# shake out is over



## 16412 (Apr 1, 2005)

It clear to see the economy has corrected it self (resession gone), and I wonder when the next inbalance will be.


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## eagle2250 (Mar 24, 2006)

With seven, count-em...seven of the friends and acquaintances in my small circle still out of work and clearly suffering the effects, I find it difficult to conclude we have moved beyond the correction. Indeed, were we to ask an employee of GM for their take on the issue, I suspect they might also disagree with the perspective we have moved beyond the correction. Perhaps we are just experiencing the lingering effects!


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## radix023 (May 3, 2007)

I don't think it's over either. The massive interventions and rate cutting have avoiding worst case, but there is more pain to come.

Alt-A mortgages have a wave of resets going through next year that will continue to drive foreclosures. There are lots of small companies that are parts suppliers to the big 3 that will go bankrupt.

I'm 50:50 on whether the US economy will bottom this year. Even if we do, I do not expect a V-shaped recession, but that growth will be anemic until late 2010 at best. If Federal deficits are not brought under control, the US will degrade to long-term growth rates like EU nations as the costs of a social welfare state and massive debt take their toll.


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## 127.72 MHz (Feb 16, 2007)

radix023 said:


> I don't think it's over either. The massive interventions and rate cutting have avoiding worst case, but there is more pain to come.
> 
> Alt-A mortgages have a wave of resets going through next year that will continue to drive foreclosures. There are lots of small companies that are parts suppliers to the big 3 that will go bankrupt.
> 
> I'm 50:50 on whether the US economy will bottom this year. Even if we do, I do not expect a V-shaped recession, but that growth will be anemic until late 2010 at best. If Federal deficits are not brought under control, the US will degrade to long-term growth rates like EU nations as the costs of a social welfare state and massive debt take their toll.


Amen! Jeeze Louise WA I don't know what main stream news source you site for "It's clear to see the economy has corrected it self (recession gone)." ( I corrected your type O's)

The most optimistic economists are *speculating* that *maybe* the full effect of the "Massive printing fiasco" (I just can't buy in and call it a stimulus) *might* be seen by the middle of Summer.

But those same *experts* are also saying another "Massive printing fiasco" might be needed.

If Federal deficits are not brought under control, the US will degrade to long-term growth rates like EU nations as the costs of a social welfare state and massive debt take their toll.[/quote]

I believe this scenario is much more likely.


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## Beresford (Mar 30, 2006)

Watch fuel prices. If they keep on going up, and they have been doing so substantially over the past couple of week, that is going to drive a lot more people and businesses under.


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## 16412 (Apr 1, 2005)

I think the shake out really isn't over as far as lingering effects. While some of your friends may not find a job for a while I believe less people are losing there jobs than people are finding jobs. Which means people are still losing their jobs, but more that have lost jobs are now finding jobs. I believe stock charts of company after company are showing this. I went looking at stock charts after stock charts last week and was really surprised at what I saw. If the economy was still going down the stock charts would reflect this. 

As far as supply and demand goes for capital for loans this has been a problem that has been with us for a while, so this is before this recession, but took full bloom during this recession. And gov. borrowing so much, which is a huge mistake by Bush and mutiplied by Obama is reducing supply which is necessary for businesses to do normal business, being supply has run out or businesses this last year would have had no problem in getting loans. If business had gotten their normal loans this recession would not be so bad and the auto industry, for example, would not be so tanked. The mo/miller business system is rather old and perhaps on creaky legs, which means a change. After all, we don't live 50 years ago, now. Perhaps a new dimension needs to be added to meet the needs of today.

If somebody mentioned inflation above, this is an error that Bernanke shouldn't make, because it takes buying power away from millions of people, which is the exact opposite of what this economy needs for pulling us out. The only reason I can see that inflation might be good is only to pay off debts and then restore the dollar to what it should be, but this is probably an illusion that it could work. Inflation is putting a bandage on something that's bigger than a bandage can handle, like a broken leg. I find the below interesting about this recession.

Vernon Smith, professor of economics and law at Chapman University, won his Nobel in 2002.
Now, Smith said, federal officials are still feeling their way through an economic crisis unlike anything in their lifetimes.
He praised the expertise of Federal Reserve Chairman Ben Bernanke but added that expertise may not be enough.
"Probably no one is better-fitted than Bernanke," Smith said. "But 'knowing that' and 'knowing how' are not the same. ... Knowing about art does not make a painter."


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## 127.72 MHz (Feb 16, 2007)

WA said:


> It clear to see the economy has corrected it self (resession gone), and I wonder when the next inbalance will be.


And then you back peddle on your original assertion. Continue further with a semi-rambling analysis, no doubt given your level of expertise on the subject, and conclude with another "Expert" economist. (Nobel prize winner not withstanding)

I guess it isn't so clear,...

Following past protocol you'll respond with a lengthy tirade.

I know it's impossible to say this without having it sound like a personal attack even though I honestly don't mean it that way.

It seems you ask for other's thoughts not because you want to poll them but so you might have someone to debate or disprove.


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## 16412 (Apr 1, 2005)

127.72 MHz said:


> And then you back peddle on your original assertion. Continue further with a semi-rambling analysis, no doubt given your level of expertise on the subject, and conclude with another "Expert" economist. (Nobel prize winner not withstanding)
> 
> I guess it isn't so clear,...
> 
> ...


If you have a college education you have been taught how to do certain things, which has advantages and disadvantages. I was reading a book about roof framing squares, From the square you cut ever piece from the ground and hand them up without a recut. Todays world you learn the number method. But, if you go back in time they didn't have the number system we have today. The squares they used in those days were blank. What is interesting is the system of the square is the same today as it was back then, we just added todays numbers. It is actually easier to teach somebody how to cut each board with out the number system and then add the numbers later, and this is for any kind of roof you can imagine. College education says numbers.

