Wikinvest Wire
Saturday, September 27, 2008
The Big Picture for the Week of September 28, 2008
I misspoke a few times. I said company twice when I should have said country. Gold and currency restrictions have happened before as I said but I meant in other countries if that was not clear. And Faber did do that interview at two in the morning not eleven at night.
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15 comments:
When "experts" talk about loading up on shotgun shells, the bottom is in and the bear is dead.
maybe but I live in a rural cabin in the mountain timezone so i have been making jokes about about shotgun shells and beef jerky for years, long before the crisis started.
I think what Faber meant re stocks was that certain companies would at least still have some intrinsic value simply based on their ability to "make stuff".
Makes sense in a way but not enough to make me want any (stocks).
Good luck to anyone like the first commenter who thinks a long term bottom is in.
Roger - Some off topic questions.
My current prediction is the credit crissis somewhat normilizes but the effect on mainstreet and companies will linger. I downgrade my outlook and I beleive a bad 2H 2008 and nothings looking to rosy up until Q4 2009. (or unless the housing clears out at bit)
Porfolio-wise, it is neutral Equity, o/w cash, almost zero FI. I cut all my have cut almost my commodity exposure.
My quesitons is how fixed income come look to you. I am a novice here and probably pick some manager for knowledge and diversificatino. As a non -US investor, it limits in further. I have thought of the ususal - PIMCO, Vanguard, Fido, Dog/Cox. Any others? There are solid senior secured debt with selll at 70C on the dollar with a stable business with 15% years I heard!!! Looks like time to long investment grade stable bueisnesses and short Treasuries (no leverage extra).
I actually see better Bond Return in the Next 12 months than Equity. Also, this keeps me from "Catching a falling knife of equities".
Sorry for the rant. I want to have say reduce dry powder from 30%to 15% and place it in the corporate bond funds. I don't it might be a bad idea to deploy this dry powder for anything but a short bear really.
So basically, what are you thouhts about bond funds in the portfolio and this point of the cycle. HAve any ones you like. I will only go with the Blue Chips. What do you do with Cash managment in the down times....
I really appreciate you taking the time to respond.
AI
PS Marc's T shirt was a some sort of black Tshirt with some Golden Zodiac sign. He was probably at the LKF Bars before hand. Cut him some slack it was 3 am... I would like to see his long term PA returns....
so muni money market funds are
paying much more than regular
money market funds....do we
put some spare cash in them
...this seems crazy cause the cash
is in a Roth or 401K.
thanks
Even with your few fumbles, you are much clearer and precise than Barack on his best day.
Wow, that was quite a pick-me-up. I think I'm going to go to Wal-Mart tomorrow to put together a "apocalypse" kit.
In the meantime, I have a question. If a ban on holding gold were put in place, what would happen to gold already in our possession? Would men in black uniforms show up at our doors to confiscate the metal, or would we be free to keep what we've already got?
Listened to the debate last night and John McCain referred to deductions as dividends at least twice. Is this a new beltway speak, or just a mistake in terms? I've never heard the words interchanged before.
Sam
Hi Roger:
I heard Faber (and others)talk about a potential ban on American citizens owning gold years ago at the annual New Orleans Investment Conference, which was formerly called the New Orleans Gold Conference I believe. This always was spoken about in the context of a currency collapse/ endgame scenario that many uber-bears have been ranting about for years (like Tice and Fleck to name a few others). Thus Faber's comments are neither new nor surprising to me. Of course now that we are finally in the seemingly "perfect storm" that they have been predicting for years, it is not surprising to hear this stuff in a more mainstream forum like CNBC. I am not saying it will or won't happen, just that it is not new.
Best, Andrew L.
Kloewer, there is obviously know way to answer your question, Faber's entire thesis was quite abstract. In terms of ETFs they could easily force a liquidation of those.
Sam, Oh yeah, I'm gonna decipher what either one said in the spin-fest.
Andrew L, bingo, not new but Erin did not know about it and did not give him the chance to talk about the foreign currency aspect of the thesis. Coincidentally one person emailed me with the video before I posted my thoughts.
The idea behind the video was a lot of people saw it and if anyone cares my thoughts on the likelihood and in the event of...there it is.
Al, compliance rules prevent me from asnwering most of your questions.
As for fixed income in general I would say this is not a time to reach for yield or take much risk. The market is not functioning properly right now. It will normalize at some point but I would rather wait until then before doing anything meaningful. I recently added a few foreign t-bills for some people that did not own any recently.
Bonds doing better than stock might be from going down less?
Mr. Nusbaum: You are wonderfully insightful, expressive in your unique, unpolished way, and I have learned immense amounts from your efforts -- your focus on "process" is most delightful, for it is always a pleasure to see a professional think, to see one go about his job.
But I can not see how any balanced and sane individual can not see that the problems with the bailout this weekend were the result of one Astonishingly Loony Political Stunt undertaken by Yet Another Astonishing Loony Politician from the same Astonishing Loony Political Party that has been ruling this country by fear and deceit for the past 8 years. The Washington Post had an article this morning that made it crystal clear the plan was good to go -- that Democrats had worked with sincere Republicans to address the concerns that many of us had had with the original proposal, had kept politics out of it, when out of the blue and from the depths of dismal poll numbers, Mr. McCain pulled his extraordinarily, unprecedented fraudulent stunt that risked the very health of this nation's and indeed the world's economy. I was willing to withhold judgment until I say the "plan" the House Republicans put forward -- they could not have been serious; or if they were, that would be more frightening yet.
If differences between the two parties are not clear to you, then let me suggest the odds of Faber's dismal prediction coming true are much greater with a Lunatic and an extraordinarily empty-headed vice president than with a Obama and Biden.
Bailout's done... expect +500 on Monday.
You misspoke, anon.
A Lunatic and an extraordinarily empty-headed vice president IS an Obama and Biden.
There, I fixed that for you. No need to thank me. I'm here for you anytime.
"a long term bottom is in." How many times have we heard this over the past few months?
A long term bottom is in was uttered by this poster the first time yesterday. when talk of "stashing shotgun shells, outlawing gold etc etc come to the front row, the selling is pretty well over. Recall a time when Reagan's Budget Director said "there were piles of debt as far as the eye can see"-close to 30 years ago. We still had an economy after that and all the associated ills that were with it.
After all the suckers are scared into buying low yielding long term debt, the equity markets will recover, inflation will take hold and off we go again. (Fixed income, IMHO, is/was/always will be a loser strategy.)
Before you know it, a middleaged guy will be making $500,000 a year and driving a $300,000 hybrid. How can I say that? Because not only "that's the way it works", unfortunately it's the only way it works.
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