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How to Prosper when The Matrix Reverses | |
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Date: July 24, 2004 04:57 AM
Author: Arthur Gibson's Rabbit
Subject: How to Prosper when The Matrix Reverses (1)
The Finster deflation thread was good, but it seems to have run into the sand. It's as if we picked up the tools for the job, but lacked the working drawings to complete the task. I'm going to attempt to take that thread to its next stage, but I'll need everyone's help to do it. I can't do this alone, without your help. Please don't make fun of the mistakes that I am about to make, correct me and move this discussion forward to the point where we can all make money out of the things we learn, by working together.
Cash is "Relative"
The critical contribution that Finster makes is his "Special Theory of Relativity" as it relates to cash. "Time" in Einstein's theory is substituted for "Cash" in Finster's theory. It is NOT constant. It is always altering its value every nanosecond. Stocks, bonds, foreign currency and property fluctuate in value and cash does exactly the same thing. If we were to measure the value of cash by using shares as a measure, we would see the value of cash alter as fast as the DOW or the FT. Each day cash would "close" at a different level of value when the final bell was rung. It could "crash" or "climb" or even go round in circles, just like shares. It's the same as if an auction of your house were held eight hours a day, every day of the year. The "value" of your house would fluctuate by the minute, as bidders joined or left the auction, or their mood changed, or they heard good, or bad news about property values on their radios or mobile phones.
Inflation/Deflation is irrelevant
I think that the mistake in the "deflation thread" was to focus too narrowly on deflation/inflation, as if they were mutually exclusive. Both Vangel and Finster are right. Inflation and deflation can co-exist at the same time. They don't need to cancel each other out, because they exist in different parts of the economic spectrum at the same time. Light in my kitchen does not cancel out darkness in my bathroom. They co-exist and I have to deal with the consequences of both existing together in my home.
Or to put it another way, everyone has their own CPI. An old person who spends much of their money on health-care is experiencing severe inflation; a kid who spends all his money on Chinese toys is experiencing strong deflation. There is a spectrum of experience in between these extremes. You, the reader of this thread, don't care about the old person's inflation, or the kid's deflation, you have your own CPI, depending on what you spend your money.
The Matrix
I think that to get the big picture on all this, we need to stand way back from the canvas and look at The Economic Matrix. When we do this, we see a boom that began in 1942 (when it became apparent that the allies would win the war) that lasted until approximately 1965. All asset classes rose in value relative to cash. P/Es rose, inflation increased and interest rates climbed. Yes, I know that all of these values fluctuated wildly during this period and they also fluctuated relative to geographical areas, but broadly speaking, this is what happened. And remember that when I write of "inflation" I don't mean CPI. To me, rising values of asset classes, relative to cash, is "inflation". CPI measures the inflation in goods and services. But to be accurate, inflation should cover the cost of EVERYTHING relative to cash. Or to put it another way, the "value" of cash during this period was FALLING. It gradually purchased less, in the way of goods and services and assets.
The next period, 1966-1981 saw The Matrix reverse. Asset prices as a whole declined, or remained stagnant. P/E's declined; credit tightened and generally speaking, the value of cash ROSE. It were almost as if our measuring ruler (cash) were slowly lengthening, like Pinocchio's nose and we progressively needed to count less multiples of it to measure the value of our assets. Cash was rising in value, relative to the other asset classes. Yes, there were sometimes violent fluctuations in The Matrix, but the overall trend was as I have described. Society as a whole had changed its underlying behaviour, compared to the previous period and it was more difficult to make money by speculating.
1982-1999 saw another reversal in The Matrix of human behaviour and economic values. It was almost as if a genetic "clock" had triggered society to behave differently. Credit boomed, asset values rose wildly (in relation to cash) and the value of cash FELL. In truth, nothing had really changed from the previous 1966-1981 period. We still woke in the morning and ate three meals a day and slept at night. But we were MEASURING things differently. Relative to each other, the asset classes were shuffled around and gave the ILLUSION that shares rose in value. In fact they did not! We just MEASURED their value differently. We used a shrinking ruler (cash) and found that it took progressively greater multiples of our measuring stick to size our portfolio!
Continued below:
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168201)
Date: July 24, 2004 05:05 AM
Author: Arthur Gibson's
Rabbit
Subject: How to Prosper when The Matrix Reverses (2)
CPI is irrelevant
The key thing to understand here is that we must NOT get confused with the CPI measurement of inflation. This is irrelevant to our thesis. We are examining on a much wider canvas the assets that CASH will purchase over long periods of time and noticing that there are alternating long waves that crest approximately forty years apart. CPI gives us a crude "snapshot" of what a basket of goods and services buy every month. But this measure is corruptly manipulated by the politicians and in any case, as we have said before, we all have our own CPI depending on what we spend our money. So CPI is useless in the broader context of our attempting to accumulate asset value by speculating.
