Birchtree's Account Talk

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Re: Birchtree's account talk

My only regret about these recent down-trends in the markets, are that I don't have a boat-load of money to buy up all these undervalued stocks.

Someone give me 50 grand, so I can be a multi-millionaire in five years time :p
 
Re: Birchtree's account talk

I had the good fortune of purchasing 432 individual stocks during our recent irrational panic bottom process and it cost me $629K - that's a lot of money to burn on faith alone. I still have $213K in reserve and am now currently resting on my dividend reinvestments while we trend sideways. When the bull starts up my portfolio will kick into high gear. I gave back $49K on the drop yesterday but I'm still up for the week unless I get drilled today. But there is always next week for better times ahead. We are getting close to a bullish market turn. I think the recession will be over by summer and an economic recovery will be in force.
 
Re: Birchtree's account talk

At least I can always come to TSPTALK and find Birchtree for the buy and hold strategist king.

http://www.cnbc.com/id/28932868

"People have learned that if you don't take a profit, it goes away," says one market pro. "Even somebody who's really biased towards buy-and-hold is giving up."

I guess they haven't seen Birchtree squeeze lemons to make big bucks, or walk on water without the use of TARP. :)

I can have some fun because I know in the long run Birchtree will make the money.
 
Re: Birchtree's account talk

Thanks Felix for the kind comments - you might want to review my thoughts on Budnipper1's account talk #149. I've been through a number of these crisis atmospheres and always have gotten devalued but I have always come out of the tunnel on the other side making money. How do I make money - I buy all the stuff no one wants at the bottom - like buying around 45 different banks and financial companies other wise known as toxic waste. I'm just operating off of prior experience learned by absorbing pain. Pain leads to profits. My TSP account continues to focus on accumulating as many C fund shares as I can while the price is under $10.00 - we completely skipped past the $11.00 and $12.00 range on the way down so I'll participate buying those ranges on the way up. The secrete is to keep putting money down the rabbit hole even if one can't see a bottom. Because when the upside arrives it will be with a probable vengence waiting for no one.
 
Re: Birchtree's account talk

Birchtree said:
Thanks Felix for the kind comments - you might want to review my thoughts on Budnipper1's account talk #149. I've been through a number of these crisis atmospheres and always have gotten devalued but I have always come out of the tunnel on the other side making money. How do I make money - I buy all the stuff no one wants at the bottom - like buying around 45 different banks and financial companies other wise known as toxic waste. I'm just operating off of prior experience learned by absorbing pain. Pain leads to profits. My TSP account continues to focus on accumulating as many C fund shares as I can while the price is under $10.00 - we completely skipped past the $11.00 and $12.00 range on the way down so I'll participate buying those ranges on the way up. The secrete is to keep putting money down the rabbit hole even if one can't see a bottom. Because when the upside arrives it will be with a probable vengence waiting for no one.
Click to expand...

10-05-05-rabbit-hole.jpg
 
Re: Birchtree's account talk

felixthecat said:
"People have learned that if you don't take a profit, it goes away," says one market pro.
Click to expand...

Yeah but the beauty of the market is it invokes greed. So 99% of the time, whenever someone 'takes profits' or 'locks in some profits' or 'takes some off the table' or 'plays with the house money', that 'profit' money will ultimately end up back in the market anyway so they really aren't locking anything up. Chances are, any 'locked profits' are lost and gone for pretty much every investor out there.

If we have market timers claiming to have beat the market in 2008 with a return of -10% while the market returned -30% or whatever, then I guess there wasn't too much discipline in locking down profits in 2008.
 
Re: Birchtree's account talk

Unless you are in a fiduciary deferred account like TSP or a Roth IRA every profitable transaction results in a tax obligation. I took out $143K in profits as a sacrifice to buy up a portfolio of financial toxic waste with mostly good paying dividends - three of those positions have been taken over by larger banks and now I'll have to scramble to come up with cash to be even with my IRS friends. But I believe in the long run my sacrifice was correct and those recently acquired assets will gain in value - some already have. I made my $143K off my commodity stocks and I lust to go back into them especially if inflation will be returning over the next several years. For now I'm stuck with 323 stocks that are keeping me warm at night. And I suspect after today that I gave back dollars on the week. I'm looking forward to next week to get my dividend reinvestments working at these lower prices - they are the redeemers of my portfolio right now - even got some C fund deep into the $9.00 range today.
 
