Between Imus, Sanjaya, and VT no one seems to have time to report that the DOW is at an all time high while unemployment is approaching an all time low. not that it would get reported anyway, I think it counts as good news. If its good news about Iraq or the economy you never seem to find it making a big splash.
Anyway, let the good times roll.
You make a good point. It's all about shootings and sex, not about success.
Debt. Debt. Oh yeah, don't forget about...DEBT.
Remember..... It's all George Bush's fault!
quote:
Originally posted by Wilbur
Remember..... It's all George Bush's fault!
Who could forget...
"Expert advice" removed.
quote:
Originally posted by dinkleman23
Also removed
I think the discussion is about the state of the economy, not the state of your investments.
Lets see... the DOW flirted with 12,000 in the year 2000. Then the irrational exuberance of the markets was finally corrected, to the point that even the conservative investors such as Buffett proclaimed it was time to buy back into American markets. After hitting lows near 7,000 the market rebounded 10,000 in about one year.
After trending neutral for several years it trended dramatically up for about a full year before seeing another small correction . Now, it is again trending strongly up. In the past 5 years it has added over 60% in value.
However, you are correct. Any investor that was dumb enough to ride the entire fall could possibly have a negative return. Though at our inflation levels the negative return would be slight. However, in my no-knowledge state I diversified to some contrarian funds and over seas markets and managed to average a decent return.
So the decline/correction starting in 2000 was bad news... but how are near record highs for the DOW bad news? I mean, I'm sorry if your a dividend investor and didnt jump on the REIT bandwagon in time. But I fail to see how a high DJI average is bad news overall?
Recovery happens...now that we are on end of the Bush Administration. [;)]
quote:
Originally posted by dinkleman23
More removal
I'd stack his credentials against your's any day.
quote:
Originally posted by deinstein
Debt. Debt. Oh yeah, don't forget about...DEBT.
What your student loans? [;)]
You'll feel differently ten years down the road when you are away from the idealism of TU making good bank and have funds available to invest.
You guys are tough on the poor guy.
He was stating the fact that the Dow Jones Industrial Average is finally back to the same level that it was when George Bush took office.
That is true.
We cannot use the Dow as the single indicator of the economy nor can we give a President the credit or blame for the overall economic health of the country. If anything, the stock market is in competion with bank for investment dollars and the federal interest rate a major factor in the Dow number.
It is too simple to say the economy is up or down for one year or three years or eight years. Most investors don't just look at the time periods as proof of their investment, they look at the size of their portfolio. Saying the economy is robust by comparing it to the bust economy is not the whole picture.
By that thinking, a bogey on a par three would be better than a par on a par five hole because it took less shots. What matters for comparison purposes is what you made as a total on all eighteen.
What RM said.
It's taken a long time for my portfolio to return to its previous level. Recessions do happen, but this one's taken nearly six years to get back to where it once was. That's a severe and prolonged setback.
Happily, Moneytalk guru Bob Brinker says investors should be fully vested for the time being. He correctly said that the 400-point drop a few weeks ago was a "gift horse" for stock buyers.
But Brinker's no big fan of the current administration, especially of its big deficits. He definitely liked the sane fiscal policies of Clinton better.
I'll agree, history does show that Clinton was more of a fiscal conservative than Rush Limbaugh and his ilk led people to believe at the time. It's well-documented.
But, he didn't have several large natural disasters in a row and an unprecedented terrorist attack on U.S. soil to deal with either. That little attack came with gov't sponsored reparations for victims, a Department of Homeland Defense, expensive overhauls of public transportation safety, etc. Please let's not delve off into the Iraq thing again, but it bears mentioning in the fiscal sense.
It's pretty easy to keep spending low when there aren't un-planned catastrophes that happen when you are under attack from nature and terrorists simultaneously.
Well, Conan, we *have* spent close to a trillion dollars in Iraq and not much to show for it.
If I were a businessman, I'd sure be grilling someone about the cost-effectiveness of such action.
If any other CEO had spent money like that with so few good results, he would have been fired.
How exactly was Bush at fault for the stock market crash that began in 2000? You yahoos do realize that it started before he took office...
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Originally posted by rwarn17588
Well, Conan, we *have* spent close to a trillion dollars in Iraq and not much to show for it.
If I were a businessman, I'd sure be grilling someone about the cost-effectiveness of such action.
If any other CEO had spent money like that with so few good results, he would have been fired.
More glass-half-empty-itice dear rwarn? You do realize that there is no such thing as ROI in war...
That's common sense, iplaw. If you spend that big a chunk of cash, you expect better results.
Wouldn't you?
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Originally posted by rwarn17588
That's common sense, iplaw. If you spend that big a chunk of cash, you expect better results.
Wouldn't you?
Only if I was utterly impatient and looking for immediate results...typical dissapointment from our instantaneous microwave-result oriented society.
