I was on CNBC on Monday talking about whether or not insider buying was important and whether it made sense to buy along with Vikram Pandit into Citigroup (C).My comment was it shows confidence on the part of management which is good but that it does nothing to tell us where the next 30-40% in the price would be.
Well, 72 hours later and we got our down 40%/
Absolutely Ludacris.
53 comments:
Roger,
Despite all the funk, I read a commentary recently re: reentering the emerging markets soon due to relative sale prices coupled with (allegedly) better business gains relative to developed nations. This commentator suggested a core of emerging markets-ishares msci(EEM), coupled with 2 particular country ishare etfs: Brazil(EWZ) and South Africa (EZA). However, he was not specific as to why he favored these nations. He suggested shying away from Russia for now. Any thoughts regarding this approach? Too risky for now?
for someone with zero EM i would have added a little exposure already so in that respect i guess i agree. as far as pairing a broad based with two country funds that looks like a kind of core and explore. nothing wrong with that per se, he may or may not have the right two countries but the concept is fine.
You know, this automaker "compromise" isn't a bad idea.
"we've already given you loans in September. Obviously you ain't gonna use those. So let's just call them the loan program you've been asking for."
I knew I had read the emerging markets article that John mentioned.
Jubak is basically saying the fundamentals of the emerging economies are improved while those of the developed economies are worsening.
sounds like a point that i and others have made which is that many EMs are dealing with a cyclical downturn where as the US might be dealing with a secular or structural issue.
if we don't get a rally tomorrow...
it's chicken mcnuggets for Thanksgiving.
if we don't get a rally tomorrow...
it's chicken mcnuggets for Thanksgiving.
Chicken McNuggets? Wow, you can afford to go out to eat? :>
Roger, how long are you going to hold our hand thru this disaster?
I'm beginning to think we retirees
should sell stocks, get as much $
as we can from our home equity lines of credit, open up 20 credit
card accounts and enjoy life.
Let the government take care of
us if we out live our $. We responsible ones that have worked 2jobs, saved, invested and lived way below our means are the stupid ones. This is how the government
runs the country... Yikes
So is there an economic incentive to do be irresponsible?
Maybe so. Personally I like not living paycheck to paycheck, doing work where i am not dependent on the business needs of some huge corporation, having my little cabin in the woods paid for so that I never need to go wait in like for a handout should something bad happen, i like not having credit card debt, I like having a margin of error and I feel no incentive to sabotage or otherwise mess up what I have tried to provide for my wife, dogs (too much $$ on fancy dog food!) and myself.
Welp, my next buy point was Dow 7500. Looks like it's time to hold my nose and jump in.
Sorry but:
http://www.alexa.com/data/details/traffic_details/randomroger.blogspot.com
huh?
I wish you had photo shopped your face over Ludas.... I feel like the car makers are in an episode of arrested development. I know you have said before that you barely, or maybe it was have looked, but hardly invest in closed end funds. Looking at the HY space, there seems to be a TON of carnage in this area. My question is, if an investor buys into these funds, knowing only that they no longer use leverage within the fund, can we assume the senior debt they hold is oversold? When does this become a question of blind faith and actual due dillagence? And how does one do due dillagence on the debt being held within these funds?
I hate to say it, but it looks like Citi is in a Death spiral. When stocks hit a certain price point it feels like they can't be saved. I hope this is not the case, but it sure feels like Citi is going down hard. S&P will break through the 750 level today. David Rosenberg called this over a month ago and I along with many others didn't believe it could be true. Louise Yamada is calling for a 600 S&P. These are very creditable people in their field. Hopefully more of us are listening or have listened.
BWJR
WOW, down 10% in two days. Is there anything out there considered to be a bargain now?
given the lag time in reporting I don't know how you do DD on the holdings. faith in a manager is one thing but you can't know the portfolio today.
Times are hard. My student loan debt was kicking my ass, so I had to think out of the box to pay it. Little by Little I am letting the big guy(Uncle Sam). If you are interested read this article. Its completely free!!!http://www.ehow.com/how_4555580_pay-off-student-loans-easily.html
These are the same idiots who were yelling SPX 1700 last yr. I personally cannot look at my savings that have accumulated over 23 yrs in which I put on avg 25k per yr. I would bet I am now worth around half what I had just three months ago. America is a dirty country taking from the savers and giving to the damn debtors.
