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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41614  
Subject: What a Jerk! Date: 9/7/2007 5:40 PM
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Today, the market dropped like a stone to a large degree because Alan Greenspan ran off at the mouth. He needs to learn to keep his trap shut because his thoughts are always used by Wall Street to over-sell the worst case scenario. Let's take a look at the financial guru's ideas:

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly [the bank panic of] 1907," Mr. Greenspan told a group of academic economists in Washington, D.C., last night at an event organized by the Brookings Papers on Economic Activity, an academic journal." - Alan Greenspan

For the whole story you may go to:

http://money.aol.com/news/articles/_a/greenspan-likens-market-turmoil-to-1987/20070907063909990001

Here is what I think. I agree 100% with that Mr. Greenspan said. He is absolutely correct, the behavior of the market is reminiscent of all of those previous catastrophes, but is it really the same? I say it is very different in almost every way...except for the silly volatility. Today is another example of the same thing and I blame it on Greenspan's mouth. The whole thing is gamesmanship by Wall Street, not the failure of the underlying strengths of our economy or over-valuation by the brokers.

What Greenspan is looking at is the volatility of the markets, not the low unemployment, the 50 year low Treasury Note rates, low inflation, high corporate profits/earnings nor the underlying growth in the economy as a whole. Nope, he just looked at the volatility and said he is reminded of the land-boom collapse of 1837 and the bank panic of 1907. What a crock!

Please do yourself a favor and read up on the 1837 crash and the panic of 1907...what we are seeing today is nothing like either of them except for the volatility stirred up on Wall Street by over-selling any story. This particular one is using Greenspan as their basis and it is more of the exact same thing! A bunch of Wall Street BullS#*t.

By the way, the 1837 crash and the panic of 1907 were both created by a pile of Financial manipulation and Wall Street BullS#*t. That is what you will find when you read up on the real story. Both were extreme cases of market manipulation.

The crash of 1987 was also completely different with stocks hyped to record highs. Today, the market is supported by record high earnings and a growing economy. Look at the 1987 "crash"...not many months later the market was back making new highs again. The market had been depressed for almost 18 years and finally reversed trend in 1982. The growth took off and Wall Street quickly hyped the market too high too fast. What is that except manipulation of the buyers? The market needed a correction and it got one. That is not what the market needs today because it is right on the sustainable growth curve...take a gander:

http://invest.kleinnet.com/bmw1/stats35/%5EDJI.html

Check out 1987 on that chart while you're at it. Look how the market fell right back to a sustainable growth rate after that little blip. Was that a real crash? Or, did the pros on Wall Street sell the idea to enough people to get the market moves they wanted to see? I know what I believe.

Also, check out the Greenspan reference to 1998. There was a correction, but look where the market went after that. We were already is a bubble in 1998 and the correction merely slowed the rate of increase. The problem back then was in the international financial markets and Wall Street used them to stir up a contraction. But, what does that have to do with what we are seeing 2007? I just see more manipulation of any news by Wall Street. So, I agree with Greenspan...all of these man-made catastrophes are connected by a common thread and it has nothing to do with reality.

I think Alan Greenspan should spend some time showing Mike's BMW charts to his friends. That would tell the true story much better and it would stop the silliness on the street. Mr. Breenspan has allowed himsoef to become a big piece of the manipulation. He needs to stop that silliness.

I think this is a perfect oportunity to pick up some bargains. Mr. Market is having a sale and we need to be shopping for underpriced securities. Remember, for every seller that these gloom and doom stories create, there is a buyer who knows what he is buying and why.

In a sad sort of way, I guesswe should thank Alan Greenspan for providing such a great opportunity. However, I feel sorry for the suckers who were manipulated into selling great companies at their low price. That is just wrong, but that is a part of this game called investing. The key to success is to learn how to not be the sucker.

It's like playing poker. If you look around the table and cannot figure out who the sucker is, you are the sucker. Investing is exactly the same. I use the BMW Method to see where the suckers are located. It spots them everytime. Today is a prime example.
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Author: Sand105 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26860 of 41614
Subject: Re: What a Jerk! Date: 9/7/2007 9:44 PM
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I think this is a perfect oportunity to pick up some bargains. Mr. Market is having a sale and we need to be shopping for underpriced securities. Remember, for every seller that these gloom and doom stories create, there is a buyer who knows what he is buying and why.

Well, some folks are taking your advice:
http://biz.yahoo.com/ap/070907/insider_transactions_august_volume.html?.v=1

I tried to buy a bit more CSE and NSH today, but neither came down far enough. Think Greenspan can spew a bit more on Monday? If so, perhaps he can mention MKL by name - I really want to catch that one at about $430.

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Author: pywong8 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26863 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 12:01 AM
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Jim,

This chart, http://invest.kleinnet.com/bmw1/stats35/%5EDJI.html, supports your thesis very well. This chart is predicated on the US maintaining its growth and its dominance of the global economy. However, there is one small point: Country risk.

The US today is not like the one of old. It is the largest debtor nation in the world, with record deficits that keep on growing. Many of its manufacturing jobs have been outsourced. Its economy is sustained only because of trade-surplus nations like China, Japan, the oil-exporting and a few other Asian countries recycling their surplus trade into USD and investing it in the US. Worse, it has lost many friends in the world. Many countries are now moving their funds away because of anxiety about the value of the USD and restrictions on what assets they can buy in the US.