Or only got my opinions on the results of the war via the filtered water coming from the media water cooler.
I think the calls of patience are moot at this point. This war now has lasted longer than the Civil War, World War I, Korea and World War II.
In the past 150 or so years in U.S. history, the only war that's lasted longer is -- gulp -- Vietnam.
There's a time for impatience, too.
The Bush Administration has seen a lot of disasters. And Iraq has caused "issues" with the DOW that it wouldn't normally see. Mostly inflationary issues, fear issues around oil.
It is the nature of the DOW to grow. Despite all the disasters and other events, if there's any sense of "normal" in the economy, the DOW should grow over time. The question in my mind when it finally hit 2000's high a few months ago at around 11,700, why did it take so long? The catastrophic losses can be explained fairly easily. The growth rate and the ability of the DOW to rebound, is a more difficult question.
I don't think anyone expected a growth rate that equaled that during the Clinton Administration. Noting of course, that the DJI was around what 3000 or 4000 when Clinton took office. But for it to be here 6+ years into the Bush administration, I'm doubtful that the "disasters" provide a full explanation of that growth rate.
And there's some contradictory signs, IMO. The higher interests rates signal to me that inflation has to be balanced, but also that stocks may be overvalued growing at a rate that is ultimately unsustainable. I'm making money in the markets. I think there are plenty of good stocks to get into, but the market as a whole IMO has not reached what I would call normalcy.
I don't think stocks are overvalued, Michael C. I've seen the price/earnings ratios, and they're well within standard ranges.
The only real blip I see on the horizon are the recent rash of mortgage defaults. The economy is absorbing them so far, but caution is in order to keep them from getting out of hand.
I think the economy as a whole has changed so much in the last 10-15 years that "normalcy" will never exist if you are comparing behaviours that existed before the 90s. The internet, electronic trading, globalization and global market influences mean that things work differently these days. If "normal" was something we learned over the 50s 60s 70s or 80s, we will not see this "normal" again.
It'll be interesting to see how that mortgage deal all pans out. I'm fairly new to this game. Last year, I mostly avoided financials and anything related to real estate. Stuck mostly to pharmaceuticals and metals. I have been eye-balling a couple of high yield financials lately. Looking to creep towards some sense of diversification.
There are plenty of great stocks out there.
quote:
It's taken a long time for my portfolio to return to its previous level. Recessions do happen, but this one's taken nearly six years to get back to where it once was. That's a severe and prolonged setback.
Any knowledgeable eonomist would tell you that the recession of 2001-2002ish was a minor recesstion. Thanks to the Bush tax cuts we were able to pull out of it quickly.
Also, you cannot compare the 911 attacks and the effect it had on stocks to anything else because this country has never experienced anything like that, and hopefully we will never again.
Also, I truly believe that the main reason for the recession was the fact that the fed and the Clinton administration allowed the economy to overheat in the 1990s. (Obviously it was made worse with the terrorist attacks) When the economy overheats, it has to eqaulize, therefore resulting in a recession.
Also, don't forget that the unemployment rate of the US under Clinton is now slightly higher than it has been under Bush. Clinton did not have to deal with a recession nor the terrorist attacks. This says a lot about how well we have recovered from the recession.
I don't care what you think about Bush as far as Iraq and other things go, but he has done a great job when it comes to the economy. If you deny that, you are only lying to yourself.
quote:
Originally posted by Conan71
quote:
Originally posted by deinstein
Debt. Debt. Oh yeah, don't forget about...DEBT.
What your student loans? [;)]
You'll feel differently ten years down the road when you are away from the idealism of TU making good bank and have funds available to invest.
I don't go to TU, I don't have any student loans and I already do invest.
[;)]
Stock market during the Clinton years:
Exhuberance over internet companies, ways to transmit all that information, and bio-tech up-starts spurred a lot of the growth in the late '90's. There were a lot of IPO's that left you scratching your head at the end of the first day of trading. Suddenly companies who had never turned a profit were "worth" $100mm. Some went on to major success with the extra capital, others tanked. Remember when Yahoo stock was trading at over $400?
There were also a lot of people who got burned trying to day-trade with all the new options for people to do their own trading on-line without using a broker for advice and having little investment knowledge.
There was a ton of profit taking at the end of that binge. There were also a lot of lessons learned about getting over-speculative on emerging technologies. I don't think there will ever be that kind of explosive growth in the stock market again. Well at least not until the "next" internet. It's also not possible to throw heaps of credit on that growth to Clinton. It had more to do with the greed of individual investors than anything.
Foreclosures: Take a look at the mortgage companies that are buckling. These were high-risk lenders.
There are also a lot of people who, due to the high price of housing in some areas, have elected to go with interest-only mortgages, ARM's, or found other vehicles to buy a home which is logically out of their price range with a traditional mortgage. There are a lot of ARMS coming up for re-sets to higher rates in the next couple of years.
