# A good sign of our times...



## invision (Aug 14, 2012)

Yesterday several reports came out positive for our economy - the markets sank
Today several reports came out that were not so good about the economy - the markets are rising...

This to me is just MORE proof all we are doing is creating another Bubble in the equities market....


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## helicopter5472 (Feb 25, 2013)

You may be right, the market reacts usually to all the current events so its hard to tell. Makes you wonder since one day all is well, the next day it changes to crap, The lefties see the all is well, the rest of us see the truth. Confuses the market. The smart ones who can afford to invest are so on edge and will pull out if they get a whiff of a fart.


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## hiwall (Jun 15, 2012)

invision, I totally agree. Asian markets fell last night(Japan fell over 5% in one day!)=bad. Unemployment numbers =bad. Housing numbers=bad. GDP revised down=bad. But USA and European markets are up. No sense to it at all.


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## mojo4 (Feb 19, 2012)

I just don't understand the "market". Supposedly its for companies to trade shares of ownership. These are larger companies that produce our goods and services. Yet our overall production from cars to electronics are in the dumper. Everything is made "over there" and now we just trade supposed ownership of factories and their output even though the sites are under a red flag. So what happens if bad feelings break out? It is insane. But I guess I just don't understand things. We have destroyed and semblance of self sufficiency for an extra buck or two.


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## Woody (Nov 11, 2008)

I look at gold and silver and have to laugh, it is so obvious. The price keeps falling and demand rises to the point it is unavailable to buy any. In an unrigged market economy the price would be rising as demand rises and stocks fall short of demand. In a rigged market those with the most money can make the price go any way they like. AND, they make money if the price rises or falls, it is incredible.


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## hiwall (Jun 15, 2012)

Got a letter today from the main office of Edward Jones(I have one IRA with them). The letter stated that they are recommending clients pull back from long-term bonds and also hinted that the stock market will likely "dip" in the (near?) future.


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## invision (Aug 14, 2012)

"dip" now that is a unique word for "Crash"... roflmao...

As a business owner, I can understand outsourcing to improve profits. I outsource my call center - yes it is US based. I outsource my online storage to a company specializing in my backup product - yes they are US based, yes the two data centers are US based. But my Network Operations Center - where all the Microsoft Certified Engineers are that monitor/repair all the servers is India based... and yes that is outsourced..

If I were to store my data myself, I would be facing a negative revenue stream, when I used a foriegn company with US data centers I was paying $1.24 per GB, now after switching companies I am paying less than .24 cents a GB... so I have gained a $1 per GB that i online... and I have well over 6,000 GBs of client data so that one move 15 months ago saved me over $6,000 a month! That single move saved me when I decided to "slow down" and stop consulting on a daily basis - losing over $170,000 a year in profit... So I can understand companies wanting to save money by outsourcing... and if they can get the same quality elsewhere with different workers, I have no complaints there... 

What I have complaints about is we are rewarding debt... the more debt the fed reserve takes in the higher the market, fear that the fed will stop QE and the markets go down...


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## Marcus (May 13, 2012)

hiwall said:


> Got a letter today from the main office of Edward Jones(I have one IRA with them). The letter stated that they are recommending clients pull back from long-term bonds and also hinted that the stock market will likely "dip" in the (near?) future.


I commend them pointing out the obvious.

I missed out on the recent run up in the market since I moved my 401k totally to the money market fund last year and my other accounts to cash or PMs. Even though there's still some risk in the money market fund, it'll be less than a regular bond fund which now has a huge capital risk if interest rates rise.

As far as the stock market, the Fed is forcing folks to get into it by depriving them of any decent return in other asset classes. But, heading into summer is one of the worst times to be in the market. You're better off waiting until late July or August to get back in. I won't be getting back in myself since I don't see any reason for the run up other than as the result of monetary policy. The end of QE will cause a big drop in the stock markets.

As I mentioned in another post, I bought some put contracts on the S&P recently. I sold half of them yesterday for a nice 14% profit in 2 weeks. So the S&P went back up today and I bought back the put contracts I sold yesterday for a final profit of 7% *and I still own the same number of contracts as when I started.* This is how you can play the usual summer volatility and still keep the same total position if you think, as I do, that the market will go down significantly in the next 3 months.

FYI, I use longer expiration date options so the time decay for the options is not such a major factor in the option pricing. This affords me the opportunity to profit on down days by selling and on up days by re-buying at a lower price than for what I sold. If I can repeat this cycle 5 or 10 times in the next 3 months, my capital risk will be cut considerably.


