of 10, 20 years etc....it's still gonna be higher. The US is the second largest economy in the world.....over that time period, even with poor business or politics....population growth alone increase the value of the market as a whole.

So what scenerio would make it right to not be in stocks long term right now? Total economic collapse...your 401k will be the last thing you'll worry about.....zero population growth? no chance.... Like I tried to say before....not being in stocks right now is like betting on the end of the world....and as I said if you're right you won't be around to collect.

Quote:
suppose now the market will recover and in 20-30 years there is another crash? Goodbye retirement? If you look at the past, saying we have another 30-40 years until a next crash is pretty optimistic. And putting money in a "safe" plan will usually lead to money made even when inflation is factored in because of tax
So basically....even if there is another crash...the odds of stocks being lower in 30 years than they are now is absurd.

When you say 'safe' what do you mean? fixed income? again, have fun making a few % before taxes. It's absolute insanity to put money in fixed income right now. There just IS NOT any fixed income right now that can beat the opportunity in the market (LONG TERM). A few months ago there were some deals w/ corporate bonds but even those weren't close.

I don't think you really know what you're talking about. And thats ok, its not your job, so why should you. But this stuff is my job....I put my money where my mouth is every single day....and I'm giving you a more informed opinion than any other you'll get for free. And better than probably 90% of those you'll pay for.


Quote:
Toyota stocks were on sale two weeks ago.... and GM last year.... and Chrysler.... and so on
Which is why you should leave the stock picking to experts unless it's something your doing as a hobby w/ money that isn't part of your retirement. A car company to invest in long term isn't a great idea. The whole industry is pretty sketchy, especially with how hard they're pushing to go to alternate fuels. Why would you risk money by investing in something the gov't and a lot of people would ideally want to minimize or dramatically change over the next few years. If you want to make a speculative play on that look for some company thats working on alternate fuels or somebody that would benefit from it. Car companies often are like airlines....not terribly invest able. FORD is the street's darling right now and they have some upside from gaining market share but the industry is in a tough spot so be careful there.

Quote:
Exactly, which is a great argument against picking stocks. Who could've foreseen the troubles Toyoda is facing today just a few weeks ago.

Why expose yourself to that kind of risk when you can hedge your bets by buying a little piece of everything and riding the rising tide? It's all about reducing your exposure to unnecessary risk and keeping expenses low.

The Automatic Millionare is a good read, as is A Random Walk Down Wall Street.
If you liked random walk read 'reminisces of a stock operator' to hear the other side of the coin. Even if your not in the market actively its an amazing book and shows a lot about how traders think, how psychology moves the markets.


I'm gonna say this: the opposition to stocks right now is exactly what will drive the market higher. There is more cash in money markets right now than there ever has been in history. That money WILL eventually seek more of a return, and move to stocks, and continue to drive prices higher. Every skeptic will eventually be a buyer. That's just how it works. Money seeks return....and as the market continues to find a bid higher and higher, money making 1% or so in MM will be drawn into the market. To simplify....there are still a lot of people that haven't bought yet....a lot of money thats not in stocks....and thats what's gonna fuel this bull market over the next few years.
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  #23  
Unread 02-22-2010, 06:43 PM
Myles.Buckley Myles.Buckley is offline
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As soon as "Big Car Company X" has a massive recall is when you should START buying up their stock. because the slightly jittery folks will be bailing first and when the sell orders drop the value more the real jittery folks start dumping too. as long as you are buying during that window you are ahead of the curve.

Years ago when the planes hit the WTC - while everyone else in the office was glued to the TV, I was on the phone with a buddy of mine (he's a broker) and he was yelling at his co-workers "TURN OFF THE DAMN TV AND AS SOON AS YOU SEE THOSE STOCK's DROP YOU BUY AND YOU KEEP ON BUYNG!"

we made a shedload
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  #24  
Unread 02-22-2010, 10:33 PM
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Originally Posted by Myles.Buckley View Post

Years ago when the planes hit the WTC - while everyone else in the office was glued to the TV, I was on the phone with a buddy of mine (he's a broker) and he was yelling at his co-workers "TURN OFF THE DAMN TV AND AS SOON AS YOU SEE THOSE STOCK's DROP YOU BUY AND YOU KEEP ON BUYNG!"

we made a shedload

You're a genius. Did you get a margin call though w/ the market in your face 100 pts or so till Nov?
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  #25  
Unread 02-23-2010, 07:24 AM
Myles.Buckley Myles.Buckley is offline
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You're a genius. Did you get a margin call though w/ the market in your face 100 pts or so till Nov?
I am not a genius - I learned from one.

