[ero]

I have some but thinking about selling everything off since I will be busy next couple of months and can't keep track of news and developments.

[beerbelly@26]

Im a pretty beginner investor, but i know a bit about economics. If the fed begins to taper, who here will stick with equities? will stocks remain a profitable asset?
I saw a chart on cnbc or something that showed a very strong correlation between equities and QE, so my rationale is that the stock market is being supported by QE right now, so investors are sticking with stocks and bonds as long the fed keeps buying and interest rates remain near zero.
but my question is based on the premise that there are very weak fundamentals supporting the stock market, just look at detriot the country is in a depression. so if the fed tapers, then equities will likely lose value. I think that were actually in a period of debt deflation, which is why nothing that the fed has done has been working and they do QE1 Qe2 QE3...
just sort of my own mini rant Im curious to read other peoples opinions.

[GameTheory]

8 red flags, including the Hindenberg Omen. what do y'all think ???

http://www.marketwatch.com/story/9-red-f...2013-08-13

[CactusCat589]

Quote:

but my question is based on the premise that there are very weak fundamentals supporting the stock market

Stop right there. In terms of fundamentals, the United States economy is dying month by month. Every time job numbers, GDP, manufacturing, etc. come out looking positive, it gets downwardly revised a few months down the line or it turns out it was a superficial, etc.

None of that matters in how you invest.

My thoughts: My dad went into banking stocks when the Dow was hovering around 6500 points and things were hitting the fan. This means Citigroup, Bank of America, etc. They're all up since they've been recapitalized and in a continuing QE environment, they'll continue to perform.

Also a few stocks like Intel that aren't rising that much, but make up for it in terms of dividends (Intel's at 4%).

Dodge & Cox is pretty good, beating the industrial average and the majority of other mutual funds. My dad bought shares waaaaay long ago, never touched it.

The Fed won't taper, unless they're willing to accept:

• the yields on all treasuries along the curve rising, which means debt service eats up hundreds of billions more in revenues (the Fed can't create the money to pay interest on the debt.)
• risking a crash in global markets. For example, when Bernanke announced taper in June, the Nikkei fell 7% in the following hours.
• fall in the stock market (just look at how the Dow and S&P 500 collapsed when they ended QE1, hence QE2... then the end of QE2, hence QE3.) See the pattern? And homeowners with adjustable-rate mortgages are going to eat it.

We've seen all this before, right, we know what happens if they follow through. Tapering is very unlikely this September.

John Maynard Keynes was right about one thing: "The markets can stay irrational longer than you can stay solvent."

[GameTheory]

^^^ right on

http://money.msn.com/business-news/artic...d=16788486

[Vampire]

The United States government may shut down (or will threaten to shut down) on October 1st if the two parties can't come to agreement on the budget. How much do you think this will impact the stock market and what are you doing to prepare?

[gsinplaya]

Any bull market correction is a buying opportunity....the highs of the year are not in as far as I'm concerned.

This is not 2007 or 1987....there will not be a crash so ignore all the bearish sentiment that gets thrown around on CNBC by the "pros"

If you are averaging into long term index funds I think you will be smiling in 5 - 10 years.

[GameTheory]

Bernanke's hints at the demise of QE is hitting the Indian Rupee hard

Quote:

The Indian Rupee has plunged to yet another new record low in a week that has seen the currency make its worst performance in twenty years.
The Rupee’s dramatic decline has been caused by speculation that the US Federal Reserve is getting closer to reducing the stimulus measures that had bolstered demand for emerging-market assets. ...
Highlighting the drastic recent decline of the Rupee was the news that India’s wealthiest man, Mukesh Ambani has been the biggest loser of the current crisis. The Rupee’s decline has erased 24% of his fortune.

http://www.futurecurrencyforecast.com/in...1993/21369

[GameTheory]

so the Dow hits a new all-time high as Big Ben says he wants to see evodence that the econ is expanding before easing off the QE faucet

[Steve9]

For those who are interested in value investing in US stocks, I can recommend reading the past postings of this blog :

http://brooklyninvestor.blogspot.com.au/

[GameTheory]

S&P 500 at new all-time highs;

http://money.msn.com/business-news/artic...d=16992746

[JayJuanGee]

(10-18-2013 03:33 PM)GameTheory Wrote:  

S&P 500 at new all-time highs;

http://money.msn.com/business-news/artic...d=16992746

What do guys on the forum think about the general performance of the stock market into the future, in terms of just index funds and long term investing?