Anyway, in the late 70s I did look at many books on economics. I was interested in certain parts. It was in the 70s that I got angery at the fools with economic degrees who hid behind theorys they didn't understand and hid behind their degrees. Afterall, he who makes the be best choices for buying stocks understands the economy better- formal education has been shown to me to not mean anything. The 70s is a long time ago and some of my ramblings is from parts of what I knew then, a few changes between then and now. The worst part is the holes because of what I have forgotten. It also takes to long to write everything, so, some of my reasons leave out at least 20 thoughts. I haven't watched the economy since the 70s that much. There are principles that never change no matter what system is used, and whether you can explain the reasoning behind them right or not doesn't matter. I also think in the picture world a lot. A picture, so the saying goes, is worth a thousand words. In 5 seconds you can flash 10 pictures throught your mind. How do you turn 10,000 words into 2 paragraphs? The picture world is an extremely fast way to think. Your thought process can go so fast you don't even know how you got from a to z. I read some books from the 50s and 60s that taught how to make and read charts (stockmarket)- charts are pictures. So you make charts of this industry and that industry and then compare them to see which ones are out of proportion. And then there are curves. Curves are interesting. Take the hammer head (aerobatic stunt). in the old plane which didn't have much power you would zoom down till you reach about 200 mph and make the curve up and go straight up, evenutally the plane would run out of power and down you go. These things happen in the economy. I was taught that a curve is one quarter of a circle and and everything has a place some where on that curve. If something is not in the right place on that curve there is a problem. Whether you use the picture world or the number world, these should be the same, the debate starts on what these figures mean.


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## Preu Pummel (Feb 5, 2008)

Why are so many of you contrary to WA??

It is clear there is no serious recession. Obama is here. Rejoice! We were promised saving, and we're being saved. Just relax. Everything is working out just fine!

....CBS, NBS, PBS, and ABC told me so.


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## ksinc (May 30, 2005)

WA said:


> It clear to see the economy has corrected it self (resession gone), and I wonder when the next inbalance will be.





WA said:


> Vernon Smith, professor of economics and law at Chapman University, won his Nobel in 2002.
> Now, Smith said, federal officials are still feeling their way through an economic crisis unlike anything in their lifetimes.
> He praised the expertise of Federal Reserve Chairman Ben Bernanke but added that expertise may not be enough.
> "Probably no one is better-fitted than Bernanke," Smith said. "But 'knowing that' and 'knowing how' are not the same. ... Knowing about art does not make a painter."





WA said:


> It was in the 70s that I got angery at the fools with economic degrees who hid behind theorys they didn't understand and hid behind their degrees. Afterall, he who makes the be best choices for buying stocks understands the economy better- formal education has been shown to me to not mean anything.


I could not agree anymore with this.

Currently: Stocks are down, Metals are down, $$$ is UP! The worst is over and the market is confirming that Obama's stimulus has achieved its goals.



WA said:


> I also think in the picture world a lot. A picture, so the saying goes, is worth a thousand words. In 5 seconds you can flash 10 pictures throught your mind. How do you turn 10,000 words into 2 paragraphs? The picture world is an extremely fast way to think. *Your thought process can go so fast you don't even know how you got from a to z.* I read some books from the 50s and 60s that taught how to make and read charts (stockmarket)- charts are pictures.


Excellent! What does this picture tell You?










For those who want to waste their time with the words. https://michaelscomments.wordpress....nt-numbers-are-here-and-worse-than-predicted/


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## norton (Dec 18, 2008)

WA said:


> I think the shake out really isn't over as far as lingering effects. While some of your friends may not find a job for a while I believe less people are losing there jobs than people are finding jobs. Which means people are still losing their jobs, but more that have lost jobs are now finding jobs. I believe stock charts of company after company are showing this. I went looking at stock charts after stock charts last week and was really surprised at what I saw. If the economy was still going down the stock charts would reflect this.


First off, buyers price stocks based on the expectations of _future _profits. This means that stock prices will rise before the end of the recession, they're a leading indicator.

Second, we've had 3 good months in the markets but stocks are still well below their highs, and will be for some time. The fact that they've risen doesn't mean they'll continue to rise or that they won't go back down. It just means that buyers currently see a better economy in the future, or have more confidence in their estimate than they did in February.


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## ksinc (May 30, 2005)

https://online.wsj.com/article/SB124451592762396883.html


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## Country Irish (Nov 10, 2005)

I believe WA is correct in essence. Those watching jobs have to wait a while longer since that will be near the end of the cycle. Those who have laid off workers but still have inventory will try to burn off as much of their warehouse stocks before getting serious about hiring. This will give them more cash leading to more stability. Those with low inventories will hire first. Service sector hiring will be from the middle to the last to be rehired depending on their specific situations.
With this said, the hiring phase will be erratic. Retail buyers don't want to spend if there are no jobs and manufacturers don't want to hire unless people are buying. The actual recession is a state of opposing interests and views. 
The financial aspects seem to be stabilizing but those laid off can't see it yet. I suspect that is why Obama wants to push more money out faster to try to jump start the job market and minimize the erratic nature of this part of the cycle.
Regardless of the opinions, the situation is running its course without surprises. The only surprises I hope to see is the hiring being smoother than expected and people learning their lesson about risky credit. (Don't hold your breath on that second one)


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## 16412 (Apr 1, 2005)

Interesting replys.

I found this interesting _A look at the __stimulus package spending__ - how late it is, and how little thus far has been devoted to job creation (it's basically gone to pay off states' social services debts) _and figured it would happen some.

Some guys above pointed out the continued fall, or shake out. I had an answer for that but for got what it was, so sorta back peddled. Another comeback is _the tide has turned_ even though water is still going strongly the other way.

Another way to think is the recession is here until we break a new DOW mark, which is over 14,000.

At this point all we can do is predict. And this is really why I started this thread is to hear other peoples predictions by counter, agreement or lots of whatever.

Norton, what you wrote is what I taught years ago, and it is nice to read it again. Some tides are huge and some I'm not sure how they know it changed other than the time table says it had to.

ksinc, what you write is interesting. You always turn to other peoples thoughts. It would be interesting to read something that you went out and took samples and tell us what you think those samples mean, with out other peoples influnce. To me it is a game or a sport. In down markets there are stocks that do really well, but do poorly in good markets, as others are the opposite. To invest in these and do well you need to know when the markets change rather close to the beginning sometimes to do well, and depending on other people is a good way to lose money. As a sport you will view it differently. My experience with other people making decisions has been disatourous more often than I care for. Perhaps you are around much better people?

The chart below is interesting. But I think it will prove wrong. With Bushs debt I figure a one time tax could pay it off. Not good, but at lest we wouldn't be under it. The Democrats adding way more to the debt has made things considerablely worse. Maybe it is time to move to some other country, like a South Sea Island.


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## 16412 (Apr 1, 2005)

Country Irish said:


> people learning their lesson about risky credit. (Don't hold your breath on that second one)


There is always a new generation, and in it some will only learn the hard way.

Back in the 60s there was a recession where $150 in a mutual fund became $50 and it stayed that way for years. Some new laws were made. But, has any mutual fund in this recession been reduced to one third of what it was before the recession?


