Bad day at Black Rock...meltdown time.

[theo]

It sounds like your ability to play the options is helpful. I wish I knew how to do that.

Now I agree that panic selling not going to make you rich. Nobody is advocating that. However, buy and hold is just as dangerous. Investors who did that in 08 rode the market down to 6600; most haven't recovered and probably never will. IMHO U.S. economy is significantly over-valued along with most American companies. I'm all for having a strategy and sticking to it, but you have to make adjustments as new information comes in.

[barrytrot]

It sounds like your ability to play the options is helpful. I wish I knew how to do that.

Now I agree that panic selling not going to make you rich. Nobody is advocating that. However, buy and hold is just as dangerous. Investors who did that in 08 rode the market down to 6600; most haven't recovered and probably never will. IMHO U.S. economy is significantly over-valued along with most American companies. I'm all for having a strategy and sticking to it, but you have to make adjustments as new information comes in.

You are making one huge mistake in your thinking: Buying and holding BAD COMPANIES is not smart, of course.

Buying and holding GOOD COMPANIES is.

Average = bad

Average = terrible in my opinion

Never buy the "average". Never hire the "average". Never be the "average".

Be exemplary and associate yourself with exemplary individuals and companies.

If you bought and held exemplary companies any time EVER you would be up right now across the board.

[theo]

LOL You sound like an advertisement for Fidelity. But seriously if you can pick these exemplary companies then you possess a skill that eludes just about all of main street and most of Wall Street. Also, even very well-run companies can be overwhelmed by high taxes, crushing regulation and unstable commodity prices.

[barrytrot]

LOL You sound like an advertisement for Fidelity. But seriously if you can pick these exemplary companies then you possess a skill that eludes just about all of main street and most of Wall Street. Also, even very well-run companies can be overwhelmed by high taxes, crushing regulation and unstable commodity prices.

Incorrect. Anyone can pick good companies. It's quite easy. Is it perfect, no. But it, thus far, has proven pretty darn close to perfect. I've not seen a good company get overwhelmed by any of those things. That said, I spend very little time doing this, so can you enlighten me with examples where a good company had that happen?

I promise you that I spend very little time "picking" and have no special skills other than "Excel" where I do a small amount of "math". And as I mentioned I mistime the market on 100% of occasions.

Steps:
1. Make sure the company is profitable
2. Make sure the company has either no debt (preferred) or less than 25% debt to cash ratio. I.e. $4 in cash for every $1 in debt.
3. Make sure that the company is in a business that will last at least 2 years.
4. Buy companies with P/E ratio that is favorable when compared to other companies in that sector.
5. Never buy a P/E ratio over 30. NOTE: I know the most explosive companies are well above 30, but that's playing with knives since eventually the P/E will come back down to earth.
6. Buy companies large enough to have a liquid market and liquid options.


Every person on this board could do those 6 things and beat the market every time. Every time.

In fact, if all you did was bought the average but threw out the companies losing money (banks lately) you would beat the market.

[barrytrot]

LOL You sound like an advertisement for Fidelity. But seriously if you can pick these exemplary companies then you possess a skill that eludes just about all of main street and most of Wall Street. Also, even very well-run companies can be overwhelmed by high taxes, crushing regulation and unstable commodity prices.

Actually one thing people may not know: Investment advisers have a variety of rules they are required to follow. Unfortunately those rules boil down to being required to "play the average" (this is over simplified but it's close).

Regular people though can do smart stuff like not putting good money into bad companies. Although most people here "average" so often they think it's a good thing. It's not. It's the worst thing you can do in any walk of life.

[neilgin1]

let me tell you all something, TRUST is a very perishable commodity. Its true, whether it's trust in a person, an institution, whether it be a corporate entity, or a government.

Once that trust is broken,thats it, its broken. Say a spouse is adulterous, you may forgive them, if they ask forgiveness, but the thread of trust is snapped, and trust in the institutions is even more fragile. The way i feel, what i've seen, experienced, my trust in ANY institution is broken, i dont trust stock issuing corporations, i don''t trust govermental institutions, none of them.

i hear ya, about the old buy and hold quality common stock, but i dont TRUST them. You might say, "you're leaving money on the table"...or "you're neglecting opportunity"...so be it, but to me, its just all paper and empty promises made by a bunch of folks who's thing is to lie reflexively...they cant do anything but lie. Now, if you wanna cop and lock on equities, brother i say, may you proper, i mean that from the heart, but for me, when i look at any American Silver coin, whether it be 90's, 40's or .999's, i see the words "In God We Trust".

now silver just IS, its not something you "trust in", silver IS, and it has intrinsic value, but God? He's who i trust.