Calling for 750 or 600 on the S&P 500 now doesn't mean much, IMO. You're just jumping on the bandwagon. Calling it 6 months ago or last year would have been meaningful.
ROGER,
ASKING FOR REAL ADVICE FROM YOU. LIKE EVERYONE, INCLUDING YOU I AM SURE, IAM DOWN 50% THIS YEAR. I HAVE LOST A GOOD CHUNK OF MONEY. I REALLY DON"T NEED IT FOR 7 to 10 YEARS. SHOULD I PANIC AND SELL NOW BECUASE IT CAN GET WORSE OR RIDE THIS OUT??? PLEASE NO TRIPLE TALK -WOULD LIKE A STRAIGHT REPLY. I DON'T LIKE KNOWING 1/2 MY WORTH IS GONE! THANKS!!!
Christmas is canceled.
Disclosure: Long Tanqueray.
Anon 2:14, I have an honest to goodness question (no hidden motive). If you were to sell today, when do you get back in?
anon 2:14
you have a long time. Bill B is right. If you are not fully invested, put some cash to work on quality with dividends that are safe. Like JNJ as an example.
to the dude with the cap lock on, the metaphor for this site is teach how to fish not give away fish.
should you panic? what do you think? if you have been reading this site and watching the quarterly videos then you know i am no where near down 50% (personally or clients). I spelled it all out ahead of time, as it was happening a year ago and now as the market is itself panicking.
i am sorry for anyone down 50% but forgetting compliacne issues for a moment how can someone put themselves in another's shoes and give advice? whatever is going on with your portfolio, more emotion won't make it better.
Just listening to the pundits on CNBC (present company excluded), it seems that they don't get that the rules are different. They continue to look at historical returns. This time is different. We are looking at a possible deflationary situation.
What have we heard? Buy staples & healthcare. Oh great, they're only down 24% and 33% respectively YTD. Phew, I thought I was in trouble!
Roger,
You can't possible say yopu are not down big time. Even if you were in for 50% and left 50% out you are down big. No one escaped, not even Buffett. The one question I have that I would like a answer is can you see this thing going down much lower and staying low?? I did see a piece on CNN that said at least 75% of people in 401K's are down at least 40% this year, so I would not be in the minority.
to anon 2:14
I'm buying MCD at this level because I believe it's good value and I'll get the 50 cent dividend by buying on or before 11/25.
I find it hard to believe you are down say 15-20% Rog. I am in bonds, stock, and cash and down 45%. The last time I remember you had small portion cash and a 1% double short. No way in heck you saved 20-25% down. Face it, many are likely down 60% right now.
I have to agree with anon 2:54. I love Roger, but their is no way with some of the things he was in that he can't be down around 40% even if he had 1/2 in cash {which is debatable}. Warren is down 50% on his Goldman investment including the 10% dividend he got. LOL -- The loss hurts - I would agree that selling now after taking a 7,000 point hit is insane, esopecially if don't need cash for a few years. Would EVERYONE agree on that????
Sit tight, folks, the market is going to rally soon. I'm a great contrarian indicator and I'm ready to pack it all in, right here. How many 5% down days can you take, unless you're a hedgie?
THIS is what I expected to happen after 911. It's playing itself out...rather we are being played
8 years later...after being pumped and then dumped.
When 401ks first started, an investment banker friend told me...never put your money where you can't get at it...they will
figure out how to get it back
when all the baby boomers retire.
I thought he probably meant that
TAXES would be raised when we
started having to pull it out
at 70.
90% cash
Anon 3:18 --- 90% cash now or converted it when the market was 14K?? I find it hard to beleive that anyone was that smart. No one saw this coming this hard. Maybe you were 90% cash since 2001 crash as your note seems to indicate? That would put you even with the rest of us now - you just did not get the thrill of the 7K decline!
anon@ 2.54
"I find it hard to believe you are down say 15-20% Rog. I am in bonds, stock, and cash and down 45%".
That's like me saying I had a well-balanced/healthy lunch the included protein, grain, and dairy. Of course, it was a double cheese Whopper w/fries and a milkshake.