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## radix023 (May 3, 2007)

here's some hard info on the mortgage mess:
https://moremortgagemeltdown.com/download/pdf/T2_Partners_presentation_on_the_mortgage_crisis.pdf

I wish you were right, WA, but I just don't believe.


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## Relayer (Nov 9, 2005)

Country Irish said:


> Regardless of the opinions, the situation is running its course *without surprises*.


*Not exactly.*

_The economy has shed 1.6 million jobs since the stimulus measure was signed in February, far overshadowing White House announcements estimating the effort has saved 150,000 jobs. Public opinion of Obama's handling of the economy has declined along with the jobs data.

For the first time, the administration admitted the economic forecasts it used to sell the stimulus were overly optimistic.

"At the time, our forecast seemed reasonable," Vice President Joe Biden's top economic adviser, Jared Bernstein, said Monday, explaining that the White House underestimated the scope of the recession. "Now, looking back, it was clearly too optimistic."

By now, according to earlier White House economic models, the nation's unemployment rate should be on the decline. The forecasts used to drum up support for the plan projected today's unemployment would be about 8 percent. Instead, it sits at 9.4 percent, the highest in more than 25 years._


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## ksinc (May 30, 2005)

WA said:


> ksinc, what you write is interesting. You always turn to other peoples thoughts. It would be interesting to read something that you went out and took samples and tell us what you think those samples mean, with out other peoples influnce. To me it is a game or a sport. In down markets there are stocks that do really well, but do poorly in good markets, as others are the opposite. To invest in these and do well you need to know when the markets change rather close to the beginning sometimes to do well, and depending on other people is a good way to lose money. As a sport you will view it differently. My experience with other people making decisions has been disatourous more often than I care for. Perhaps you are around much better people?
> 
> The chart below is interesting. But I think it will prove wrong. With Bushs debt I figure a one time tax could pay it off. Not good, but at lest we wouldn't be under it. The Democrats adding way more to the debt has made things considerablely worse. Maybe it is time to move to some other country, like a South Sea Island.


WA, it's a historical chart. It can't be proved wrong. It happened. It's over. And except for some revisions it will stand. Unemployment is climbing above the President's Economic predictions for stimulus and without. *Weren't you the one claiming a few weeks ago that an economist should be graded by the accuracy of his predictions?*

WA, your comment about me turning to other people's words is ridiculous. First, I recognize that some other people are smart. You may have noticed that most of the facts I reference to offer a contrarian view of things. I rarely reference their opinions, but do reference their work and apply what may be postive or selectively normative to the debate at hand. Second, You expect me to go conduct an economic study to post on the board? No one else is. You aren't. Why would that rule apply to me? Somehow you mistakenly believe that having no facts and talking out of your head is better than having an informed, educated view. It isn't. You are unable to distinguish between me reading varied opinions and theories; being familiar with them and understanding them; and that I am not following them blindly or letting them think for me. Q: if you aren't reading other people's views, what exactly are You thinking about? It's a commonly stated view that One doesn't have to "think" about what One already "knows." If you aren't informing yourself past your 70s experiences you aren't thinking; whether that is inside or outside of the box.

It's a fundamental in most of the sciences that you have to learn the current knowledge before your new ideas are of value. It's interesting that you sit around with no knowledge and come up with new debates on things like taxes and interest deductions, but it's not of intellectual value and it doesn't contribute new knowledge to anyone except other uninformed people like yourself. And what it does contribute is 1) nearly always wrong and 2) an attitude that information is useless because you just have think about it yourself and that's just as good. Which; if that was the case, two year olds would run the world.

When you say something I haven't heard before or something that isn't fundamentally wrong and elemental on the scale then perhaps I will respond by not posting something commonly known. The value of your question is demonstrated by the type of replies you get. Surely, as a learner and teacher you are aware of this? If you're getting answers you don't like or answers on a level you don't like BLAME the questions. Perhaps your questions are less thoughtful than you think they are?

Once again I have entertained your questions; while in contrast, you never respond to my direct questions to you except to ramble or attack me. Contrary to your claims that you post your thoughts you make an intellectual fraud out of yourself for doing so. You post in a way to get debate then you get it and you whine, complain, and attack others. This was pointed out above by other posters. How long before you get the point?


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## ksinc (May 30, 2005)

Country Irish said:


> I believe WA is correct in essence. Those watching jobs have to wait a while longer since that will be near the end of the cycle. Those who have laid off workers but still have inventory will try to burn off as much of their warehouse stocks before getting serious about hiring. This will give them more cash leading to more stability. Those with low inventories will hire first. Service sector hiring will be from the middle to the last to be rehired depending on their specific situations.
> With this said, the hiring phase will be erratic. Retail buyers don't want to spend if there are no jobs and manufacturers don't want to hire unless people are buying. The actual recession is a state of opposing interests and views.
> The financial aspects seem to be stabilizing but those laid off can't see it yet. I suspect that is why Obama wants to push more money out faster to try to jump start the job market and minimize the erratic nature of this part of the cycle.
> Regardless of the opinions, the situation is running its course without surprises. The only surprises I hope to see is the hiring being smoother than expected and people learning their lesson about risky credit. (Don't hold your breath on that second one)


Well, it is running its course without surprises (or any positive changes due to government spending and so-called stimulus), which proves WA is wrong in essence.

Q: Savings continue to climb. Are those the unemployed saving all that money?

They have created two types of people: The unemployed who can't spend; and the employed who are afraid to spend. That's definitely a stimulus ...

WA can't make up his mind whether it the promise of profits or the money hitting the streets that causes economic activity to rise. Take the stimulus, if the market went up because of the promise of stimulus spending then why is it important to accelerate that spending; isn't the good already done? Haven't businesses already "saved or created" the jobs they will need to implement the stimulus spending? If what we have been told is true then doesn't it make sense that spreading the stimulus out and keeping businesses on the hook will keep those people employed longer because business won't lay them off and rehire them (costs too much), but will just hang on to the people they will eventually need vs. getting the money; doing the job; and then laying them off when the stimulus money stops flowing? Pick a side of the equation.

The reason the shake out isn't over is because the consumers are still standing around looking at Government either to give them something or wondering what else government will steal from them. Obama is doubling down on his efforts. It won't be until Obama "gives up" on saving us all that the economy will recovery. If he remains stubbornly committed to his interventions that will be at least 2010 and maybe 2012. Late 2009 market activity will be a bet on 2010 and not a result of stimulus spending.


