Birchtree's Account Talk

[Birchtree]

Re: Birchtree's account talk

I've never been one to chase momentum in trying to catch fast money. If it happens it's because I was in the right place at the right time just sitting tight. Yesterday I caught another buy out with LDG (Longs Drug Stores) and the stock was up $16.66 to $70.70. I bought my first position 3/26/04 for $18.52 and DCA'd every year since looking like this: $21.38, $23.82, $23.35, $45.85, $36.91, $46.17, $41.75, $52.29, $38.00. So the moral of this story aside from a little luck is to be right and sit tight - this is buy out number six so far this year. My portfolio is shrinking so it is apparently time to add to my toxic financials before they run away. Who will be next is the question - I'll just patiently wait.

 

[Steadygain]

Re: Birchtree's account talk

So the moral of this story aside from a little luck is to be right and sit tight - I'll just patiently wait.

Good to see back Birch.

I have to admit, the longer I "be right and sit tight" the more comfortable I feel. The B&H strategy was more forced on me - but I have no problems collecting contributions in G and waiting for more timely drops to DCA.

I felt Tom's comments (today) were excellent and I'd be way more Capital Preservation minded if I only had a few years. For me Capital Preservation is much more grounded in the 'Stay the Course' mentality since I bought high. So buying more and more shares in the long run will bring me to the top.

I talked with a Commonites Expert recently - and he showed me how some things boom under these conditions; so I'm not surprized that some of your picks did so well.

 

[fabijo]

Re: Birchtree's account talk

But it reminds me of another conflict. One in which the most major Super Power on Earth decided to attack Iraq. What stood out the most is "the rest of the entire global population" all said they opposed the war and would not give the needed permission to start it. Instead of the Super Power showing they were willing to be part of a unifed GLOBAL effort to resolve the condition - they bribed a completely insignificant Africian Country to give them a "yes". You see under "international law" the Super Power did not have the authority to wage this war without some kind of clearance. All significant countries said "NO" - so one with essentially no might or power was persuaded to say "YES".

Amen.

 

[Birchtree]

Re: Birchtree's account talk

Hey, it's not my fault. I'm just along for the ride. But every time I hit a buy out I loose income. I want my dividend income to be for eternity - if you sell or loose the stock there goes the income. That's why it's important to practice sound dividend reinvestments during times of corrections to get the opportunity to accumulate more shares which also pay dividends - it's a self feeding system. The capital gains can fluctuate but the income is STEADY and usually forever with the potential to increase year in and year out. And of course if one is fortunate to own financials some of those dividends are being reduced but only temporarily - they will all eventually be reinstated at a later date. I can wait. Snort.

 

[Steadygain]

Re: Birchtree's account talk

Amen.

WOW - reading that now sounds kind of bad.

I want everyone to know that I am very happy to be a US Citizen by birth and I've pretty much always been hugely blessed with the freedom and prosperity this country has offered since my birth.

I have strived to be a productive citizen and I give 6 times to charities (compared to the average person with my income) only because I do have more to give and my mindset is not the norm.

I also went into the Military and was everything they could have hoped for "while I was government property" - but because of the depth by which I functioned as a soldier I spent the rest of my life trying to be the exact opposite.

But the bottom line is 'I am not anti American' - I am simply against the ways the Powerful are so easily inclined to show their power and do and take whatever they please - at the cost of others (who by sheer virture of where they were born) are destined to the most miserable conditions imaginable.

 

[Birchtree]

Re: Birchtree's account talk

fabijo,

You know very well that is all total nonsense. Iraq had the money and the desire to build their own WMD and the plans were found indicating that was their intention. I'm glad that Iraq is now a free democracy and will help the free world to contain the Iranians - well what's left after they are annihilated.

Ferdinand, did you notice the girls are back so leave the porch light on we don't want anything broken in the dark.

 

[Steadygain]

Re: Birchtree's account talk

But every time I hit a buy out I loose income.

That's not how I see it at all - typically whatever you bought you bought at a very good price and by the time the 'buy out' occurs you're raking in the bucks. (Capital Gains are the problem)

I want my dividend income to be for eternity - if you sell or loose the stock there goes the income. That's why it's important to practice sound dividend reinvestments during times of corrections to get the opportunity to accumulate more shares which also pay dividends - it's a self feeding system. The capital gains can fluctuate but the income is STEADY and usually forever with the potential to increase year in and year out. And of course if one is fortunate to own financials some of those dividends are being reduced but only temporarily - they will all eventually be reinstated at a later date. I can wait. Snort.