I'm in cash, stocks, and bonds and down 34% (got out of SDS too soon, rolled the money into 3 new "longs" about 2 months ago).
jan
Roger, are you beginning to take deflation into account in your investment planning? It seems too early to me, but I'm late on everything.
anon. @2:54,
The other thing, Roger doesn't really go into bond exposure here, either personal, or client accounts. His blog really pretty much only deals with his thoughts on equities, so heavy cash, heavy bonds (esp. T-bills/T-bonds), some equity; he could well be down 50, 60, maybe even 70% on the equity side, and still down way less than 20%, overall portfolio.
jan
"No one saw this coming this hard. Maybe you were 90% cash since 2001 crash as your note seems to indicate?" That's right, I'm not
smart. I did not see this coming THIS hard...I did think we would
touch 800 for a minute. I went
to cash after the rally of W
second term (I figured the USA
was insane to re-elect him) I
jumped in and out the last 4 years
and as I posted before; last OCT
went home for a funeral and everyone was losing their jobs,
family business of 50 + years closed down and a cousin got a nothing down mortgage....that
was my cue to go to cash......
pure LUCK...not SMART. The $ I
have in the market NOW...I put
in too early BUT I've been day
trading and am up a bit because
of LUCK again.
Wish you all the best.
This is not meant to be a prediction, but take a look at the following link http://dshort.com/charts/bears/four-bears-large.gif
After the pain that's been suffered during this bear, could you imagine living thru 29 - 32???
You Anonymous Fools, at least sign your nonsense with "JoJo", or Jack". So our Roger won't figger you're all the same Dudes.
MELISSA
We went out and did some errands and are about to do a little yard work (it is a little before 2pm) and wow what a flurry of comments.
For the people who care about my performance such that you are posting so many times; well clearly (read with sarcasm)you're focused on the right thing.
someone took no where near 50 to mean 15-20%, dude, relax. If you've been here for a while you have an idea of how much cash i have and you know the sectors i've avoided, i wrote about this stuff since before it happened (read inverted yield curve and 200 dma breach).
anon 2:54 your comment is just plain wacky--you wildly mixed up.
for now the big number on the YTD decline for most folks is probably still a two and if we drop 10% in the next two days it would probably tick higher. anon 2:54 might have trouble understanding that but the rest of you will get it.
ROGER,
I'm not anon 2:54 {but I have read your blog for a few years and I actually thought your loses based on the things you wrote may be in the 40% range - not sure why you would deflate them as that may be better then Gates and Warren have done}, but I don't quite understand your following comment, please explain in little words: 'for now the big number on the YTD decline for most folks is probably still a two and if we drop 10% in the next two days it would probably tick higher.'
still barely in the twenties, another leg down and into the 30s. my cash level has been close to 30% for ages and extremely underweight financials and staples.
I'm hearing some desperate calls for help so I thought a few adages would be nice...
Misery loves company, but this is too much.
This too shall pass...WHEN!
A penny saved is a penny earned. I"M cashing them in.
And my favorite...
Tomorrow is the first trading day of the rest of your life. Try not to blow it!
So. Looking forward for a minute ('cause I'm tired of thinking about 5% daily drops) a few things on ETF liquidity were mentioned some time ago.
At what point does everyone think an ETF is big enough or liquid enough to invest in? Or do people care less about liquidity and more about fundamentals/performance?
I'm not sure about Wisdomtree (and a friend at Claymore just lost his job, while everyone had to take a decrease in salary) - but, reservations aside, Powershare's RAFI fundamental based emerging market ETF interests me. It has about $56m in assets and trades 50k to 70k shares/day.
Invesco is at least profitable. Heh.
On Sept 5, 2008 I was down a little over 9%. If I would have stayed in the Market I would be down 31%. I went 100% into short term CD's 30-90 days. I suggested this at the time to my FA and he advised against it as I must say so did Roger. (check the post) Now I am not saying I am a Financial genius, because i admit i got real lucky. Days after i got out the market started its 45+ day crash to date. When i sold the stocks it was suggested that i stay in the bond funds. as most of you know many of the bond funds are down over 205 since that time. I believe the middle of Dec i will slowly move back in with dividend paying stock of high quality and mix in some corporate bond etf's.
Just one mans opinion. Again so far I've been lucky.
If the level of emotion in todays post's are any indication, the bottom based on panic selling is pretty close.
Roger, you have to feel like Jeff Garcia after he was blindsided on Sunday! I hope your clients are more understanding than today's posts.