Re: Birchtree's account talk

"Bull runs start when things look bleak, and often keep going even though things get bleaker for several months. (I noticed the EMAs are really compressed - big move coming only I don't know which way). After the bull market started in October 1974, unemployment kept climbing from 6% all the way up to 9%, and GDP growth was negative in the fourth quarter of '74 (-1.6%) and much worse in the first quarter of '75 (-4.7%). Why do the gurus fare so well after downturns? I think a big reason is that, in a downturn, fear begins to permeate the markets and investors wait on the sidelines even if very attractive values are available - just what is happening now. The fears of further declines are just too strong, and emotion overcomes rationality. By keeping emotions in check and focusing on fundamentals, the gurus were able to pick up a variety of strong bargain-priced stocks while others waited on the sidelines, and they reaped the benefit when fears subsided and others returned to the market. (Count me in for 432 purchases). While evey bear market is different, this notion - that investors who let fear and emotion get in the way of reason lose out by heading to the exit after big downturns - is one that has held up throughout history. (I collected 5 dividend reinvestments Friday and a nice chunk of C fund at $9.55). I see no reason why it won't again be true as we come out of the current downtrend. So while I've lost quite a bit, I won't let the emotions raised by those losses dictate my current investment decisions. (Good for you).

When it comes to the stock market I am optimistic - realistically optimistic. I fully understand that we've been through a terrible stretch, and that the skies are far from clear. But while I don't know exactly when the market will make its big move upward, I do believe that lonf-term investors who stay calm and forge ahead through tough times will be rewarded in the end. (Reminds me of a girl I know). But while the specifics of each crisis are always different, history has shown that the way for investors to emerge victorious from such crises is the same: Stick to a strategy that buys the stocks of good companies when they are cheap.

Even the most conservative of the commonly used valuation tools, the 10 year P/E ratio (whixh averages earnings over a 10-year period) has recently indicated that stocks are cheaper than they've been in two decades. History has shown that buying at times like these leads to nice long-term returns. (I just close my eyes and hold my nose). Buying low is hard work - it requires discipline, and the ability to make rational decisions amid highly emotional climates. As we move out of this downturn, I think we'll see the same result: Those willing to stick to the fundamentals rather than fear will pick up great values and generate some huge returns. (You hear that Mindylou?) The time of maximum pessimism is the best time to buyt and the time of maximum optimism is the best time to sell. (It worked for me when I sold my commodity positions locking in a $143K profit). It won't be easy, and it won't happen overnight. But in the end, we'll emerge from this crisis and those who bet against the stock market's long term resiliency will end up regretting it."

http://moneycentral.msn.com/investor/home.aspx John Reese - Journal Entry 1/28/09 Strategy Lab
 
Re: Birchtree's account talk

I know - girls just want to have fun. With the Dow off 8.84% for the month it was the worst January in its 113-year history and the fifth consecutive month of declines. The 31% decline over the five months was the sharpest since the five months ended December 1937. Historically, stock's performance in January often foetold performance for the year. For the Dow, January has accurately predicted the yeare's durection 75% of the time. In the past 30 years, it has been right 26 times. Well what girl doesn't know that statistic? Battered investors may want to kneel for a reprise of 2003. After falling in January, the Dow and S&P 500 soared about 30% over the next 11 months. That turnaround also followed the bear-market lows of 2002. I'm in favor of an up year for 2009 - got a target of 17,421.
 
Re: Birchtree's account talk

Just looking for a few improved facts to keep me positive. If U.S. consumers' and companies' appetite for imports stay low in 2009, that could buoy GDP growth, but it won't bode well for economic growth world-wide. Weakness in consumer spending is expected to persist, following a 3.5% drop in the fourth quarter and a 3.8% decline in the previous quarter - the worst back to back drops in more than 50 years. From a contrarian perspective is this the trough? The decline in GDP (-3.8%) was the largest since 1982, though still well below the post war record of -10.4% quarterly drop seen in 1958. Consumer sentiment rose in January to a level of 61.2 from 60.1 in December and 55.3 in November. Even so, consumers on average expect the unemployment rate will hit 9% by year end, which could keep a lid on their spending until their outlook improves. The stock market will undoubtedly be a lot higher by then. Seven out of ten of the S&P 500 sectors showed earnings revisions to the upside in January from December. And now the recent ISM is showing a positive direction.
 