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## norton (Dec 18, 2008)

ksinc said:


> The reason the shake out isn't over is because the consumers are still standing around looking at Government either to give them something or wondering what else government will steal from them. Obama is doubling down on his efforts. It won't be until Obama "gives up" on saving us all that the economy will recovery. If he remains stubbornly committed to his interventions that will be at least 2010 and maybe 2012. Late 2009 market activity will be a bet on 2010 and not a result of stimulus spending.


100% agree.


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## turban1 (May 29, 2008)

*fools rush in where angels fear to tread*

Gosh, what a relief to know it's all that simple. Well, I guess I can stop worrying now. Run up debt, print money, and everyone gets richer. I guess that's why it's worked so well in Zimbabwe.


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## ksinc (May 30, 2005)

> But as readers know, I still fear that this depression is quietly deepening. The savings rate is rocketing in the deficit states of the US, UK, Spain, et al, as the "sinners" belatedly tighten their belts, but their fall in consumption is not being matched by an offsetting rise among the surplus "saints" states, China, Japan, Germany-Netherlands, which all points to an implosion in world demand. Yes, the West is printing money.


https://blogs.telegraph.co.uk/ambro.../08/europe_swings_right_as_depression_deepens


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## ksinc (May 30, 2005)

You want numbers? You can't handle the numbers! 

"Still Searching for a Bottom" by Diane Swonk


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## magogian (Jul 2, 2008)

Whether or not we are out of the recession, I should point out that employment is a lagging indicator -- and a very delayed one at times.


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## TMMKC (Aug 2, 2007)

ksinc said:


> The reason the shake out isn't over is because the consumers are still standing around looking at Government either to give them something or wondering what else government will steal from them. Obama is doubling down on his efforts. It won't be until Obama "gives up" on saving us all that the economy will recovery. If he remains stubbornly committed to his interventions that will be at least 2010 and maybe 2012. Late 2009 market activity will be a bet on 2010 and not a result of stimulus spending.


Amen. IMO, the "shake out" will be over when the moderates in the middle class who turned out in droves to vote for Obama turn against him. The honeymoon will be over soon enough, but when the middle class realizes the massive debt and social programs the administration is subjecting us to can only be funded by wringing out their pocketbooks as well, he'll be toast. The Obama administration can only haul out the beautiful wife and cute kids so many times when things get dicey. Eventually voters will see through the tricks and realize again that having more of their own money to spend really fuels and repairs the economy, not bailout after bailout after bailout.


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## ksinc (May 30, 2005)

TMMKC said:


> Amen. IMO, the "shake out" will be over when the moderates in the middle class who turned out in droves to vote for Obama turn against him. The honeymoon will be over soon enough, but when the middle class realizes the massive debt and social programs the administration is subjecting us to can only be funded by wringing out their pocketbooks as well, he'll be toast. The Obama administration can only haul out the beautiful wife and cute kids so many times when things get dicey. Eventually voters will see through the tricks and realize again that having more of their own money to spend really fuels and repairs the economy, not bailout after bailout after bailout.


Yes; one of the unintended consequences that is going unnoticed is that old income gap. The energy, monetary, and fiscal policies dictate the middle class will become less stratified and as the band narrows it will also be pushed lower. The upper class will continue to do well in even in real dollars. The nominal gap will increase and the real gap will widen exponentially. The reasons for this are many, but the good/bad news is those trapped in the _new_ new middle class won't understand them until we have just two classes - royalty and commoners.

FWIW, I think the shopping trips are getting old with a lot of female voters who can't shop right now. FLOTUS is openly demonstrating she's totally out of touch with the majority of women. They hid her away when she started doing it during the campaign, but now they can't control her it seems.


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## 16412 (Apr 1, 2005)

ksinc said:


> WA, it's a historical chart. It can't be proved wrong. It happened. It's over. And except for some revisions it will stand. Unemployment is climbing above the President's Economic predictions for stimulus and without. *Weren't you the one claiming a few weeks ago that an economist should be graded by the accuracy of his predictions?*
> 
> WA, your comment about me turning to other people's words is ridiculous. First, I recognize that some other people are smart. You may have noticed that most of the facts I reference to offer a contrarian view of things. I rarely reference their opinions, but do reference their work and apply what may be postive or selectively normative to the debate at hand. Second, You expect me to go conduct an economic study to post on the board? No one else is. You aren't. Why would that rule apply to me? Somehow you mistakenly believe that having no facts and talking out of your head is better than having an informed, educated view. It isn't. You are unable to distinguish between me reading varied opinions and theories; being familiar with them and understanding them; and that I am not following them blindly or letting them think for me. Q: if you aren't reading other people's views, what exactly are You thinking about? It's a commonly stated view that One doesn't have to "think" about what One already "knows." If you aren't informing yourself past your 70s experiences you aren't thinking; whether that is inside or outside of the box.
> 
> ...


I see you know nothing about economics. No reason to consider you anymore about this subject anymore.


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## ksinc (May 30, 2005)

WA said:


> I see you know nothing about economics. No reason to consider you anymore about this subject anymore.


ROFLMAO!!! That's hilarious! Thanks for the laugh! You seriously have no shame; which is good. It's high entertainment value.


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## ksinc (May 30, 2005)

WA said:


> Another way to think is the recession is here until we break a new DOW mark, which is over 14,000.


Actually, that's another way *NOT* to think.


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## 16412 (Apr 1, 2005)

ksinc said:


> Actually, that's another way *NOT* to think.


I agree, but I figured somebody might say it, so I put it out there. There are other ideas what a recession is too. One of them is not bad, but I don't use it (I thought of it when I started the thread, but don't remember now).


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## 16412 (Apr 1, 2005)

ksinc said:


> ROFLMAO!!! That's hilarious! Thanks for the laugh! You seriously have no shame; which is good. It's high entertainment value.


Glad you got a laugh, but it goes both ways. A kid in middle school talked football until you were wishing you were looking at daisys above. He read every book in the libraries, watched everything thing on tv, experts and all, read the magzines and studied all the plays he could get his hands on. So I thought in PE I'd like him on the same team. When it was his time to be quarter back you couldn't pay people enough to get rid of him. Kids who had no interest in football and didn't even know the rules gave us some nice wins, and they created plays right off the top of their heads. Guess which one I think you are.


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## ksinc (May 30, 2005)

WA said:


> Glad you got a laugh, but it goes both ways. A kid in middle school talked football until you were wishing you were looking at daisys above. He read every book in the libraries, watched everything thing on tv, experts and all, read the magzines and studied all the plays he could get his hands on. So I thought in PE I'd like him on the same team. When it was his time to be quarter back you couldn't pay people enough to get rid of him. Kids who had no interest in football and didn't even know the rules gave us some nice wins, and they created plays right off the top of their heads. Guess which one I think you are.