Down the line we can talk about this more at length - maybe work out a different deal (compared to your other clients) - BUT THIS IS EXACTLY WHAT I WANT - with at least half of my assets.

Let's just hope our health continues over the years.

 

[Birchtree]

Re: Birchtree's account talk

At my current age I'm not experiencing the anxiety rush of the hippity hopper - already been there and done that. I'm just the accepting type - taking the gains and losses with the same equitableness knowing full well the risk we all take in dealing with the future. But I also realize there is a future and these dark clouds will also pass - but the rain is needed to flush the excesses and to start the next leg of the mega trend secular bull market.

 

[fabijo]

Re: Birchtree's account talk

Of course they wanted wmds. If I ran a country, I'd want some. Once your country has nukes, you have a voice on the international arena.

 

[Birchtree]

Re: Birchtree's account talk

There is an unidentified sovereign fund that is gearing up to purchase real estate owned homes, or homes that have already been taken over by the mortgagee. The unidentified fund is joining individual U.S. investors, hedge funds and Wall Street banks that are looking at REO homes, which have fallen in value so much that they are now tempting investments. A sovereign fund has two distinct advantages over other investors - the depressed value of the U.S. dollar makes the homes a bargain and sovereign funds have deeper pockets. These people can buy homes in bulk and have plenty of time to wait until the markets improve. This is a perfect time to buy cheaper housing for the future gains that will follow. We are a country on sale - so let them come and buy, buy and buy.

 

[fabijo]

Re: Birchtree's account talk

Would that unidentified sovereign fund be China?

 

[Birchtree]

Re: Birchtree's account talk

I wish I knew - could be somebody from the Middle East, Hong Kong, etc. But they may all come here to start buying - I hear about the Russians buying real estate in NYC.

 

[Steadygain]

Re: Birchtree's account talk

There is an unidentified sovereign fund that is gearing up to purchase real estate owned homes, or homes that have already been taken over by the mortgagee. The unidentified fund is joining individual U.S. investors, hedge funds and Wall Street banks that are looking at REO homes, which have fallen in value so much that they are now tempting investments. A sovereign fund has two distinct advantages over other investors - the depressed value of the U.S. dollar makes the homes a bargain and sovereign funds have deeper pockets. These people can buy homes in bulk and have plenty of time to wait until the markets improve. This is a perfect time to buy cheaper housing for the future gains that will follow. We are a country on sale - so let them come and buy, buy and buy.

Absolutely !!

In addition many of the banks are now buying back the homes for less than what the owners paid and letting the owners (now sellers) off without owing on the outstanding balance.

In part this is probably because it's a lot cheaper to buy the home in good condition - at a bargain price - than force them out and have the home distroyed. Will sell a lot quicker remaining in good shape.

THE BIG ASPECT - THAT NO ONE SEEMS TO WANT TO IDENTIFY - Is that this whole ordeal essentially applies to only the new home buyers who got caught up in this big fiasco. Homeowners like me who have had their home for awhile are in no way, shape, or form damaged by this garbage. We're probably dealing with a small percentage of the overall population.

BUT EVERYONE IS ACTING (OR THINKING) THIS IS ACROSS THE BOARD

 

[luv2read]

Re: Birchtree's account talk

THE BIG ASPECT - THAT NO ONE SEEMS TO WANT TO IDENTIFY - Is that this whole ordeal essentially applies to only the new home buyers who got caught up in this big fiasco. Homeowners like me who have had their home for awhile are in no way, shape, or form damaged by this garbage. We're probably dealing with a small percentage of the overall population.

BUT EVERYONE IS ACTING (OR THINKING) THIS IS ACROSS THE BOARD

The statistics are that 1 in 4 mortgages nationwide are in default. There are a lot of homeowners who have had their mortgages for awhile but took the equity to pay for improvements, cars, vacations, medical, or college tuition and now find themselves underwater. It's not just the ones who bought more than they could afford believing the hype that their income would increase to cover the future larger payments.

 

[fabijo]

Re: Birchtree's account talk

Speaking of house purchases, I'd like to add that I just bought my first house two weeks ago.

 

[Silverbird]

Re: Birchtree's account talk

Maybe the Sovereign fund is Kuwait? If so, according to this are backing off more investments now....
http://themortgageinsider.net/mortgage-news/foreign-sovereign-funds-turn-their-backs-on-the-gses/

 

[Steadygain]

Re: Birchtree's account talk

The statistics are that 1 in 4 mortgages nationwide are in default. There are a lot of homeowners who have had their mortgages for awhile but took the equity to pay for improvements, cars, vacations, medical, or college tuition and now find themselves underwater. It's not just the ones who bought more than they could afford believing the hype that their income would increase to cover the future larger payments.