I anticipate that likely in the next 20-30 years we are still gonna get between 4-8% return in the stock market index funds in spite of various instabilities, volatiles, and inabilities to exactly predict the future. Probably can just keep dollar cost averaging for the next 20-30 years, no and keep getting between 4-8% in index funds?

I've been in various index funds, mutual funds and some bonds since about 2002, and my overall return as of the end of 2012 was about 4.5%-5%; however, my return this year seems to be going between 15-20% - so maybe my overall average will go up to 5-5.5% after this year.

There are always ups and downs in the stock market and bonds, but in spite of some shenanigans of the last week directed at government stability (referring to shut down and debt ceiling shenanigans), we probably still have a good 20-30 years of dollar dominance and stock market volatility and general long-term upward trends in the stock market, no?

I am predicting 4-8% returns in the next 20-30 years.

If you predict otherwise regarding the stockmarket and the dollar, then what are you doing otherwise for investments and what is your source for such prediction, hunch or something else?

My prediction seems to be sort of a hunch based on past performance of my portfolio, long term historical performance from what i understand of it and my continued confidence in dollar cost averaging as among the better investment vehicles and the dollar remaining dominant b/c other countries do NOT have any other realistic options at this time to invest otherwise.

[_DC_]

^ If we're talking index funds the S & P completion index has returned well over 20% this year. Historically back to 2002 probably >10% annually. IMO if youre young your money should mostly be here. I think their top holding is facebook (probably just out if the top 500).

I mentioned before VExMX tracks the completion, just check it out.

I actually withdrew my completion IRA funds around OCT 1st. Theyre back in now. Either the market didnt care about a possible default (more money to the rich folk in general) orr everyone knew that shit would get resolved, me thinks the second.

Put your money in risky index funds. The returns are great but because you have a shit ton of companies you cant lose your shirt. Even in the huge crash 5 years ago, it took about 6 months to tumble. Plenty of time to get out. I use the rest as "gambling money" and take chunks of cash into promising companies with lots of potential and roll the dice, so long as you got the bulk in index.

[_DC_]

If you want some evidence for the above read "a random walk down wallstreet". Do indexes, and if you have a gambling itch, put the minority in promising pennies.

[Steve9]

Quote:

What do guys on the forum think about the general performance of the stock market into the future, in terms of just index funds and long term investing?

I think you can outperform index funds by investing your money with money managers who have consistently crushed the indexes.

The obvious example is Warren Buffett's Berkshire Hathaway. Anyone can invest in his company - the BRKB shares are $116, and your only "fee" is the one off brokerage commission.

Because Berkshire is huge now, I have also invested in the "mini-berkshires", companies that are much smaller, but run in the same way, by outstanding capital allocators like Buffett.

Examples of these companies are Markel (MKL) and Leucadia (LUK).
I believe with these firms you can happily buy now, tuck away in a corner somewhere, and come back in a few years having trounced the broad market with no work.

I also suggest you read this classic essay by Buffett, where he presents a group of investors who have crushed the S&P 500 over a 28 year period :

http://www.grahamanddoddsville.net/wordp...Hermes.pdf

[Steve9]

(10-18-2013 03:33 PM)GameTheory Wrote:  

S&P 500 at new all-time highs;

The most bullish thing a market can do is go up, and history shows that the probabilities are high that the index will not be down in a few months.