The subprime problem may just be the tip of the iceberg. If other problems crop up, the US economy will crash, and the stock market along with it. In that case, Alan Greenspan could be doing a lot of investors a big favor, although, maybe for the wrong reasons.:)

My investment in the US is just a drop in the ocean to the US. What is keeping me in the market are Boards like this where people are so generous in sharing their knowledge. But long-term, I will be divesting and shifting my funds to Asia. The growth is more predictable.

Just my 2 cents.

py

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26864 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 8:43 AM
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Please do yourself a favor and read up on the 1837 crash and the panic of 1907...what we are seeing today is nothing like either of them except for the volatility stirred up on Wall Street by over-selling any story. This particular one is using Greenspan as their basis and it is more of the exact same thing! A bunch of Wall Street BullS#*t.


Make no mistake - this thing would be PRECISELY like the 1907 panic if we did not have the Fed as lender of last resort to pump liquidity into the market (a role which back then was filled by JP Morgan himself).
The reason that we have the Fed is why it's currently all looking relatively under control.

http://en.wikipedia.org/wiki/Panic_of_1907

The problem, of course, is that the existence of the Fed appears to have encouraged the kinds of brinkmanship Wall Street has been engaging in....

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26865 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 8:45 AM
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I think this is a perfect oportunity to pick up some bargains. Mr. Market is having a sale and we need to be shopping for underpriced securities. Remember, for every seller that these gloom and doom stories create, there is a buyer who knows what he is buying and why.


The markets are very much overvalued on average. You have to pick your bargains very carefully. Homebuilders, for example, likely have a far way to go down until they become reasonable investment opportunities.

My advice to anyone would be - wait until the next recession. Then buy. It's going to come. Stocks, which are currently valued on record corporate profits (as percentage of GDP) will drop a lot when that happens. Then you buy. Now's too early.

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26867 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 10:43 AM
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My advice to anyone would be - wait until the next recession.
AdvocatusDiaboli


The experts cannot tell if and when we are in a recession, They usually only make up their minds after the recession is over. How do we lesser mortals know that we are in a recession if the experts don't?

Denny Schlesinger

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26868 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 11:04 AM
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The experts cannot tell if and when we are in a recession, They usually only make up their minds after the recession is over. How do we lesser mortals know that we are in a recession if the experts don't?


When the official number for quarterly GDP growth is negative two quarters in a row.
If you want to be sure you're in, make it the first quarter of negative GDP growth, or maybe even the first two quarters with below 0.5% (annualized).

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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26869 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 11:08 AM
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"The problem, of course, is that the existence of the Fed appears to have encouraged the kinds of brinkmanship Wall Street has been engaging in...." - AdvocatusDiaboli

I tend to agree and disagree. A number of things have happened since 1907 to change the overall situation completely. First, we are not on the Gold Standard which played into the game very prominently in the distant past. All sorts of games were played with Gold due to it's limited supply and the fixed price placed on Gold by the government.

A lacking in communications is another huge difference. The manipulators were much freer to jerk the market around than they are today. I know they still jerk things around, but they cannot influence the economy like they did in 1907. Back then, it was boom or bust...there was no "Goldilocks economy" like we have today. Plus, in 1907 the percentage of "normal" Americans who invested in the stock markets was maybe 4%...today it is around 60%. Actually, there is a great deal of stability provided when you have more investors and better communications. In other words, the total Capital is spread over a larger and larger group of people.

By the way, there were also panics in 1857, 1869, 1873 and 1893 that were rally the same old game with different twists. IN 1857 a shipload of Californai Gold headed from San Francisco to new York to provide liquidity to the markets sank off the caost of North Carolina...a panic was created. In 1869, President Ulyses S. Grant and the First Lady were even manipulated into creating another Gold panic. His brother-in-law used the family connection to defraud millions of investors and the solution was for Grant to open the treasury vaults and to sell Gold.

Today, the Federal Reserve can step up and provide liquidity that was not there 100 years ago. J.P. Morgan stepped up to perform that service many, many times in the old days. The government actaully had to beg him for support and I am sure he got many hidden perks for his service. Capitalists expect a return on their investments.

So, I agree that the Fed actually may make some manipulation of the markets easier because the bad guys know the Fed will step up and help solve the problem. However, the real solution is to backtrack their manipulations and put the people in jail who lied and cheated to suck Capital out of the system. From what I have read about the subprime debaccle, there was much outright fraud involved. In that respect, it is much like 1837, 1857, 1869, 1873, 1893 and 1907. The difference today is we have a system that allows us to find the perpetrators and bring them to justice. The dollars provide a great trail to follow. The question is, will we go back and prosecute the bad guys?

Overall, I think America has made great progress in smoothing out the rough spots in the free enterprise system. There are still shysters who try to misuse the system, but their abilities are greatly diminished. Laws have been put in place to regulate the major manipulations and to control them. The Federal Reserve is one of those positive steps in my opinion. I just wish Alan greenspan would dtop being a part of the problem and think before he puts sound bites out for the manipulators to use against the common stock investors.