Re: Birchtree's account talk

Birch,
Consider this a PM :cheesy:

I'm seriously considering buying an Aero Watch - a limited edition (with a little over 500 made)

Now I do like the fact it's very classy and never has to be wound and never needs a battery - but I most like the idea of having a watch that only about 500 others on the globe will ever have.

It's over $500 - but it's rare I splurge (in fact it's very rare) but some things I see becoming increasingly valuable over time ... like varoius paintings, pieces of art and such...

So what do you think Birch - should I risk the stigma of 'flaunting my wealth' - especially as the suffering is ever expanding ??? Or should I take the chance of getting a rare opportunity and being pleased with a lifelong watch I'll always enjoy??

Be my 'moral compass' and help me out?? Slurging is hard for me - especially on these lines... but in a way I feel like I'm all the more entitled to such a very rare act.
 
Re: Birchtree's account talk

"New Wave of Foreclosures to Hit U.S. in 2009

The U.S. may experience another shock wave of foreclosures as early as next year, sooner than expected, according to data released Tuesday from Fitch Ratings.
The company reported that almost $29 billion worth of option adjustable rate mortgages (ARMs) are poised to reset next year based on its analysis of a large group of loans originated in the last phases of the recent housing boom.
Pay option ARMs differ from other ARMs in that borrowers are allowed to choose from four different payment options each month during the initial term. The option most exercised by borrowers is the lowest payment amount, which does not even cover the full amount of monthly interest due on the home loan. After making only this minimum payment for several years, and with the aid of decreasing home values, many homeowners find themselves in upside-down mortgages, meaning they owe more on the mortgage than their home is worth.
Lenders only allow borrowers to build up a certain amount of negative amortization on their home loans before they reset the interest rate and require higher payments. And as most option ARM borrowers have only been making the minimum payment since their loans began, their mortgage interest rates will reset sooner than they otherwise would have.
Fitch Ratings has estimated that most of those with these option ARMs will see an increase of $1,053 in monthly mortgage bills, a figure that is likely to be too high for many to keep up with, resulting in mass foreclosures across the U.S. once again.
“The combined impact of payment shock, negative amortization, declining home prices and restricted availability of mortgage credit may leave many option ARMs’ borrowers unwilling to continue paying their mortgage,” said Group Managing Director and U.S. RMBS group head Huxley Somerville in a statement.
According to the credit rating firm, the foreclosure wave is likely to last well into the beginning of the next decade, as there are an additional $67 billion in pay option ARMs due to reset in 2010."

http://blog.mortgage101.com/2008/09/04/new-wave-of-foreclosures-to-hit-us-in-2009/
 
Re: Birchtree's account talk

Steady,

Well why not - buy and enjoy the watch. Perhaps you will start another consumer purchasing trend. I remember when I bought my $800 Tonkinese cat - not many of that breed around - but I have no regrets having her around and taking her for walks on her leash. Mindylou is a pure delight and loves the wife more than me and that really makes me happy. I'm the pet playmate, the pet doorman, the cookie box cleaner, the boxer that loves to get play bitten, the dinner preparer and the mummy that makes her run when we play hide and seek. She has become our surrogate child until the grandchildren come on to the scene. So enjoy the watch and always know you are on time.
 
Re: Birchtree's account talk

mojo,

I'm reaching my point of least resistance and would say let the foreclosures take their natural course of action. Flush the poor folks that are upside down - there is nothing wrong with renting. I'm actually waiting on the recent refi money that should start kicking the market rather soon.
 
Re: Birchtree's account talk

Birchtree said:
let the foreclosures take their natural course of action. Flush the poor folks that are upside down - there is nothing wrong with renting.
Click to expand...

I agree with this totally but why don't you think this is a major upcoming economic (Wall Steet, bank, etc) problem equal or worse than what has already occured. How are the banks going to absorb the new, possibly larger wave? How can they when they are already teatering on collapse?

I'm really looking for some kind of logical reason for an upcoming economic recovery but I haven't found it.
 
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