How to get rich
Essentially, what we are trying to do is to increase our asset base by NOT working. If we can use our brains to accumulate wealth, we won't have to sell our hour long units of labour to employers. We can let other people do that while we swim in the pool or work on our handicap. We can increase our asset base (by not working) by bartering our assets with other people and outwitting them in the process. We have to cheat them to do this. We have to offer them a parcel of asset, be it shares, bonds, cash, property, or whatever, in exchange for a parcel of assets that they are willing to part with. If we are smarter than them, they get shafted and walk away with a loss. We get the better deal and our asset base is increased.
However without a correct understanding of the variable value of cash, we are going to fail in our endeavour. During the last twenty year period (1982-1999) our measuring stick of cash SHRANK; cash was a dangerous thing to hold on to. Generally speaking, our (cash) asset was reducing in value, relative to the other asset classes, for the majority of that period. However there were exceptions. If we had bartered all of our shares into cash in September 1987 (prior to the October 1987 equities crash) there would have been a host of buyers for our shares, eager to give us cash for our stocks. However four weeks later the situation had reversed 180 degrees and everyone wanted cash, not shares. If we had bartered our cash back into shares, our overall wealth would have hugely increased. The cash did not change. It still looked the same and in November 1987 our golf club membership cost the same as back in September 1987. But in between times there had been a flux in The Matrix and for a period of time, cash had massively increased in value, relative to shares. Then it settled back down again to an even LOWER level of value.
So over the long term, NOT holding cash during this time frame was advantageous because it was shrinking. Holding assets such as property, bonds or shares was the way to go. Sometimes violent fluxes in The Matrix reversed this trend, but their power was overwhelmed by the overall trend. If you missed the flux it was annoying, but the trend forgave you in the longer term and cancelled out your mistake.
Through the Looking Glass
But what if we were to "pass through the looking glass" and find ourselves in a 1966-1981 type economic universe where The Matrix and all the laws of finance and economics reversed? In this universe the cash measuring stick has shrunk to such an extreme extent that it is difficult to find! It has become so rare that society has altered its perception of it and decided that they require more of it, to pay down debt which has been used to buy all the other overpriced asset classes such as stocks, bonds and property etc. Now there is a clamour for this asset class called "cash". Where is it? We need it? It is the only thing that will get us out of debt and break the credit stranglehold that is choking society! For twenty years cash has been the ugly sister of the asset classes. She was left to sweep the floor and do the chores. Cash was not needed. Credit was the "belle of the ball" and everyone had courted her. But credit had run up huge bills for her suitors. She had ballooned the price of assets until their yields were insufficient to retire on. She had sucked the cash life-blood from her boyfriends and liquidated it out of existence. Now they were feeling faint through lack of the cash-life-blood. An infusion of cash was the remedy, but where was the damn stuff? Suddenly everyone needed cash at the same time and the hunt was on for Cinderella-Cash.
When an asset class is in demand, its price (value) escalates rapidly. But how can the price of cash rise? It rises because the suitors are in an auction for the stuff. They will bid greater and greater numbers of shares for the same amount of cash. They will give more property for it; they will swap more bonds for the same parcel of cash. They HAVE to get Miss Cinderella Cash, to pay off debt. Suddenly they HATE Miss Credit; she is the bitch that caused all this trouble in the first place. Society has learned a lesson that will take another two decades to forget. It will be the next generation that will court Miss Credit once again and think that abusing Miss Cash is an acceptable form of behaviour. It will take approximately twenty years for The Matrix to reverse and forty years before it returns to the same part of The Matrix. But now the auction is on with a vengeance. More shares are bid for the same units of cash, so the VALUE of the shares is decreasing as the auction progresses. The same goes for all the other asset classes. Holders of the asset classes progressively outbid each other and devalue the value of their holdings. The auction lasts approximately twenty years until the last parcels of cash are bartered for larger and larger blocks of shares, bonds and property. Towards the end of the auction the sellers are completely ruined. Their assets are of little value compared to the cash that is on offer. They are broken men.
The Matrix reverses again
But something has changed. Cash is now abundant. It's all over the place. Everyone on the block has cash. It's become commonplace. Cash is boring. P/Es are low and yields on shares are high. Property is cheap and rents are great. It dawns on the new generation that their parents were wrong about cash. Cash is not as attractive as other asset classes and in any case, credit can be used to purchase assets that give a better yield than cash. The Matrix reverses once again and the economic laws of physics are turned upside down. The hunt for Miss Credit has started again.