Here is more research on this :

http://www.thereformedbroker.com/2013/03...ket-highs/

[SVK]

I just started trading in July of this year and it's been a wild ride. A lot of fun, and I learned a ton. Being invested in the game forces you to learn quickly. Right now, I'm about $6700 up on initial investment of about $21k, however, I've also been down about $4k just a over a month ago. I started investing since I'm currently able to comfortable save about $40k a year and simply didn't know what else to do with all that cash.

More than half of my securities are in options (thus the volatility), and it is working out for me right now, but I know it could change overnight. In september my AAPL calls lost about 85% value in just couple days due to iPhone release being initially disliked by Wall street. That really sucked. But they recovered later this month and my portfolio went green in a big way.

But Apple earnings report is coming, and it will be most likely good, however it still doesn't mean that the stock won't drop.

400x AAPL Jan 18 2014 530.00 Calls - up $2,748.44 on that one
100x AAPL Jul 19 2014 550.00 Calls - up $200.36 on this one

Thinking about getting rid of at least 200 of the Jan 530 calls and to risk less going into ER. Wanted to do it today, had a limit sell order, but it didn't get reached as AAPL pulled back over 1% today. If any experienced traders have some feedback that would be appreciated.

[Steve9]

(10-20-2013 02:10 AM)Steve9 Wrote:  

Examples of these companies are Markel (MKL) and Leucadia (LUK).
I believe with these firms you can happily buy now, tuck away in a corner somewhere, and come back in a few years having trounced the broad market with no work.

A good analysis of Markel :

"Tom Gayner is the President and Chief Investment Officer at Markel, and his investment performance over the years is nothing short of phenomenal. In the 15 year period ending 2011, Gayner's picks in Markel's equity portfolio have had a cumulative return of 253% versus S&P's cumulative return of 124% over the same period."

http://seekingalpha.com/article/1762702-...is-on-sale

[JayJuanGee]

(10-26-2013 06:54 PM)Steve9 Wrote:  

A good analysis of Markel :

"Tom Gayner is the President and Chief Investment Officer at Markel, and his investment performance over the years is nothing short of phenomenal. In the 15 year period ending 2011, Gayner's picks in Markel's equity portfolio have had a cumulative return of 253% versus S&P's cumulative return of 124% over the same period."

http://seekingalpha.com/article/1762702-...is-on-sale

Steve 9 or anyone else:

Getting back to financial calculation basics. I have a question.

If a person invested $100, then:

1) a 124% return would represent having $224?

and

2) a 253% return would represent having $353?

However, compounding interest is going to affect these numbers as well, yet I would imagine that any bragging rights concerning the returns that Gayner got is already accounting for the effects of compounding interest and including that into his values?

In any event I find these kinds of back descriptions to be confusing; however, if they use the same methodology for calculating each outcome, then I suppose we are getting a representative indications of past performance.

[Nemencine]

The market makes a new high today. Once again, the trend is up, we play the trend....
My main ongoing play right now are these four healthcare stocks(check below). These are speculative plays and based on the momentum of the obamacare.

(12-31-1969 07:00 PM)Nemencine[381179729' Wrote:  

..... OBAMACARE will be implemented starting from tomorrow: OCT 1st, 2013...... How do i profit in the stock market from this event?...., my babies are: LPNT, HCA, CYH, THC. .....

Anyways, after THC and HCA both went up by +20% from entry, i sold half. No need to be greedy. Bulls make money, bears make money, and pigs get slaughtered. The stock CYH has given me a 2nd entry at $42.00...but it is being a bit sluggish...we will see how it goes.
On LPNT...after the initial entry at $45.50, the game plan was to add position at $47.50 as illustrated by the chart below.



SO WHAT EVENTUALLY HAPPENED?
well....I took that opportunity(adding a second leg at $47.50).... the trade updated below:

(10-16-2013 09:28 AM)Nemencine Wrote:  

..... i added to my position in LPNT at $47.50...risk is $2 per share.....

