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Are stocks a suckerís bet?
Foxnews ^ | 1/28/2013 | Peter Morici

Posted on 01/28/2013 4:35:16 PM PST by PieterCasparzen

With corporate profits at record levels and stocks regaining the ground lost during the financial crisis, Wall Street anxiously anticipates the return of the individual investors to equity markets. It may be a long wait, because the little guy may have concluded stocks are a sucker’s bet.

Investors, as opposed to traders, buy stocks in companies whose profits they expect to rise. The conventional wisdom says stock prices will follow profits up, but over the last two business cycles, that simply has not happened.

In March 2000, the S&P 500 first closed above 1500. Since corporate profits are up 135 percent but stocks have made virtually no gain since over the last thirteen years.

Buying stocks does not seem to pay any more, because most of the increased value created by higher profits has been captured by hedge funds, electronic traders, private equity funds, aggressive M&A shops, and trading desks at investment banks, which have multiplied over the last two decades.

(Excerpt) Read more at foxnews.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Foreign Affairs
KEYWORDS: jcsbthinktank; privateenterprise
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Yes, we need real private enterprise, not the capital markets monopoly that is SEC + Wall Street.
1 posted on 01/28/2013 4:35:27 PM PST by PieterCasparzen
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To: PieterCasparzen

I’ve made plenty of money on stocks over the past ten years. You just have to do proper analysis of the companies, and figure out how you’re going to get paid. A highly profitable company that throws away its cash is not what you want.


2 posted on 01/28/2013 4:37:50 PM PST by proxy_user
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To: Absolutely Nobama; Alex Murphy; Army Air Corps; azishot; bigbob; B.O. Plenty; BornToBeAmerican; ...

Ping

Founding Group

Covenant Private Enterprise Council

The American People vs. Globalism.

It's time for cultural change, not political theater

FReepmail me if you want to be on or off the JCSB Think Tank ping list.

3 posted on 01/28/2013 4:40:16 PM PST by PieterCasparzen (We have to fix things ourselves)
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To: PieterCasparzen

What, all stocks? That’s hardly possible. You must be able to buy cheap and sell dear something, at least.


4 posted on 01/28/2013 4:43:27 PM PST by Tublecane
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To: PieterCasparzen

With the DOW closing today at 13,881 where the all time (2007) high was 14,098... it’s hard to consider getting back in (100% cash currently). Seems like the only place for this puppy to go is down, and buying at the top ain’t my idea of investing...


5 posted on 01/28/2013 4:44:33 PM PST by grobdriver (Sic semper tyrannis!)
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To: PieterCasparzen

I have a friend who made over a million dollars on the futures market. I have no idea what that is but he was pretty wealthy before so I doubt it really made that much difference in his life.


6 posted on 01/28/2013 4:45:53 PM PST by yarddog (One shot one miss.)
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To: grobdriver
Seems like the only place for this puppy to go is down

But on the other hand, it may be that Barry and his minions will continue to prop up the market and get it to new highs in the next two years before the next election.

7 posted on 01/28/2013 4:48:52 PM PST by grobdriver (Sic semper tyrannis!)
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To: PieterCasparzen

Not if you are short.......


8 posted on 01/28/2013 4:51:39 PM PST by Osage Orange (MOLON LAVE)
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To: yarddog
Depends over what time frame...your friend made that money.

Fwiw-

9 posted on 01/28/2013 4:55:05 PM PST by Osage Orange (MOLON LAVE)
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To: proxy_user

I have as well. It takes a lot of studying and effort. I’ve found a few that have done well. It is a constant learning process, researching, defining entry and exit points, reading filings, studying the companies. But it has been worth it. I find that I can only concentrate on a few at a time, ideally no more than three. I’ve made a lot of mistakes over the years as well..but have done better than if I had left it all in a mutual fund or someone else’s hands. With today’s markets, it’s not for everyone.


10 posted on 01/28/2013 4:57:19 PM PST by SueRae (It isn't over. In God We Trust.)
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To: SueRae; All

No worries with a privately-held business. Keep making profits, you know what it’s problems are, if it goes bad shut it down.

There is no “market” for your stock to worry about. Book value, the value of the business is all yours.

If one is smart enough to figure out the vagueries of the stock market, one is certainly smart enough to run a business, IMHO.


11 posted on 01/28/2013 5:01:27 PM PST by PieterCasparzen (We have to fix things ourselves)
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To: grobdriver

Since the dollar has lost approximately 24% of it’s value during the last 5 years, the DOW would have to top 17,500 in today’s $ to equal 2007’s high of 14,164.


12 posted on 01/28/2013 5:02:23 PM PST by yadent
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To: dennisw

ping


13 posted on 01/28/2013 5:05:31 PM PST by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both)
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To: PieterCasparzen
the little guy may have concluded stocks are a sucker’s bet.

Apparently not everyone has battered-wife syndrome.

This isn't "sour grapes" on my part. I dabbled in the market just before the dot-com bubble burst, and doubled my few thousand bucks in less than a year. Got out and never got back in because I didn't understand what made the market go up and what made it go down.

If I could just follow those who control it - bet when they bet, and dump when they dump - I'd get back in. But house games are for suckers.
14 posted on 01/28/2013 5:13:34 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: PieterCasparzen
This Peter Morici guy's the President of Islamic Egypt. Don't listen to him.

He'll suck your brain out.

15 posted on 01/28/2013 5:20:24 PM PST by billorites (freepo ergo sum)
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To: PieterCasparzen

When dollars are printed, then sent out, they can ony purchase assets denominated in dollars. Thus US stocks wind up as the sump/dump.


16 posted on 01/28/2013 5:20:54 PM PST by jonose
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To: billorites

A Fox News web reporter moonlights as Egypt’s President?
Wow talk about versatile....


17 posted on 01/28/2013 5:25:23 PM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: SueRae

My portfolio is more like 25. I don’t like to put more than 3% of my money in any one thing. The smartest guy can be surprised.


18 posted on 01/28/2013 5:27:16 PM PST by proxy_user
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To: Osage Orange

I am not sure how long it took him tho he did it between our contacts. We both worked together during several Summers when we were in college.

He always seemed to have some money. During the 60s he drove an XKE and now has among other cars, a Rolls Royce. In the last 20 years or so, we only have contact about every year. He waited until he was in his 60s to marry, tho he always did look younger than he was.

He got most of his wealth from inheritance but at one time he had squandered most of it. Maybe in the stock market, I am not sure. I will say he always was generous and still is.


19 posted on 01/28/2013 6:01:41 PM PST by yarddog (One shot one miss.)
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To: yadent
Since the dollar has lost approximately 24% of it’s value during the last 5 years, the DOW would have to top 17,500 in today’s $ to equal 2007’s high of 14,164.

hmmm, you understand the above but not the future's market?

20 posted on 01/28/2013 6:20:50 PM PST by GOPJ ( Revelation can be more perilous than Revolution. Vladimir Nabokov)
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