y8s

iTrader: (8)

amass Fiat 500s. when gas prices go nuts, you can sell for profit.

JasonC SBB

Here. The key word to remember is... UNSUSTAINABLE.

http://www.sovereignman.com/expat/is-it-fixable
http://www.sovereignman.com/expat/wh...nomic-collapse

ZX-Tex

iTrader: (15)

So three weeks after I bailed, the US market indices dropped below where it was when I got out. The drop was very steep today, 2.2% on the Dow and 2.7% on the NASDAQ.

It looks like the Asian market indices are dropping as well.

Good thing Congress passed the debt bill. It looks like the markets are responding favorably. Not.

hustler

iTrader: (6)

Feel free to site my Facebook status as anytime, you unoriginal bastard. And yes, I'm still waiting on the stock-market boom from Hussein saving us from Pelosi's vision of "the world ceasing to exist as we knew it".

Thanks to the pages...oh look, Gabby Gifford is here!!!!

y8s

iTrader: (8)

oh herro double bear play time investments! nice of you to make 5% today!

I was happy to make my comission back.

ZX-Tex

iTrader: (15)

Holy ****, as of 12 pm eastern the Dow is down 2.8% just from this morning's opening. NASDAQ is down 3.39%.

The S&P 500 is down almost 10% from its April peak.

Hang on to your hats ladies.

Scrappy Jack

iTrader: (2)

What is your process for moving back in to equities?

Do you know what the average intra-year drop is over the past 30 years?

ZX-Tex

iTrader: (15)

I am going to wait for the recovery to take hold, or at least when there are better economic outcome predictions, and for the market to bottom out. Both are hard to know for certain of course. Then I'll get back in, hopefully not missing the rally, and go into a broad spread of foreign and domestic equity funds, same as before. I am in this for the long haul so fortunately my timing does not need day-trader precision.

I'm not an investment expert, but I play one on the internet.

In the mean time, I am no-cost refinancing the house with my current lender at a stupid-low 15-year fixed rate. Mortgage rates are really, really low right now.

Scrappy Jack

iTrader: (2)

A) Do you know what the total dollar amount of output lost in the official recession was? And how much of it has been recovered since?

B) If you are going to try and time the market (i.e. large tactical moves such as selling out of all or most of your equities to sit in cash temporarily), I would think you need a better defined process than the above.

C) "What economic outcome predictions?" As in predictions from economists? If you are using statistical economic indicators, which ones? Hopefully not things like unemployment and GDP.

D) How will you know the market has "bottomed out?" Bottomed out over what time period? For the calendar year?

This seems counter to the whole point of your OP and the ones referencing daily market moves. If you are in this for the "long haul," and do not need short-term precision, why are you attempting to time short-term (i.e. a few months worth of) market moves?

Going back to 1980, the average intra-year drop is 14.3%. More recently, in 2009 when the S&P finished +23% (price only), there was a short-term drawdown of -28%. In 2010, when the S&P finished up +13%, there was a short-term drawdown of -16%.

ZX-Tex

iTrader: (15)

Dow closed down 4.3% for the day. NASDAQ is down 5.3%

Yep, exactly.

Faeflora

iTrader: (2)

Glory hallelujiah

what a day

back in black here i come

spoolin2bars

iTrader: (1)

i pulled what i had out a while ago. you know, gold is supposed to hit 2k/ounce by the end of the year!

Faeflora

iTrader: (2)

ultrashort ultrashort ultrashort ultrashort ultrashort ultrashort ultrashort !!!! !

!

Scrappy Jack

iTrader: (2)

Again, for a guy with a long-term outlook, you are focusing on the day-to-day an awful lot.

I am not saying that tactical moves cannot add risk-adjusted return (I would argue just the opposite). I would argue that making major tactical moves based on "feelings," economist predictions and backward-looking or lagging economic indicators is the way to achieve "average individual investor" returns. You know, the kind that lag basic indices over normal investment time horizons?

If you were using a specific forward-looking data set or a defined process, it would make more sense to me. You seem like too smart a guy to be making huge moves based on emotion.