[barrytrot]

let me tell you all something, TRUST is a very perishable commodity. Its true, whether it's trust in a person, an institution, whether it be a corporate entity, or a government.

Once that trust is broken,thats it, its broken. Say a spouse is adulterous, you may forgive them, if they ask forgiveness, but the thread of trust is snapped, and trust in the institutions is even more fragile. The way i feel, what i've seen, experienced, my trust in ANY institution is broken, i dont trust stock issuing corporations, i don''t trust govermental institutions, none of them.

i hear ya, about the old buy and hold quality common stock, but i dont TRUST them. You might say, "you're leaving money on the table"...or "you're neglecting opportunity"...so be it, but to me, its just all paper and empty promises made by a bunch of folks who's thing is to lie reflexively...they cant do anything but lie. Now, if you wanna cop and lock on equities, brother i say, may you proper, i mean that from the heart, but for me, when i look at any American Silver coin, whether it be 90's, 40's or .999's, i see the words "In God We Trust".

now silver just IS, its not something you "trust in", silver IS, and it has intrinsic value, but God? He's who i trust.

Actually I agree with you almost completely. The only thing I don't is this: I have money to invest and I have the level of bullion that I want so what should I do with the rest? I know that FIAT currency is the least trust-able thing out there, so I'm left with either "Real Estate" or "stocks". I do real estate as well, but it isn't as easy to add month by month, each transaction takes a long time. Time I don't really have. So I'm stuck.

Unless someone knows of a better investment. I'm open to suggestion!


Also one other tidbit: I don't trust companies but I do trust people to do ignorant stuff almost 100% of the time. So betting against the "average" is something that is pretty attractive to me

[neilgin1]

Steps:
1. Make sure the company is profitable
2. Make sure the company has either no debt (preferred) or less than 25% debt to cash ratio. I.e. $4 in cash for every $1 in debt.
3. Make sure that the company is in a business that will last at least 2 years.
4. Buy companies with P/E ratio that is favorable when compared to other companies in that sector.
5. Never buy a P/E ratio over 30. NOTE: I know the most explosive companies are well above 30, but that's playing with knives since eventually the P/E will come back down to earth.
6. Buy companies large enough to have a liquid market and liquid options.


Every person on this board could do those 6 things and beat the market every time. Every time.

In fact, if all you did was bought the average but threw out the companies losing money (banks lately) you would beat the market.

i feel your ignoring one massive paradigm shift and that is Peak Oil, and we are there. Every single company is tied into either "cheap" or "managable" energy costs, and when the hydrocarbon complex gets really near and dear, all models collapse, Infinite growth is running into the wall of finite resources, and those who foist "infinite growth" are deluded to the point of the insanity.
of course you can argue Peak Oil with me, as many have since 97, but i've spent too much time poring over the EIA and IEA stat's, other independent hyrdocarbon stats, and we are in huge trouble. What has been unraveling since 08, is the DIRECT result of hitting peak oil, the calories cant support the debt, plain and simple, but again i say, may you prosper.

[neilgin1]

[quote="barrytrot]

Unless someone knows of a better investment. I'm open to suggestion!


[/quote]

Go long wood, water and protein...might sound cryptic, but Ted Turner, i believe is the largest landholder in Montana, and outside of marrying jane Fonda, he's no dummy.

[Treetop]

Go long wood, water and protein...might sound cryptic, but Ted Turner, i believe is the largest landholder in Montana, and outside of marrying jane Fonda, he's no dummy.

A pile of manure and handtools also???

[NHsorter]

Well the last couple of days have been fun holding DXD, but I had to bail out at the final minute today. I expect more pain early next week, but I figure I'll sit it out for a bit cause I just don't have the time to sit here and watch this constantly and I certainly don't trust it enough right now to own any stocks without babysitting them. Plus, now I'll be able to relax a little this weekend. Don't even plan to look for deals on PM's this weekend. Just gonna drink and fish I think.

[68Camaro]

I don't give investing advice to people (except my wife and daughter, and even then only sparingly). I am often willing to share what I do (and have been very open and explicit about it both here and in PMs when people have asked). But I don't recommend. Over the past 4 months I have been fortunate to, in my very basic and relatively crude way (no options, no margin, no futures, only working with basic gold and silver paper) increase my trading account by 15%, a 45% annual rate, and that in this crazy market. I'll say no more - the details are in past posts - and again, I won't recommend it, because I don't want to be responsible for anyone else's money, and these are assets that I really don't need for some years to come (God willing) and it would not be a catastrophe to me to lose them (though I prefer not to). I continue on that path as long as it appears to follow those patterns and continues to be profitable, and it especially works for me because I want to be long in these positions anyway, so if I'm caught out on a drop in these funds for an extended period, I have no problems just holding on, letting them ride and spending my time elswhere.