If we read the entire article, the quote that made the headlines and created yesterday's selling spree is not the gist of Greenspan's speech. But, Wall Street glommed onto the doom and gloom scenario and ran with it. But, what's new? That is what they do every time because it generates sellers and too many sellers generate low price that are good for the manipulators because they are buying on the dips that they create with their doom and gloom stories. To them, it is just a game.

The way to beat the game is to understand it. I hope we are doing that right here.

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Author: ltpj Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26870 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 11:36 AM
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The experts cannot tell if and when we are in a recession, They usually only make up their minds after the recession is over. How do we lesser mortals know that we are in a recession if the experts don't?

Here's an interesting paper from the Jackson Hole conference.

http://www.kansascityfed.org/publicat/sympos/2007/PDF/2007.08.03.Leamer.pdf

I'm not much of a macro guy and certainly not an expert, but I believe that the U.S. recession started this quarter. I'm kinda' wishing I hadn't spent like a drunken sailor in August and drawn cash down to 8%.

Regards,
Tom

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Author: Sand105 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26872 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 12:03 PM
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The markets are very much overvalued on average.

Anything at all to back this up?

Stocks, which are currently valued on record corporate profits

So what you are saying is that the profits we are seeing, due mostly due to industrialization in China, Korea, Brazil, Latin America, India, and Russia are going to tank. That is a varied list of countries that have to regress to bring the current level of profits down.

So which countries are going to crash?

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26873 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 1:08 PM
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When the official number for quarterly GDP growth is negative two quarters in a row.
AdvocatusDiaboli


We know that. What we don't know is WHEN they will adjust the guesstimated GDP growth, it could be a quarter or two after it happens, in other words, by the time the recession is official it could well be over!

Denny Schlesinger

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Author: jck101 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26874 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 1:19 PM
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Today, the market dropped like a stone to a large degree because Alan Greenspan ran off at the mouth. He needs to learn to keep his trap shut because his thoughts are always used by Wall Street to over-sell the worst case scenario.

Yeah, I kinda thought when he retired, he would umm retire, not come out every 2 or 3 months and give us an update on his thoughts. The guy is now a semi politician who pushes his points of view and leaves others to clean up the mess. He should publish a paper if he has economic insights he wants to share, the statements like he recently made don't help anyone.

Eventually we'll get used to it and his statements won't move the market at all, but until then I guess look at it as a buying opportunity like you said.

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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26875 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 2:26 PM
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"Eventually we'll get used to it and his statements won't move the market at all, but until then I guess look at it as a buying opportunity like you said." - jck101

That may happen, but that was not the point I was attempting to make. What I was trying to point out is how Wall Street picks and chooses his words to sell their agenda. That makes a jerk out of Greenspan because he is allowing them to twist his message and distort the real story. You would think that after all these years Greenspan would be smart enough to make his message so clear that this could not happen. Then again, he has never been famous for clarity of message.

The real problem is sound bites and selective reporting. I read the entire article and saw all sorts of great BMW Method type positive messages. Wall Street read the same words and picked out the one reference to panics. That was not the Greenspan message but it became the headline and a new scare tactic for Wall Street.

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26876 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 2:56 PM
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Anything at all to back this up?


Certainly.
If you check out the P/E (with average five years trailing earnings)you'll find that it's about twice the historical median.

http://www.hussman.net/wmc/wmc070514.htm

Other measures, such as Price/Dividend are similarly devastating.
(1.8% vs. 4% historically, if I remember correctly).



So what you are saying is that the profits we are seeing, due mostly due to industrialization in China, Korea, Brazil, Latin America, India, and Russia are going to tank. That is a varied list of countries that have to regress to bring the current level of profits down.


Profits as percentage of GDP have always fluctuated. Competition, if nothing else, will bring them back to historic norms again. This is a cyclical thing.

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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26877 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 3:33 PM
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I have a few free minutes, so let me delve a little deeper into what Alan Greenspan said because I agree 100% with him. It's sad that the headlines failed to find the correct comments instead of the one that they chose to use.

"The euphoria in human nature takes over when the economy is expanding for several years, and leads to bubbles, "and these bubbles cannot be defused until the fever breaks." - Alan Greenspan

Exactly! But, the bubble we saw from 1995 to 2003 is behind us. The bubble was diffused by the reality of the situation. Wall Street over-sold the potential of the Dot.Com revolution and the stock prices were not justified by anything but the euphoria. Surely, there were no real earnings to back up the stock prices in most cases. That is why the bubble popped.

He continued, "Bubbles can't be defused through incremental adjustments in interest rates. The Fed doubled interest rates in 1994-95 and 'stopped the nascent stock-market boom,' but when stopped, stocks took off again. 'We tried to do it again in 1997,' when the Fed raised rates a quarter of a percentage point, and 'the same phenomenon occurred.'"

But, Wall Street was screaming and gnashing their teeth at every rise in the Fed rate! Here, I think Greenspan failed to get his own story right because the Fed did finally call a halt to the market's exuberance in early 2000 when the DOW 30 finally reversed course. Even then, the NASDAQ continued upward until the Fed raised again by a full 1/2 point. Wall Street tried to blame the Fed for creating the market collapse rather than admitting that they created a bubble by over-hyping stocks with no earnings. This is one of the Fed's jobs...to be Wall Street's whipping boy.

