News Stories

[ganbaru]

Senate OKs deal to avoid government shutdown
http://www.reuters.com/article/2011/...78P47720110927

Nevada's big bet on secrecy
http://www.reuters.com/article/2011/...78P1Y020110926

[Decagon]

Originally Posted by DonQuigleone

Rather then buying all these exotic mutual funds and whatnot, why not just buy stock in a relatively stable company, say, Coka Cola. Even if Coke's stock price takes a day to day tumble, it's not going to change the fact that at it's core Coke is a pretty profitable business, Coke isn't going to go out of business tomorrow.

There's a whole host of companies that are similiarly stable, you just have to make sure you're buying them at the right price. With market being what it is, I bet you could get stocks in those kind of companies for a steal.

I think the criticism can be made that people who don't believe themselves savvy with investments tended to leave things to people they trusted to do things well, that or they tend not to disturb what they have out of the belief that a long term investment is sound. As it relates to people in or close to retirement, some people who have enough invested in dividend providing stocks can rely on dividends, while others may have planned to gradually sell off investments, or have a financial product that behaves similarly, are stuck having to sell their assets at these prices to pay for normal expenses and may need to earn more money to replenish their nest egg.

[Vexx]

Originally Posted by DonQuigleone

Rather then buying all these exotic mutual funds and whatnot, why not just buy stock in a relatively stable company, say, Coka Cola. Even if Coke's stock price takes a day to day tumble, it's not going to change the fact that at it's core Coke is a pretty profitable business, Coke isn't going to go out of business tomorrow.

There's a whole host of companies that are similiarly stable, you just have to make sure you're buying them at the right price. With market being what it is, I bet you could get stocks in those kind of companies for a steal.

1) Mutual funds are not "exotic", they're very straight forward. For instance, one I use invests in socially responsible companies (ones that don't use slave labor, etc).
2) Investing in single companies.... here's a specific example: we invest in Walgreens, a retail pharmacy. Over the last few years it has dropped in value by half along with the rest of its sector and only started returning this summer before last week's tumbles. $45->$28->$35 ... depending on when you *need* the money, that could be damaging. The stock (like many others) has dropped 30% in seconds without any reason at all (high probability of stock manipulation?) Do you buy? Too late to sell... companies get punished even when they exceed their projections because a Goldman-Sachs analyst wasn't happy enough.

Plus, we have options with the company. Those have to be exercised before a given date. With the wild variation in the stock market, you could take a bath just because the date came at a bad moment - pure gambling. Recently, we've had to let options vaporize because the initiation value was higher than the current value... whee.

Even municipal bonds and utility bonds are unstable (historically a hugely safe bet and also tax exempt).

Savings accounts ~0.99% at best ($10000 or more)
CDs ... well if you're okay with the money locked up for 5 yrs ~2.2%

What I'm getting at is that unless you operate in values of a million $$ or better - you're probably getting raped every time you twitch.

[SaintessHeart]

Today is my off day! Let's take a look at a few stocks we can lose money with!

Originally Posted by DonQuigleone

Rather then buying all these exotic mutual funds and whatnot, why not just buy stock in a relatively stable company, say, Coka Cola. Even if Coke's stock price takes a day to day tumble, it's not going to change the fact that at it's core Coke is a pretty profitable business, Coke isn't going to go out of business tomorrow.

There's a whole host of companies that are similiarly stable, you just have to make sure you're buying them at the right price. With market being what it is, I bet you could get stocks in those kind of companies for a steal.

Who said anything about Coke being at the right price?

Take a look at the 10-year....Coke has almost doubled it's share price and it would be dumb to buy now. Even Honeywell might make itself a better bet next year if the second dip does really occur.

And NEVER, NEVER, NEVER PUT ALL YOUR EGGS IN ONE BASKET.

