Stocks and investing thread

[Y2HH]

ok, honestly, this run by the current market is totally unfounded and ridiculous. I have a feeling what we're seeing is some (ahem) foreign buying here to push things up to an "irrational" level. There's more then meets the eye on this "rise" of the markets, IMO.

 

The difference is, this time, unlike during the .com boom period of the late 90's early 00's, is that this bull is being led by blue chips and the DJ stocks that actually do turn profit and have solid portfolios. Unlike the last time, most of the stocks leading the way on the big board are paying dividends, turning profit, and aren't mired in debt while leaning on what business they 'may be conducting in the future'.

 

These are solid stocks, with solid pasts and solid futures.

 

People always ask me about stocks, as I'm one of my only people in my group of friends heavily (self) invested in stocks, how do you do it? Well, first, it's not rocket science...investing is all around us, everyday...we simply ignore it. Back in 99-01, when every "Johnny come lately day trader" busted onto the scene selling off their chips for diluted tech crap...I sold them what tech crap I had and bought up their blues at bargin basement prices. Just take a look around your house at the numerous products you cannot do without, (soda, candy, cereal, bread, etc) and read the packaging. Who makes those products?! Those are the companies to buy, the ones that will be here for a long time to come because they sell products we cannot live without. Drug companies is another one. People will always get sick, people will need meds. The key is buying them when they're low -- which they aren't anymore -- because people learned from the tech sector the first time around.

 

Oh, and futuremore, this is why trickledown is bulls***. The uninitiated into the global marketplace doesnt stand a chance, because the only info they have on investing is what comes from the experts -- who do not lose even if you do.

 

If you're interested in investing, just look around -- and buy companies you know have been here, and will be here for years to come. For example, Tootsie Roll company (haha, laugh if you will), but in a recession or downturned economy, when people cannot afford cars and expensive computers -- they can still afford a 2cent tootsie roll candy.

[NUKE_CLEVELAND]

The difference is, this time, unlike during the .com boom period of the late 90's early 00's, is that this bull is being led by blue chips and the DJ stocks that actually do turn profit and have solid portfolios. Unlike the last time, most of the stocks leading the way on the big board are paying dividends, turning profit, and aren't mired in debt while leaning on what business they 'may be conducting in the future'.

 

These are solid stocks, with solid pasts and solid futures.

 

People always ask me about stocks, as I'm one of my only people in my group of friends heavily (self) invested in stocks, how do you do it? Well, first, it's not rocket science...investing is all around us, everyday...we simply ignore it. Back in 99-01, when every "Johnny come lately day trader" busted onto the scene selling off their chips for diluted tech crap...I sold them what tech crap I had and bought up their blues at bargin basement prices. Just take a look around your house at the numerous products you cannot do without, (soda, candy, cereal, bread, etc) and read the packaging. Who makes those products?! Those are the companies to buy, the ones that will be here for a long time to come because they sell products we cannot live without. Drug companies is another one. People will always get sick, people will need meds. The key is buying them when they're low -- which they aren't anymore -- because people learned from the tech sector the first time around.

 

Oh, and futuremore, this is why trickledown is bulls***. The uninitiated into the global marketplace doesnt stand a chance, because the only info they have on investing is what comes from the experts -- who do not lose even if you do.

 

If you're interested in investing, just look around -- and buy companies you know have been here, and will be here for years to come. For example, Tootsie Roll company (haha, laugh if you will), but in a recession or downturned economy, when people cannot afford cars and expensive computers -- they can still afford a 2cent tootsie roll candy.

 

 

Great points. To add a little bit, I was reading where while earnings have exploded since the 2000-2001 recession, stock prices have risen much more modestly. As a result, the P/E ratio of the S&P 500 is only 15 or so right now as opposed to the 23-24 that it was during the height of the dot-com bubble. This implies that stock prices have a lot more room to run. Additionally, since most U.S. multinationals do a lot more business overseas now than they used to, their earnings are not affected nearly as much during a downturn in the U.S. economy as they once were. This is why corporate earnings have continued to increase drastically even as our own economy slows somewhat.

 

ok, honestly, this run by the current market is totally unfounded and ridiculous. I have a feeling what we're seeing is some (ahem) foreign buying here to push things up to an "irrational" level. There's more then meets the eye on this "rise" of the markets, IMO.