Alan is 100% right in the facts because, in hindsight, we can see what actually happened. But, Greenspan was wrong to say that bubbles cannot be diffused through incremental adjustments...the adjustments may need bigger increments though. What they did from 1995 thru 1999 did not seem to work, but that changed in early 2000 and Greenspan chose to leave those facts out of his speech for some reason.

"The human race has never found a way to confront bubbles," he said.

That is wrong! He confronted the recent bubble and was vilifed for doing it. However, when the Fed rate rose to over 7% the game ended. I agree it should not have required such a drastic upward move, but it is undeniable that the rate increases ultimately had their desired effect.

The subsequent rate reductions all the way down to 1% also had the desired effect of restarting the economy. As with the rise to 7%, it should never have taken that much of a move, but that is what the Fed decided to do. The unrealistically low rates helped create the housing bubble. However, I do not blame the Fed, I blame the crooks who abused the situation and defrauded our system to rob Capital.

The rate is now at 5.25% and the increase to that level did the trick this time. Six years earlier it took 7.25% to achieve the desired effect. I see that as a huge plus! The controlling rate is 200 basis points lower today and they are talking of cuts again. That is excellent!

The Federal Reserve is a two edged sword. It can be used to smooth the economy and resist inflation and recssions. However, it can create situations where unscupulous speculators manipulate the markets by over selling something. Recently it was real estate...before that it was Tech stocks. Both markets were held in check by reducing the same rate, but two differnet rates were needed. Real estate is far more sensitive to rates than the higher growth stock market. That is the important point.

Here is the part of his speech that I would have emphasized:

"Business expansions are driven by euphoria and contractions by fear. While economists tend to think the same factors drive expansions and contractions, 'the expansion phase of the economy is quite different, and fear as a driver, which is going on today, is far more potent than euphoria.'"

Did you get that? What Greenspan actually said was that we are in a contraction and it is driven by fear! Yesterday, the market proved him 100% correct. Look how his words were misquoted! And, sure enough, fear was used to contract the market once again.

"We have nothing to fear but fear itself," was how FDR said it in 1932. But, we are not into a Depression this time. We aren't even in a recession, but Wall Street is selling doom and gloom. They are hyping fear and that is what I heard Alan Greenspan say. The reports of his speech actually prove Greenspan to be 100% right!

Fear will create a recession and a little bit of positive thinking can stop it. I am not ready for unbridled euphoria again, but I am sick of the constant drone of negativism. Please, look at the BMW Method chart one more time. It tells the story better than Greenspan or I can:

http://invest.kleinnet.com/bmw1/stats35/%5EDJI.html

It doesn't get much better than this! We are right where we need to be...not too hot, not too cold...JUST RIGHT! This is exactly like Goldilocks would have it and all of the Bears are just wasting our time trying to make it worse than it is in reality! At least, that is what I believe.

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26878 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 4:21 PM
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The US today is not like the one of old. It is the largest debtor nation in the world, with record deficits that keep on growing.

Deficits are growing? Can you explain what measure you are using?

Many of its manufacturing jobs have been outsourced.

Does it matter than many of its manufacturing jobs have also been insourced?

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26879 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 4:24 PM
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He continued, "Bubbles can't be defused through incremental adjustments in interest rates. The Fed doubled interest rates in 1994-95 and 'stopped the nascent stock-market boom,' but when stopped, stocks took off again. 'We tried to do it again in 1997,' when the Fed raised rates a quarter of a percentage point, and 'the same phenomenon occurred.'"


WOOT
A full quarter of a percent (is that an oxymoron or what).
What he DIDN'T do, but could have done, would have been to increase margin requirements for stocks. That might have helped a bit. He might also not have dumped QUITE as much liquidity into the markets.
And he might not have made insane statements like the following (from 1999):


“To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indices of stocks and other assets.”

To anybody with a firm grip on market history, that statement was great entertainment. It reflected exactly the sentiments that existed just before the 1929 Crash. As J.K. Galbraith wrote in his book The Great Crash, 1929, the influential Joseph Lawrence of Princeton also defended the market's valuation at the time, saying:

“The consensus judgment of the millions whose valuations function on that admirable market, the Stock Exchange, is that stocks are not at present over-valued. Where is that group of men with the all-embracing wisdom which will entitle them to veto the judgment of this intelligent multitude?”


http://www.hussmanfunds.com/wmc/wmc040209.htm

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Author: WuLong Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26880 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 4:26 PM
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let me delve a little deeper into what Alan Greenspan said because I agree 100% with him
And yet he's a jerk.
I'm not getting this.

What Greenspan actually said was that we are in a contraction and it is driven by fear!
Duh.
And WEB keeps saying "be greedy when others are fearful".
Are you saying its wrong to tell the truth? Or just for AG?

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26881 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 4:28 PM
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The US today is not like the one of old. It is the largest debtor nation in the world, with record deficits that keep on growing.

Deficits are growing? Can you explain what measure you are using?


Er - dollars maybe?
Current account deficit:

http://www.epi.org/content.cfm/webfeat_econindicators_capict_20060616

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26885 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:01 PM
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The US today is not like the one of old. It is the largest debtor nation in the world, with record deficits that keep on growing.

Deficits are growing? Can you explain what measure you are using?