WOW - My "BETTER HALF" has spoken

And I really mean that L2R. Totally forgot about stuff like that. How incredibly dumb of me... I live in another world ..thinking everyone else lives just like me and only goes in debt to buy their home.

NOW I'M CONVINCED THIS AFFECTS A HUGE POPULATION - AND IS FAR FROM LIMITED TO THE "ORIGINAL HOME- BUYERS"

Thank you - you're absolutely RIGHT

 

[Birchtree]

Re: Birchtree's account talk

"Market panics are a 'harvest time' for seasoned speculators who, armed with a war chest of cash, coolly watch from the sidelines as the great unwashed masses push and shove and beat their way towards the exits, gripped by blind fear that the world is coming to an end, at least as far as their investments are concerned, and that if they don't sell immediately their previously cherished holdings, they will get much less for them later and perhaps nothing. They jettison everything, regardless of fundamentals or intrinsic value, and as the panic approaches maximum intensity and prices accelerate into a verticle descent, the Smart Money (Ferdinand) moves in and vacuums up all the trashed securities at firesale prices and then sits back and relaxez, assured of huge profits as prices stabilize ahead of the next lonf upleg."

http://www.marketoracle.co.uk/Article5869.html

 

[Birchtree]

Re: Birchtree's account talk

The BPI (Bullish Percent index) went below 20% at the February lows - this condition is an intermediate term bullish sign. This bullish set up of stocks making lower lows and BPI makes a higher low (July 15th) occurred at the 1998 bottom and the 2002 bottom. The current positive divergence is much larger than the previous two bottoms and is a positive bullish sign. The market needs the large caps to lead the charge, but the small caps have shown some impressive strength across the board over the past few weeks - could be the kiss of death. The R2K advance/decline MCSUM is now above the zero line and has gained 1100 net points and has now equaled its October 2007 high. The NYSE breadth MCSUM is still trying to push through -500 on its way to the zero line. The run up in the dollar indicates that investors are seeing a light at the end of the tunnel for the beleaguered American economy. That means domestic consumption can pick up the slack as demand softens overseas. I'm going to hold my 30% position in the I fund.

 

[luv2read]

Re: Birchtree's account talk

The statistics are that 1 in 4 mortgages nationwide are in default. There are a lot of homeowners who have had their mortgages for awhile but took the equity to pay for improvements, cars, vacations, medical, or college tuition and now find themselves underwater. It's not just the ones who bought more than they could afford believing the hype that their income would increase to cover the future larger payments.

Totally forgot about stuff like that. How incredibly dumb of me... I live in another world ..thinking everyone else lives just like me and only goes in debt to buy their home.

NOW I'M CONVINCED THIS AFFECTS A HUGE POPULATION - AND IS FAR FROM LIMITED TO THE "ORIGINAL HOME- BUYERS"

Thank you - you're absolutely RIGHT

timely article

How U.S. banks sold home equity loans
By Louise Story

Friday, August 15, 2008
...Not long ago, such loans, which used to be known as second mortgages, were considered the borrowing of last resort, to be avoided by all but people in dire financial straits. Today, these loans have become widely accepted in the United States, their image transformed by ubiquitous ad campaigns from banks.
Since the early 1980s, the value of home equity loans outstanding has ballooned to more than $1 trillion from about $1 billion, and nearly a quarter of Americans with first mortgages have them. That explosive growth has been a boon for banks. Banks' returns on fixed-rate home equity loans and lines of credit, which are the most popular, are 25 percent to 50 percent higher than returns on consumer loans over all, with much of that premium coming from relatively high fees.
However, what has been a highly lucrative business for banks has become a disaster for many borrowers, who are falling behind on their payments at near-record levels and could lose their homes. The portion of people who have home equity lines more than 30 days past due stands 55 percent above its average since the American Bankers Association began tracking it around 1990; delinquencies on home equity loans are 45 percent higher. Hundreds of thousands are delinquent, owing banks more than $10 billion on these loans, often on top of their first mortgages... [more]

http://www.iht.com/articles/2008/08/15/business/sell.php

and one more...this year was just the tip of the iceberg.

http://www.nytimes.com/2008/08/04/business/04lend.html?_r=1&oref=slogin&pagewanted=print