Continued below:
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168203)
Date: July 24, 2004 05:07 AM
Author: Arthur Gibson's
Rabbit
Subject: How to Prosper when The Matrix Reverses (3)
Where are we in The Matrix?
So the crucial question that we have to ask ourselves is NOT are we facing inflation or deflation; in a way that does not matter. The critical question is "Where are we in the asset value Matrix?" Is our measuring stick of cash lengthening or shortening, compared to asset classes in general? It is absolutely vital that we find the answer to this question. If we don't know where we are in this cycle, we cannot succeed in our efforts to increase our wealth at the expense of those with whom we barter our assets. If they know where they are and we don't, we are the ones who will get shafted. This must NOT be allowed to happen!
The awful truth is that we don't actually know where we are in the cycle. The "cash shrinking" cycle started in approximately 1982 and the turning points are always a bit blurred. It is possible that the cycle turned in Y2000, but we may be wrong. Is the latest reversal by Greenspan, to a policy of monetary tightening, a signal that the cycle turned in 2004? I don't know and none of us can be sure, until a few more years have passed. But I rather suspect that 2004 will mark the turning point in the cycle and not 2000. Even if we are wrong in our judgement with regard to dates, it is likely that we are very, very close to the reversal of The Matrix.
How to prosper
So we now return to our original question. How do we prosper in a world where cash is increasing in value? A world where the cash measuring stick gets longer by the year and our other assets annually shrink when measured by the ruler of cash?
At first glance, the answer seems obvious. Just hold cash for twenty years and don't buy any other assets. But this proposition is flawed. Classical CPI inflation is eating away at our cash asset and our golf club membership fee is still increasing by the year. The erosion of fiat currency is working to negate the phenomenon that our cash is increasing in value at the same time. In truth we are faced with a horrible outlook. Two decades of declining asset values, relative to a cash asset that is also being eroded, albeit at a slower pace. This is a slippery slope with nothing to hang on to.
The Answer
The answer is to take advantage of the periodic fluxes in The Matrix during this long period of time. These are times when the force-field reverses for a period and some assets, or cash, are propelled UP the slippery slope for short while. These will be opportunities for us to barter either cash or other assets with punters who are willing to take what we are offering. Our purpose will be to offload assets or cash after, or prior to, fluxes, so that the recipient of our trade will lose value after the transaction and we will gain from the free ride upwards. If we don't do this, we are going to progressively slide down the slope towards the hell of becoming poorer!
Cash is the asset class of choice for the major period of this time. As interest rates rise, cash yields will improve and these will assist to keep our heads above water. But TIMING the fluxes in The Matrix will become the crucial objective of our investment strategy.
Warren Buffet leads the way
The greatest investor on the planet, Warren Buffet, is leading the way in this new paradigm and showing us how it should be done. Fifty percent of his assets base is now in cash. Why? Read his answer. What he says is vital to our understanding of how to prosper in this new financial environment:
"Despite three years of falling prices, which have significantly improved the attractiveness of common stocks, we still find very few that even mildly interest us. That dismal fact is testimony to the insanity of valuations reached during The Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge. The aversion to equities that Charlie and I exhibit today is far from congenital. We love owning common stocks if they can be purchased at attractive prices. In my 61 years of investing, 50 or so years have offered that kind of opportunity. There will be years like that again. Unless, however, we see a very high probability of at least 10% pre-tax returns (which translate to 6½-7% after corporate tax), we will sit on the sidelines. With short-term money returning less than 1% after-tax, sitting it out is no fun. But occasionally successful investing requires inactivity The shortage of attractively-priced stocks in which we can put large sums doesn't bother us. Our capital is under-utilised now, but that will happen periodically. It's a painful condition to be in but not as painful as doing something stupid."
What Warren is saying is that he judges his low yielding cash to be of greater value than other asset classes, which are giving greater yields! He is foregoing the short term gain of moderate returns, in order to use his cash to set a trap which will eventually ensnare the greater prey of higher yielding assets!
It is a truly brilliant strategy and its genius has not been recognised by the commentators. When the Buffet trap finally snaps shut, he will capture possibly the greatest financial gain in history, outside of MICROSOFT. He might even capture a large part of that as well!
Warren is taking advantage of the credit "hangover" to club his doped victims with the weapon of cash. He realises that we have "passed through the looking glass" and that The Matrix has reversed. Owning cash, not stocks, is the trap to catch the prey of value uplift. Once his prey (of billions of US$ of stock) is in the net, he will either hang on to them for their generous yield, or perhaps trade them back for cash and use the cash to set another trap. I suspect that he might do the latter.
