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Or you can now use TapaTalk again!Birchtree's Account Talk
- Thread starter Birchtree
- Start date
anthony
TSP Strategist
- Reaction score
- 10
Boomers to the Rescue?
Thanks for posting the article Birch. You have a knack for helping us weed through the chaff to find the good stuff out there worth reading.
I think the most important thing to take away from an article like that is to look at it with a critical eye and not see it as a certain future. After reading material like that I fall back on a lot of the stuff that guys like Peter Lynch write about. Even in a generational scale bear market (which I'm not convinced were in) you can:
1) protect yourself before that happens by carefully picking your stocks to find companies that can survive such an event, i.e. cash moats and regular dividend payers.
2) continue to invest all the way to the bottom in order to pick up all the down-trodden equities that are out there - but at the same time still focusing on "survivor" companies like the ones above, in case it gets much worse after you buy.
Last thing - the author makes the argument that babyboomers may pull money out of equities in order to "fund retirement lifestyles they believe they deserve," and that such an event would contribute to a generational scale bear market. I personally don't think that event alone would trigger such a slide in equity markets. Afterall, if indeed the boomers are funding a certain lifestyle, that suggests they are spending an awful lot of money in the economy - the argument kind of defeats itself.
Perhaps the reality is that babyboomer equity cash-in and follow-on spending would be more likely to trigger a recovery from a deep slide than it would be to actually cause the slide in the first place.
That in mind, I like to think about what industries or individual companies would benefit most from boomer retirement and spending. Any thoughts?
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
anthony,
It sounds to me like you've been through one of these temporary quagmires before. You have an excellent strategic focus. You are remembering that the reasons we get paid more as equity investors are the ups and downs that we experience in the market. To stay true to your investing strategy, you must act the opposite of how you feel. I don't know when things are going to turn around but we need to continue to be opportunistic today. I remember the third bottom of the last bear market in March '03. There was not a kindred soul in sight that had any positive vibrations accept for myself and the ride up from that bottom was special. I think 1995 is on the way. I'm a baby boomer and I plan to remain 100% stocks and reinvest my dividends and when I may need some serious cash I'll sell a beauty to trigger a capital gain. This next bull leg will be twice as powerfull as the March '03 move and it will come out of the blue and there won't be any believers - such a classic. Kinda like wearing my Bass-Weejuns out in public with no socks of course.
caymanbrac12
Market Tracker
- Reaction score
- 9
Re: Birchtree's account talk
Birch I'm still on vacation but have been very careful for July but I have to give you kudos for a good ol' fashion pounding - you are fearless even when the bus runs over you and then has the audacity to back up as well.
I went to Budapest to see the Formula 1 race yesterday (Sunday but got there on Friday) and if you ever get the chance to hear about 20 cars rev to 20k rpm at a starting line you will never be the same ( at least your ear won't be
- thank God for ear plugs) - although I speak for myself - one hell of a race. Europe is so absurdly expensive you don't know whether to laugh or cry but hey when you play you have to pay. Going to enjoy the sights for a few more days but have been checking in occasionally to see how you boys are doing.
Best of luck - hope the DCA works out and 30% by year end. :nuts:
Cayman
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
I noticed that MOS is down over $12 to $109 - I was fortunate enough to get out at $145.00. I did buy some more Elan today at $11.00. And I'm actually making money on ABK (Ambac Financial) which is a surprise. We should push all indexes higher by the close.
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
How about a few words of wisdom from Ric Edelman, a rather prominent investment advisor, "properly diversified investors should just sit tight. For an investor who has maintained a properly diversified portfolio, structured for long term growth, the correct reaction to the bear market is likely to be none." Edelman counsels patience during the bear market. "Every one of the 13 bear markets we've experienced since 1945 has been followed by a tremendous bull market. The S&P 500 has risen an average of 38.1% in the year end of each of the bear markets. The lesson to learn here is to develope a competent investment program and stay vigorously committed to it over the long term. Today's economy is just a fleeting picture, but your need to achieve your long-term goals is not. Investor panic worsens the effect of bear markets," says Edelman. Thank you Ric.
luv2read
Market Veteran
- Reaction score
- 18
Re: Birchtree's account talk
Birch, does this mean you finally agree that THIS IS A BEAR MARKET and NOT A CORRECTION???
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
I recently burned off a goodly numberr of my commodity stocks to raise money to buy the toxic banks - so far that looks like a prescient move with the banks in a strong rally mode. Now I'm prepared to start dollar cost averaging to the upside - buying those undervalued and underloved wall flowers for the next leg of the mega trend secular bull market. Snort.Re: Birchtree's account talk
A correction within a Bear Market, it may very well be. But it ain't over
until the Bear Grawls for forgiveness and feels the pain us Bulls have felt
over the last 10 months.
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
"Another sign that the market decline is in the process of reversing with a new bull market soon to be underway is seen in the traditionally 'smart money' options indicators. I'm referring to the OEX put/call open interest ratio, which has been accurate in calling the major tops and bottoms for the S&P 100 in recent years. The message of that ratio is currently bullish."
http://safehaven.com/article-10920.htmBraveheart
Analyst
- Reaction score
- 12
Re: Birchtree's account talk
Do you know what's holding down the S Fund. Yesterday it dropped out of the blue. Today the market has a huge day and the S Fund based upon the past should have hit at least $18.25+ something is pulling it back but what ??? THX - Braveheart
Birchtree
TSP Talk Royalty
- Reaction score
- 143
Re: Birchtree's account talk
Aside from the credit crunch the reason the small caps may underperform could be related to the fact that they were the outperformers for the last seven years - it could simply be their time to rest a little. The large caps were the underperformers during this particular time interval and now I'm expecting them to shine in their own light. The large caps have access to credit and have exports in their favor and will be buyers of other companies. I've been preaching the C fund for a couple of years now to the point of being tendentious and if only a few believe in this scenario the better for Ferdinand and myself. Snort.
phillyfed
Market Tracker
- Reaction score
- 14
Re: Birchtree's account talk
A Birchtree day....No doubt about it....Congrats bud!
I am bullish for the year on out. I think theres light at the end of the tunnel and the Market always sees it before the reality slaps you in the face. I am down about 3% YTD.Braveheart
Analyst
- Reaction score
- 12
Re: Birchtree's account talk
Thanks I was stunned when I saw the small caps down Monday and did not fully recover when the market jumps 3%.
anthony
TSP Strategist
- Reaction score
- 10
Re: Birchtree's account talk
"The decline the U.S. stock market has had to suffer through was necessary to clear the way for the final "blow off" phase of the 2003-2009 bull market. This final advance is expected as the 6-year cycle bottoms and the 10-year cycle enters its final year of ascent. The "birthing pains" are nearly over and soon we'll have a new bouncing baby bull on our hands."
If that is the case and what we are going through is just a shake off correction before the longer trend bull market ignites the booster rockets, then it would seem that we are in for a more "real" bear market correction in the 2010 to 2011 timeframe. I recall articles discussing an impending true bear market starting around 2011, but can't really remember them. Do you recall any such writings that have data to support such a theory?
p.s. - Actually, its my first time through such a cycle as an aware and more educated investor. But I read a lot to get a idea of how to weather such a storm. Peter Lynch's book was my favorite so far.Similar threads
