Aviator Guy's Account Talk

[Aviator_Guy]

I’m currently in the “C” and feeling pretty good about it. I’m a little worried about the good news this morning. In the past few weeks, bad news caused the markets to sky rocket. Guess investors are excepting another rate cut, but I don’t think it’s going to happen. I will jump out of stocks COB today if I believe I can get a short term gain. Good luck with your TSP investments!

Good news: Retail Sales increased .3% last month and .6% this month. PPI core (excluding fuel and food) rose .2% last month and only .1% this month. And finally, GE profits rose 7.1%.

Bad news: Oil is still running about 83.00 a barrel, ouch!

Note: I spent about 4K on a new LCD and BlueRay, so I did my part in helping the economy. My advice is for you to go out and buy something you really don’t need. Have a great weekend!!

 

[Aviator_Guy]

Looks like a great day for stocks thanks to the outstanding earnings report from Microsoft. Just heard on Bloomberg every time you buy one of the Xbox 360 games, Microsoft gets about 10.00 bucks. Microsoft is locked in for long term growth, smart company. I purchased that HALO 3 game for my kids and grandkids when they are visiting. I asked the guy at Best Buy if they sell “Pong” and he just looked at me if I was from Mars. That was my favorite game back in 1978.

I’m very worried about the effects of the surging price of oil. Last time I checked it was over 91.00 a barrel!!... If it hits 100.00, that will mean about 4 bucks for a gallon of gas here in California. We were paying about 3.50 last year and that was tough. When it hit 3.50, people cut back their consumption even in Los Angeles!! It made commuting a little more tolerable.

Guess the big question is how much the Fed will cut rates this month. I think they will only cut by .25, but time will tell. The financials seem to be recovering somewhat and that’s good news too. I’m staying in the S&P.

 

[Aviator_Guy]

I was looking at the TSP talk main page and noticed the YTD % gains don’t match my personal spreadsheet. The three funds I like keeping track of are the C, S and I. The TSP shows the opening price of these funds as follows:

Jan 3rd 2007 Opening bell
C = 15.69
S = 18.76
I = 22.22
Nov 8th 2007 COB share prices
C = 16.58
S = 20.10
I = 25.45

I take the opening price of the TSP share prices on Jan 3rd and divide that by the COB on Nov 8th minus 1 to give me a percentage difference. Maybe I’m doing it wrong, but, I figure it’s as follows YTD as of COB yesterday, Nov 8th..
C = 5.37%
S = 6.67%
I = 12.69%

Anyway you look at it, the USM has taken a beating this year. Since Oct 22nd, my account is down 4.43 % and that doesn’t factor in today’s loss! I will try to ride this one out. All of my future contributions will throttle back to the G fund, but I’m not making any Interfund transfers at this time and will stick in the C fund.

I’m going to dust off my BMW motorcycle and enjoy a nice ride to the coast this weekend. Everyone have a great three day weekend and don’t forget about thanking our military vets, those who have served, those who are serving and those who are no longer with us. We owe them our gratitude and thanks for a job well done.

Happy Vets Holiday everyone!!

 

[Aviator_Guy]

FY 2008 Tax Year…FYI

Important: There will be 27 Pay Periods and 27 pay dates in the 2008 tax year (Pay Period 25 of 2007 through 25 of 2008). Employees who are covered by the Federal Employees Retirement System (FERS) and elect to contribute the maximum TSP contribution ($15,500) should be mindful that reaching the maximum before the end of the 2008 tax year will result in the loss of matching contributions for those pay periods when contributions cannot be deducted. Therefore, if you are planning to contribute the maximum amount to your TSP account for tax year 2008, divide the $15,500 by 27 and make your TSP change effective Pay Period 25 of 2007 (December 9, 2007).

15500 / 27 = 574.00
5000 / 27 = 185.00

 

[Aviator_Guy]

November TSP returns (COB Oct 31st thru COB Nov 26th 2007)

C Fund, -9.92%.....YTD +.88%
S Fund, -10.73%....YTD +1.37%
I Fund, -7.92%.....YTD +8.86%

I’m down -5.50 % (COB Oct 31st thru COB Nov 26th 2007)…. Ouch!!

 

[Aviator_Guy]

The S&P rally is in 2nd straight day led by financials, I love it. My goal is to reach 15% per year as a minimum and this year has been really tough. As of COB yesterday, I still have to gain 4.47, so I’m getting a lot closer, but still not there yet. If there is a downturn in Large Caps, I will jump back in, but for now, I’m taking my small gains off the table, good luck with your TSP investments!!