Er - dollars maybe?
Current account deficit:

http://www.epi.org/content.cfm/webfeat_econindicators_capict_20060616


You don't have to be so condescending (or maybe you do. I don't know). It isn't at all clear that this person was talking about current account deficits. Typically people are referring to the Federal budget deficits when they say "deficits."

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26886 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:13 PM
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You don't have to be so condescending (or maybe you do. I don't know).


Well it does feel kind of good.

Typically people are referring to the Federal budget deficits when they say "deficits."

The federal budget deficit isn't looking that good either, is it, and in fact it contributes a third to the US current account deficit.
Currently you're running a 2% of GDP deficit (if you count in the SS surplus, if not, it's around 4%), and this is the top of the economic cycle.
Just wait til you get a recession. You'll be up to 6-7% in no time.

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Author: mklein9 Big gold star, 5000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26887 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:21 PM
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My advice to anyone would be - wait until the next recession.

OK, so let's say it takes a year until we know we're in a recession, or at least become sufficiently convinced of it that we think it's time to buy. Then we buy, and over the next 2 years make 50% because we timed it pretty well. That's a CAGR of 14%, under optimistic assumptions. Not very good in my book.

-Mike

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26888 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:29 PM
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The federal budget deficit isn't looking that good either, is it, and in fact it contributes a third to the US current account deficit.
Currently you're running a 2% of GDP deficit (if you count in the SS surplus, if not, it's around 4%), and this is the top of the economic cycle.


I didn't say that the Federal budget deficit was looking good, but if the budget deficit was what was being referred to, it isn't increasing.

Just wait til you get a recession. You'll be up to 6-7% in no time.

Interesting prediction considering that it has only been higher than 5.1% once since World War II.

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Author: mklein9 Big gold star, 5000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26889 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:35 PM
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Many of its manufacturing jobs have been outsourced.

Does it matter than many of its manufacturing jobs have also been insourced?


Furthermore, isn't it maybe a pretty interesting development that some, maybe many, of those are capital-intensive jobs, which might mean that on average the US' return on invested capital might be increasing? In my mind, return on invested capital is the engine of profitable growth. It doesn't seem so bad to me to see other countries willing to invest huge amounts of capital into low-profit manufacturing. It frees the US from high-capital industries and/or industries whose main advantage is access to cheap labor, and lowers prices for our consumers. This may not always be a smooth transition -- certainly no major change ever is -- but is, again IMHO, a movement in the right direction.

-Mike

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26890 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 5:37 PM
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OK, so let's say it takes a year until we know we're in a recession, or at least become sufficiently convinced of it that we think it's time to buy. Then we buy, and over the next 2 years make 50% because we timed it pretty well.


Let's assume the stock market performance between now and the next recession is -40%.
That's a conservative estimation - this would still leave the market at above median valuations. Wouldn't it be good to be out?

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Author: jlyer Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26891 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 6:03 PM
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Here is a counterpoint to the gloom of the current account deficit, a research paper that a friend of mine is involved in (from U of Rochester):

http://www.somc.rochester.edu/May05/Stockman.pdf

Basically -- the current account deficit is not a problem at all because our businesses are healthy -- and that is what is bringing foreign investments in. Not to mention that foreign countries have a looming need of having larger savings due to older population, and are saving in anticipation of retirement.

However, we'll eventually have to deal with the problem that lot of people have personal debts, but that is more of a microeconomic, not macroeconomic problem.

Point here is: I am not sure current account deficit is anything to worry about.

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Author: Sand105 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26892 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 7:23 PM
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If you check out the P/E (with average five years trailing earnings)you'll find that it's about twice the historical median.

http://www.hussman.net/wmc/wmc070514.htm


I have always hated this metric - I think it is terribly flawed. Averaging P/E ratios, particularly at this point when the average includes the high current earnings combined with the high P/E days of '02 and '03 ends up showing a red flag with this metric.

The fact is earnings are high for very good reasons - there is lots of real GDP being created in the US and particularly in developing countries. P/E ratios in a lot of these places are also low - these are real earnings associated with real growth.

Other measures, such as Price/Dividend are similarly devastating.

This is more interesting and compelling if you could find the list.

From my perspective I see the spread between Treasury yields and stock yields decreasing (or in the case of high yield stocks, increasing). This argues for stocks being undervalued.

Right now my portfolio is yielding ~1% better than the 10 year Treasury.

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Author: jck101 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26895 of 41614
Subject: Re: What a Jerk! Date: 9/8/2007 11:52 PM
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That may happen, but that was not the point I was attempting to make. What I was trying to point out is how Wall Street picks and chooses his words to sell their agenda. That makes a jerk out of Greenspan because he is allowing them to twist his message and distort the real story.

I misunderstood because I am one of the people who generally only listens to soundbites. Hopefully I've learned my lesson.

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Author: mklein9 Big gold star, 5000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26896 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 1:19 AM
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Let's assume the stock market performance between now and the next recession is -40%.
That's a conservative estimation - this would still leave the market at above median valuations. Wouldn't it be good to be out?


Yes, if you're only using the broad market to invest. My point was more to illustrate that sitting out results in rather anemic returns even if you eventually get some great luck and guessed right. The context here, on this board, is to concentrate on picking individual stocks that are undervalued and ignoring the macro stuff. By doing that you should certainly be able to do better than 14% even during a recession. There are always good opportunities at any time.