[barrytrot]

Unless someone knows of a better investment. I'm open to suggestion!

Go long wood, water and protein...might sound cryptic, but Ted Turner, i believe is the largest landholder in Montana, and outside of marrying jane Fonda, he's no dummy.

When your life long goal is marry Jane Fonda and you pull it off, that's smart Staying married if you are either Jane or Ted is probably not easy, being in the lime light, and being a "super-alpha".

Anyway: You predicted "peak oil" in 1997, it is now 14 years later, so we'll assume your timing isn't perfect.

Since your timing isn't perfect then I'll say the optimal strategy is to start moving some capital into "wood/water/protein". Which is probably a good idea. But putting 100% into that? We don't have any idea if it is time yet. Had we listened to you, we would have done that 14 years ago. Meanwhile people have become millionaires and billionaires investing in the future instead of assuming destruction.

[Treetop]

barry, there will likely be very wealthy people created if society ever does face any falls or major stumblings as well.... which I do thinks possible, but for my part i think such things are wise anyway....

[barrytrot]

barry, there will likely be very wealthy people created if society ever does face any falls or major stumblings as well.... which I do thinks possible, but for my part i think such things are wise anyway....

Absolutely.

I'm going to see about shifting some money in that direction, based mostly on this discussion. It may not be this year or even soon, but there are some weird times coming and hedging in that direction is looking more and more sensible.

[neilgin1]

Anyway: You predicted "peak oil" in 1997, it is now 14 years later, so we'll assume your timing isn't perfect.

Since your timing isn't perfect then I'll say the optimal strategy is to start moving some capital into "wood/water/protein". Which is probably a good idea. But putting 100% into that? We don't have any idea if it is time yet. Had we listened to you, we would have done that 14 years ago. Meanwhile people have become millionaires and billionaires investing in the future instead of assuming destruction.

Dear friend Barrym since this cyber communication and you cant hear my the tone and tenor of my voice, its not adversial. i know i write that a lot, but i seen many a cyber forum discussion go south, because folks cant "hear the tone" of a person's voice, and words are potent and frequently mishandled OR misinterpreted.

i only APPREHENDED the concept of Peak Oil in 1997, not "predicted"...i'm good with long pulls, terrible timer in short time frames. i was buying crude 16-19 a barrel, KILLING, just doing great guns, but i have a flaw. when trading futures, margined, i go pedal to the metal and overtrade.
Why buy just 1, when you can buy 10, and why buy just 10, when you buy a 100? Crude's up 3.00? "Buy a 100 at the market". Down a $1.00? fuggit, just sit...and thats how a guy gets blown out, happened to me more times than i like to fess up to. Made great money, spent great money, then get blown out. Cashing checks is a whole mess of fun, getting margin calls is not. i was done in 2002, couldnt take it no mo. Now i just trade in physicals, its good, you know your limits. I never traded stock or equities, i have trust issues. (lol)

imo, Peak Oil is the whole ballgame. Once i apprehended the ramifications of Peak Oil, i got into stat's, much too dense and boring for me to unspool. a really great doc to watch is "Collapse", netflix watch it now. basically it takes 10 calories of energy to produce one calorie of food. Some folks say we Peaked in 2005-07....we might be in what they call the "rocky plateau" production stats, we been producing, globally about 85 mln barrels a day, we're going to "need" a 100 mln soon. Nation state reserves are a closely held secret, and there's 3 million ways, geologically to play with numbers. The Saudi's can SAY they have 262 bln barrels , but its impossible to do an audit, Matt Simmons wanted to audit them (google him...a respected analyst) but he died of a heart attack in his hot tub at age 65...stuff like that happens. Iraq's reported reserves are in the 100 bln barrel plus, but i've reports that amp that number to 300 bln, who knows. i do know we have 50,000 troops there, and i may not like that, but its probably the smart move, in a cold blooded way.
i've also seen junkies, and as long as they have their junk, they're cool. But the minute they get cut off, they hit a wall, REALLY quick...and thats what i think "petro-world" is...like a big stumbling junkie. So high, they cant see the wall a-coming, which is why, to me, the best long term play is woods, water and protein, in areas with a killing winter and low population density...and to live "smaller". thats just me. believe me, i KNOW you're a really good stock trader, that list is good, i'm not just giving you ear candy....i just dont trust nothing to what i cant hold anymore . have a really good trading week, fondly, neil

[argent_pur]

Physical gold and silver are wonderful for protecting what wealth one has saved up, but investing in companies that make things that people want to buy is a time-tested way of increasing wealth. Stock trading has existed for centuries...think about what they (stocks) have seen in that time...famines, earthquakes, disease, world wars, scandals, hurricanes, etc... and yet stocks are still here, companies still producing, people still buying, commerce still goin' on. Even if the dollar crashes and burns in a hellstorm of fire and brimstone---the sun will still rise, people will die and be born, and money will still be spent on stuff made by other people.