 

 

You can ask SS2K about this one but there's so much liquidity sloshing around out there that it ain't even funny. This cash has to be put to work somewhere so in an environment where corporate earnings are soaring the only answer is stocks.......hence this runup. I kinda wish they'd take a little breather for a week or so but I'm certainly not going to look a gift bull market in the mouth.

[Balta1701]

 

Graphic via the LA Times.

[kapkomet]

Some of these are business stupidities (Gap, Sharper Image, Hot Topic), some of these are a little surprising. It's pretty much a proven fact, though, that when gas goes up, (other) discretionary spending goes down.

[NorthSideSox72]

 

Graphic via the LA Times.

This is another one of those news articles that makes you say... "Ask the question!" The obvious question I have when I see articles like this is... what about online retailers? Those online outlets (Amazon, Buy.com, Peapod, etc.) are making huge gains every year, and I am sure that is cutting into the business of the brick and mortar stores. The bad weather will only exacerbate that effect.

 

So, frankly, I don't put much stock in numbers coming from the "International Council of Shopping Centers". I am guessing that group also discludes mom-and-pop local shops, which are making a comeback in a backlash against the Walmarts of the world. The article's conclusion that this is automatically a reaction to gas prices is narrow and incomplete, in my view.

 

 

Some of these are business stupidities (Gap, Sharper Image, Hot Topic), some of these are a little surprising. It's pretty much a proven fact, though, that when gas goes up, (other) discretionary spending goes down.

Yes, but there are other forces at work here that the article failed to address as well.

[southsider2k5]

Yes, but there are other forces at work here that the article failed to address as well.

Yeah, look at the companies whose sales are up, and tell me if they represent a niche.

[NorthSideSox72]

Yeah, look at the companies whose sales are up, and tell me if they represent a niche.

That's one!

[NUKE_CLEVELAND]

Another thing I've been reading is that the early Easter pulled quite a bit of sales back into March from April and that helped contribute to the decline in most places.

[southsider2k5]

Yesterday saw a record close in the SP 500, the first since 2000.

[Texsox]

This kind of prompted a survey of sorts, what is the shortest horizon y'all are comfortable with when buying a stock? I guess I am contrasting day trading versus retirement planning. There is no way I would want to make a move where I already knew I needed to sell in a day. For that matter, I wouldn't want to buy with less than a year or so. I know I am not asking this clearly. Perhaps this way, what is the shortest amount of time you would knowingly buy a stock for?

[southsider2k5]

I would only feel comfortable day trading, because that is what I have seen all of my career.

[Texsox]

I would only feel comfortable day trading, because that is what I have seen all of my career.

 

That is interesting and perhaps a generational thing brought on by technology. I was raised to think of stocks as long term investments. Perhaps it would be different if I had life events where I knew I would need to sell. You young kids are so advanced

[southsider2k5]

That is interesting and perhaps a generational thing brought on by technology. I was raised to think of stocks as long term investments. Perhaps it would be different if I had life events where I knew I would need to sell. You young kids are so advanced

 

I believe that stocks are a long term investment. But I have worked for nearly 10 years with traders and specialists, so my experience is in day trading type settings. It takes a whole different set of thinking for short term versus long term. One is trading, the other is investing.

[Texsox]

I believe that stocks are a long term investment. But I have worked for nearly 10 years with traders and specialists, so my experience is in day trading type settings. It takes a whole different set of thinking for short term versus long term. One is trading, the other is investing.

 

I guess I equate that trading with gambling. I'd go nuts looking at daily fluctuations, I could not imagine minute by minute. You are gutsier than I.

[southsider2k5]

I guess I equate that trading with gambling. I'd go nuts looking at daily fluctuations, I could not imagine minute by minute. You are gutsier than I.

 

Heck minute by minute would get you bankrupt. The stuff I deal with is tick to tick. Personally I have no money on the line, and don't plan on doing so. It is sort of like gambling, but there is lots of information out there that can make you a winner, unlike a casino where the house always has an edge.

[NUKE_CLEVELAND]

This kind of prompted a survey of sorts, what is the shortest horizon y'all are comfortable with when buying a stock? I guess I am contrasting day trading versus retirement planning. There is no way I would want to make a move where I already knew I needed to sell in a day. For that matter, I wouldn't want to buy with less than a year or so. I know I am not asking this clearly. Perhaps this way, what is the shortest amount of time you would knowingly buy a stock for?

 

 

I generally stick to mutual funds. I don't have the time or the patience to do research on all these companies so I just hand my money off to a professional and take advantage that way.

[NorthSideSox72]

A few financial items that might be discussion worthy...

