Birchtree's Account Talk

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Re: Birchtree's account talk

Just imagine how many shares you would have if you would of sold when the C fund was $16 per share and bought again at $10.

10,000 shares at $16 = 16,000 shares at $10.
 
Re: Birchtree's account talk

Prozium said:
Just some perspective.

C fund current pricing started on 2 June 2003 @ $10.03 per share.

After today it will well below that.

5.70 years later, underwater. To bad C fund does not pay quarterly dividends to receive more shares.

Talk about not locking in losses, well you have to lock in gains or that is called - GIVING IT ALL BACK.

Market trades both way. Trading one way is like trying to box with one arm.
Click to expand...

The government pays a dividend to the FERs types of a sort. It's called matching contribution every 2 weeks. I'm not a buy and hold type but that 4% added to a 5% contribution of base pay takes the place of a dividend in my mind.
 
Re: Birchtree's account talk

Prozium,

Investing in hindsight is always a simple task. I remember in 2007 that I left $120K sitting on the table by selling my position in AKS at $39 instead of $69. I have a whole history of doing such things and of course it works in both directions. I certainly thought about getting out of my C fund position at $17.56 which would be a contrarian strategy but didn't do that. I also thought about shorting the box with my Merrill account when the Dow was at 14,154 but did not move in that direction either. Sticking to principles I've developed over decades in the markets allows people like me who live and breath investments to be relatively relaxed about their retirement portfolios. This is hardly the time to hunker down and take bets off the table. It's long-term money, and I look at it that way. I'm staying the course. I did give back $64K yesterday but that still leaves me up on last week - so I'll have three days to recoup. I also collected a nice dividend reinvestment on MAS yesterday at a price of $8.08. Still no fear here. I doubt I'll collect my C fund price under $9.55 this week but that's fine, it's a long way back to the top.
 
Re: Birchtree's account talk

Prozium said:
Just some perspective.

C fund current pricing started on 2 June 2003 @ $10.03 per share.

After today it will well below that.

5.70 years later, underwater. To bad C fund does not pay quarterly dividends to receive more shares.
Click to expand...

It agree with the point that you were making.

But the C-fund share price includes the dividends that the stocks in the S&P500 has paid. That's the difference (in one calendar year) in the C-fund share price and the S&P500 number.

Yes, the C-fund was at $9.59 yesterday. People that stayed in C for the last 5.7 years have lost 5% before inflation.
 
Re: Birchtree's account talk

Greg said:
Yes, they (CSRS and their union bosses) sold everybody else out to keep from having to change what they got.
Click to expand...

People in CSRS had 2 chances to switch to FERS. We don't get the 5% matching grant....but that's OK by me.
The bad part is, people in FERS didn't have the chance to switch to CSRS.
 
Re: Birchtree's account talk

I noticed that my NU (Northeast Utility) recently increased its dividend. However, my GXP (Great Plains Energy) and STI (SunTrust Banks) have reduced their payouts. Also, my DHT (DHT Maritime INC) has paid an irregular dividend and an extra dividend. My latest Merrill statement indicates that my oceanic account will pay somewhere between $45K and $50K this year that will be reinvested. That amount will increase over the year depending on how many shares I accumulate. And of course the amount will be greater next year if I hold my asset positions. This income level is above and beyond any capital appreciation. So the objective is to gain income that is currently used to reinvest to gain more income. The longer the market trends at these lower levels the more shares I potentially can accumulate. March will be a big month to collect this income. So in the next ten years I'll probably have another $600K or more invested by leaving the portfolio on auto-pilot. Now it may not happen exactly that way because I will take some profits and most of those profits will be reinvested. It was only last fall that I dumped $772K down the well on our bottom buying 432 individual positions - most of those had good yields and I was dollar cost averaging all the way down - now I'll relax a little and let my dividends do the heavy lifting for awhile.
 
Re: Birchtree's account talk

"The stimulus package is just not that important compared to the plans for the financial sector. In the aggregate, government spending does not create jobs. It never does. Total federal government spending increased significantly from 1950 through the early 1980s. But unemployment did not go down, it went up. While some argue, correctly, that correlation is not causation, the fact that the unemployment rate was significantly higher at the end of 1950-1980 period suggests government spending does not create jobs. With the Obama Stimulus plan likely to push government spending to 24% of GDP, the economy could face a long-term period of stagnation.

