Birchtree's Account Talk

[nnuut]

Re: Birchtree's account talk

Oh, I was thinking here: http://www.opm.gov/oca/07tables/html/dcb.asp
Plus another 3% in CY08, bonuses, investment income - $225k AGI for a married couple ain't hard to imagine. But those are the rich - we DESERVE more taxes.

Yes with Man and Wife both working!!! Thought we were talking SALARY?
Sorry!!:embarrest:

 

[Pill]

Re: Birchtree's account talk

Birch is accumulating shares!

He who ends with the most shares wins.

I think Birchtree's doctrine in TSP is sound. Its not for every one however he has his diversication outside of TSP. C-Fund will eventual be way higher than it is now. So his accumulation of shares will pay off. Its just a matter of time.

If I am wrong Brich please let me know.

 

[charmed855]

Re: Birchtree's account talk

Yes with Man and Wife both working!!! Thought we were talking SALARY?
Sorry!!:embarrest:

Thought we were talking about the Rangel tax plan. Oops. :embarrest: No problem, I guess I need another drink.

 

[nnuut]

Re: Birchtree's account talk

You see, I'm just lost. Must be the smell of the Tenderloins grilling?

 

[Boghie]

Re: Birchtree's account talk

Eee Gads Birchtree,

Sorry about the AMT discussion…
I was just stating the obvious. People will adjust to the tax code.
I did so in the past. I will do so in the future.

By the way, two GS11 – GS13 salaries in a locality pay region employed in an information technology field places you smack dab in the AMT threat range. Maybe one schlump is a GS11 and the significant other is an academic counselor at a community college. But is said family rich in San Diego, California. Seems this family isn’t waiting around for monthly dividend checks or cashing in on Sempra shares. Seems to be a ‘working class’ white collar family. Wow, filthy rich in a condo with a couple of pets. Never better!!!

Regardless, Birchtree’s board is not the place to deal with this. Feel free to lob scuds in my Boghie message board.

Birchtree is holding ‘C’ and allocating new assets to ‘C’. Long term, that seems to be the correct allocation to me as well.

Short term the situation could be rather different.

I will loose big time growth if the market moves +3% before I make my adjustments out of the G fund and into the C/S/I. In that event, Birchtree will boom. That scenario is very possible. To me, it is just not worth the risk in this frothing atmosphere. Soon enough, however, I will be sitting next to Birchtree enjoying the growth of the American economy.

And, paying less in tax than I am now because I will hunt for every single deduction and every single pre-tax benefit I can. I will adjust. I am preparing.

 

[Birchtree]

Re: Birchtree's account talk

Well, the first order of business should be to purchase this new book called "The Bearskinner" by Laura Amy Schlitz. Candlewick, 30 pages, $16.99.
This is a children's book for ages 5-12. It's a magnificent retelling of an obscure tale from the Brothers Grimm.

Steadygain, please don't worry about me, I've been doing this a long time and I can handle the devaluation - I haven't lost a thing. I have the opportunity to continue with DCAing until the spring. I'm very positive on the economy and the markets. There are times when one can actually be correct on the future and stll get run over by 50 million Frenchmen all going in the wrong direction. It always happens - nothing to worry about.

We are not going into a recession. Because trade deficits subtract from US gross domestic product, the lower than expected gaps in August and September indicate the US economy likely grew even faster than thought. The government, in its first estimate for third-quarter GDP, said the economy expanded at a 3.9% annual rate. Some economists think third quarter GDP growth will ultimately be revised to about 5%, though they expect a sharp slowdown in the fourth quarter. What if that doesn't happen and the GDP keeps on growing strongly in the 4th quarter - that means profits will surprise most investors - but not this one. Let's see what the producer price data and consumer price data look like this week.

 

[Birchtree]

Re: Birchtree's account talk

The falling dollar has boosted US exports to record highs. American producers are benefiting from stronger growth in the internationals. The trade deficit is running 7.4% below last year's record of $758 billion. That has pushed 3Q GDP to possibly 5% and should help 4Q to hit 3%.

"Europeans, Canadians, and others revel in their wealth relative to Americans. It's their chance to grow their risk-taking capital base, set global standards, and begin to dominate geopolitical issues. But ever strengthening currencies run risks as well, as the US found in the economic boom/recession cycle of the late 1990s, when stock prices were bid higher despite declining profits.