 

So the markets had a bit of a panic, partially due to the whole sub-prime mortgage phenomenon, and there is a general fear that the big housing boom followed by the correction means a lot of mortgages will fail. Some are even predicting massive doom. There is a CNN article discussing these things, but also, the increasing realization that the economic recovery of 2003-2005 was in great part fueled by the housing boom. So putting defaults aside, another major danger to the economy is that the absurdly high consumer spending propelled by home equity dollars will have to dwindle. I'll be obnoxious here and say that I mentioned this a couple years ago. Anyway, its becoming reality now. How bad will it get?

 

Also on the mortgage subject, saw another article on a neat mortgage tool gaining steam in the U.S. It originated in Australia. Its much like a standard variable mortgage or HELOC, except instead of making payments against it, you actually deposit your paychecks to it, and pay out against other bills. this means your avg daily balance is lower, saving a bit on interest every month, and you have the potential to save tens of thousands in the long run. Only practical for those making positive net ground, though. What do people think of this? I might consider it in a few years, when its time to look to move out of the city and into a house somewhere.

 

And here is one more question - are stocks still overvalued, or did the correction last week take care of that?

 

[kapkomet]

A few financial items that might be discussion worthy...

 

So the markets had a bit of a panic, partially due to the whole sub-prime mortgage phenomenon, and there is a general fear that the big housing boom followed by the correction means a lot of mortgages will fail. Some are even predicting massive doom. There is a CNN article discussing these things, but also, the increasing realization that the economic recovery of 2003-2005 was in great part fueled by the housing boom. So putting defaults aside, another major danger to the economy is that the absurdly high consumer spending propelled by home equity dollars will have to dwindle. I'll be obnoxious here and say that I mentioned this a couple years ago. Anyway, its becoming reality now. How bad will it get?

 

Also on the mortgage subject, saw another article on a neat mortgage tool gaining steam in the U.S. It originated in Australia. Its much like a standard variable mortgage or HELOC, except instead of making payments against it, you actually deposit your paychecks to it, and pay out against other bills. this means your avg daily balance is lower, saving a bit on interest every month, and you have the potential to save tens of thousands in the long run. Only practical for those making positive net ground, though. What do people think of this? I might consider it in a few years, when its time to look to move out of the city and into a house somewhere.

And here is one more question - are stocks still overvalued, or did the correction last week take care of that?

Of course, I already have a house, but I'll have to read more on this.

 

IMO, things are still over-valued... but as to why, well, I have to work right now.

 

[southsider2k5]

The big sell-off Friday was not a good technical sign. I think we finally might be getting that official Bear market sell off that everyone has been hoping for.

[THEWOOD]

I think the market still has a good distance to go down. We have not seen a BIG rally since each of these massive down days. That shows the market has no legs. It will be a grind back down to around 12500 where it should find a good amount of support.

[DBAHO]

The big sell-off Friday was not a good technical sign. I think we finally might be getting that official Bear market sell off that everyone has been hoping for.

Yeah and the flow on effect is really hammering our market down here.

 

Our Dow Jones equivalent is down about 500 points over the past week, although everyone's calling it just a major correction we had to have, and not a bear market.

[southsider2k5]

I think the market still has a good distance to go down. We have not seen a BIG rally since each of these massive down days. That shows the market has no legs. It will be a grind back down to around 12500 where it should find a good amount of support.

 

 

Yeah and the flow on effect is really hammering our market down here.

 

Our Dow Jones equivalent is down about 500 points over the past week, although everyone's calling it just a major correction we had to have, and not a bear market.

 

12600 is the 10% official Bear market. We have to get down there and test that area first before you can really tell if this selloff has legs, or is just looking for the technical correction to get it out of the way.

[NorthSideSox72]

12600 is the 10% official Bear market. We have to get down there and test that area first before you can really tell if this selloff has legs, or is just looking for the technical correction to get it out of the way.

I so dislike the DJIA as a measure of the markets. I really wish they'd focus more on the 500, as well as the Russell.

 

 

[Cknolls]

I so dislike the DJIA as a measure of the markets. I really wish they'd focus more on the 500, as well as the Russell.

 

 

I would feel better if the S&P 500 hit 1400 and then reversed. Maybe even 1370. 1400 being a full reversal from the July high, and 1370 being long term trend line dating to 2002. But, that's just my opinion .

[Queen Prawn]

All I know is that my 401K has lost a good bit of money in the last month or so. The annual performance of my selections are very good, but the last month has been painful.