This is part of what has held stocks down in recent months - the fear that government will continue to grow rapidly in the years ahead. But this is not the only mistake government has, or will, make. Mark-to-market accounting for anyone with eyes to see, has created a disaster in America's financial system.

History also has something to say here. According to Milton Friedman, mark-to-market accounting in the Great Depression caused the failure of many banks. Little known by economic historians is that in 1938 President Roosevelt's administration finally realized the mistake and suspended mark-to-market accounting.

Then, from 1939 to 2007, the USW had a relatively subdued business cycle and experienced no panics or depressions, even in the 1980s and 1990s when more than 3000 banks and S&Ls failed. In 2002 with Sarbanes-Oxley and in 2007 with FASB 157, mark-to-market accounting made its comeback. Since then, the economy has had serious troubles. Once again, correlation is not causation, but it sure is an awful coincidence."
http://www.ftportfolio.com
 
Re: Birchtree's account talk

There are several articles regarding mark-to-market on the above link that may be helpful.

Now for a few comments from Steven Jon Kaplan: "The longer that amateurs and hedge funds are afraid to get back into the stock market, the longer it will be able to rally, and therefore the more elevated it will become in 2009. My summer target of 1300 for the S&P 500 will be too conservative if amateurs continue to be afraid even after several more days like this one (2/10).

I don't expect amateurs to stay out of the market indefinitely, no matter how much the media tries to discourage them from participating. Eventually, people will realize that by selling in a panic in recent months, they have missed out on the most powerful short-term rebound in many years. They'll start to overcome their fear, and will jump aboard the bandwagon. This process will result in the VXO and VIX eventually moving back into the 20s. As long as the media are hyping deflation, job losses, how terrible the economy is, how people are cutting back, how fashion has turned recessionista, and so on, you know it's safe to stay in the stock market. The financial markets will always act in the way for which the fewest number of participants are prepared."
 
Re: Birchtree's account talk

Mark-to-market is an accounting methodology of assigning a value to a position held in a financial instrument based on the current market price for the instrument or similar instruments. For example, the final value of a futures contract that expires in 9 months will not be known until it expires. If it is marked to market, for accounting purposes it is assigned the value that it would currently fetch in the open market.

When you suspend market to market accounting that creates bubbles like we are seeing now. All the derivatives and tranches are carried on the books at $1.00 but are actually worth much less because there is no market for them. This gives you and idea how big this bubble is. These numbers are in TRILLIONS.

Trying to deleverage 74:1 leverage is like trying to push an elephant through a keyhole.

OCCpg1.png
 
Re: Birchtree's account talk

Birch,
It's rare I even look at the prices....because since 10 or 11/07 the rest of us (non B&H) are only in just long enough to get wet.


But when the Prices were at their peak - or approaching that point I always looked at the PRICE and considered the risk even more.

For any Federal Employee who is mega secure


C/$9.70......S/$11.40.........I/$12.70

Those are 'incredible buys' and only getting better :D

I had longed for the day the S&P would be <$10 and there is NO DOUBT my TSP will be fully intact for years to come.

As we plunge towards the BOTTOM...

................I'm thinkn' of ya more and more :)
 
Re: Birchtree's account talk

A few more choice comments from Steven Jon Kaplan: "Emotional traders are never rewarded as a group. With fund flows proving that there were historically high withdrawals during the past several months, the market will punish them in the best way possible: with a powerful rebound. As a rule, the duration of stock market rally in a secular (long-term) bear market is positively correlated with the amount of time it took for the preceding bottoming process to complete. As a rule of thumb, for each month that the market took to complete a bottoming pattern, the subsequent rebound tends to last for about one and one half months. The result of our lengthy bottoming pattern caused those who tend to panic to sell in October and November 2008, while those who are impatient have been more likely to unload in recent weeks and even in recent days. Thus the financial markets have succeeded in eliminating all those who were encouraged to sell their stocks for emotional reasons." LOL, not me.
 
Re: Birchtree's account talk

I'm thinking we'll see a 70 point gain on the SPX tomorrow when some of the sidelined money tries to get through the small vent hole. Woosh...if this is the catalyst watch out shorts.
 
Re: Birchtree's account talk

Birch,

I think you are the only TSP Guru


You should add a signiture that says sometime like:

I'M COOL YOU'RE COOL WE'RE ALL COOL




actually - I like the idea -- never mind
 
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