Good News:
Fed Vice Chairman’s comments suggest they will cut rates to spur the economy. Note the durable goods dropped more than expected supports data that the economy is slowing.

Existing home sales came in better than expected (4.97M vice consensus of 4.95M)

Oil is headed south again!! Down -2.8 % the last time I checked… WoooHooo

Bad News:
Durable goods orders month to month came in at -.4% vice the consensus of .3%.

 

[Aviator_Guy]

I want to jump back into the “I” fund prior to December 11th, but will hold off until the day after we have a +FV. If we get a nice +FV today, I will move into the “I” Fund COB Monday and hope to catch a –FV Monday.

Note: If we’re going to be limited to only two IFT’s per month, I will lean towards the OSM vice USM. Long term, the OSM are outperforming USM. Also, if we only two IFT’s you can still take advantage of the FV’s, but only having two per month will make is a lot tougher!! Everyone have a great weekend and good luck with your TSP investments!

 

[Aviator_Guy]

Moving back into the C fund (high quality large caps) COB today. I have mixed feelings about the plan for subprime relief which will be detailed this afternoon. I don’t understand why the Tax Payers should subsidize the banks and subprime homeowners. My wife has one of those crazy subprime loans for her home in AZ and pays a ridiculous 11 percent vice my CA home loan of 5.25%, but she has never been late on her payments. Everyone have a great day and good luck with your TSP investments!

Good News:

• New jobless claims came in a little lower than expected.
• Bank of England lowered their interest rates by .25%.
• Still expecting a .25% Fed rate cut on Dec 11.

Bad News:

• 30% of Subprime loans are now behind in their payments. Expectations are 143 Billion of Subprime loans will go into foreclose in the next two years!
• Financials are dragging stocks down again on the Subprime mess.

 

[Aviator_Guy]

My minimum retirement age is 56, so I have another 5 ½ years to go. To reach my goal of 1M on that date, I have to earn a minimum of 15% interest per year. 2007 has been a really rough year for investors, but I locked in YTD of 15.38% yesterday, so I met my 2007 goals. I’m moving into the “I” fund today and hope to catch a –FV prior to the Dec 11 cut. We had a good jobs report today and oil dropped another 1.8%. Good luck with your TSP investments!

 

[Aviator_Guy]

Going from the “I” fund to the “G” fund COB Dec 11th and expect the .25 fed cut. The Asian markets had a nice overnight gain, but the European markets are down right now. I expect them to go into the green after the Fed announcement later this afternoon.

My YTD interest is 15.97% and my Dec gain is 2.54%, so I don’t want to risk an above average return before the year closes out. I’m not ruling out moving back into stocks prior to the end of the year if they take a major dive, but if I jump back in, I will probably carry those profit gains into 2008. Everyone have a happy “Fed Watch” day and good luck with your TSP investments!

 

[Aviator_Guy]

Good News… Construction Spending was better than expected, +.1% increase vice Consensus of -.3%.... I also think the weak dollar will really help our exports since it makes our exports dirt cheap. I think the fed is now a lot more likely to give a helping hand with another rate cut this month.

Bad News… ISM (Institute for Supply Management) Manufactures Index level report was lower, 47.7 vice 50.9…

More Bad News…ICSC (International Council of Shopping Centers) Store week to week change was -.2%

Really Bad News… Oil has gone thru the roof due to weak $$$

Stocks have taken a beating over the last two months. The C fund is down -4.9% and the I fund is down -6.03!! The last time I checked, the C fund was down since the markets opened this morning. January is traditionally a good month for the markets, but it’s not getting off to a good start. The weak dollar is going to really hurt us on our oil imports. When it tops at 100.00, I will start looking at buying one of those high tech hybrids that are coming out in 2009.

I did my part by helping the economy by purchasing six GPS units for Christmas gifts and one apple i-Touch gadget for my wife. I think 2008 is going to be another wild ride for stocks. But, I’m in 100% C as of COB today. Good luck with your TSP investments for 2008! Happy New Year!

 

[Aviator_Guy]

I’m going to stick to large caps for now…

Finally, a little good news for a change. Copied this from Bloom...
Orders to U.S. factories rose 1.5 percent in November, the most in four months, and were higher in October than first reported, according to the Commerce Department. A report from ADP Employer Services showed companies in the U.S. added 40,000 jobs in December, more than projected. The reports helped assuage concern the U.S. economy is headed for a recession.

 

[Aviator_Guy]

Bad News is Good News?? Well, it looks like further Fed cuts are pretty much a done deal in my book at least for Jan 28. I’m going to ride this wave out in Large Caps until I see a gain. Good Luck everyone!

