Re: Birchtree's account talk
Here's a little something for those of us deep in it up to our chins. An article with information from Jason Zweig of TWSJ dated 10/04. Summon Your Courage and Buy Stocks.
"Add it all up, and it is hard not to be bullish. As an intelligent investor, you must always ask: What is my edge? What information or skill do I possess that the people on the other side of the trade don't. In normal times, that is a high hurdle. Today, however, you need only two things in order to have an automatic edge: cash and courage.
Normally, as a buyer you have to compete with a lot of very, very smart competitors. But many of the smartest people are on the sidelines now because of redemptions, margin calls or panicked out of their mind selling. So you don't have to be as smart as you did before. You just have to be in the game.
That is because investments every where are priced as if the whole solar system were going out of business. U.S. stocks have lost 24% since Jan. 1; foreign stocks are off 32%; emerging markets, nearly 40%; junk bonds are down 13%; even municipal bonds have fallen almost 10%. Money is pouring into U.S. Treasury debt - so much so that stocks now offer more income than bonds do. The dividend yield on the DJIA is currently at 3.09%, higher than the 2.68% yield on the five-year Treasury note.
With so many professional money managers afraid to act, with most of the public in the grip of fear and anger, you should put your cash and your courage to work. If you have no cash, use your courage: Rebalance by selling a little of anything that's gone up and buying more of whatever's gone down.
If you have both cash and courage, make a list of 10 stocks you've always wanted to own at "the right price". Chances are, they are cheap. Better yet, think of an investment category you've long wanted to venture into, like emerging markets. Chances are, it is on sale. Just about everything is."
Personally I just sent Merrill $35K to keep me in the game without having to sell any assets at this time. I've bought this turkey all the way down and there is no reason to cut and run at this late stage - I'll keep adding to my pain level now that I'm already past my threshold of misery. These prices are truly golden for the brave at heart.
It doesn't take Courage to buy stocks and what I have learned is the stock market is also built up on hype and a group of thugs that would kill for every penny we have.
I posted earlier what made Apple a $200 stock (HYPE) it is now $97 and no one is buying so I asked around and used a Baseball Card as an example. In 1999 a Mark McGwire rookie card was worth $4000 how do I know I sold 5 of them. Today that same card is worth $1.50 it was all (HYPE).
Same as any other baseball cards & all stocks "It is only worth what someone is will to pay"
Was this Stock Market the same as the housing market and the same as that Mark McGwire baseball card. Maybe there is a buyer for Apple and sure it looks good at $97 but maybe it;s only true value is $35.
I am sure that anyone who paid $4000 for a baseball card and saw it bottom out thought it was a good investment at that time buy what they found in less than a year was no one wanted that card just like this market no one wants to buy a stock today that looks like a great deal but is it.
Who knows Apple may move to $300 a share if folks are willing to pay that price but I don't see that stock at $200 for a long time if ever. Remember if no one wants it or worse it becomes nothing more than a home that was overpriced or marked-up 300% or that baseball card that was marked up on hype then Apple could be a $35 stock.
Why did the Baseball Card World collapse (FRAUD) dealers selling fake cards and inflated their value on top of that. Why did the Housing Market collapse (FRAUD) and when there is a lack of trust in any company and more important every Bank then no one will pay any price unless their are very strong regulations that are actually enforced. Martha Stewart went to jail and wait for the long list that will be out soon as the Feds build their case. Why did the Stock Market drop (FRAUD)
The last person holding those McGwire baseball cards are holding $1.50 piece of cardboard. It isn't me and I don't want to be that person holding Apple or any stock until we all know what wa going on behind closed doors.
I sold AIG at $71 and yes I made some good money a year ago I started buying in AIG in 1992 right until 1997 and held the stock I was thinking of buying on the dip but didn't I had a house built on the lot of land I own a 4 BR Home and paid cash no a dime was financed. I Thank God I did not buy back in.
The value of my home can drop and I could care less because I am not selling and never planned to.
What this market crash fails to talk about is they claim it was the lenders fault. That to me is total B.S. I remember Pres. Bush saying more Americans own their homes today than ever before and that was in 2005. It was a system the American People used and abused. This was the EEO policy of Freddie and Fannie. No job, no income, no credit where do I sign and it happened over and over and now those same people want a break because they were taken advantage of. That is a lie these people took advantage and also used the system.
If there were legitimate home owners that actually had a job, good credit and somehow they found themselves over their heads those are the folks that should be given an opportunity. Maybe someone got laid off or someone was ill and for those people I have no problem but I do not and will not support some Affirmative Action Housing Program backed by Obama (ACORN) and Congress to give more handouts to those who were not qualified in the first place.
It wasn't Oil that took this Country down it was people like Barney Frank and the scum at LEH, Goldman, Bear and Co. but #1. Fannie & Freddie.
The forum won't let me give any more reputation points today. It says I've given plenty within a 24 hour period.