Originally Posted by Vexx

1) Mutual funds are not "exotic", they're very straight forward. For instance, one I use invests in socially responsible companies (ones that don't use slave labor, etc).
2) Investing in single companies.... here's a specific example: we invest in Walgreens, a retail pharmacy. Over the last few years it has dropped in value by half along with the rest of its sector and only started returning this summer before last week's tumbles. $45->$28->$35 ... depending on when you *need* the money, that could be damaging. The stock (like many others) has dropped 30% in seconds without any reason at all (high probability of stock manipulation?) Do you buy? Too late to sell... companies get punished even when they exceed their projections because a Goldman-Sachs analyst wasn't happy enough.

Plus, we have options with the company. Those have to be exercised before a given date. With the wild variation in the stock market, you could take a bath just because the date came at a bad moment - pure gambling. Recently, we've had to let options vaporize because the initiation value was higher than the current value... whee.

Even municipal bonds and utility bonds are unstable (historically a hugely safe bet and also tax exempt).

Dow Jones SPDR or HSI sounds like pretty good deals, but I am holding my breath at the moment because it might dip again. I don't have access to candlestick charts (1y or 6m) so I can't really do a full analysis, but judging from the shape I'd say we better wait until the first week of October.

Savings accounts ~0.99% at best ($10000 or more)
CDs ... well if you're okay with the money locked up for 5 yrs ~2.2%

What I'm getting at is that unless you operate in values of a million $$ or better - you're probably getting raped every time you twitch.

Philosophy : Don't react. Look through the "deal first", it is your money. If you miss it, then let it go, there may be another deal somewhere else.

Mark Hulbert has this case-in-point :

Commentary: Blaming Greece fails simple reality check

Except for their citizens of course (because their government is sitting on a pile of BS and dishing them out). For the rest of us : don't like it, don't buy it.

Originally Posted by Decagon

I think the criticism can be made that people who don't believe themselves savvy with investments tended to leave things to people they trusted to do things well, that or they tend not to disturb what they have out of the belief that a long term investment is sound. As it relates to people in or close to retirement, some people who have enough invested in dividend providing stocks can rely on dividends, while others may have planned to gradually sell off investments, or have a financial product that behaves similarly, are stuck having to sell their assets at these prices to pay for normal expenses and may need to earn more money to replenish their nest egg.

This. For our older generation who have less time to live and learn the stuff from scratch, I'd say that is excusable.

But for the rest of us at my age, I say it is stupid if we don't learn how to manage our funds ourselves.

[Jinto]

Originally Posted by SaintessHeart

And NEVER, NEVER, NEVER PUT ALL YOUR EGGS IN ONE BASKET.

Depends... in Germany the retirement funds for employees is a PAYGO system. That means technically as a retiree you get a defined amount of the wealth that is generated by the part of the population that is employed and not yet in retirement.
So, the money you get as a retiree is coupled to the current economic success of the economy and the population growth/pyramid. It might be less then you have paid into the system, but it can never be null.

So, stocks are essentially just another basket here (either you diversify your eggs in one basket... or you diversify your baskets). Since stocks are just one basket of many (other can be your own house, your certificates of Deposit...) you might be willing to conentrate the little investment that is left for that particular basket into one "egg". In my case it is the company I am working for.
I have several reasons to do so, first I trust the size of my company to survive whatever crisis lies ahead, second I have trust in their economic strategy, third I get a certain amount of company shares for half the market price each year, fourth I do not plan to invest more than that amount of mony in stocks (so for me trusting that one "egg" is the most sensible thing to do).

[DonQuigleone]

Originally Posted by Vexx

2) Investing in single companies.... here's a specific example: we invest in Walgreens, a retail pharmacy. Over the last few years it has dropped in value by half along with the rest of its sector and only started returning this summer before last week's tumbles. $45->$28->$35 ... depending on when you *need* the money, that could be damaging. The stock (like many others) has dropped 30% in seconds without any reason at all (high probability of stock manipulation?) Do you buy? Too late to sell... companies get punished even when they exceed their projections because a Goldman-Sachs analyst wasn't happy enough.

Well as long as you don't need to sell, this doesn't really matter, just continue to sit on it and ignore all the stupid price fluctuations. Nothing has changed about Walgreens other then what stock analysts think of it.

Just don't ever sell a stock unless it has some kind of impending doom on the horizon. If it's a growing business hold on to it. Now if these had been borders I would have been looking to get out when that company when I saw how Amazon was taking over, and Borders long term prospects were poor.

