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Total US Stocks market value as a percentage of GNP, what a common sense metric that most people never really think about:
http://money.cnn.com/2009/02/04/magazine.../index.htm
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Yea as long as GNP doesnt keep dropping like a rock too  .
Here's my prediction. Buy when the dow dips below 7400, which will be in the next month.
If you have cash.....
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
![[Image: maull2.gif]](http://bengtel.com/maull2.gif)
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I don't understand the underlying logic behind Buffett's argument. Why is it good at 80%? And, as maull pointed out, what if GDP drops too.
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This article is linked inside the one I posted. You need to read this one first:
http://money.cnn.com/magazines/fortune/f...10/314691/
Edit: Great example Buffet uses in this article:
Quote:Dow Jones Industrial Average
• Dec. 31, 1964: 874.12
• Dec. 31, 1981: 875.00
I was going to try to sum it up, but I couldn't. I know this is a long article, but I think it will answer your first question.
As far as GNP dropping, the answer is that you need to accept the premise that our country will continue as an economic power house. In other words, Breadan and Schiff would probably not accept this argument whereas Buffet and people like me would continue to say that it hasn't been profitable to bet against America for the past 200 years and the conditions that make America a great country for business growth are still here and are still going strong.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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I would agree with that bet. I wouldn't bet against America on the long run. However I am not confident in any way or form that the economic woes are near an end.
- 2 Trillion of mortgage assets still pending default.
- Large companies with massive stock and no demand, and no way to get loans to work through the rough spell.
- A stimulus package that looks like politicking as usual loaded with pork and a bunch of assholes in Washington who are clueless to the impact of thier ineptness.
- Americans are not spending. Everyone is afraid, and hording money if they can. Mostly because they are over spent in deep in dept.
I think there is only one solution that would turn things around. Through out that stimulus package, and do a new one with nothing but infrastructure work. I'm talking 500 to 700 billion in roads, bridges, dikes, Dams, green power, etc etc. Do things that can not be outsourced. Put America to work. then they will spend, and everything will normalize.
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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America will stop being -The- power house once China decides to develope some more infrastructure to support it's 1.3 billion in population: Can't stop The Zerg!
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Return to economic power = rebuilding our manufacturing infrastructure and returning to a viable savings rate. The savings is starting to return, which is good.
The answer is not the current political trend: making even more loose credit available to people, so that they will spend it on consumer goods. "Oh we need the banks to start lending again!" Banks and their loose lending is what got us into this mess in the first place.
Throughout history: Production based Economy > Service based Economy.
I was watching CNN this morning I think and they had the mayor of Lansing on the phone who was very outspoken, and while he kept rambling I did like his points. The best was in response to the question "Since we are a service economy now, shouldnt we be focusing more on that instead of manufacturing" and he replied "Service economy? What are we all gonna do, make hamburgers for each other?"
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Breand Wrote:"Service economy? What are we all gonna do, make hamburgers for each other?"
No Shit. We cant be a service economy if 70% of our engineering and science degrees go to foreign students.
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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We are 1% away from our Nov lows in the S&P. If we hit 741, I will eat dirt and say I was wrong to agree that Nov 21st was the bottom.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Ive been saying low 7k and perhaps high 6k on the dow. I think we will hit that this week. The broke through the bottom and are at like 1997 levels right now.
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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Have a finance buddy who said if it went below 7500, which it did, all hell will break loose and it will go down to 6000. Im inclined to believe him.
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I've also heard and seen charts that suggest that if the Dow breaks the 6k, it's not going to find strong support until the 3's.
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Saw this on my investment forum:
![[Image: four-bears-extended-large.gif]](http://dshort.com/charts/bears/four-bears-extended-large.gif)
I haven't checked the source, but it looks fairly accurate.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Interesting. The big question is if it will track to the 89%......
I have looked at the 1929 trends. What I find interesting is the bump and steady increase after the crash for about 6 months or so. I could see people just pouring money back into the market at that point afraid they would miss the next run. That seems to be today's wall street attitude. then it just starts crashing on down from about 25% loss to 89% over 3 years.
Is this what we have today? If we saw a solid run, would it just be a temporary run.
I have not jumped out of the market, but I'm seriously considering it.
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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Ok, I need to eat some dirt. It looks like the Nov low of 741 was not the bottom after all.
Feb 27th 2009 S&P 500 index at 735
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Dustie Wrote:Ok, I need to eat some dirt.
Pictures or it didnt happen
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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The Wash Rule:
I read today in the WSJ that the to avoid the wash rule you only need to wait 31 days between the time you sell a stock and re-buy it. In other words, I don't need to wait 1 year to re-buy the same stock if I want to lock in my losses as tax write offs for future years. Is anyone an expert on this?
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Im not an expert, but I think it was 1 month.
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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have to wait 30 days, you can buy back on day 31.
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Good article on the wash rule. Interesting in that it is 30 days befor and after the loss.
http://www.smartmoney.com/personal-finan...ules-9860/
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
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Markets pretty bullish right now, hard to not make money especially in financials..
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this is killing me, shoulda gone with my gut:
MRX
I was up at 2am as per usual last night, and saw a 1AM press release from the company saying a competitor had dropped their claim to making one of the drugs and will stop making it, making MRX the sole distributor. I was like Hmmm...that sounds very favorable to MRX. I was gonna buy $500 worth but decided not too.
It's up 25% today.
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