As stated above; your opinion of the unknown is limited by your lack of knowledge of the known. You only think of me what you do because you're inexperienced in the business world not because I am. I am humored by the need of you to relay your highschool experience which apparently was the last time you felt relevant.


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## 16412 (Apr 1, 2005)

norton said:


> Second, we've had 3 good months in the markets but stocks are still well below their highs, and will be for some time. The fact that they've risen doesn't mean they'll continue to rise or that they won't go back down. It just means that buyers currently see a better economy in the future, or have more confidence in their estimate than they did in February.


Some of this is exactly how accountants are taught to think for accounting reasons. I read parts of books aimed at personal investing, so as not to have my wrist chained to a desk for the next 40 years, as that is what formal education is about. These books have a different reason, so a different angle of veiw. This PH.D accountant wrote a book about investing in rental houses and said it was a total waist of time or breaking even, but he didn't take into consideration how the future goes. You could buy rental house back then for $4,000. I bought one for $12,000. Today you can't touch that house for probably $200,000. Therefore, because of the time it takes to pay off a group of rental houses, even with prices going down and a 17 years of houses stay flat in price, he was off by millions of dollars. I knew that, but he convinced somebody else who railroaded my investments. When I was nine years old I started learning about realestate investments from people who made, so knew what they were talking about. You can theroies about why machanics works, but when you don't differenate between mechanics and theroies, and worse, fall for the theroies that says a working machanic isn't working you've got investment problems. Theroies that help something work better is good, but not the other way around.

I think you are right, but there is something called reading between the lines, which I call stupid math- I think the economy is going up for awhile, unless we get bombed or something. If the stock charts show more varitations I would say we are still down. Dips don't mean the market is going down, so those who bail out for dips loose.


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## 16412 (Apr 1, 2005)

ksinc said:


> As stated above; your opinion of the unknown is limited by your lack of knowledge of the known. You only think of me what you do because you're inexperienced in the business world not because I am. I am humored by the need of you to relay your highschool experience which apparently was the last time you felt relevant.


You wrote something ealier that amounts to you putting the cart in front of the horse and then asking your experts what to do next and they said to throw the harness over horse and cart. I really can't take you seriously about economics. I wouldn't doubt you are very good in business and probably would be excellent in accounting, but finance and economics- maybe not so. But if you try it you might like your results more than so much of what you read, which would be a gain. Here is a question to wonder about. If you take a piano jazz score to a classical pianist and ask him to play it - will he play jazz? They're both music, so look a lot a like. There are experts in both fields.

There are at least a half dozen reason why I asked you to take sample and compare them and forcast the future. One is to sorts out cons. Another, it helps you to pick economist for this and others for that, since few are good at everything. It really helps to weed out the lousy ones. There are other reasons, too. When you get your foot in the door like that you will get so much more out of the famouse ones. Greenspan is certainly one of the greatest economist ever. He forgot a rule and misunderstood a couple of other things, if that is all of his mistakes when it counts the most and he "painted" one of the best pictures, if not the best, then he is an expert at the top of the experts. Artist need to step back and look at the picture sometimes to make for sure everything is correct (take an oil painitng class with canvases in the 20s and 30s for inches and you will understand what I'm taking about). The complaint I have is not every body can move up the food chain as he drove the econonmy, those people who can't move up the food chain some of them need good wages, the overal spot on the curve was just below what it should have because of that (my opinion) (but this is an extremely minor problem). So he was supurb. If you are going to do aerobatics expect to crash, so have fun.


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## ksinc (May 30, 2005)

WA said:


> You wrote something ealier that amounts to you putting the cart in front of the horse and then asking your experts what to do next and they said to throw the harness over horse and cart. I really can't take you seriously about economics. I wouldn't doubt you are very good in business and probably would be excellent in accounting, but finance and economics- maybe not so. But if you try it you might like your results more than so much of what you read, which would be a gain. Here is a question to wonder about. If you take a piano jazz score to a classical pianist and ask him to play it - will he play jazz? They're both music, so look a lot a like. There are experts in both fields.
> 
> There are at least a half dozen reason why I asked you to take sample and compare them and forcast the future. One is to sorts out cons. Another, it helps you to pick economist for this and others for that, since few are good at everything. It really helps to weed out the lousy ones. There are other reasons, too. When you get your foot in the door like that you will get so much more out of the famouse ones. Greenspan is certainly one of the greatest economist ever. He forgot a rule and misunderstood a couple of other things, if that is all of his mistakes when it counts the most and he "painted" one of the best pictures, if not the best, then he is an expert at the top of the experts. Artist need to step back and look at the picture sometimes to make for sure everything is correct (take an oil painitng class with canvases in the 20s and 30s for inches and you will understand what I'm taking about). The complaint I have is not every body can move up the food chain as he drove the econonmy, those people who can't move up the food chain some of them need good wages, the overal spot on the curve was just below what it should have because of that (my opinion) (but this is an extremely minor problem). So he was supurb. If you are going to do aerobatics expect to crash, so have fun.


I will give your view the weight that your credentials and experience demand; even what your demonstrated abilities demand. Since you have so far refused to engage any substantive debate; why don't you take us through an analysis of your $12k to $200k investment in real estate? Here's your chance to show us your financial and economic analytical abilities. Your answer can be any format you like with the lone assumption that it represents the highest stage of analysis you are capable of producing on the transaction; i.e. no second chances.


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## 16412 (Apr 1, 2005)

ksinc said:


> I will give your view the weight that your credentials and experience demand; even what your demonstrated abilities demand. Since you have so far refused to engage any substantive debate; why don't you take us through an analysis of your $12k to $200k investment in real estate? Here's your chance to show us your financial and economic analytical abilities. Your answer can be any format you like with the lone assumption that it represents the highest stage of analysis you are capable of producing on the transaction; i.e. no second chances.


I only owned that property for one year, more or less. It would be illegal to go through somebodies elses property taxes to chart out the price of the house. You can always figure out inflation rates by looking at interest rates. One thing about land it is never increasing in size, whereas, the population is. So, ever decreasing supply and ever increasing demand. Even when prices are flat for a while you know the price will catch up once prices start moving again. If half the population got wiped out that would change the supply demand ratio. What is interesting is population growth where we are seeing in parts of Europe 4 grand parents, two parents, and one child and add in imigration. How does one figure future land value in that? I think an analysis of 12,000 to 200,000 is not of much value because it is the wrong history for projecting the next 33 year future. At best it would be and educated guess. You would need to look at why people would be here in 33 years to project land prices then, and it would still be a guess. If you can figure out why people will be here then you can figure growth. If you can do that then you can figure where the choice lands are for an investment. If you want the details there are books about it. This one person I meet did that; he bought cheap land out in nowhere, so hardly payed any taxes (taxes are against profit) and he retired 20 years later. Over analyzing just adds grey hairs, me thinks, not to mention, adds confusion.


