Portfolio Black Day

[Breand]

With little fanfare, today marked the day my 401k portfolio went back into the black from it's Sept 08 levels. Yippie. We'll see how long that lasts.

[Vanraw]

SELL SELL SELL!!!!

[Grieve]

With little fanfare, today marked the day my 401k portfolio went back into the black from it's Sept 08 levels. Yippie. We'll see how long that lasts.

Based purely on market value, or also including additional amounts you've added since then?

[Breand]

market value, doesn't include new money added.

[Dustie]

Nice. Now the question is, will you listen to Maul or not?

I'm personally torn. I sold my US Steel (X) yesterday after it went up 40% since I bought it. Now of course, its up another 7% today so I feel stupid. I sell very rarely, but when things rise to high too fast (X isn't even in positive earnings land yet), I can't stand by and watch.

I imagine this is a conversatoin that lots of people are having across the country right now -- "I have my money back, now what? Tuck it in a matress? Let it ride?"

[Breand]

Im just letting it ride for now. I think we'll still have some upwards movement for awhile and then have another crash sometime either at the end of the year or early next year, maybe later. Basically, I don't have a huge amount of options with my 401k. Currently I have close to half in PIMCO Total Return (Bill Gross is God), and then 2/3 of the rest in an S&P 500 Index, and the rest in a Target Small Cap fund.

When I saw the crash coming in 2008, I moved a lot of money over into PIMCO to protect it, which worked out well. I lost only about 20% of my portfolio value when it was at its lows. Then in March I moved everything I had put extra into PIMCO, back into stock funds, and they had a great recovery.

I can imagine at some point towards the end of the year doing the same thing, and moving a lot back into PIMCO.

Here's a situation I imagine. Towards the end of the year maybe, or perhaps a tad earlier we start getting good unemployment numbers and the markets go ballistic, moving upwards quickly. Then, at some point later down the line all the government debt obligations start coming home to roost and foreign countries finally give up on buying U.S. Treasuries, which cause a panic in the markets and the whole thing crashes again, leading to massive inflation and the death of the dollar as the reserve currency. Fun times ahead!

[Breand]

I'm personally torn. I sold my US Steel (X) yesterday after it went up 40% since I bought it.

I can do worse, sold PIR (Pier 1 Imports) at a 225% profit, if I sold it today it would be a 796.88% profit. I bought it at 64 cents, it's 5.74 now. At one time in March it was as low as 11 cents because everyone thought they would file for bankruptcy.

[Vanraw]

My Sell sell sell was tongue in cheek for sure. My 401 k, is close to returning to levels prior to 9/2008 as well. For the most part I never touch the 401k. Its distributed well, and if I change it, it is just moving the balance around. Over all my 401k has made money over the years, but my aggravation is that wall street greed continues to screw the small guy. For instance my son had a insurance settlement from a accident that was 100% invested in low risk index funds in 1999 around the peak. 10 years later his original investment is still in the red. Untouched. Buy and hold long...... 10 years..

So when people say buy and hold, I now say, "The big investors thank you for the donation". Yes I'm bitter. My take is that money at the macro level is like energy. It doesn't go away, it just moves around dissipates, moves around etc. When everyone is losing, someone is always winning. We are not the players, and thus the best we can do is to try and jump on the tail of the players low, and jump off before they move the market. Yes yes this is very conspiracy theory based, but Ive seen enough to feel its all a play at the highest levels. Old money is still in control.

So, Dustie making 40% = beating the players. GREAT job, GREAT trade, stop looking at the stock and doing the "if I woulda" and you will happy and fulfilled. Beating the players is the ultimate PVP.

Here's a situation I imagine. Towards the end of the year maybe, or perhaps a tad earlier we start getting good unemployment numbers and the markets go ballistic, moving upwards quickly. Then, at some point later down the line all the government debt obligations start coming home to roost and foreign countries finally give up on buying U.S. Treasuries, which cause a panic in the markets and the whole thing crashes again, leading to massive inflation and the death of the dollar as the reserve currency. Fun times ahead!

On the long side I sorta agree with Breand's position on a strong 2010 due to unemployment numbers. I think we will see some sort of new housing construction bump too. Not great, but enough to get the masses running the market up. I say this because I dont think it will take alot to improve unemployment a couple of percentage points, and I think that is all it will take. So if unemployment drops to say 8%, it will push a strong market bump.

On the other side, I'm not afraid of debt from a perspective of other countries stopping the purchase of bonds. In fact I think bond investment from foreign countries may go up, because inflation is going to force interest rates up. I think It will be inflation that will correct the market.

Here is the thing we need to be afraid of as it relates to the deficit. If the government measures the deficit as ratio to GNP, then inflation can be their friend. Meaning higher cost of goods = higher GNP and thus lower deficit to GNP ratio. This is sort of the President Carter theory of economics. Be afraid.

[Breand]

Well the government (and the FED) secretly WANT tons of inflation, they just can't say that. But inflation is the only way they can meet their debt obligations. They need the dollar devalued so they can pay off their debts. And it's working great for them so far because we are getting plenty of inflation and the market is absorbing it. But that can't last forever. That's another thing Schiff is always fond of saying: if you price the stock market in dollars, you get some middling return numbers, but if you price the market in gold, the stock markets have NEVER made positive returns.