Pre-Y2000, this would have been a formula for ruin. Being IN the market was the trap to catch the uplift. Now being OUT of the market and into cash is the trap that will catch the falls and scoop the following uplift, by buying (and then selling) the devalued shares.
Timing our moves
Timing the market is notoriously difficult. But oddly enough, it becomes much easier when The Matrix reverses. When cash is reducing in value and assets are growing, you have to time your move into cash just prior to a fall in the market. This is virtually impossible to get right! But in today's financial climate the timing is easy. You wait in your bunker of safe cash until AFTER the market falls and then scoop the cheap shares. Low P/Es are your guide. If you make a mistake, or judge that you want to wait for a bigger fall, you just wait for the next crash to happen. Who cares if the wait is two or three years? It will come.
Moreover the timing of when to sell your shares is equally simple. If the P/Es are low enough you DON'T sell them. If the P/Es are not right, you either don't buy them, or offload them after a moderate rise. You DON'T hang on to them for long because The Matrix is working against non-cash assets.
Essentially, what you are doing is stiching the uplifts together and avoiding the downdrafts.
The difficult part will be judging when The Matrix reverses again, in approximately twenty years' time. But we can deal with that at later date; it's not exactly a pressing concern right now!
Concluded
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168204)
Date: July 24, 2004 09:28 AM
Author: Arthur Gibson's
Rabbit
Subject: PS
As if my previous post were not long enough, I am going to add a little bit to it.
Several people have asked me what to do in the current situation. That is to say, they are facing a small portfolio loss. Should they wait for better times, or should they sell now?
My answer is this: If my thesis is correct and the Matrix has reversed, time is on the side of cash and not on the side of equities. Before the reversal, you could wait for underwater shares to surface again, simply with the passage of time. However this may not necessarily work if we are in a new investing paradigm. You may be looking at your portfolio being underwater for vast periods of time. The extreme case is the Nikkei, which has not surfaced since 1989. I don't for one moment suggest that we face a Japanese style deflationary future. But nevertheless, we could get a greatly scaled down version of it. In that case, your portfolio could be under "shallow water" for a greatly extended period of time. Who knows?
My advice in the current trading environment is to buy yourself out of trouble as fast as possible. If shares are headed down and The Matrix is working against you, you have to take the loss and grab the precious cash as fast as you can. When you have the cash in your hands, The Matrix is once again working in your favour. With the passage of time, that cash will grow in value, relative to other assets and you will one day be able to invest it in assets of greater value than the ones that you sacrificed to gain the cash. In other words, it is more cost effective to take the fixed loss now, than to face an accumulating loss over many years. Pre-2000 the reverse was the case. Now it is all different.
I have held on to some of Arthur's Australian shares for too long and last week I observed an ominous reversal in the Australian All Ords. The other banks and many other shares were falling in tandem with the stricken National Australia Bank, for no reason. I immediately grabbed my keyboard and sold the portfolio, without considering the losses and profits on the various transactions. Even now I have not bothered to work out the result. I just know how much of Arthur's precious cash I have moved into his short term Australian Government Bonds portfolio and I know that his losses are ended. If I had held on until yesterday, he would have lost thousands of A$ more. If the shares rise next week (they won't) I don't care. I shall wait for the terrorists to attack the Olympic Games, or Washington DC, the shares will plunge and his bonds will rise. Then I might sell the inflated bonds and buy the deflated shares.
"Buy and Hold (shares)" was the slogan when The Matrix was working against cash. Now it must be revised to "Hold (cash) and Buy" to achieve long term success.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168256)
Date: July 24, 2004 09:39 AM
Author: Arthur Gibson
Subject: ???
Eh?
What do you mean you "have not bothered to work out the result"? That's my money you are losing you stupid rodent.
And stop writing long boring posts. That post was so long that it will probably cost Agora about US$5.00 in data transfer, every time someone reads it. If Bonner sends me an invoice for his costs, I shall take it out of your salary.
All this "Matrix" stuff is bollox. You should be telling them what a bunch of crooks the Chinese are, like I do.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168263)
Date: July 24, 2004 10:33 AM
Author: Chris
Manougian
Subject: Careful, now,
"We'd better be very polite in all those discussions about trade and human rights."
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168305)
Date: July 24, 2004 11:47 AM
Author: gosfield
Subject: I just woke up
Thanks for pointing out that site Chris. It's now in my favourites.