Originally Posted by SaintessHeart

Who said anything about Coke being at the right price?

Take a look at the 10-year....Coke has almost doubled it's share price and it would be dumb to buy now. Even Honeywell might make itself a better bet next year if the second dip does really occur.

I was just using Coke as a specific example of a Company you could invest in that won't go bust. Obviously whether you should invest in it is down to what the ratio between share price to earnings/growth/company value is. I don't know what the yardstick for determining the right price to buy something, but it's not going to be something hugley complicated.

And NEVER, NEVER, NEVER PUT ALL YOUR EGGS IN ONE BASKET.

Well that's obvious, we don't want to leave ourselves vulnerable to an Enron, but on the flipside, you don't need to be super diversified either. Better to know what you're investing in pretty well.

[Tom Bombadil]

Shanghai train crash injures 200

I am appalled. For a minute all I could do is cursing.

[Sides]

Originally Posted by SaintessHeart

And NEVER, NEVER, NEVER PUT ALL YOUR EGGS IN ONE BASKET.

Does it mean I should impregnate as many women as I can, to secure my future? I wish some some politician would say that, he/she would totally get my vote

[SaintessHeart]

Originally Posted by DonQuigleone

Just don't ever sell a stock unless it has some kind of impending doom on the horizon. If it's a growing business hold on to it. Now if these had been borders I would have been looking to get out when that company when I saw how Amazon was taking over, and Borders long term prospects were poor.

Depends on how you define "growing". Webvan was an example of a growing business that exploded in 2001. Business have to move along with the times and constantly have a team to do market research, and expand laterally instead of specialising in one area.

I was just using Coke as a specific example of a Company you could invest in that won't go bust. Obviously whether you should invest in it is down to what the ratio between share price to earnings/growth/company value is. I don't know what the yardstick for determining the right price to buy something, but it's not going to be something hugley complicated.

Just read everything here and you'll understand how to use the yardstick.

Then again, nobody knows where the bottom is. Nothing beats doing research - even if you don't buy the stock, at least writing an article about the financials can net you a few visits to your site in the long term.

Well that's obvious, we don't want to leave ourselves vulnerable to an Enron, but on the flipside, you don't need to be super diversified either. Better to know what you're investing in pretty well.

That is my belief, but Jinto actually made a good point in specialising your portfolio/investment......in his case he had good stock in a dominant player that is unlikely to go bust in his working life :

Originally Posted by Jinto

Depends... in Germany the retirement funds for employees is a PAYGO system. That means technically as a retiree you get a defined amount of the wealth that is generated by the part of the population that is employed and not yet in retirement.
So, the money you get as a retiree is coupled to the current economic success of the economy and the population growth/pyramid. It might be less then you have paid into the system, but it can never be null.

So, stocks are essentially just another basket here (either you diversify your eggs in one basket... or you diversify your baskets). Since stocks are just one basket of many (other can be your own house, your certificates of Deposit...) you might be willing to conentrate the little investment that is left for that particular basket into one "egg". In my case it is the company I am working for.
I have several reasons to do so, first I trust the size of my company to survive whatever crisis lies ahead, second I have trust in their economic strategy, third I get a certain amount of company shares for half the market price each year, fourth I do not plan to invest more than that amount of mony in stocks (so for me trusting that one "egg" is the most sensible thing to do).

It is some sort of belief system depends on your day job, qualifications, lifestyle, etc. I live in a place where the government prefers to import than to train labour, and bares their orifices for MNCs to make their GDP image look good, so yeah, I am more inclined to believe in "divide and conquer" rather than "focus energy"; both are valid strategems outlined in Sun Tzu's Art of War.

Originally Posted by Sides

Does it mean I should impregnate as many women as I can, to secure my future? I wish some some politician would say that, he/she would totally get my vote

Sensibly speaking, you should. But it is illegal due to the damned Women's Charter.

[ganbaru]

Originally Posted by Tom Bombadil

Shanghai train crash injures 200

I am appalled. For a minute all I could do is cursing.