Currency momentum can be broken. The dollar wouldn't be hard to strengthen if the Treasury included dollar weakness in G-7 discussions, and the Fed singled out dollar weakness as a concern. The Fed's in a good position if it wanted to strengthen the dollar. By cutting rates well before economic weakness, it has room to express stronger interest in the dollar's recovery even if it comes across as hawkish. A clearer preference for dollar strength would increase the demand for dollars, breaking the weak-dollar momentum without requiring currency intervention or rate hikes. As the dollar strengthens, capital would return to the US; providing extra liquidity and making the Fed's stimulus job easier.

The weaker the dollar in recent years, the more quickly capital has flowed out - to emerging markets, commodities and foreign real estate. Cheap is assumed to become cheaper when a currency is weakening. The US economy, though slowing, has kept growing even as high energy prices hit consumers. At one point in 2000, the euro was worth only 85 cents. Now one euro buys $1.47. One dollar now buys only 93 Canadian cents. The dollar's swoon means that consumers in different parts of the world don't feel the same pain. Since the start of 2003, oil prices in dollars have tripled, but in euro terms, they have a little more than doubled."

From David Malpass - Chief economist at Bear Stearns. http://www.wsjonline.com/public/us

 

[caymanbrac12]

Re: Birchtree's account talk

Birchtree did you get any short positions rolling from the high 13's?? or do you even play that game??

 

[Birchtree]

Re: Birchtree's account talk

Sorry, there are two things I currently don't do: play with bonds or take short positions. I'd rather sell a profitable position and hold the cash for moments like this. I still have this stupid idea that we'll see Dow 15,900 by the end of the year - now I am a silly man.

 

[fabijo]

Re: Birchtree's account talk

I still have this stupid idea that we'll see Dow 15,900 by the end of the year - now I am a silly man.

That is well within the realm of possibility. I'm sure you're feeling much better now that these message boards are full of fear and bearishness. I know you've been waiting for a bearish attitude to strike everyone. You just might have it if tomorrow is another down day.

 

[Guest2]

Re: Birchtree's account talk

Birchtree,
Without significant positive news, the bears & shorts could hold on tight.
On Monday (11/12/07) I couldn't see anything that would have me dive
back into stocks with both fists. Not Economic News, Nor Earnings. Even
if the Market is oversold, the due factor may not come into play.


With that said, should Tuesday look like a down day, maybe the PPI and
CPI will be enough for a temporary bounce. A short squeeze would be nice
for Wednesday & Thursday (Gulp). I'll probably dip some dough, then go!
But in this market, not the whole enchilada !


I respect your knowledge and ask for your thoughts concerning the above
:embarrest:

 

[Birchtree]

Re: Birchtree's account talk

I must be blind because all I see is good news. Exports jumped at a 16.2% rate, more than double the second quarter's 7.5% - the strongest increase since the fourth quarter of 2003. I mean nonfarm business productivity grew at a 4.9% annual rate and was the fastest pace in four years. Goldilocks loves porridge. The midcycle slow down periods of the mid 1980's and mid 1990's were accompanied by relatively meaningful expansions in stock prices - one just has to remain patient. This feels to me like the 9 month cycle has shifted and prices will soon be heading higher.

 

[Guest2]

Re: Birchtree's account talk

I must be blind because all I see is good news. Exports jumped at a 16.2% rate, more than double the second quarter's 7.5% - the strongest increase since the fourth quarter of 2003. I mean nonfarm business productivity grew at a 4.9% annual rate and was the fastest pace in four years. Goldilocks loves porridge. The midcycle slow down periods of the mid 1980's and mid 1990's were accompanied by relatively meaningful expansions in stock prices - one just has to remain patient. This feels to me like the 9 month cycle has shifted and prices will soon be heading higher.

Thanks for your insight and thoughts. They're always appreciated.

 

[Steadygain]

Re: Birchtree's account talk

Steadygain, please don't worry about me, I've been doing this a long time and I can handle the devaluation - I haven't lost a thing. I have the opportunity to continue with DCAing until the spring. I'm very positive on the economy and the markets. There are times when one can actually be correct on the future and stll get run over by 50 million Frenchmen all going in the wrong direction. It always happens - nothing to worry about.

We are not going into a recession.