As I read the Rabbit's posts, I was wondering what happens to gold in the Matrix. As cash becomes more expensive, does gold become cheaper? Will it pay to wait for gold to drop in price? Is that the same as dropping in value?
I like the idea behind this thread. Thanks to the Rabbit and Finster.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168348)
Date: July 24, 2004 04:59 PM
Author: Chris
Manougian
Subject: A Few Dilemmas (for me) concerning
PM and Commodities
Gos, SafeHaven is excellent site. SirEd turned me onto it as has been the case on a few occasions.
There was another great article a week ago on safehaven.com, by Steve Saville, "Gold and Interest Rates". It was terrific.
If I'm lucidly reading Saville's article, my take is that, in theory, as the yield spread tightens, PM should become less attractive/fall in price, and that the USD should firm/appreciate.
What we have taking place now, at least on the surface, is Greenspan INSISTING that short-term rates WILL increase, gradually, come hell or high water. I'm taking him at his word (to a large degree). Saville would probably take exception to this.
First, the carry-trade needs to be unwound. By telegraphing FFR increases, AG is trying to get this done with the least amount of carnage exacted on the bond market. Also, and related, the expanding property bubble must be stopped, if not slowly deflated Greenspan certainly has this on his mind.
Second, the USD will continue to lose if the FFR isn't increased, and this will further monetary inflation. We import like crazy, and we have already seen this to some degree concerning oil prices. At some point, a weak USD produces substantial inflation. A stronger USD, produced by higher rates, cools this off.
Third, as other countries look to increase rates, the US will have to compete for funds, or
IMO, at least as far as I can see in this short to medium term, we have turned the corner on rates they are headed up. (I think) Greenspan means business.
My other skepticism for PM (in the short to medium turn) results from Morgan Stanley's call on China. See the Moxley thread. In particular, follow both of my Moxley thread links to Andy Xie and Steve Roach's latest articles on China's impending slowdown. Roach: "The China slowdown has barely begun".
Steve Roach is not quite as bearish on China as is Xie. Xie is calling for a major commodity retreat with a focus on commodities other than PM. However, this would seem to add deflationary seasoning across the board, and would seem to affect PM also, assuming China can pull it off (and a shock event doesn't send oil prices to the moon). Morgan Stanley has been consistent/unwavering on this theme that a slowdown in China will have a large (deflating) affect on commodity prices.
Is the gig up on interest rates? That's the way it looks to me. In any event, I can't see how you lose betting against the homebuilders if you have the patience to hold on (to your shorts).
However, there is a lot of uncertainty. If the U.S. economy really starts to tank, Greenspan could be forced to hold the line to some degree. If he gets "behind the curve" (more than he may already be), PM goes up, and the USD goes down. But to me, AG doesn't think he's behind the curve. In a way, his insistence on "measured" rate increases keeps him ahead of the curve.
It's a very tough call. If you're conservative, cash is king.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168437)
Date: July 24, 2004 09:05 PM
Author: the
hobbit
Subject: gold down
this is true. nevertheless, hold it.
In true deflation it does retain purchasing powwer despite nominal decline in price. In inflation it has the same preservation of PP.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168488)
Date: July 24, 2004 12:26 PM
Author: er
Subject: Rabbit, Einstein & Q
Interesting. I recall that "time" twists space and "mass" warps space through gravity.
Mass being the asset class that grabs the attention and focus of the market at large, (because it is changing rapidly) it warps perception by retaining our focus and thus warps our perspective of the bigger (BIG) picture.
Cash,being the measuring stick that expands and shrinks "twists" that perception even more. Like the rogue waves appear on the ocean and "twist" everything on the surface, they seem to be only a minor abberation in the big picture (sea) unless you find yourself (and investiments) in the way of that coming spin.
The people ARE the sea. And they ARE roaring! I think I'm beginning to understand.
Thanks Rabbit! Thanks Q. And thanks Albert.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168363)
Date: July 25, 2004 05:43 AM
Author: Chris
Manougian
Subject: Why not short (selectively)?
Just as inflation means different things to different people, risk tolerance seems to work along the same lines as it relates, specifically, to age. Berkshire Hathaway is an old, "old-line", company. They are sitting on gobs of cash/assets. No need to get "wild and crazy" - although Buffett is betting against the USD. Coming out of the last Matrix, Microsoft looks similar. However:
MSFT Aside: The $75B giveback to shareholders seems somewhat odd/counterintuitive. It would seem that MSFT did this to support the value of its stock. This is puzzling to me. First, I have to wonder if it really will support the stock price. If it doesn't, effectively, wouldn't MSFT benefit more from hording their cash? When the paradigm shifts again, they could use their additional $75B + to buy up everything in sight diversifying; become like GE (with more cash/tangible assets). No question, MSFT has hoarded, and will continue to hoard, cash. But why have they given back $75B? Did MSFT make a mistake?