And don't forget to add in the poor folks who bought at the peak of the market in over-heated housing markets who are now trying to move else-where and can't get what they paid for their house, so they are just leaving.
IOW- there is some blame to lay at the feet of over-aggressive lenders in a competitive lending market, and stupidity on the part of people buying homes they really couldn't afford in the first place. It's not necessarily people losing their jobs who are facing foreclosure.
I'm not living in a vacuum and do realize there are pockets in the country where unemployment is higher. There are people who have lost a job, gotten a divorce, or had a medical crisis that wiped them out.
However, using mortgage foreclosures as a leading barometer for the economy is an imperfect science when you take into account ALL the factors at play.
quote:
Originally posted by deinstein
quote:
Originally posted by Conan71
quote:
Originally posted by deinstein
Debt. Debt. Oh yeah, don't forget about...DEBT.
What your student loans? [;)]
You'll feel differently ten years down the road when you are away from the idealism of TU making good bank and have funds available to invest.
I don't go to TU, I don't have any student loans and I already do invest.
[;)]
Must have you confused with another poster, my bad[;)]
(Conan, I swear I dont try to copy you! I start posting these things and get interrupted and they grow and it ends up taking 30 minutes to finish a damn post. This is the second time today I've done this. Not trying to, sorry)
I went to TU and I have student loans. and more loans. However, at 4% they can sit and fester.
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Per the DOW. An economist friend of mine put it well when he said
quote:
Probably the worst economic mistake made day after day after day in the news media is the confusion of the level of the stock market with the strength of the economy as a whole. The stock market is a place where a bunch of people come together to exchange guesses about the values of a bunch of different companies. Since many of the people participating in the stock market are speculators rather than investors, their guesses are often frenzied and wildly out of line with reality. The economy as a whole, by contrast, is where everything that we own and everything that we produce come together to make life tomorrow better than life today. Unfortunately, few reporters know the difference.
That is entirely true. However, when you see the stock market rise it at least means people have some confidence and the money to invest. Furthermore, when corporate profits are on the rise and P/E ratios stay in sane zones it is even more impressive. Again, I fully admit a robust stock market does not a strong economy make nor indicate. But it helps (can money buy happiness?).
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Per politics and economics.
It is undeniably true that the crash of 2000 was primarily caused by, as Greenspan put it, irrational exuberance. The stock market didn't so much crash as get back to reality. PE's in the 60's, companies with no assets OR profits worth hundreds of millions and capital flowing to any BusinessVenture.com to be had. Clearly after the bubble burst there was still further fall out as investors got nervous. And yet MORE following 911. And the final death blow was the combined effect of scandals surfacing and some sectors collapsing (Communications & Aviation foremost).
Now, if someone can point out out to me what Bush had to do with any of that I would appreciate it. His primary snafu was mentioning a weak economy/unstable stock market in his first State of the Union address. Otherwise, his economic agenda has been praise other than one primary complaint.
The complaint obviously being his total lack of fiscal responsibility. It makes investors nervous to see continuation of debt load both presently and in the future obligations. A secondary complaint would be his failure to garner good relations with the rest of the world. This has yet to have a serious impact on international trade, but the prospect is enough to keep the markets scared.
So overall I dont think you could blame Bush for the collapse. It started before he was there and factors outside his control were the primary drivers for its continuation. If you wanted to try and point a political figure the prior office holder would certainly have more responsibility for the irrational exuberance, the terrorist strikes, and the accounting scandals. All of the underlying causes took place during Clinton's administration, not Bush.
Though, I would like to point out, there is little the executive could have done for at least 2 of the 3 causes (how much does the average president know about accounting schemes and shadow corporations?). And just like Bush in Iraq, Clinton acted in regards to Osama with the best intelligence we had available. A bombed warship, a few marines, a barracks, and a couple embassies was worth doing anything about at the time.
Oh, and for the BOOM under Bill Clinton., thank god Al Gore "took the liberty, of inventing the Internet." [:P]
Clinton is an example of being in the right place at the right time and being smart enough to stay the hell out of the way, economically speaking.
Happens to me too. [;)]
Two more things, one of which I thought of as I mentioned the "next" internet in my last post.
"Green Technologies" could be the next one.
However, the huge market gains in the .bomb era happened just as much because on-line trading had really just come about, there were lots of young techies making good bank and playing the market- trying to become billionaires by the time they were 30. Plenty of those people learned their lesson or wound up penniless.
It will be just as hard to separate the hucksters in GT from the real deals as it was with the hot IPO's of the '90's. But we will be able to thank Algore again for inventing Global Warming. [;)]
Second thought was from CF's post- the stock market for speculators is a lot safer form of gambling than Vegas. Nothing more, nothing less. People who are pros figure out how to make money off it when it goes up and when it goes down. I've had short-selling explained to me countless times. Either I don't have the guts to do it or I'm just too obtuse to figure it out.