At least it didn't had the same result than the train crash months ago.

[Bri]

"Honest" trader leaves BBC speechless.


Initially it was thought that it was a all a joke but he seems to be a genuine trader. Wonder if he just said this to scare people.

[Xellos-_^]

Originally Posted by Bri

"Honest" trader leaves BBC speechless.


Initially it was thought that it was a all a joke but he seems to be a genuine trader. Wonder if he just said this to scare people.

can't disagree with the guy

when the housing crash back in 08/09 i thought it was great time to make money.

[ChainLegacy]

Originally Posted by Bri

"Honest" trader leaves BBC speechless.


Initially it was thought that it was a all a joke but he seems to be a genuine trader. Wonder if he just said this to scare people.

Of course he didn't. The global system is corrupt and fundamentally unworkable in the long term. Guy really was just being honest.

[Jinto]

Originally Posted by Xellos-_^

can't disagree with the guy

when the housing crash back in 08/09 i thought it was great time to make money.

Well, if they are that desperate to bad mouth the situation so intensely then I have the feeling they just might bluff... and its in the hands of the politicians to do the right things to make such people actually lose the chicken game.

I'ld let Greece go orderly into insolvency, and then use the ECB/IMF to rebuild its economy without other investors' money. I bet that costs only 1/10th of the money and resources that are burned in this game of make something crash to make a profit (typically the losses in the crash - which are public - are far higher than the profits - which are mostly private). This is like when the local building company keeps burning down houses in the neighbourhood to increase their profits.

[Xellos-_^]

Originally Posted by Jinto

I'ld let Greece go orderly into insolvency, and then use the ECB/IMF to rebuild its economy without other investors' money.

personally i thought that should have been the way to go form the start. The Ham-handed efforts at bailing out Greece probably cause more damage to investor/consumer confidence then letting Greece go into a orderly Bankruptcy.

[ganbaru]

Originally Posted by Xellos-_^

personally i thought that should have been the way to go form the start. The Ham-handed efforts at bailing out Greece probably cause more damage to investor/consumer confidence then letting Greece go into a orderly Bankruptcy.

BUt would they had to get Greece out of the Euro for avoiding de damage as well ?

[Xellos-_^]

Originally Posted by ganbaru

BUt would they had to get Greece out of the Euro for avoiding de damage as well ?

1. Greece should never have been allow to join the Euro
2. Greece should have gotten out as soon as their economy ran into trouble.
3. Greece NEEDS to able to devalue its currency and it can't do that as a part of the Euro.

[Solace]

Originally Posted by ChainLegacy

Of course he didn't. The global system is corrupt and fundamentally unworkable in the long term. Guy really was just being honest.

Why listen to honesty when you can call the messengers authenticity into question?

Granted, the Forbes interview isn't that tilted, but already calls are going out that this guy should die, it's a hoax, etc., not to mention that his line about Goldman Sachs ruling the world is going to feed every single conspiracy you can imagine.

What he is definitely right about is that no measure of intervention is going to help Europe, anymore than it did the United States. Simply rescuing the financial system isn't going to solve the problem, at this point it is too systemic to be merely bailed out. However "another recession" is a misnomer, for most people it never ended.

Should he be listened to? Well, let's just say it's rare to see someone say such things in the open, for obvious reasons.

[Zakoo]

There's no text to leave the EU actually I believe.

But yes, they shouldn't have entered, their economy wasn't suitable and see the consequence.

They can't leave now either since it will show that EU isn't "as one". In short they will have to sell everythiiiiiiiiiiiiiiiiiiing and history showed how it ends up generally.

[Xellos-_^]

Originally Posted by Zakoo

There's no text to leave the EU actually I believe.

But yes, they shouldn't have entered, their economy wasn't suitable and see the consequence.

They can't leave now either since it will show that EU isn't "as one". In short they will have to sell everythiiiiiiiiiiiiiiiiiiing and history showed how it ends up generally.

If Greece really wants to leave how does the rest of the EU stops them? Military force?

Greece doesn't really need to leave the EU but it does need to drop the Euro. As long as it keeps the Euro, it will never be able to fix its problems.