Getting back to my first thought, an individual's age factors into risk tolerance. As we get older, we become increasingly risk averse (usually). If we have money later on in life, we would look to hold cash given your analysis.
Assuming that, no matter how old you are, you have at least a 5-year investment time frame in mind. Why hold cash exclusively? Or better put, why not short the equities market with the inverse logic used in the last Matrix cycle? If the trend is down for equities, and up for cash, why not short the equities by looking at high P/Es (assuming broad, poor fundamentals)?
Yes, cash would/will become worth more, but relative to what? A quality short?
You will have the same counter-trend rallies in equities, reducing the value of cash. In these circumstances, you could trade, or hold on. In this case, in its purest sense, shorting and holding would probably be the best tact for the majority of shorters.
If The Matrix has truly shifted and I guess that's the real question why not short? Doesn't it come down to the same thing as it did in the prior Matrix that "hard work"/education and discipline make or brake you?
Of course, it doesn't have to be an all or nothing strategy as it was not (for prudent investors) during the last Matrix. But, why shouldn't shorting the market be part of your strategy?
You were quick to sell your portfolio. Did you consider shorting?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168594)
Date: July 27, 2004 02:23 AM
Author: Agent Tokyo
Subject: MSFT
Perhaps that was the easiest way for the head honchos to pull cash out of their shares? They get the "free" money out, and as an added bonus, the plebs now think the stock is actually worth more. The stock price gets a boost, some of which will last past the payout, after which, they can sell some of their shares for a greater profit than the pre-payout value... perhaps.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169381)
Date: July 27, 2004 06:28 AM
Author: SirEdward
my thoughts exactly. same as pump & dump/stock buy-back, using shareholders funds again. up 20% since mid May. large insider sales.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169411)
Date: July 25, 2004 03:31 AM
Author: rich gates
Subject: Gold in the 1970s
I looked at the monthly average prices for Gold from Kitco for the years 1968 through 1981 (your previous rising cash period- no data available for 1966, 1967). Monthly average at start (Jan 1968) = $35.20, monthly average at end (Dec 1981) = $410. This shows gold being better than cash during that rising cash period. Gold also got as high as $675 in the highest monthly average in 1980. Granted the starting value was artificially low that time and won't be this time. But the big question is will gold be a good value in this rising cash period??
I am betting it will be, but the outcome is far from certain.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168582)
Date: July 25, 2004 05:37 AM
Author: Arthur
Gibson's Rabbit
Subject: Hmmm Interesting
Your data would indicate that gold acted like a currency, (cash) not a commodity, during a period when cash was increasing in value. Perhaps we should have guessed that it would.
I suppose the indications are that it will do so again in the future.
Can you get more data for us to consider?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168593)
Date: July 27, 2004 02:32 AM
Author: Agent Tokyo
Subject: gold window?
We also need to take into account the history of gold leading up to the rise. I believe it is a little different in this run of the Matrix.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169383)
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(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168765)
Date: July 24, 2004 11:31 AM
Author: Finster
Subject: Einstein's Rabbit
Yes! Mr. Rabbit "gets it"!
Just a semantic point here. These are the same thing in Finster-speak. That is, inflation and deflation on one hand, and the cash measuring stick shortening and lengthening on the other. Purists may object to my use of the xflation terms that way, but it is so much shorter to say "deflation" than "you know that phenomenon where prices decrease due to an increase in the value of the monetary unit".
The bottom line, therefore, is that we are in substantive agreement on your point. There are for sure real movements in non-cash asset classes that have nothing to do with the changing value of cash, but often there are apparent movements that really boil down to little more than just that. And most investors overlook those latter instances, confusing the latter cash movements with the former real asset value changes. By looking at all asset classes to determine which effect is dominant, they can avoid being fooled and improve their returns.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168340)
Date: July 24, 2004 05:29 PM
Author: dyjech
Subject: The dominant eye
Hey rodent.How in the hell do you putt with those big feet and floppy ears?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168443)
Date: July 24, 2004 07:45 PM
Author: Arthur Gibson's Rabbit
Subject: The DOW in the various cash cycles
At the start of the 1942-1965 cash shrinking cycle, the DOW started at 111 and finished at 969.
At the start of the 1966-1981 cash expanding cycle, the DOW started at 969 and finished at 875.
At the start of the 1982-1999 cash shrinking cycle, the DOW started at 875 and finished at 11,497.
