To the Gordon Gekkos of the world.........

[eric42434224 1]

On the plus side, I'm not retiring for some 30 years. By then, perhaps I'll have recovered what the market has lost me over the last 8 years.

Rest assured it will, and in that long of a time horizon, we will have plenty of financial ups and downs, including a full blown crisis or two sprinkled in for good measure.

[mack 44]

Chippa-

I just mean in general, but it's safe to assume most people are now more aware about investing than they were years ago. My back-up plan is our pub back in Ireland, so I know that's not going to go anywhere as it's like investing in air.

[aliebe 0]

My back-up plan is our pub back in Ireland, so I know that's not going to go anywhere as it's like investing in air.

I'm a buyer of booze and tylenol/advil....

[Spreedizzle 1]

I invest in refrigerant

Bought 40 bottles of R-22 residential refrigerant 5 years ago at $52 a bottle. I sold it today to one of my customer for $162 a bottle. Not bad for the investment. ;)

Now if ONLY I had picked up 40 jugs of R-12 about 10 years ago. :(

[Chadd 916]

Chippa-

I just mean in general, but it's safe to assume most people are now more aware about investing than they were years ago. My back-up plan is our pub back in Ireland, so I know that's not going to go anywhere as it's like investing in air.

The difference is that people used to invest for the long term and the dividend. Now people invest mostly for the short term and off market volatility. The over-focus on stock prices has also cause so many companies to make decisions that favor investors over the short term and hamstring the company itself over the long run.

[james12lucy 0]

You absolutely will. Just remember me when you retire and the value of your portfolio has increased by 70% by buying at the bottom

I agree with what you are saying but a word of caution. ALWAYS and I mean ALWAYS have a cash reserve that is liquid and easy to get to in case you need it. Never put everything in the market.

I'm no pro, but I've been researching a little bit lately. I've realized a cash reserve is good only if the markets remain stable. Since the market is set to crash it'll also de-value the worth of the dollar. If there is, say, another depression then cash will have very little to no value.

If you've done your homework you'll know Gold is where it's always been at when it comes to investing. If you've noticed, gold has done nothing but vastly increase in value since the late 1990's. The people investing in private gold are also the ones running the economy. Also of note, is that many mints have stopped issuing gold coins because they can't keep up with demand; demand from those that have foresight into the market. One practice of the mint has always been to increase the output of gold in crisis times to bring the value down; that hasn't been the case this time. It seems as though the mints want to keep gold value too high for most to afford; thus reserving it for the elitest.

Meh, sorry to sound like a raving conspiracy theorist here. Just trying to shed some light on the topic.

[chippa13 1844]

You should always have some quick liquidity to fall back on, cash or short term cd's (1-3 months) will do the trick there.

I started this thread a hair on the dramatic side since I'm well aware that by the time I reach retirement age my investments will rebound and then some. Where this crisis really hits home is with my father who is getting ready to hang 'em up and enjoy the golden years.

[mrusse01 0]

Don't worry, the government can just print $770 billion more cash, use that money to buy up all the bad debt, and then all the financial institutions that used to have bad debt on their balance sheet now have nice, pristine, cash on there....bingo bango, everybody wins.

Well, except for whoever has to end up paying that $1.5 TRILLION already added to the national debit this year, it's going to suck for them.

It took 209 years for the United States to amass the first $5 trillion in national debit. In the last 10 years, an additional $6 trillion has been added. Hmm....

[JR97 2]

With the lack of confidence in the market, not just this month but for the last year or two, 401k's are sinking along with the market. Sure, diversification is supposed to insulate the investor from some of the market volatility but eventually the market pulls them down too.

Yes, they get pulled down. But they will also go up again. When is it the best time to buy? When prices and valuations are low. Buy putting more money away now, you will increase the returns in the future. Any money put in the past 2 years was buying at the top. Now that the market is correcting and approaching a bottom, this is a buying opportunity. Hedge funds are liquidating positions which is creating some nice entry points for individual investors.

DON'T PANIC! BE SMART! Remember: Buy Low, Sell High

Be smarter than that and open up a chart and learn some basic technical analysis and dow theory. Put your money somewhere that has growth potential in a general economic downturn. Unless you can tolerate continued draw downs in the equity markets, let the market prove that what you think is low now isn't just a pause before the market drops even further. Otherwise you're just throwing good money out the window for the benefit of a "tax break".