It seems that Barry is taking a very level-headed approach here. Many great empires have come and gone, and I'm sure that, at the time, it seemed like the end of the world. PM's are not the end-all/be-all of human existence, but rather a part of it. So, "divide your portion, for you do not know what may happen upon the earth".

Thanks Solomon

[68Camaro]

Physical gold and silver are wonderful for protecting what wealth one has saved up, but investing in companies that make things that people want to buy is a time-tested way of increasing wealth. Stock trading has existed for centuries...think about what they (stocks) have seen in that time...famines, earthquakes, disease, world wars, scandals, hurricanes, etc... and yet stocks are still here, companies still producing, people still buying, commerce still goin' on. Even if the dollar crashes and burns in a hellstorm of fire and brimstone---the sun will still rise, people will die and be born, and money will still be spent on stuff made by other people.

It seems that Barry is taking a very level-headed approach here. Many great empires have come and gone, and I'm sure that, at the time, it seemed like the end of the world. PM's are not the end-all/be-all of human existence, but rather a part of it. So, "divide your portion, for you do not know what may happen upon the earth".

Thanks Solomon

Not to be contrary, but until the 1920s, stock trading itself wasn't a means of wealth growth. Ownership of stocks was primarily for the purpose of raising capital, and stock shares were expected to provide a return on the investment via the company doing well. The primary means of growth of wealth over the centuries was in business and merchant trading; NOT in stock trading. This is all a very recent phenomenon. And since that wasn't exotic enough, deriviatives and hedging and multiple other variaiants of the variants have been created since, those mostly just in the past 30-40 years.

[neilgin1]

really good points, agent pur and 68, Barry does have a level headed approach, and stock speculation is a newer way of wealth growth, "newer" meaning in the last 100 years, i just think that in a mad world, only the mad are sane.

[NHsorter]

sorry to go off topic a little here guys, but I was curious if you could give me a little insight into the reason that you think a "killing winter" is an important factor in your choice of location?

[IdahoCopper]

The cold kills most of the insects. Our flies don't get annoying until late August when we have a previous winter that is cold. There are a heck of a lot of dairies around here, hence the flies have a lot of opportunity.

[neilgin1]

sorry to go off topic a little here guys, but I was curious if you could give me a little insight into the reason that you think a "killing winter" is an important factor in your choice of location?

no worries mate, i go off topic a lot, attribute it to ADD. Idaho sawed some of that biscuit, and i've had 250 miles to think about this, coz precision in definition is important, at least to me. a "killing winter", the way i define it and feel it, is a winter with multiple sub zero degree days, sometimes lasting over a week, a wind that can bite and a sky that can pour down lots of snow.
in a northern tier big city, a killing winter is easy to do, excepting if you're homeless, or dont have a place to crash. Sure, a killing winter is a nightmare to some folks, by golly they complain all winter, and then in the summer they complain about the heat.

but in a sparsely populated northern tier, upper midwest rural area, if you dont have things wired down, a killing winter can turn into a real nightmare, which is why northern tier rural areas ARE sparsely populated, which is good. And its why you see the big migration to SoCal, Arizona, and FLA. (no offense to any brothers in those states)..(and its no accident most of the real estate mess is in those states)

people like ease, but Idaho touched on this, a killing winter knocks out a lot pestilence, malaria, dengue fever, etc. Is a killing winter, a big fun time all the time? Heck no, not when you have to snow plow a private road and its 10 degrees with a 20 knot wind, but just layer up, gitr done, and that fire stove is a nice welcome back. I believe such a life toughens one up and thats kind of good. Plus it binds you to your neighbors, and thats also a very good thing. One last thing, you have to get bear like in your thinking, meaning if you get the triple whammy, a heck of a snow storm, 6 foot drifts, and wind, followed by a week of 25 below zero days, with wind, then two days of minor warmup ,maybe up to 30-33 degrees, so things can just melt enough to get icy, followed by another blast of sub zero artic air...meaning you just have to go into hibernating mode, have enough food, good books, heat....coz you WILL wanna stay in, in fact, you SHOULD stay in. (i'm laughing) Accidents can and will happen. in closing heres a really cool RM Commando video, i might have posted it before, but its good. Now i'm FAR from being a commando, but if you're in a prepper mind set, these are some good things to wrap your mind around, i hope you enjoy this, and stay warm....neil
http://www.youtube.com/watch?v=pk750Wzhvo4

[Oakair]

A killing winter is a killer winter (for skiers )

[neilgin1]

A killing winter is a killer winter (for skiers )

right arm....errr, i mean right on.