-Mike

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26897 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 1:36 AM
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I have always hated this metric - I think it is terribly flawed. Averaging P/E ratios, particularly at this point when the average includes the high current earnings combined with the high P/E days of '02 and '03 ends up showing a red flag with this metric.


It makes sense to take the average of trailing earnings over the course of an economic cycle - after all, stocks don't become "expensive" when earnings crater temporarily in a recession.
As an example, earnings for the S&P 500 fell by about half between 2000 and 2002. The price of the S&P 500 fell only about one third, so the P/E was certainly higher in 2002 than in 2000. Yet you would never say that the S&P 500 was more overvalued in 2002 than in 2000.
Going forward, someone who bought the S&P 500 in 2002 will continue to outperform someone in 2000.
So evidently normal P/E isn't a good measure, you want to somehow capture the "earning potential" of the stock market, not its current earnings. One way of doing this is use of an average - to capture the earnings of one economic cycle, and compare it with another past cycle. This is what taking average earnings does.

Usually Hussman simply takes the last highest earnings (the record "E") to smooth out the ups and downs of the economic cycle.
That paints a picture that is a bit more favorable, but not by that much. It leaves you with a P/E of maybe 17.5, which is still high (the median valuation for P/Record E is 11).

This is more interesting and compelling if you could find the list.


Barra used to have very nice Price/Dividend charts for the S&P 500.
Doesn't look like they have them anymore.
Here is the stock market data from Robert Shiller ("Irrational Exuberance").

http://www.econ.yale.edu/~shiller/data/ie_data.htm

Better is the Excel file, I suppose, which can be gotten here:

http://www.econ.yale.edu/~shiller/data.htm

It shows that the current dividend yield for the SPX is about 1.8%.
Historically, it's around 4%.

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26898 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 1:41 AM
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The context here, on this board, is to concentrate on picking individual stocks that are undervalued and ignoring the macro stuff. By doing that you should certainly be able to do better than 14% even during a recession. There are always good opportunities at any time.

That's true, but it will be a lot harder going into the next recession than it was going into the one in 2002.
In 2000 there was an incredible bifurcation between the valuation of the popular sectors of the market (high-tech, well known blue chips) and especially small-cap value and commodity stocks.
I don't think there's a sector right now that's similarly undervalued. I'd be glad to here your in that regard.
I do believe however that the chances of getting returns of over 10% annualized between now and the next recession by picking individual stocks as extraordinarily low.
What stocks are you thinking about?

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26900 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 2:31 AM
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It makes sense to take the average of trailing earnings over the course of an economic cycle - after all, stocks don't become "expensive" when earnings crater temporarily in a recession.

AdvocatusDiaboli


Why not just compare dollars to dollars? At the end of the day if you buy a stock for $1 and sell it for $2 you have made a 100% gain no matter what the P/E was at any time between purchase and sale. Imagine telling your stock holders that you lost half their money, but not to worry, the P/E is less than half now than when we bought it so the intrinsic value is a lot higher than when we bought it.

Frankly, I think the market is fairly valued:

http://invest.kleinnet.com/bmw1/stats30/^GSPC.html
http://invest.kleinnet.com/bmw1/stats30/^DJI.html

Denny Schlesinger

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Author: mklein9 Big gold star, 5000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26901 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 2:44 AM
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I don't think there's a sector right now that's similarly undervalued.
...
I do believe however that the chances of getting returns of over 10% annualized between now and the next recession by picking individual stocks as extraordinarily low.


I don't really pay much attention to sectors so I don't have a pulse on any. My approach is unfortunately not very BMW-ish at this point but based on fundamental screening for specific situations. Half of my portfolio currently is market caps under $100 million, but that tends to vary. In any case I don't really have any BMW-ish stocks to suggest and agree that it's not as obviously easy as it has been at some times in the past. But personally if I thought 10% were the best I could get for the next couple of years, I'd have to be getting back into the job market and real quick :-). My own expectation is a great deal higher than that.

-Mike

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26902 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 3:20 AM
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http://invest.kleinnet.com/bmw1/stats30/^GSPC.html
http://invest.kleinnet.com/bmw1/stats30/^DJI.html

Denny Schlesinger


Denny,
you've created a trend channel for the period between 1980 and now. That period is dominated by the biggest bull market in history. This period took valuation from extremely low (P/Peak E of 7) to extremely high (35 in 2000, about 18 now). Dividend yield went from 6% to 1.8%.
In order for the returns of the last 25 years to continue, you would need a further increase in P/E, and a further decrease of dividend yields.
I suggest that this is unlikely, and that we are more likely to see a return to lower, historically normal P/Es, and higher dividend yields - through either a prolonged stagnation in prices, or an outright price decline.

You may want to make that graph for the entire post-war period to get a more realistic expectation.

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26903 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 3:22 AM
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Half of my portfolio currently is market caps under $100 million

I'd be curious to hear a few names, if you care to share them.

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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26905 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 5:11 AM
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I said, "Let me delve a little deeper into what Alan Greenspan said because I agree 100% with him."

WuLong asked, "And yet he's a jerk....I'm not getting this."