The smart money has been out of the equity markets for at least a year and possibly up to 5. Warren Buffet for example ditched most of his US equity holdings and starting dumping dollars for Euro's about 5 years ago. Not the best of timing but he's sitting pretty now. Bill Gates was onboard that train as well.

[eric42434224 1]

With the lack of confidence in the market, not just this month but for the last year or two, 401k's are sinking along with the market. Sure, diversification is supposed to insulate the investor from some of the market volatility but eventually the market pulls them down too.

Yes, they get pulled down. But they will also go up again. When is it the best time to buy? When prices and valuations are low. Buy putting more money away now, you will increase the returns in the future. Any money put in the past 2 years was buying at the top. Now that the market is correcting and approaching a bottom, this is a buying opportunity. Hedge funds are liquidating positions which is creating some nice entry points for individual investors.

DON'T PANIC! BE SMART! Remember: Buy Low, Sell High

Be smarter than that and open up a chart and learn some basic technical analysis and dow theory. Put your money somewhere that has growth potential in a general economic downturn. Unless you can tolerate continued draw downs in the equity markets, let the market prove that what you think is low now isn't just a pause before the market drops even further. Otherwise you're just throwing good money out the window for the benefit of a "tax break".

The smart money has been out of the equity markets for at least a year and possibly up to 5. Warren Buffet for example ditched most of his US equity holdings and starting dumping dollars for Euro's about 5 years ago. Not the best of timing but he's sitting pretty now. Bill Gates was onboard that train as well.

I disagree. The technicals havent proven reliable in the last year or so. So many things have been changing.

As for finding the bottom, and using Buffet as an example of the smart money being out for years.....you need to watch the news.....Buffet pumped 5 BILLION into GS last week. The Oracle of Omaha has spoken, and he IS smart money.

[JR97 2]

I disagree. The technicals havent proven reliable in the last year or so. So many things have been changing.

As for finding the bottom, and using Buffet as an example of the smart money being out for years.....you need to watch the news.....Buffet pumped 5 BILLION into GS last week. The Oracle of Omaha has spoken, and he IS smart money.

GS is a good example.. but it's a single example of a prime opportunity. But it's not like Buffet is throwing his vast fortunes across the equity markets in general. Plus, Buffet can afford to average in.

As far as the technicals go, what specifically are you talking about that became unreliable?

How about some generals like the inverted yield curve, individual savings to debt ratio? Or if you want to get into chartist territory, the head and shoulder pattern on the dow weekly as well as trendline break? Price dipping below the popular moving averages (20, 50, 100, 200)? All technical and all plenty reliable if you know what you're looking at.

Either way, I"m not looking for an argument on technical analysis. Just trying to point out that the used car salesman line of keep throwing money into your retirement and 401k accounts without understanding where the money is going and the nature of market behavior can be a loser. I will agree that contributing money is a good idea in general... just know where it is going and try and get a little educated to control where it's going. I'm not saying learn the ins/outs of dollar cost averaging or hedging. Just don't take every word the 401k admin dude on open enrollment day is saying blindly.

[aliebe 0]

I will agree that contributing money is a good idea in general... just know where it is going and try and get a little educated to control where it's going.

And that is what I've been saying all along.

[mrusse01 0]

Can anyone explain or link me to an article explaining why this bailout package is now going before a vote in the Senate?

I have a rough understanding of the United States Congress; two houses of congress are the House of Representative and the Senate...bill can be introduced in either house....requires approval from both houses as well as Presidental authorization to go into law (technically Presidential veto can be overruled with a 2/3rds majority vote in both houses of congress).

My confusion is that from everything I've read the Constitution bars the orgination of bills dealing with increasing federal revenue (raising taxes) from occurring in the Senate. As well, there is some debate that appropriation bills (authorizing the expenditure of federal funds) are also constitutionally barred from originating in the Senate, and the debate is settled in practice by the House simply ignoring any appropriations bills that originate in the Senate.

So I'm confused as to why the House would consider this bill even if it passes vote in the Senate later tonight? Is this somehow not considered an appropriations bill?...is it just special circumstances?

[Chadd 916]

Can anyone explain or link me to an article explaining why this bailout package is now going before a vote in the Senate?

