Posted on 04/14/2009 6:07:04 AM PDT by SeekAndFind
ARROYO GRANDE, Calif. (MarketWatch) -- Never buy stocks. Never. Unless, of course, you love gambling (and losing) at the Wall Street casino. Or you don't mind making payments on your broker's BMW. Or you just joined a monastery and just took a vow of poverty. Otherwise, don't buy. Stocks are losers.
At least that's the only rational investment strategy you'll come away with after reading economist and long-time Forbes columnist Gary Shilling's analysis of the miserable performance of stocks during Wall Street's recent bull/bear cycles, beginning with the election of President Reagan in the early 1980s.
And it gets worse when you project into the bear market predicted for the next decade, till 2020. Ergo, more tough times ahead for investors, possibly a sequel to the painful sideways bear of 1968-1982.
So I ask you: Knowing the history, why would anyone in their right mind invest in stocks? You'd be a fool, right?
Yes. But join the club. We are a nation of "those who cannot learn from history," as the philosopher George Santayana once warned, so we "are doomed to repeat it." Statistics prove that year after year America's 95 million investors are indeed clueless fools, easily conned into buying stocks by what BusinessWeek once called the "Wall Street Hype Machine."
We never learn, no matter how painful the losses, we just keep repeating the same old mistakes, over and over, forever falling under Wall Street's magical spells. Admit it: We've become the laughingstock of history. Wall Street's giants were bankrupt, in fact and morally. In reality, they were nationalized. Their bosses are arrogant, greedy and incompetent. All should have been fired. Yet we were stupid enough to give them $2.2 trillion in tax dollars to bail themselves out.
(Excerpt) Read more at marketwatch.com ...
It’s called diversification. If people would follow that simple rule instead of dumping every penny into the piece of crap stock they bought from a stranger over the phone, they would be ahead of the game instead of behind.
I remember this guy I used to work with. Came here on a work visa and thought he was brilliant - Americans were stupid. Anyways, he would laugh when myself and a couple other folks would talk about our investments in bonds, t-bills, CD's, etc. He lost his shirt in the Clinton “Dot Com” recession. Wonder if he's in a cardboard box after the latest burst?
ding, ding, ding..........we have a winner, you need to see a professional planner, or take a class on investing. My local adult education people had a 6 week class on investing that I took before investing a dime...It does help to know a little about what you are doing with your future before you do it....our hit during this downturn is about 30%, but we are still way ahead over the long haul, and it is beginning to rise...this recession is just about a single percentage point worse than the dot com bubble...everything will be alright if you do not panic and just let the market take it’s course
Well, let’s put a caveat on that headline: that return requires that you are able to get zero-coupon T’s at the sort of yields they produced in 1981 - which for 25 years would have been north of 12%.
Which you cannot do right now. I doubt you can get zero’s at even half the yields seen in 1981.
The only way you’d achieve that sort of yield is to load up on risk in commercial bonds.
Then why did my stock portfolio so wildly outstrip both my securities and funds portfolios?
I did have the foresight to convert all my stocks to securities two years ago when the Rats won the Congress back.
Does this guy make his money selling bonds?
Bookmark for later.
This guy could have let a fund manager do it for him, and then make the good decision to let a different fund manager take over the job at the right time. 1st guy with a stock fund and the second guy with a Government Bond fund. The question of when to do that is the tricky part.
I did have the foresight to convert all my stocks to securities...
I would have been poor if I had invested in only bonds.
The buy and hold attitude will kill you, but staying posted and realizing that their are big big economic cycles is essential. Anybody can do it.
I have a similar shelf, but I have more freeze dried food in number 10 cans (Mountain House, Provident Pantry). I get a thirty year shelf life. Check your expiration dates on your cans. The ones you need a can openner to open are decent, but the pull tab ones are very short.
Why do you think that would be? I don’t follow expire dates necessarily, since they are gov’t mandated on EVERYTHING, including vinegar!
They are *best by* dates, not expiration.
I rotate and so far, I have found that a few things I forgot about that went 9 months or so past *best by*, were still ok, However, acidic items, like tomato sauce and some fruits taste tinny if they go too long. That makes sense, about the pull tabs. I suppose they aren’t as tight a seal?
I am told that many pharmaceuticals, like antibiotics, are ok fairly long past their expiration dates, too. That information was from my vet.
RE: “Then why did my stock portfolio so wildly outstrip both my securities and funds portfolios?
I did have the foresight to convert all my stocks to securities two years ago when the Rats won the Congress back.
Does this guy make his money selling bonds?”
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That was very astute of you, converting stocks to securities when Rats won Congress back. People need to look ahead and make the right decisions but it sure is difficult. That “buckets of money” guy (can’t recall his name) has opined recently that if one cannot ride the waves of the market at LEAST 15 years, they should stay out of stocks totally. I happen to agree with that opinion.
Ah — let’s understand what we mean by “investment grade” bonds now.
Are you using the ratings from the ratings agencies to define “investment grade?” I’m guessing so.
Here’s MY criteria for ‘investment grade’ paper: If it is carrying a rating A/A or higher, and it is priced at less than $90/$100, it ain’t “investment grade.” If it is sporting a price down in the 80’s, it is priced like junk.
The market is my yardstick now for what is ‘investment grade’ - and some GE Capital ain’t priced like investment grade - down in the mid-to-high 80’s.
Goldman Sachs... I don’t trust those SOB’s as far as I can fling them.
Cat - I own some Cat - priced $93 to $97, so I’ll buy that.
"Favorable themes" include: The U.S. dollar, and for the long-term, dividend-paying stocks, asset managers, Treasuries, North American energy, apartment REITs and factory-built homes.
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