There was $554 billion of output lost and $634 billion of output recovered.

Not sure if serious. Do you know what gold is trading at on an inflation adjusted basis? What the inflation-adjusted peak was and when it was? What happened to it in the years following?

Or, more simply, what typically happens to something with a nominal price chart that looks like the left side of the Eiffel Tower?

Again, not sure is serious. "The market can stay irrational longer than you can stay solvent." Also remember that the leveraged ETFs have tracking errors over longer holding periods. They are really better used for very short term hedging.

ZX-Tex

iTrader: (15)

Yeah I agree. Do not read too much into me following the market day-to-day. It is just interesting. I am not sitting here watching a real-time DJIA plot with my pointer on the 'execute trade' button.

You seem to know investing. What is your background? We need to get JasonC back in here. This could be epic.

Faeflora

iTrader: (2)

Scrappy Jack. An intelligent Floridian?

I behold a pale horse...

hustler

iTrader: (6)

If only Capitol Hill would provide an unchecked debt ceiling increase, this never would happen.

y8s

iTrader: (8)

I played around with a little bit of bear and double bear funds over the last couple months just to see how it worked out. Since late April they're up 8 and 16% respectively. Of course the Dow is down about 8% over the same period but what I own in major index tracking ETFs sits where it sits and the DOG and DXD get sold off sometime in the next few days.

It wasn't enough cash to offset the short term losses from the last week but it was fun to watch.

Scrappy Jack

iTrader: (2)

I am going to break this in to a couple of posts because it got longer than anticipated.

I am "in the business." I have two major advantages over the average amateur (and most "professionals"): time and resources. I spend 50+ hours/week involved in finance, economics and investments.

I do not watch CNBC at all. Instead, I have access to institutional research and a lot of very smart people. None of those people are TV/radio hosts or newspaper columnists. I work hard to synthesize all of that data and those subjective interpretations to come up with an understanding of where we've been and the probabilities of where we are going.

That said, none of what we are discussing should be taken as me giving individual investment advice. We are just talking about general principles.

Understanding that all metaphors are flawed, you could think of your current investment "strategy" like this. Imagine you have an upcoming track day with an LS1 Miata. You look backward at the past couple of weeks of weather reports and see that it has been hot and getting hotter. You do not use any predictive weather reports. You do not compare the recent weather to any sort of historical averages. You just know that, in nominal terms, it's been damn hot and you feel like it will be damn hot for your track day.

So, you dump a bunch of fuel and pull a bunch of timing. It turns out, the track day is really hot and voila! Your car does not blow up because you are running a 10:1 AFR, practically no WOT timing advance and no detonation.

You are also making about 150 WHP in an LS1. You won't blow up, but you won't really set any respectable lap times, either.

When asked to describe your process for how and when you will dial things back up, your answer is "when things feel better, I will add more fuel and timing."

That would seem like a terrible tuning method, right? I believe the same thing goes for investing. It should be done using data and a specifically defined process (preferably a forward-looking one).

Going back to the car metaphor, a better strategy might be to say you will use certain DAQ measurements in defined increments, noting the car's performance as you progress, to get back to a specific target WHP range (e.g. 320 WHP +/- 15 WHP).

Scrappy Jack

iTrader: (2)

Again, I am not offering individual investment advice or soliciting business of any kind.

There were almost 9 million jobs lost and only a bit over 2 million gained since. This could be a structural issue for the short and intermediate term because of the type of jobs lost.

Using June 2011 numbers, gold spot price was around $1500 nominal and ~$270 inflation-adjusted. At the beginning of 1980, it was about $850 and $325, respectively. By 1983, it was trading under $400 nominal. In adjusted-inflation terms, it continued to fall for about the next 20 years.

In 1980, there was no GLD or other gold-oriented ETFs and the average investor did not have 24-hour online access to trading accounts. Gold was an illiquid asset that often required physical receipt (and redemption).

If you believe in reversion to the mean, it's important to remember that things that are extended to the upside rarely fall back and stop at the mean.