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## ksinc (May 30, 2005)

WA said:


> I only owned that property for one year, more or less. It would be illegal to go through somebodies elses property taxes to chart out the price of the house. You can always figure out inflation rates by looking at interest rates. One thing about land it is never increasing in size, whereas, the population is. So, ever decreasing supply and ever increasing demand. Even when prices are flat for a while you know the price will catch up once prices start moving again. If half the population got wiped out that would change the supply demand ratio. What is interesting is population growth where we are seeing in parts of Europe 4 grand parents, two parents, and one child and add in imigration. How does one figure future land value in that? I think an analysis of 12,000 to 200,000 is not of much value because it is the wrong history for projecting the next 33 year future. At best it would be and educated guess. You would need to look at why people would be here in 33 years to project land prices then, and it would still be a guess. If you can figure out why people will be here then you can figure growth. If you can do that then you can figure where the choice lands are for an investment. If you want the details there are books about it. This one person I meet did that; he bought cheap land out in nowhere, so hardly payed any taxes (taxes are against profit) and he retired 20 years later. Over analyzing just adds grey hairs, me thinks, not to mention, adds confusion.


Thank you for being responsive. I like some things about your answer even if they are articulated in "unusual" ways. The areas where your thinking is lacking are "typical" IMHO of those that tout real estate as a superior asset class - it focuses on appreciation instead of net after-tax cashflow. As you mentioned property taxes; the problem is not that they come out of profits; it is specifically that they do NOT come out of profits. Over analyzing adds grey hairs, but I assure you that you are no where near that warning state in your thinking based on your response; although I cannot speak to the confusion level. If you have a managed process for evaluating transactions more analysis leads to clearer thinking not more confusion. The problem is the unmanaged process. We have a great video series that explains this coming to the market soon.

I've explained this before, but I will try once more. While it's true there are people that know accounting that do not understand finance and economics the reverse is not true. Economics is spoken in the language of Finance. Finance is spoken in the language of Accounting. There is no one that has a true understanding of Economics that cannot see and define the Finance & Accounting transactions. This was demonstrated in the discussion of interest deductions creating incentives. I think most RE investors drastically over-estimate and over-report (to everyone except the IRS) their net profits. Conveniently many of them keep scant records. 

One of the GAAP concepts is usefulness to decision making; specific principles are Consistency and Comparability. The problem with an unmanaged process is that it is InConsistent and leads to UnComparable results. This is tragic among either/or decisions or baskets of investments where the investors poor decision making leads to self-weighted decisions that break-even at best overall. We call this the Price of NonConformance. In RE, I will give an example, I know someone that is currently financing the ongoing R&M of a basket of 40 investment properties. Today he says, If I knew then what I know now (or knew it was even a possibility) I would have selected a different type of property or asset class entirely. The question I had for him was: Why didn't he know before he put his money in?


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## Acct2000 (Sep 24, 2005)

Ksinc,

If you don't mind, I would like it if you would PM me when your product is available.


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## norton (Dec 18, 2008)

WA said:


> I think the economy is going up for awhile, unless we get bombed or something. If the stock charts show more varitations I would say we are still down. Dips don't mean the market is going down, so those who bail out for dips loose.


As you pointed out we are all free to make our own decisions based on our own estimates of the future, that's how the market finds its equilibrium price. If you want to make money you can place a bet on your prediction.

My job is to manage risk for my clients, that means I try to position them so that they will have acceptable results no matter what happens in the future. If they want to make bets they can do that on their own.


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## ksinc (May 30, 2005)

forsbergacct2000 said:


> Ksinc,
> 
> If you don't mind, I would like it if you would PM me when your product is available.


Sure; I will be happy to do that. January 2010 is the private launch date for our institutional clients. We definitely intend to open it up to individuals as soon as possible after that date. It's very exciting and the project has just taken so many unexpected turns. The genesis was obviously not so good, but it's turned into a real blessing for us in so many ways.


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## ksinc (May 30, 2005)

rec'd today



> The economy remains in a deep recession, as was confirmed by this morning's (June 11th) retail sales report.
> Inflation, however, has started to resurface, as oil and related gasoline prices jump partially in response to a weaker dollar and ongoing dollar debasement by the Federal Reserve. These and other recently reported numbers suggest that the economic assumptions underlying the projections for the federal budget deficit and U.S. Treasury fundings are overly optimistic, with greater than expected budget deficits and Treasury fundings ahead. Accordingly, the broad outlook, as outlined in the last newsletter, remains intact. The weeks ahead will see the next newsletter, as well as an updated Hyperinflation Special Report. Odds continue to mount for an extremely serious inflation problem to unfold within the next year.
> -----------------------------
> https://www.shadowstats.com?nl
> ...


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## Acct2000 (Sep 24, 2005)

ksinc said:


> Sure; I will be happy to do that. January 2010 is the private launch date for our institutional clients. We definitely intend to open it up to individuals as soon as possible after that date. It's very exciting and the project has just taken so many unexpected turns. The genesis was obviously not so good, but it's turned into a real blessing for us in so many ways.


That would be really cool. I'll PM you when I have a bit of time to explain my interest.


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## 16412 (Apr 1, 2005)

norton said:


> As you pointed out we are all free to make our own decisions based on our own estimates of the future, that's how the market finds its equilibrium price. If you want to make money you can place a bet on your prediction.
> 
> My job is to manage risk for my clients, that means I try to position them so that they will have acceptable results no matter what happens in the future. If they want to make bets they can do that on their own.


Precisely. Accountants don't bet with somebody elses money. All investers do. Is there any investor that hasn't crashed and burned? Some of them visist the heavens many times without a crash and burns when they return.

I suppose the best accountants are pretty good at investment betting. Do you find this to be true of those who rise to the top? I find accountants can be excellent advisers, but some are not.


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## Acct2000 (Sep 24, 2005)

Unless you have taken special financial management classes, it is not really something an accountant is trained for. Over the years, what you learn in general can help (people who listen) to avoid wilder, more speculative investments, and help explain tax consequences, but a good financial advisor and a good accountant are not always the same person (although in some cases one person is trained in and good at both.)