Jan. 4 (Bloomberg) -- Hiring in the U.S. slowed more than forecast in December and unemployment jumped to a two-year high, raising the odds the Federal Reserve will need to cut interest rates more than anticipated to ward off an economic slowdown.
Payrolls rose by 18,000 after a 115,000 gain in November that was larger than initially reported, the Labor Department said today in Washington. The jobless rate rose to 5.0 percent, the highest since November 2005, from 4.7 percent in November.

 

[dickster]

Do you think this represents a buying opportunity or is there more down side action to come???:blink:

 

[Aviator_Guy]

Do you think this represents a buying opportunity or is there more down side action to come???:blink:

If I were in the G, I would jump in the stock pool COB today. The S&P has gone down about 2 percent over the last week. And, it looks to lower down another 1-2% today!

 

[fedgolfer]

hopefully we'll hold the longer trend. QQQQ/tech/small caps heading into CES and Macworld... but, that won't be enought to hold it all up if we dip below the big support lines... which we'll be challenging in about another half percent down in the QQQQs.

 

[Aviator_Guy]

I wish I could lock in 100%, but only 100% in the Nikkei 225 on their next COB. They might be down as much as 6% YTD on their next COB! That would be one interesting jumping in point!! I’m in the C Fund and sticking to it.

I’m not in the gloom and doom corner just yet. Here in Los Angeles, the writers strike is hurting our local economy a little, but not much. The shopping centers here in LA are still pretty packed and you still have to look get a good parking spot. I also don’t see a lot of For Sale signs going up in my neighborhood either. But, the high price of energy is my main concern. I don’t mind paying a lot of money for our home grown energy because those profits stay here. But, the bulk of oil profits go to countries that could care less about the United States. I bet you will see the candidates hit on that subject and if not, they should.

On a final note, Hillary came in 3rd place last night in Iowa. She will probably get the nomination, but I must admit that was pretty amusing to see her spend a lot of her political capital in that state and come in third!! I just hope the next pres supports elimination of the capital gains tax before I retire.

It’s supposed to rain like crazy in California tonight. My home is not in a burn area, so I don’t need to worry about mud slides, but my prayers are with those who are. Everyone have a safe weekend, and don’t worry if stocks are on the slide. Just remember that Hillary came in third and it will ease the pain somewhat.

 

[southbeachrat]

AvGuy, I'm with you on staying invested at this point. I put some more cash to work at the close today in my brokerage account and have been waiting for this kind of drop. Don't know if I would be in the I fund right now, maybe a Japanese ETF like EWJ would be poised for a nice bounce. Anyone know of a better way to play the Nikkei 225??

 

[Aviator_Guy]

AvGuy, I'm with you on staying invested at this point. I put some more cash to work at the close today in my brokerage account and have been waiting for this kind of drop. Don't know if I would be in the I fund right now, maybe a Japanese ETF like EWJ would be poised for a nice bounce. Anyone know of a better way to play the Nikkei 225??

When I retire, I will be looking using some of my private funds in the International market. But, until then I'm stuck with TSP. After maxing out my TSP, not too much left over for private investing.

 

[Aviator_Guy]

Great summary by Mr. Plosser (CEO Philly Fed) off the Wall Street Journal… Jan 8th

My approach to making monetary policy decisions is to look at incoming information about the economy and about financial market conditions and ask three questions:
1. What information is consistent with my current outlook?
2. What information suggests I need to change my outlook for the economy or for inflation? and
3. What information indicates the need for further Fed actions to ensure that financial markets function effectively?
The answers to these questions help guide my thinking about how to simultaneously address the Fed’s responsibilities for monetary policy and financial stability.
To sum up, I think the U.S. economy will experience several quarters of sluggish growth in 2008 before returning to a sustained expansion over the next two years. There are risks to the downside in terms of the possibility of even weaker economic growth. A substantially weaker outlook than expected, particularly if that weakness is projected to be more prolonged than anticipated, may require further adjustments to policy.
At the same time we also face risks of higher inflation. Inflation remains a concern to me because it is uniquely the Federal Reserve’s responsibility to control it. No other agency or policy arm of the government can effectively deliver on the goal of achieving and maintaining a stable price level. Price stability allows the economy to grow at its maximum potential and supports the efficient functioning of our financial markets. Consequently, we must remain vigilant on the inflation front and be prepared to act as necessary to avoid the risk of undermining public confidence in the central bank’s commitment to price stability.
Overall, it should prove to be an interesting and challenging year for policymakers.