Thank you my dear friend! You were the first to post on my thread and you did so in a loving and concerned manner - as you felt my decision to buy the I Fund may be more costly instead of beneficial. For the time I was in, it paid off. I also agree with you and Uptrend regarding the immediate Market analysis - which is very positive and likely to result in at least a short term substantial gain. It only because I care about you that I'll have these occasional moments of worry. And as a result of your concern (as well as Uptrend's) I'll avoid the I Fund for the immediate future. Happy gains my friend.

 

[Birchtree]

Re: Birchtree's account talk

After the close yesterday the oceanic is down $127K from the recent high. I'm comforted because I thought it was going to be worse. When you play this game you simply have to take it on the chin from time to time - I should get a nice chunk of that back today. Be right and sit tight. Many investors remain hopeful, recalling other sudden market swoons over the past two years. Each time, US stock markets bounced back and hit new highs, as low interest rates and global prosperity generated huge amounts of money that found its way into stocks. Snort.

 

[Birchtree]

Re: Birchtree's account talk

Well my gosh it looks like we just barely missed a Dow Theory bear signal yesterday. The two Dow Jones Averages, Industrials and Transports, plunged to secondary lows on August 16, Industrials at 12,845.78 and Transports at 4672.35. From the August 16 lows, the Averages rallied with Industrials reaching a record high of 14,163.80 on October 9th. The Transports failed by a wide margin to confirm. This sets up the potential for a classic Dow Theory bear sign.

The sugnal for a primary bear market would be given under the following conditions. Both Averages, and I emphasize BOTH, must now decline and break their August 16 lows. The authority of the signal would be heightened if the two Averages were to break below the August 16 marks simultaneously, and an increase in volume.

A violation of one Average, unconfirmed by the other, would not constitute a bear market signal. In fact, a violation of one Average, while the other AZverage stubbornly refuses to follow, could represent a bullish non-confirmation. The DJIA hit a low of 12,987.55 while the DJTA hit a low of 4593.49. We'll see what happens next.

http://www.gold-eagle.com/gold_digest_05/russell102207.html

 

[Birchtree]

Re: Birchtree's account talk

That was a nice come back yesterday - looking for a duplicate today. The new and improved Mindy Lou system is indicating we should stay in the C fund the entire week - that somehow sounds so familiar. I looked out the kitchen window this morning and saw the strangest thing. Ferdinand was chasing Smokey through the fields instead of the other way around. Snort.

 

[anthony]

Re: Birchtree's account talk

Well my gosh it looks like we just barely missed a Dow Theory bear signal yesterday.

Birch - this was a very interesting read - thank you for posting it.

Well, half of this is a sure thing for today with Transports breaking the low by 50 points. Industrials are floating at only 2% above the low, or around 250 points above.

So I guess the real question, IF this indicator fell, is do you:
a) Take the Rip Van Winkle approach to investing, continue to contribute each month, and wake up 20 years from now richer and never the wiser that this occurred. Or ...
b) Seriously consider a shift to security and try to pick the bottom in a few months, a year, or two years when the trend reverses.

With the amount of cash that I have heard is sitting on the sidelines, if it did break toward a bear market, it could be a relatively short-lived bear, compared with others in history.

 

[Steadygain]

Re: Birchtree's account talk

Hey my man I'm not the only one concerned. We're all thinkn' hey man don't you see what's going on. Well I tried the Birch method of patience and I just can't deal with watching these huge drops while I'm fully in. Fortunately I'm also like you - in that it would take quite a bit more to really cause some damage, but Birch I can only let these thousands dwindle away for so long. :worried:

 

[anthony]

Re: Birchtree's account talk

I can only let these thousands dwindle away for so long. :worried:

I think you just have to ask yourself one question: When is retirement? If it isn't in the next year, then by bailing out it seems you stand a good chance of losing. Remember you haven't really lost anything if you still own the shares.

If oil prices meet with reality and finally drop back down, this market is going snap back up like a rubber band. Every bear in history gets followed by climbs to new record higher highs. IF this goes to a bear, I think oil price changes will be what pulls it out.

So the counter to staying invested is the idea that you can time this perfectly and buy more shares at the bottom. A snap-back off of oil price drops is going to be a tough bottom to pick. Risk tolerance works both ways - can you afford to risk missing the bottom? Or, even worse, what if the market doesn't follow the rules, breaks the Dow Theory signal and then decides to climb to new highs just to spite. Then where will you be?