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## norton (Dec 18, 2008)

forsbergacct2000 said:


> Unless you have taken special financial management classes, it is not really something an accountant is trained for. Over the years, what you learn in general can help (people who listen) to avoid wilder, more speculative investments, and help explain tax consequences, but a good financial advisor and a good accountant are not always the same person (although in some cases one person is trained in and good at both.)


I agree with this. I think the confusion arose because I stated elsewhere that I am a CPA. I'm also a Certified Financial Planner, hold several securities and insurance licenses and taught college economics for around 10 years. I maintain a tax practice, but most of my work these days is financial planning.

I'd say that in general accountants don't make very good investment managers, although they couldn't do any worse than most investment managers.


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## 16412 (Apr 1, 2005)

forsbergacct2000 said:


> Unless you have taken special financial management classes, it is not really something an accountant is trained for. Over the years, what you learn in general can help (people who listen) to avoid wilder, more speculative investments, and help explain tax consequences, but a good financial advisor and a good accountant are not always the same person (although in some cases one person is trained in and good at both.)


You bring up tax consequences; I like high risk; Brokers refused to let me buy stocks that I figured 800% or higher (this can mean two things- they wouldn't let me buy any high risk stock stocks, which would be anything over 20%?) (in a few months) that I would have riden close to 1,100% before selling- is a 20% growth stock better? (These are before the last two years of Jimmy Carter, when Reagan stepped in the markets went intirely different). Plus, I would look for stocks that went 200% then drop, then 200% then drop, the cycle was once a month, or maybe it was every two weeks- You could set your watch by these stocks. Taxes are high, After taxes who made the most, high risk or growth stocks? I always figured the high risk made more, but maybe I'm wrong.


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## ksinc (May 30, 2005)

WA said:


> Precisely. Accountants don't bet with somebody elses money. All investers do. Is there any investor that hasn't crashed and burned? Some of them visist the heavens many times without a crash and burns when they return.
> 
> I suppose the best accountants are pretty good at investment betting. Do you find this to be true of those who rise to the top? I find accountants can be excellent advisers, but some are not.


It's more that investors that can understand financials because they know the accounting make better choices and can understand the implications of changes in rules/regulations.

An example is an issue like fair value accounting and mark-to-market. Have you heard someone with no accounting background try to explain how mark-to-market actually works? It's pathetic.

If you have knowledge of the accounting you can tell quickly if they don't. In this environment someone who doesn't understand the FASBs is lost.

On the other hand, if they *only* know accounting they are equally unlikely to make good decisions. This is why I frequently encourage young people when I am asked to do as I did and get the BS in Accounting and MBA-Finance then pursue the Ph.D in Economis. Then they are well equiped on both fronts and the knowlege builds as you move on up the ladder.


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## ksinc (May 30, 2005)

forsbergacct2000 said:


> Unless you have taken special financial management classes, it is not really something an accountant is trained for. Over the years, what you learn in general can help (people who listen) to avoid wilder, more speculative investments, and help explain tax consequences, but a good financial advisor and a good accountant are not always the same person (although in some cases one person is trained in and good at both.)





norton said:


> I agree with this. I think the confusion arose because I stated elsewhere that I am a CPA. I'm also a Certified Financial Planner, hold several securities and insurance licenses and taught college economics for around 10 years. I maintain a tax practice, but most of my work these days is financial planning.
> 
> I'd say that in general accountants don't make very good investment managers, although they couldn't do any worse than most investment managers.


Exactly. I am amazed at the perceptions of CPAs and how people confuse CMA, CFA, or CFP knowledge with that of a CPA. Take a subject like estate planning, for example. I don't know anyone who had an estate planning question on the CPA exam. LOL! The person I trust most with that is only an EA, but he specializes in that area. I'm doing the CVA program next, I think.


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## Acct2000 (Sep 24, 2005)

WA said:


> You bring up tax consequences; I like high risk; Brokers refused to let me buy stocks that I figured 800% or higher (this can mean two things- they wouldn't let me buy any high risk stock stocks, which would be anything over 20%?) (in a few months) that I would have riden close to 1,100% before selling- is a 20% growth stock better? (These are before the last two years of Jimmy Carter, when Reagan stepped in the markets went intirely different). Plus, I would look for stocks that went 200% then drop, then 200% then drop, the cycle was once a month, or maybe it was every two weeks- You could set your watch by these stocks. Taxes are high, After taxes who made the most, high risk or growth stocks? I always figured the high risk made more, but maybe I'm wrong.


As long as you were using your own money, you could have bought anything you wanted to.

The other thing is that almost all people who think they can speculate and time the market get burned over time. It's your money, so I suppose you are free to try to time the market on these things if you really want to.


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## ksinc (May 30, 2005)

forsbergacct2000 said:


> As long as you were using your own money, you could have bought anything you wanted to.
> 
> The other thing is that almost all people who think they can speculate and time the market get burned over time. It's your money, so I suppose you are free to try to time the market on these things if you really want to.


Doesn't the SEC require them to have an investor figuring on an 800% return to be committed? :devil:


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## ksinc (May 30, 2005)

forsbergacct2000 said:


> That would be really cool. I'll PM you when I have a bit of time to explain my interest.


I'll look forward to your message.


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## 16412 (Apr 1, 2005)

ksinc said:


> Thank you for being responsive. I like some things about your answer even if they are articulated in "unusual" ways. The areas where your thinking is lacking are "typical" IMHO of those that tout real estate as a superior asset class - it focuses on appreciation instead of net after-tax cashflow. As you mentioned property taxes; the problem is not that they come out of profits; it is specifically that they do NOT come out of profits. Over analyzing adds grey hairs, but I assure you that you are no where near that warning state in your thinking based on your response; although I cannot speak to the confusion level. If you have a managed process for evaluating transactions more analysis leads to clearer thinking not more confusion. The problem is the unmanaged process. We have a great video series that explains this coming to the market soon.
> 
> I've explained this before, but I will try once more. While it's true there are people that know accounting that do not understand finance and economics the reverse is not true. Economics is spoken in the language of Finance. Finance is spoken in the language of Accounting. There is no one that has a true understanding of Economics that cannot see and define the Finance & Accounting transactions. This was demonstrated in the discussion of interest deductions creating incentives. I think most RE investors drastically over-estimate and over-report (to everyone except the IRS) their net profits. Conveniently many of them keep scant records.
> 
> One of the GAAP concepts is usefulness to decision making; specific principles are Consistency and Comparability. The problem with an unmanaged process is that it is InConsistent and leads to UnComparable results. This is tragic among either/or decisions or baskets of investments where the investors poor decision making leads to self-weighted decisions that break-even at best overall. We call this the Price of NonConformance. In RE, I will give an example, I know someone that is currently financing the ongoing R&M of a basket of 40 investment properties. Today he says, If I knew then what I know now (or knew it was even a possibility) I would have selected a different type of property or asset class entirely. The question I had for him was: Why didn't he know before he put his money in?