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## invision (Aug 14, 2012)

Marcus said:


> As I mentioned in another post, I bought some put contracts on the S&P recently. I sold half of them yesterday for a nice 14% profit in 2 weeks. So the S&P went back up today and I bought back the put contracts I sold yesterday for a final profit of 7% *and I still own the same number of contracts as when I started.* This is how you can play the usual summer volatility and still keep the same total position if you think, as I do, that the market will go down significantly in the next 3 months.
> 
> FYI, I use longer expiration date options so the time decay for the options is not such a major factor in the option pricing. This affords me the opportunity to profit on down days by selling and on up days by re-buying at a lower price than for what I sold. If I can repeat this cycle 5 or 10 times in the next 3 months, my capital risk will be cut considerably.


That is absolutely the correct way to be in the market - unless you are like my dad - which is long term investments - buying stocks that only pay dividends and have a tendancy to split. He has some stock he has owned for 20-30 years, after all the splits - say Microsoft as an example - it total purchase price is now sitting in the single digit for purchase cost per share - let's say it is $8, if he sold today at $35.17 he would have over a 300% ROI...

However, the buy/sell cycle you are talking about, I guess it would depend upon the volume of stocks you are buying... 14% return on $1,000 is only $140... The only way to make real money doing this would be to be putting in a few more multiples of a $1,000...

I think this summer it will be volitile, but it won't be down like it typically is during the summer months... my reasoning is QE is still pumping strong... and as long as this money is being pumped into the market, and the "common" people see no other forms of investment they will put their money there too... I just can't believe people don't understand you don't buy HIGH, you sell HIGH, and you buy LOW... Right now - for me, Gold is not quite a buy yet, I want to maximize my investment so I am hoping it goes back down to say $1000... Silver though is an opposite, my reasoning is based on historical pricing ratio between Gold and Silver.. It is still far below the average ratio, and I believe in a time of crisis Silver will go back towards that ratio and thus out pacing gold in increased value.


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## Marcus (May 13, 2012)

invision said:


> That is absolutely the correct way to be in the market - unless you are like my dad - which is long term investments - buying stocks that only pay dividends and have a tendancy to split. He has some stock he has owned for 20-30 years, after all the splits - say Microsoft as an example - it total purchase price is now sitting in the single digit for purchase cost per share - let's say it is $8, if he sold today at $35.17 he would have over a 300% ROI...


I had an uncle who invested the same way for years. The downside was his cost basis on his 2 largest holdings, which constituted over 50% of his portfolio, was less than $1/ share. This meant he couldn't really sell without paying enormous taxes on all those gains. After he passed, I had my aunt sell his half of both positions since her cost basis was the price of the stocks on the date of his death. Then I had her sell covered calls on the remainder which netted her $20K.



> However, the buy/sell cycle you are talking about, I guess it would depend upon the volume of stocks you are buying... 14% return on $1,000 is only $140... The only way to make real money doing this would be to be putting in a few more multiples of a $1,000...


It's the speculative part of my portfolio, and it is about a 4x multiple. It generated better than a days pay for me by just clicking a few buttons. Oh, and I sold again today for a 19% return.  Now I'll have to reload next week.



> I think this summer it will be volatile, but it won't be down like it typically is during the summer months... my reasoning is QE is still pumping strong... and as long as this money is being pumped into the market, and the "common" people see no other forms of investment they will put their money there too... I just can't believe people don't understand you don't buy HIGH, you sell HIGH, and you buy LOW... Right now - for me, Gold is not quite a buy yet, I want to maximize my investment so I am hoping it goes back down to say $1000... Silver though is an opposite, my reasoning is based on historical pricing ratio between Gold and Silver.. It is still far below the average ratio, and I believe in a time of crisis Silver will go back towards that ratio and thus out pacing gold in increased value.


I agree summer will be volatile as most of the money folks will be enjoying the fruits of their labors in the Hamptons. The on again, off again QE rumors virtually guarantee a whipsaw effect on the markets and PMs. I also agree that silver is a better play right now though one of the guys I follow believes gold has bottomed while silver has one more big drop.


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## tsrwivey (Dec 31, 2010)

Do ya'll invest in real estate at all? Just wondering. We took nearly everything out of the market several years ago & put it in real estate. Hubby owns a construction company & RE is something we felt confident in.


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