At the start of the 2000-20?? cash expanding cycle, the DOW started at 11,497 and ended at __________ .
When we are all old and grey in two decades time, one of us should resurect this thread and fill in the missing number. My guess is approximately 11,250. Already, four years into the cycle, the DOW is below 10,000 and heading South. It is not beyond the realms of possibility that it will not reach 11,497 for another two decades!
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168479)
Date: July 25, 2004 11:26 AM
Author: tbo
Any relation to the baby boomers here?
At the start of the 1942-1965 cash shrinking cycle, the DOW started at 111 and finished at 969.
boomers in diapers
At the start of the 1966-1981 cash expanding cycle, the DOW started at 969 and finished at 875.
high school through college
At the start of the 1982-1999 cash shrinking cycle, the DOW started at 875 and finished at 11,497.
grown up, raising a family and working
At the start of the 2000-20?? cash expanding cycle, the DOW started at 11,497 and ended at
starting to retire
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168680)
Date: July 24, 2004 09:13 PM
Author: Arthur Gibson's Rabbit
Subject: More conclusions
It leaves us with the interesting conclusion that the dividends paid out by shares will progressively become more valuable as the next two decade period continues. Partly this will be because P/E ratios will generally RISE over the next two decades, whereas they FELL over the past two decades. But also, the CASH paid out by the dividends will gradually increase in value, as a means to purchase other assets. Or to put it another way, the gain from shares will come from the dividends and not from the capital gains, which will be virtually non-existent.
This has other important implications:
1. Many "traders" are going to go bust, because The Matrix is working against them, instead of for them.
2. High yielding shares will become more valuable than low yielding shares. The low yielding shares rely on capital gain for their value. But as there won't be any capital gain, they should be avoided like the plague.
3. Listed property trusts with high yields will be (are) good value in this new environment. These high yields will shrink, as investors learn the rules of the new paradigm and clamour for this type of investment.
4. Buy the high yielding shares NOW before it dawns on the crowd that this is the way forward. When that happens, the price of such assets will rise and the yields will fall, to cancel out the anomaly.
5. The derivatives mountain will gradually "landslip" down to crush the banks that are offering these idiotic products.
6. Pension funds will be decimated, until they learn how to invest in a world in which cash increases in value annually.
7. Your retirement investment plans should be urgently re-assessed as a result of this new economic situation.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168489)
Date: July 24, 2004 09:41 PM
Author: Chris Manougian
Subject: Microsoft
Maybe Mister Softie is "ahead of the curve". Not sure I would buy it now, but I've been in and out, and will always keep an eye on it.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168499)
Date: July 25, 2004 08:23 AM
Author: Finster
Subject: MS
MS looks like a two-edged sword. The business has seen its best days. Look at a long term chart and you see the stock going from about ten cents to sixty dollars, and since then in what appears to be a secular trend of decline. This probably reflects the fact that people simply don't need or want new software all the time. Moreover, for all the hype, there have been no fundamental improvements in years. Windows is still a disk operating system, still requires booting and rebooting, etc.
On the other hand, MS is the only major tech company that has renounced stock options. Their move to restricted stock reflects a move away from the shareholder rape that option grants represent. Unlike most companies, when you read their financial reports, you get a pretty honest and up-front picture of what your share interests represent.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168622)
Date: July 25, 2004 07:00 AM
Author: Finster
Subject: Good Conclusions
There are more reasons dividends will be valuable. The demographics of retiring aging populations mean many more people looking for income-producing investments. Moreover, if equity prices are not rising, the only way to profit from such investments will be via distributions. Further, in an era where companies play accounting games with earnings, dividends add credibility. So even if deflation turns out to be short term or even a no-show, dividend-paying investments will have an edge.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168609)
Date: July 25, 2004 08:58 AM
Author: gosfield
Subject: Dividend Yields
Currently, yields are low. Do they not need to rise to have this theory make sense, particularly as interest rates rise?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168629)
Date: July 25, 2004 09:10 AM
Author: Finster
Subject: Absolutely
Absolutely, dividend yields would have to rise if interest rates rise. So unless corporations increase their dividends, that would mean falling stock prices, which are deflationary and therefore tend to limit interest rate increases. So there is a tension between these effects - it's one of the things which tends to establish equilibrium in the markets.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168632)
Date: July 25, 2004 02:42 PM
Author: Davis May
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(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168766)
Date: July 26, 2004 08:27 PM
Author: Lucius Foster
Subject: Ticker Tapes are back and looking for the constant
market.