I thought that I explained this. I think a jerk misrepresents himself and crates havoc through his actions. In Greenspan's case he continually uses words that allow Wall Street to pick and choose the sound bites to sell their agenda. In his position, the ex-Federal Reserve Chairman needs to be smarter than that.

Or, maybe he does it on purpose. Who knows which it is?

About 15 years ago Steve Martin, the comedian, did a movie entitled "The Jerk" which explains this. I see Alan Greenspan much like the dufus in that movie. The character always had the best of intentions and acted in good faith but the things he did created havoc.

In the movie, the jerk learned to deal with his jerkiness. Alan Greenspan just never seems to catch on. Then again, maybe the real jerks are the Wall Street stock brokers and the media who fail to accurately report his message.

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Author: erierambler Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26906 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 8:08 AM
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That's true, but it will be a lot harder going into the next recession than it was going into the one in 2002.
In 2000 there was an incredible bifurcation between the valuation of the popular sectors of the market (high-tech, well known blue chips) and especially small-cap value and commodity stocks.


Common sense, I like this explanation. Other people are making good points , but this one stands out.

I don't think there's a sector right now that's similarly undervalued. I'd be glad to here your in that regard.
I do believe however that the chances of getting returns of over 10% annualized between now and the next recession by picking individual stocks as extraordinarily low.
What stocks are you thinking about?


The only sector that I can see is XLP ( consumer staples ). It hasn't hardly reached above it's 2000 high. Can't say it's undervalued , but I'm suspecting that is where to be looking to the future for big caps, for now.

erie

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Author: DavidRuttenburg One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26907 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 8:35 AM
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The subsequent rate reductions all the way down to 1% also had the desired effect of restarting the economy. --BuildMWell

I've been around the Fool for a while, but only on this board for a month or two. But I have a question.

Was it a drop in interest rates or the tax cuts that restarted the economy?


Thanks in advance.


--a complete novice

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26908 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 9:08 AM
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you've created a trend channel for the period between 1980 and now. That period is dominated by the biggest bull market in history.
AdvocatusDiaboli


The bull market with the highest CAGR but not the longest in years, that glory goes to the 1932-1966 bull market. The period from 1942 to 1966 was not a shabby bull market either with a CAGR of 10.3%


Start End CAGR Years
Jul 1982 808.60 Sep 2007 13,113.38 11.7 25
Apr 1942 95.35 Jan 1966 983.51 10.3 24
Jun 1932 42.84 Jan 1966 983.51 9.8 33
Apr 1942 95.35 Sep 2007 13,113.38 8.0 65
Jun 1932 42.84 Sep 2007 13,113.38 7.9 75
Jan 1893 30.00* Aug 1929 380.33 7.2 36

* Eyeball estimate


You may want to make that graph for the entire post-war period to get a more realistic expectation.

I don't have 1942 to the present chart but we can eyeball a longer term chart:

http://invest.kleinnet.com/bmw1/special/DJIA.html

Starting from around 1935, the Dow has an average CAGR of 7% plus dividends. Ten percent should be sustainable if we don't do stupid politics like the New Deal, The Great Society and the Nixon-Ford-Carter stagflation. At the international level the economy is getting a great push forward by also eliminating some of the more draconian economic dictatorships. Now, if Euroland would get rid of their form of economic restraint, the world could grow even faster.

The 40 year Dow chart shows an Avg. CAGR of 9%

http://invest.kleinnet.com/bmw1/stats40/^DJI.html

Denny Schlesinger

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Author: abFatPitch Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26910 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 9:38 AM
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OK, so let's say it takes a year until we know we're in a recession, or at least become sufficiently convinced of it that we think it's time to buy. Then we buy, and over the next 2 years make 50% because we timed it pretty well. That's a CAGR of 14%, under optimistic assumptions. Not very good in my book.

-Mike


Except those still holding in that interim period have their ports drop 20 or 30% during the recession.

ab

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26912 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 11:51 AM
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Was it a drop in interest rates or the tax cuts that restarted the economy?
DavidRuttenburg


Liquidity restarts the economy. Tax cuts provide liquidity. Rate cuts provide liquidity. Lower credit standards provide liquidity. Housing bubbles and stock market bubbles provide liquidity. Free trade provides liquidity.

The economy tanks when one or more of the above breaks: borrowers can't repay their loans, banks cut lending, housing values fall, Congress increases taxes or tariffs on trade, stock market darlings go broke.

Denny Schlesinger

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26913 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 12:25 PM
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The context here, on this board, is to concentrate on picking individual stocks that are undervalued and ignoring the macro stuff. By doing that you should certainly be able to do better than 14% even during a recession.

Wow now that is optimism, where can I send you my money?

I'll even let you keep anything over the 14% assuming of course you will cover any shortfall :<)

B

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Author: pywong8 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26915 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 12:53 PM
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MadCapitalist said:
Deficits are growing? Can you explain what measure you are using?

Here are the figures and sources. It is based on annual figures, not quarterly, as I believe it gives a more representative figure:

2005 http://www.bea.gov/bea/newsrel/transnewsrelease.htm
2006 http://www.iie.com/publications/papers/paper.cfm?ResearchID=735

Current Account Deficit USD
2005 792 billion
2006 857 billion

He also said:
Does it matter than many of its manufacturing jobs have also been insourced?