I have a rough understanding of the United States Congress; two houses of congress are the House of Representative and the Senate...bill can be introduced in either house....requires approval from both houses as well as Presidental authorization to go into law (technically Presidential veto can be overruled with a 2/3rds majority vote in both houses of congress).

My confusion is that from everything I've read the Constitution bars the orgination of bills dealing with increasing federal revenue (raising taxes) from occurring in the Senate. As well, there is some debate that appropriation bills (authorizing the expenditure of federal funds) are also constitutionally barred from originating in the Senate, and the debate is settled in practice by the House simply ignoring any appropriations bills that originate in the Senate.

So I'm confused as to why the House would consider this bill even if it passes vote in the Senate later tonight? Is this somehow not considered an appropriations bill?...is it just special circumstances?

If the house passes something different, any differences would be worked out behind closed doors. That would allow them to strip out anything provisions they don't want.

[JR97 2]

Congressional Marshal Law trumps all. Of course they don't tell you that it was invoked on CNN or Faux.

http://www.cbpp.org/7-28-06bud-stmt.htm

[mrusse01 0]

Can anyone explain or link me to an article explaining why this bailout package is now going before a vote in the Senate?

I have a rough understanding of the United States Congress; two houses of congress are the House of Representative and the Senate...bill can be introduced in either house....requires approval from both houses as well as Presidental authorization to go into law (technically Presidential veto can be overruled with a 2/3rds majority vote in both houses of congress).

My confusion is that from everything I've read the Constitution bars the orgination of bills dealing with increasing federal revenue (raising taxes) from occurring in the Senate. As well, there is some debate that appropriation bills (authorizing the expenditure of federal funds) are also constitutionally barred from originating in the Senate, and the debate is settled in practice by the House simply ignoring any appropriations bills that originate in the Senate.

So I'm confused as to why the House would consider this bill even if it passes vote in the Senate later tonight? Is this somehow not considered an appropriations bill?...is it just special circumstances?

If the house passes something different, any differences would be worked out behind closed doors. That would allow them to strip out anything provisions they don't want.

My understanding is that if the legislation is amended then it goes 'behind closed doors' to a conference committee where representatives of each house of congress confer and come to an agreement, but then doesn't it have to come back to the House and the Senate for a vote?

[Chadd 916]

Can anyone explain or link me to an article explaining why this bailout package is now going before a vote in the Senate?

I have a rough understanding of the United States Congress; two houses of congress are the House of Representative and the Senate...bill can be introduced in either house....requires approval from both houses as well as Presidental authorization to go into law (technically Presidential veto can be overruled with a 2/3rds majority vote in both houses of congress).

My confusion is that from everything I've read the Constitution bars the orgination of bills dealing with increasing federal revenue (raising taxes) from occurring in the Senate. As well, there is some debate that appropriation bills (authorizing the expenditure of federal funds) are also constitutionally barred from originating in the Senate, and the debate is settled in practice by the House simply ignoring any appropriations bills that originate in the Senate.

So I'm confused as to why the House would consider this bill even if it passes vote in the Senate later tonight? Is this somehow not considered an appropriations bill?...is it just special circumstances?

If the house passes something different, any differences would be worked out behind closed doors. That would allow them to strip out anything provisions they don't want.

My understanding is that if the legislation is amended then it goes 'behind closed doors' to a conference committee where representatives of each house of congress confer and come to an agreement, but then doesn't it have to come back to the House and the Senate for a vote?

Nope, that's how stuff gets slipped in.

[troy 12]

Here's a pretty decent article about Buffett's recent acquisitions:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

[Trooper 8]

If you've done your homework you'll know Gold is where it's always been at when it comes to investing. If you've noticed, gold has done nothing but vastly increase in value since the late 1990's. The people investing in private gold are also the ones running the economy. Also of note, is that many mints have stopped issuing gold coins because they can't keep up with demand; demand from those that have foresight into the market. One practice of the mint has always been to increase the output of gold in crisis times to bring the value down; that hasn't been the case this time. It seems as though the mints want to keep gold value too high for most to afford; thus reserving it for the elitest.

Meh, sorry to sound like a raving conspiracy theorist here. Just trying to shed some light on the topic.

Gross oversimplification. Gold, adjusted for inflation, is still lower than it's peak in 1980 at the end of the 1970s bear market. If it was simply "the best", all those smart investors would be in gold, and that's not the case.

