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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
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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To: grobdriver

You do realize that every previous “all-time high” has since been superseded?

P/E ratios are getting a bit pricey—around 16-18, depending on which index you’re looking at. That’s a bit higher than the historical average, but it’s nowhere near 40 or 400, as we’ve seen in previous bubbles.

I doubt I would get all in now if I were in cash, but I don’t think it’s time to head for the hills, either.


21 posted on 01/28/2013 6:41:36 PM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
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To: Choose Ye This Day

Small Caps are overpriced. The P/E of the Russell 2000 is around 36.


22 posted on 01/28/2013 6:43:03 PM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
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To: PieterCasparzen

Stocks are almost worth what they were years ago, a bad long term investment. The stock market is straight up gambling.


23 posted on 01/28/2013 7:10:27 PM PST by Mike Darancette (Soylent Green is Boomers)
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To: PieterCasparzen

I read not too long ago that 85% of ALL TRADES are between the 5 or so Too big to fail banks, there is very little with regards to the General Public or other institutions, which tells me it is a suckers game and they have been artificially pumping the market in an effort to Sucker the Public back in, so they can FLEECE US AGAIN.


24 posted on 01/28/2013 7:27:39 PM PST by eyeamok
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To: BenLurkin
Stocks a suckers bet for the small guy>??? The problem is that over the last 30 years the major players have figured out ways to extract wealth from the markets that do an end run around simple buying and trading stocks. Via private equity funds, via hedge funds, via high frequency trading which extracts a toll (part of a cent) from each conventional (slow witted) trade
25 posted on 01/28/2013 7:39:18 PM PST by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
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To: PieterCasparzen
The degenerate douche traders will artificially pump up the value of their worthless paper and then head for the tall grass with real coin when the SHTF.
26 posted on 01/28/2013 7:46:01 PM PST by Rome2000 (THE WASHINGTONIANS AND UNIVERSAL SUFFRAGE ARE THE ENEMY -ROTATE THE CAPITAL AMONGST THE STATES)
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To: Rome2000

I agree R2000, it is a game of what the perception is rather than reality.
Also, many are forced into places like the stock market because government keeps interest rates for bank accounts near zero so the interest on the national debt is less.

There is so much manipulation that unless you are in a rare crowd doing all the manipulating you are at risk of maybe losing it all.


27 posted on 01/28/2013 7:49:08 PM PST by A CA Guy ( God Bless America, God Bless and keep safe our fighting men and women.)
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To: PieterCasparzen

Are stocks a sucker’s bet?


No VOTING is...... i.e. massive voter fraud..


28 posted on 01/28/2013 8:46:39 PM PST by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
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To: PieterCasparzen

Are stocks a sucker’s bet?


No VOTING is...... i.e. massive voter fraud..


29 posted on 01/28/2013 8:55:40 PM PST by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
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To: GOPJ

Oh, I understand plenty. Some don’t seem to understand the present/future effects of capital expansion vs credit expansion and which one has been occurring during the last 20+ years.


30 posted on 01/28/2013 10:18:03 PM PST by yadent
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To: yadent

That’s high level stuff alright - so I’m right - you understand futures :) That said, I’m also concerned about credit expansion - creates waaaaay too much funny money.


31 posted on 01/29/2013 8:06:34 AM PST by GOPJ ( Revelation can be more perilous than Revolution. Vladimir Nabokov)
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To: Choose Ye This Day
You do realize that every previous “all-time high” has since been superseded?

Well yes, I would expect that in a normal world.
But in this economic climate? With this administration?
People I talk to can't explain why we're doing even this well right now, much less marching to new highs.

32 posted on 01/29/2013 5:17:30 PM PST by grobdriver (Sic semper tyrannis!)
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To: grobdriver

Corporations earnings are at an all-time high (in dollar value). That’s why the market is doing well at the moment.

Now, the question can be asked: why are corporations’ earnings so high? Is any of it due to government bailouts, stimulus, loans, etc? Some of it, yes. Much of it because the companies are still running very lean labor-wise and productivity is way,way up. They have learned to make do with much less. That leads to profits. Also, many of the MNC’s are making and selling products overseas.

The economy IS growing—very slowly, despite Obama’s best efforts to kill it. Of course, most of his Obamacare provisions have yet to go into effect, so we’ll have to see.


33 posted on 01/30/2013 6:09:22 AM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
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To: Choose Ye This Day
Well thanks for that.
Perhaps it's time to dip my toes back in - partially - and see where this takes us.
34 posted on 01/30/2013 7:13:28 AM PST by grobdriver (Sic semper tyrannis!)
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To: PieterCasparzen

-——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.-——

That is a wordy sentence of hedged nonsense. One wonders if the Maryland professor took some days off to be part of OWS.


35 posted on 01/30/2013 7:24:34 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
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To: PieterCasparzen

stocks are propped up by tax payer bailouts, and stimulus to keep large banks from failing causing the feds to print monies that inflate our dollars causing more of them to be needed to buy the stocks of which they are selling to increase the market which they say is an indicator of a robust economy...

we are through the looking glass and here’s the reality...

milk has risen from 1.19 a gallon to 3.89 a gallon.

is it a good time to buy? either way, someone getting some teat.

teeman


36 posted on 01/30/2013 10:04:17 AM PST by teeman8r (Armageddon won't be pretty, but it's not like it's the end of the world.)
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