Sam
Don't tell me the majority of people are down low 2s when I know for a fact 4/5 investors are down 35%+ ytd. This guy was a millionaire this time last year investing in a diversified portfolio, now he is down 54% ytd.
http://www.1stmillionat33.com/my-networth/
Take a look at every stock out there and notice 80% are down 50%+. Put this in the pipe and smoke it.
who said most people? seriously you need to slow down and read a little more thoroughly here or preferably not comment. if you are the same person at 2:54 you do a lot of 1+1=11.
As simple research would show, losing in the 2x% range could be boiled down to a 60% equity/40% bond portfolio.
Of course, those of us who felt young and a bit aggressive.....
Roger,
I actually think you are smart and helpful, BUT to say you are down in the 20's this year is impossible to beleive unless you are saying you were over 50% in cash which we know you weren't. I think that is what people are saying to you. It upsets people who beleive they are smart to hear someone is down 1/2 what they are and that person was more involved in the market then them. It just isn't possible as your holdings that you mentioned was more violatile to the world markets then some others. You loved Focus Fund and it's down 60% this year. Some of the markets you were in was destroyed. I think part of this blog should be built on reality in that you have no crystal ball. The Oracle stated he was down like every other American, yet you were down 1/2 of what he is?? I am a good investor at 50 I keep 75% in stocks - mostly high rated funds and I am down 45%. I was not smart enought to get out on the way down so I have to ride this out. I would think that is what you are doing?? I am unsure about buying now as I am in shock a bit. Your thoughts??
This quite the joyful place today ;) I for one think that it makes perfect sense that a non buy-and-hold investor like Roger would have very different performance than the indexes and the famous buy-and-holders. Its tautological.
These posts got me thinking that I should calculate my drawdown. I don't know if anyone cares about another data point, but it is about -27%. Before all this I was holding roughly 16% US value, 18% 1-3 year treasuries, 50% in an endowment style portfolio, and 16% cash.
My value portfolio fell about -48%, the endowment portfolio about -39%.
At the end of October I converted the endowment portfolio to Harry Browne influenced portfolio because the endowment portfolio exhibited little diversification benefit - not what I had in mind. It appears that everything that quacks like an equity is perfectly correlated today.
Here is about what I did with that money: 20% TLT, 10% DGP, 20% SHY, 20% money market, 4% DBC, 6% PXH, and 20% is dedicated to seeking absolute return from high yield debt ETFs hedged by corresponding ultra short ETFs. I plan to put some of the cash into UVT once you people stop liquidating your mutual funds...
So Stephen, I do like PXH I think its a great idea:) Maybe I am not very sophisticated about this but I don't mind owning low liquidity ETFs. I go ahead and buy them as long as the spread isn't too great, and I can buy and sell in a reasonable amount of time.
I agree with Sam... we must be very close to capitulation point. The emotions are very very high.
As for Rog's performance, the intensity with which someone might disbelieve he is NOT down 40+% is, in my foolish opinion, strongly correlated with the investment mindset that equates "up" with "good".
Here's an experiment worth trying to see if you're one of those people:
Take a chart of your favorite stock/holding, and rotate it 90% counterclockwise. Now, "up" = passage of time. (The only thing that always goes "up".)
Now, most "up" is "good" investors are like the extreme liberals... any movement to the right is heresy.
But if you're free from that (fanciful) liberal-biased perception, "up" and "down" are replaced by "left" and "right".
There is no intrinsic "goodness" to seeing the squiggles on your chart move to the left instead of the right.
Freed from the limitation that profits only come from one direction, you might do what Roger has done to optimize overall portfolio performance. Buy something (since its likely "short selling" or "put options" are not in your arsenal) that is profitable when your favorite line squiggles to the right.
Rog has spoken many (MANY) times of the utility of the inverse ETFs. They add dollars to your account twice as fast (on a daily basis) as the line known as "SPY" squiggles to the right.
With a judicious use of inverse ETFs, the gut wrenching losses have been muted.
In my most active account, I'm actually down only 2% for the year.
But I trade all day.
(In one of my retirement accounts, like Jan, I jumped back in too early, and am down 20% from Sept 30...)
R in NY
Where is that one guy tomK who posted when dow was 14k? Must be down 60% based on his model with all that international trash.
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