[JR97 2]

If you've done your homework you'll know Gold is where it's always been at when it comes to investing. If you've noticed, gold has done nothing but vastly increase in value since the late 1990's. The people investing in private gold are also the ones running the economy. Also of note, is that many mints have stopped issuing gold coins because they can't keep up with demand; demand from those that have foresight into the market. One practice of the mint has always been to increase the output of gold in crisis times to bring the value down; that hasn't been the case this time. It seems as though the mints want to keep gold value too high for most to afford; thus reserving it for the elitest.

Meh, sorry to sound like a raving conspiracy theorist here. Just trying to shed some light on the topic.

Gross oversimplification. Gold, adjusted for inflation, is still lower than it's peak in 1980 at the end of the 1970s bear market. If it was simply "the best", all those smart investors would be in gold, and that's not the case.

Smart investors also know that owning actual gold is a risky prospect because it can be "called" or essentially confiscated thanks to provisions in the Patriot Act. Similar to the gold seizure in 1939. Gold coins like double eagles etc can be called, if I'm not mistaken. Even antique coins can depending on whether they are numismatic vs non-nusmismatic or something. Heck, even HOW you deposit gold in your bank can determine what actually happens to your gold Allocated vs non-allocated determines whether you actually keep the gold or the bank gets it and you just get a certificate redeemable in cash based on the gold value but you don't get your actual gold back.

[headonaswivel 1]

I have just recently passed my securities exams, conduct and practices exam, and have my final insurance licensing exam in 2 weeks. I am lucky enough to be training as a financial advisor with a great firm.

The problem in many cases is firms that go over on the short term risk factor. Chadd was EXACTLY right in his statement on the last page. As hard as it is for our generation that wants everything yesterday, the ideal way for security, is long term investments in blue chip companies, diversified to around 32 different holdings. Easier said then done, that is why Mutual Funds are a great thing for younger people with less money to spread it into.

As someone else correctly stated here, as diversified as you are you can still take a hit over the entire spectrum, but not putting all your money in one area is about as wise as you can be. It's good to hold things that are negatively correlated, meaning when the price of X goes one way, typically the price of Y goes the other.

Now I am in no position to give advice, what I am saying is that now is a great time to get in to stable investments that are dipping down. 10 years from now you be very happy you did.

Do your research, ask questions, don't watch garbage newscasts. Try and talk to a professional. If they are worth their salt they should be fairly positive right now.

Nothing sells things off like fear. Dig in your heels.

[shooter27 116]

Thought I would try to bring a little levity to this thread, and I don't think this email I got deserves its own thread, so...

Liquid Assets

If you purchased $1,000 of Delta Airlines stock 1 year ago, you would

have $49.00 today.

If you purchased $1,000 of AIG stock one year ago, you would have

$33.00 today.

If you purchased $1,000 of Lehman Brothers stock 1 year ago, you

would have $0.00 today.

But, if you purchased $1,000 worth of beer 1 year ago, drank all the

beer, returned the aluminum cans for a recycling refund, you would

have $214.00.

Based on the above, the best current investment plan is to drink

heavily & recycle.

It is called the 401-Keg.

A recent study found that the average American walks about 900 miles a year.

Another study found that Americans drink, on average, 22 gallons of

alcohol a year.

That means that, on average, Americans get about 41 miles to the gallon!

Makes you proud to be an American!

[interpathway 9]

From the October 13th, 2008 issue of TIME Magazine...

"'My name is not Gordon.' MICHAEL DOUGLAS, actor, referring to Gordon Gekko, his character in 1987's Wall Street, when asked about the financial crisis and whether 'greed...is good'".

[JR97 2]

From the October 13th, 2008 issue of TIME Magazine...

"'My name is not Gordon.' MICHAEL DOUGLAS, actor, referring to Gordon Gekko, his character in 1987's Wall Street, when asked about the financial crisis and whether 'greed...is good'".

haha. He's said quite a few times that it bothers him to be approached as "Gekko" because the character is quite the opposite of what Douglas is in real life, allegedly.

[interpathway 9]

From the October 13th, 2008 issue of TIME Magazine...

"'My name is not Gordon.' MICHAEL DOUGLAS, actor, referring to Gordon Gekko, his character in 1987's Wall Street, when asked about the financial crisis and whether 'greed...is good'".

haha. He's said quite a few times that it bothers him to be approached as "Gekko" because the character is quite the opposite of what Douglas is in real life, allegedly.