The bulk of the buying was done in mid Sept / Early Oct as the margin calls were set at around 50 pts - the buying had slowed somewhat until the end of November when another batch was triggered.

Last edited by Myles.Buckley : 02-23-2010 at 07:27 AM.
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  #26  
Unread 02-23-2010, 07:51 AM
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imho trying to "time the market" is generally fruitless. I think a better strategy is to put a set amount of money into stocks each month. That way when prices are low you buy more, and when prices are high you buy less, automatically.

Thoughts?
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  #27  
Unread 02-23-2010, 08:04 AM
Myles.Buckley Myles.Buckley is offline
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Quote:
Originally Posted by JMo87 View Post
imho trying to "time the market" is generally fruitless. I think a better strategy is to put a set amount of money into stocks each month. That way when prices are low you buy more, and when prices are high you buy less, automatically.

Thoughts?
it works well enough

What some find works better is to have more than one stream of investing.

The first is what you describe, the monthly/biweekly/weekly methodical investment.

The second set is variable and set inversely to the market - when there is doom and gloom and declining markets you are buying more - and when the market is hot (like when oil was over $100/barrel) you buy a lot less (or none at all).
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  #28  
Unread 02-23-2010, 09:50 AM
Elf Elf is offline
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Originally Posted by Myles.Buckley View Post
Toyota stocks were on sale two weeks ago.... and GM last year.... and Chrysler.... and so on.
I'm not sure, but I don't think I bought em.

I don't think anyone did, you know with the automobile industry basicly being screwed and all. Infact, the only time I would've invested in the automobile industry was in like 1900.

And comparing plane crashes with market crashes... The chance of crashing with a car are far bigger then crashing with a plane. Driving somewhere is more dangerous then flying there.

But this is not about a maybe. It's not "maybe" the markets will crash. They will again sooner or later, and having stock that you can sell at anytime means you can minimize the losses. I sold it all when the US market started to go nuts. Here everyone was like "Noo that's just the greedy Americans, we're fine our markets are strong we have a unified Europe" and now some people have no retirement. No professional said sell your stocks because it's going to blow over. Of course all the professionals are still "very optimistic" because it wasn't their own retirement that got lost.

I'm going to bail on this one now, it seems the reality of the "professionals" is completely different from the one I'm living in.
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  #29  
Unread 02-23-2010, 10:51 AM
Myles.Buckley Myles.Buckley is offline
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Originally Posted by Elf View Post
I'm not sure, but I don't think I bought em.

I don't think anyone did, you know with the automobile industry basicly being screwed and all. Infact, the only time I would've invested in the automobile industry was in like 1900....
Of the car mgfrs. The only one I've bought was Toyota. and I know four others that bought Toyota stock recently too - the same day I did (the day after the 1rst wave of recall notices.)
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  #30  
Unread 02-23-2010, 10:57 AM
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Quote:
Originally Posted by JMo87 View Post
imho trying to "time the market" is generally fruitless. I think a better strategy is to put a set amount of money into stocks each month. That way when prices are low you buy more, and when prices are high you buy less, automatically.

Thoughts?
works well enough. There are people who have 'timed the market'...but its not something anybody can do. In the past few years the term "alpha" has come into vogue....a manager's alpha is his/her ability to beat the market. So S&P returns 10%, a manager is up 15%, his alpha is 5%....his discretionary decisions or system beat the market. A lot of managers consistently beat the market. Err, I'll say, there are a percentage of them that have beat the market consistently through different environments and a longer period of time. Paul Tutor Jones, Buffet, etc are a few that are well known, but there are others.

But for a retail guy just trying to gain exposure to the market, your plan is good. Just figure an amount you can consistently put in, each month, whether up or down.
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