Short selling is some weird stuff, and even a moral conundrum for some.
My opinion of investing overall:
This always has been and will be (barring a devestating total implosion of our economy due to debt or world war) a growth based economy. We expand and build things and finance them based upon the ever exponentially increasing growth of our economy.
Stock market investing in general has historically yeilded a what, 8-12% yearly gain? I forget the exact number, but in that range.
That is overall, for everyone. Most people just have money mindlessly put in for retirement plans. Some people are just plain foolish.
All you need is the slightest bit of education and knowledge, and you are ahead of the curve. So for an educated investor, making gains of 20% a year or more is pretty easily done.
I only wish I had money to invest :)
I don't believe I could be a short. I understand the concept, I don't have the guts.
I might actually find it fun to short companies I dont neccesarily approve of.
Like big pharma corps. I'd love to see their demise, why not make some bucks along the way? :D
Give it up. Only people tied to the government who know of impending disasters can short stocks...[8D]
quote:
Originally posted by dinkleman23
Good news? Let's see the DJI was last at these levels in 2000 so if someone was invested in the DJI for these past seven years they have a negative real return. Dividends will mitigate slightly but not much.
You need to learn about investing ... your no-knowledge shows.
Having an off day at Edward/Jones......
lol @ teddy jack. You know we pay a phone tax was initiated as a telegraph and wire tax to pay for the Spanish-American war? Those bastards. So I would rest assured that we wont ever really pay this way off either.
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Shorting a stock is nearly impossible to make money off of as a private investor. You can do it, as IP pointed out, as a corrupt official - which explains why the Senate (who is exempt from insider trading laws) has nearly double the average return of the average American (shenanigans!). It also works for corporate officials (say your company sold tainted pet food and you want out, and delayed the announcement that the pet food was tainted until after you sold).
The best way to make money if you think a stock is going to crash is to sell options. But you have to be able to cover the margin of at least a 20% rise. Ouch. I usually just avoid it and buy into a competitor. The best way to make money, is not to lose it.
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More bad news, DOW 12,900. More importantly my portfolio is up 10% for the year (apprx. 31% APR). Man, that's just horrible, horrible news. In fact, today its so bad, every stock I hold in the online account I actually pay attention to is up:
BJS 29.70 +0.10 (0.34%)
MMM 78.02 +0.44 (0.57%)
PPR 7.58 +0.00 (0.02%)
SYNM 3.40 +0.01 (0.29%)
TGB 3.13 +0.09 (2.96%)
WMT 48.97 +0.63 (1.30%)
YUM 61.04 +0.36 (0.59%)
DE 112.61 +1.91 (1.73%)
Ebay 33.48 +0.29 (0.87%)
BA 93.64 +0.65 (0.70%)
BRK.B 3,637.00 +4.20 (0.12%)
Though I confess I think its trading high and will probably get out of a few and buy into some overseas mutuals.
Dow at 12,900. CF, do you ever get tired of being the bearer of bad news? This just sucks!
It's not bad news, it's just not really news at all. Thankfully, no one chose to post a new thread every freakin time DJI hit a new high.
I don't mind talking specific stocks, I do quite a lot of that. But DJIA? Who cares? I own stock in a company that's up 15% TODAY, repeating TODAY, expecting no less than 60% on the year (with something more in the neighborhood of "ungodly" gains possible). DJIA isn't going to do that! Screw DJIA.
Michael, I posted this thread because the news that the economy overall is doing well has been ignored and downplayed as much as possible. Fully acknowledging that the DOW is not an indicator for the entire economy, it is one that people recognize and understand (people complain when unemployment is 'up to 4.5%' even though that's not really bad).
Nor should the DJIA be the benchmark for investments. They are inherently low risk large cap stocks. S&P makes a much better benchmark... but again, for some reason everyone loves the DOW.
I don't do specific stocks. That's because you would have what's called specific-stock risk.
If you don't know what that is, ask a former Enron employee.
Index funds (S&P 500, Russell 2000, etc.) are best for investing in the market. Their costs are very low, they follow the market, and you have a diverse portfolio with minimal fuss.
I agree. I have a list of 4 ETF's I'm looking to expand into. VTI IYR IYM EFA, mostly for diversification and stability.
But right now, I think part of my mindset is I'm still a little on the young-side, I'm only 34, if I lose I lose, I still have time to build it back. In the riskier stocks, I look for very specific items. So far, it's going well. I will be moving into more stability soon.
Anyone want to bet me on the Dow?
I will bet lunch the DOW goes down on Monday.
Chickens...No one would take my bet...
Dow lost 43 points on Monday.