Today is a glorious day for my LPNT. It hits 1st price target at $51.50. Here is an update chart below, again, the chart tells the tale:

[GameTheory]

^^^^ $$$$$$ !!!!!

[Cattle Rustler]

Hey Nemecine, those rising stock prices are evidence that the economy is going to fall soon due to obama's runaway printing press. If I were you I would use those profits and buy gold.

[Nemencine]

(10-28-2013 08:05 PM)GameTheory Wrote:  

^^^^ $$$$$$ !!!!!

Thanks, man. It went up again today. All of them.

(10-28-2013 08:17 PM)Cattle Rustler Wrote:  

Hey Nemecine, those rising stock prices are evidence that the economy is going to fall soon due to obama's runaway printing press. If I were you I would use those profits and buy gold.

HAHAHAHA. I get your jokes. yes, i should buy gold, stock up on guns, build a survival shelter deep in the jungle. wear tinfoil hat and prepare for the apocalypse. afterall, there is a democrat in the whitehouse of U.S.A; a black democrat at that! oh the horrors! hehehehe. Funny, how all those healthcare stocks went up nicely today too.
one thing that delights me is the deteriorating stocks of healthcare insurance companies. how they've been going down. i avoided WLP and UNH as stated in this post.

(10-07-2013 04:02 PM)Nemencine Wrote:  

..... however, i am ignoring UNH and WLP(they are both insurance companies)....

It is a delight to see their stocks get beaten down mercilessly. Unfortunately, i did not have the heart to short both of them in this healthcare stock bullish period.

(10-26-2013 08:12 PM)JayJuanGee Wrote:  

Steve 9 or anyone else:

Getting back to financial calculation basics. I have a question.......

you are right, JJG.

That is why it is critical to look at monthly performance and risk of ruin and risk-adjusted analysis of performance, sharpe ratio, sortino ratio, upside potential ratio, efficient frontier analysis etc.

Saying somebody makes 253% doesnt really tell me much.

I remember when i started trading...after a while, i was generating 30% return per month... however, i was risking 60% to 80% of AUM to make that 30%. On paper, claiming 30% looks good. but when you see the risk i was taking: 60% to 80% to generate that 30%. that was retarded. I was basically playing russian roulette with my account. A few wipeouts in my account taught me that harsh lesson.

Risking 1% to make 4% is better than risking 40% to make 10%. Even though the 10% is shiny and can easily distracts.

The LPNT stock trade that i posted...i risked 1% of AUM on $2 per share. when the stock went from $47.50 to $51.50 that is a gain of $4 per share . which translates to 2% extra gain = 200% gain on risk. even though going from $47.50 to $51.50 is only a gain of 8.42%, however, with a stop loss at $45.50, i basically risk 4.2% to make 8.42%. In a nutshell, i made 200% on my risk. Again, one has to look at the internals of the returns to fully understand what is going on.

Another thing i want to add with regards to the 253% boast in 15years... they may be up by 253% in 15 years..what if all that 253% happened because they were down by -74.7% for 12 years, then, in the last 3years bullish market, they overleveraged and went up by +1000%? which makes it net = 253% gain in 15 years. A person that was with them in the last 3 years will think they are geniuses(because his account will be up by 1000% in 3 years)... while a person that was with them before that will think they are morons(his account will be down by 75%). Again, one has to dig deeper into the internals of their monthly gains/losses.

** this is not to cast aspersions on the group recommended by steve9. it is just to show how important understanding the numbers behind the percentages is critical**

[Brez]

For all you London Stock Exchange investors, I highly recommend Lloyds Bank for a solid long term investment, a little late I know but I do think it's still a good time. I'm in at 50p from about 4 months ago, already sitting on a tidy 75% profit!

[GameTheory]

now BOTH the Dow and S&P are near/at all-time highs, DESPITE the Sequester and Gov't shutdown. (the Russel 2K did LOSE 2% THIS WEEK). time for buying ???


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