I am not sure I understand your question. What do you mean by insourced?
If you are saying that outsourcing of manufacturing jobs is not important, then I am afraid the late Dr Kurt Richebacher may not quite agree with you. http://www.richebacher.com/

jlyer said:
...foreign countries have a looming need of having larger savings due to older population, and are saving in anticipation of retirement.

...... Point here is: I am not sure current account deficit is anything to worry about.


For every expert who has an opinion, another has an opposite opinion. For example, C. Fred Bergsten of Peterson Institute says here: http://www.iie.com/publications/papers/paper.cfm?ResearchID=705
(The US economy is vulnerable to large and prolonged reductions in foreign capital inflows, especially if such shifts were to occur abruptly.)

and here: http://www.iie.com/publications/papers/paper.cfm?ResearchID=735
(The goal of US adjustment should be to cut US global current account deficit to 3–3.5 percent of GDP. The dollar will need to fall, hopefully in a gradual and orderly manner over the next two or three years, by a trade-weighted average of about 20 percent. An increase of at least 15 percent in the average value of the RMB against all other currencies, which would imply an appreciation of about 35 percent against the dollar.)

Actually, one's perspective depends on whether you are looking in or looking out. If you are in the US and spending USD, it probably doesn't matter too much to you whether the USD depreciates or not against other currencies. But for a non-resident foreigner, it matters a lot.

I think it is wishful thinking to believe that foreign countries have nowhere to keep their money except in the US. The challenge for those countries is really how to manage an orderly diversification of their USD holdings away from the US in order not to trigger a dollar crash. You can be sure that they are reducing the inflow of new funds to the US.

Leaving aside as to which economist is right, what is undeniable is that the USD has dropped substantially against the major currencies of the rest of the world and the outlook is that it has to drop a lot more to bring its deficit to manageable proportions.

Here is the change from Jan 2003 to date:
1 USD =	             Jan 03	   Sept 07	   Depreciation of USD
AU $ 1.77 1.2043 32%
Can $ 1.56 1.0557 32%
Chinese RMB 8.3 7.5415 9%
Euro 1.03 0.7262 29%
Japanese ¥en 120.48 113.375 6%
SGD 1.75 1.53 13%
Swiss Franc 1.4 1.1885 15%
U.K. £ 0.63 0.493 22%


Currency risk is therefor very real. Factoring in the risk of a stock market crash during a US recession, it would appear that country risk of the US is quite high.

The question for a foreign investor is: Is the potential gain from investing in the US stock market enough to offset the risk of a dollar devaluation?

py

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26916 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 1:25 PM
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Today, the market dropped like a stone to a large degree because Alan Greenspan ran off at the mouth.

…and I thought the market dropped like a stone because it was becoming becoming increasingly clear that the pain the housing/mortgage situation, coupled with high gas prices, were causing was beginning to spill over into the broader economy. A contracting job-market in August didn't help either. Apple reducing the price of its new iphone by $200.00, HOG and even COST, reporting and predicting slowing sales and growth etc. All this is indicative that even the more affluent are curtailing their discretionary spending and are having to allocate a larger portion of their budget for necessities.

…seems to me that you give the guy (Greenspan) too much credit.

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26919 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 2:35 PM
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The question for a foreign investor is: Is the potential gain from investing in the US stock market enough to offset the risk of a dollar devaluation?

py


That depends on the currency on which your economy is based. For example, Venezuela, being an oil exporter, had a US$ based economy. If the US is China's major trading partner, would not China be in the same boat? In other words, while the US economy is the elephant in the China shop, the worries foreigners have is not of major consequence for the USA.

It's the old golden rule, he who has the gold, rules. While the American consumer is affluent enough to buy all the world produces, America does not have much to worry about.

Denny Schlesinger

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26920 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 3:01 PM
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MadCapitalist said:
Deficits are growing? Can you explain what measure you are using?


Here are the figures and sources. It is based on annual figures, not quarterly, as I believe it gives a more representative figure:


Okay, but it doesn't make sense to first talk about debts and then use the word "deficits" to imply current account deficits.

He also said:
Does it matter than many of its manufacturing jobs have also been insourced?


I am not sure I understand your question. What do you mean by insourced?


I obviously mean the opposite of outsourced. There are quite a few foreign companies who have started manufacturing operations in the US.

If you are saying that outsourcing of manufacturing jobs is not important, then I am afraid the late Dr Kurt Richebacher may not quite agree with you. http://www.richebacher.com/

I don't care about Richebacher's opinion.

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Author: djdanad Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26922 of 41614
Subject: Re: What a Jerk! Date: 9/9/2007 4:59 PM
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For a direct reply to your request of beating 14%, here is a 10 year period of trades that would have accomplished it.
http://invest.kleinnet.com/hg/hg-hist97-sell1yr.html

Culling that list with a very simple limit, I pushed it near 50%. If you check Manucastle's CAPS portfolio, you can see how the over 100 million market cap stocks are fairing (rather well in comparison to the S&P 500, without the money losing/point winning shorts so prevalent in the high score CAPS ports).

So, to all of the prolific posters in this thread, I have enjoyed this forum because of its way above average civility. While you are writing your next post, please consider taking some of the heat from it to maintain the very generous atmosphere here.

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