Thanks ksinc,

I agree with most of this. A beginner buyer should know what price and almost the exact day he is going to sell. If he is off he needs to go back to the drawing board.

One part I'm not sure about and need to think about many things to decide what I think is correct.

The last paragraph explains supply and demand and the stupid factor- how they work together. That is, the stupid factor, because the theory in school is not finished, but it does not matter, because it equals out. It is also aimed at average or 50/50. Some personal investors can do much better, because their mind is wired that way. People who are less than 50/50 can use the 50/50 method and come out much better.

Handeling other peoples money is way different because of the volume. Everybody sees it....


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## 16412 (Apr 1, 2005)

forsbergacct2000 said:


> As long as you were using your own money, you could have bought anything you wanted to.
> 
> The other thing is that almost all people who think they can speculate and time the market get burned over time. It's your money, so I suppose you are free to try to time the market on these things if you really want to.


With personal money the old saying _not to have all of your eggs in one basket_ still applies.

It is still a good idea to have some in growth stocks. But, I showed even they get burned now and then- $150 ends up being $50? I have seen where several recessions have reduced mutual funds to half- that is clearly being burned. Whether you burn yourself or by a professional everybody gets burned.

There is one other concept. Money is not god, therefore, put $200 - $1,000 aside and invest it and reinvest for 20 years. This money has nothing to do with the money you put into growth stocks 401s and so on. You might loose it (which is no lose, because it is so small) or you might discover you have a knack for personal investing.


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## 16412 (Apr 1, 2005)

ksinc said:


> Doesn't the SEC require them to have an investor figuring on an 800% return to be committed? :devil:


It's a sport. And while you are at it you want to be the one that sells on the crest.

One piece of advise- never be caugth trying to sell after the crest (it's smoky down there).


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## Nicesuit (Apr 5, 2007)

The "shake-out" is far from over. We've still got option-ARM and alt-a loans to worry about, the credit card companies are on the verge, commercial defaults are escalating and unemployment numbers are still huge. We're in nothing more than a government manufactured "spike" at the moment. It's all smoke and mirrors.


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## ksinc (May 30, 2005)

Nicesuit said:


> The "shake-out" is far from over. We've still got option-ARM and alt-a loans to worry about, the credit card companies are on the verge, commercial defaults are escalating and unemployment numbers are still huge. We're in nothing more than a government manufactured "spike" at the moment. It's all smoke and mirrors.


party pooper!


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## 16412 (Apr 1, 2005)

Nicesuit said:


> The "shake-out" is far from over. We've still got option-ARM and alt-a loans to worry about, the credit card companies are on the verge, commercial defaults are escalating and unemployment numbers are still huge. We're in nothing more than a government manufactured "spike" at the moment. It's all smoke and mirrors.


Smoke and mirrors? You maybe right about that. I was to hasty with the shake-out words. But, when stocks are climbing there are usually two or three "shake-outs" before thet reaches the top. So it has several meanings.

There is one other thing that can blow my prediction out of the water- Magic Democrat Tax. Government takes in more revenue with a lower tax, but Democrat greed says kill the goose.


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## 16412 (Apr 1, 2005)

ksinc, something you wrote reminds me of another method of buying stocks that I would have gone to if the method I used didn't work. Your method picks out way more stocks to buy, so a bigger slection, but it seems more risky. Never learned your method, just know about it. 

About the rental house. I expected to use other peoples money to pay it off- renters. While I new about inflation I didn't know how to caluate it. After I sold the house the only smart thing a stock broker sold me was a book. In the book she (author) explain how to figure inflation, of course nobody knows what the rate will be, but you get a good idea of what it can be. At 9 1/2 % inflation 30 years later it is about $200,000. The rent @$150 back then is probably more than $1,000 today. Life changes.


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## ksinc (May 30, 2005)

WA said:


> ksinc, something you wrote reminds me of another method of buying stocks that I would have gone to if the method I used didn't work. Your method picks out way more stocks to buy, so a bigger slection, but it seems more risky. Never learned your method, just know about it.
> 
> About the rental house. I expected to use other peoples money to pay it off- renters. While I new about inflation I didn't know how to caluate it. After I sold the house the only smart thing a stock broker sold me was a book. In the book she (author) explain how to figure inflation, of course nobody knows what the rate will be, but you get a good idea of what it can be. At 9 1/2 % inflation 30 years later it is about $200,000. The rent @$150 back then is probably more than $1,000 today. Life changes.


WA, I was not speaking specifically of a method to screen or pick stocks, but the way to compute and compare real options. These could be stocks or say your RE investment, but are mostly business valuations.

It seems like you said inflation, but mean appreciation?

If you want to try my stock screening method learn to compare implied volatility to historical volatility and sell some calls. https://www.ivolatility.com/help/


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## Asterix (Jun 7, 2005)

According to Buffett:

https://articles.moneycentral.msn.c...t-dispatches.aspx?post=1166774&_blg=1,1166774


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## 16412 (Apr 1, 2005)

What Buffett says is not good for the economy. Inflation is not good, nor adding to the stimulus package. I did figure at one time the bottom of the housing market would be the turn around, and maybe it will be, people have to live somewhere. But, I still tend to believe the tide has turned. 

Inflation takes buying power away. This destroys the markets, and is hard on jobs. When Reagan stepped into power inflation was double digits along with interest rates and so on. When all of this started going down the economy got better and better. To do what Jimmy Carter did is an illusion I don't want to see again. Did Buffett forget what it was like?


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## 16412 (Apr 1, 2005)

ksinc said:


> It seems like you said inflation, but mean appreciation?


Most of that is appreciation. But I wonder if inflation is being added up right.

Here is a story to think about. This old man, who is dead now and for a few years, said when got out of high school he bought some property and had a house built and rented it and payed the total cost of $1,000 off in one year. How many right out of high school kids can buy a house and pay it off in one year, nowadays? Been reading in the paper for the last few years where young people ready to go to college have to decide if they will go to college and buy a house or go to college and have children or skip college but buy a house and have children because the cost of the three is too much. At this rate of appreciation, or, maybe inflation is higher than believed, how much longer before ordinary folks are sleeping on park benches?


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