Dear David May, oops not David, well is Archie Preissman there? How I miss them. Archie would just take a cigar out of his mouth and say,"Kid, go buy 1,000 shares of Sliding on the Mud." I would and from my profits send him a box of newly arrived Cubanese Cigars.
One day he called me and said,"This guy has an apartment house loaded with his girl friends. Got to stop. Go buy it and chase them all out and make a buck." I did, that got me into the Friars Club for lunch. All he wanted was a telephone number of one of those newly disposed. Really could not see it she looked like a Vassar Graduate with an overbite and a conversation loaded with Mums and Dads. But I learned. The super rich know things us common folk will never know. Has nothing to do with Statistics,Projections, Age Groupings. Arbitrary insertions by Governments etc. It has to do with people.
When arbitrary events become constant, then and then only will the people at cause; them that do, begin a sideways movement in answer to the events. You cannot always see it coming, but you can leave space in your planning for such events. They do occur, will occur. are occuring and I see them in the responses to the Spike Market in Real Estate. I expect the stock market will follow.
I await with mixed emotions, two parts gin one part vermouth. Ugg.
Lucius
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169250)
Date: July 24, 2004 09:23 PM
Author: Arthur Gibson's Rabbit
Subject: Gold
If cash is rising, Gold will fall.
I have wracked my brains and I cannot thing of any asset that will increase in price, when cash itself rises in purchasing power and therefore value.
Everything asset measured in cash, which is all of them, by definition, must fall in relation to cash when it rises. If they don't fall, they will certainly remain at a standstill.
It's a bit like watching the sea level rise (which it will) and wondering which parts of the globe will not be affected. It is a stupid question. The sea level will rise everywhere and no place will escape. So when cash rises, every other asset will (appear to) sink.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168492)
Date: July 24, 2004 11:13 PM
Author: the hobbit
Subject: Purchasing power
Gold will fall in nominal dollars, but should retain much of its purchasing power as the dollar strengthens. Best strategy would be to sell gold for dollars at the begining of the slide and reaquire gold later.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168522)
Date: July 25, 2004 05:52 AM
Author: SirEdward
Subject: Chris
>As we get older, we become increasingly risk averse (usually). If we have money later on in life, we would look to hold cash given your analysis.
Good point. Therefore, as a country's population ages it places a higher price on holding cash & assets go into decline as in Japan.
Here's the figures for the youngest trailing-end boomers sorted by age.
Japan 55
Russia 45
US 40
Canada 40
Hong Kong 40
UK
35
OZ 35
Singapore 35
Switzerland 35
Germany 35
Italy
35
Netherlands 35
France 30
Spain 30
China 30
South Korea 30
New Zealand 30
Ireland 25
Thailand 25
Indonesia 20
Brazil
20
South Africa 15
Vietnam 10
India infinite
Malaysia
infinite
Japan's tipping point/burnout was 1990, fifteen years ago when their youngest trailing-end boomer was 40 years old. UK's will happen in 5 years. US is about ready now, only surviving from temporary life-extension from Greenspan.
Japan's excellent export trade to the rest of the prospering world helped prevent it going into depression. Those countries with high external debt accounts, grand entitlement programmes, strong currencies & poor exporting capabilities won't be so lucky.
if Japan's any guide this means the G8 will be in recession within 5 years. Global melt-down.
source www.census.gov/ipc/www/idbpyr.html
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168595)
Date: July 25, 2004 04:24 PM
Author: Chris Manougian
Subject: Graying Societies and Entitlements
Ed, great post.
I've been a DR poster for well under a year. Maybe the graying of America/entitlements issue has already been tackled in full, but I have not seen it. A group discussion on this issue would be intense, perhaps somewhat bitter, but very worthwhile, nevertheless.
Concerning the US SS system, I've seen all kinds of opinions concerning its pending demise. A few months back, Bonner & Co. offered up some fundamental ideas from a referred book that pointed to draconian measures needed to deal with Social Security I think the book/DR article included thoughts on Medicare also. There are others that don't see the situation requiring draconian measures. Some believe that all that is needed is to increase the retirement age.
Greenspan has already laid the groundwork for tackling SS over the next 4 years. If Bush is reelected, he will deal with it. For this reason alone, I want to see Bush win. First off, he knows he has to deal with it, and "wants" to deal with it. At the very least, the Republicans should retain the House. A second term Bush with nothing to lose (besides a mid-term congressional election) is going to be much better positioned to deal with SS. It's doubtful that Kerry 1) "wants" to deal with it, and 2) will have the ability to deal effectively with it due to what will be his a) first term status, and b) his constituency.
If Bush wins reelection, the issue will produce intense political theater. There should be some degree of class and generational warfare that ensues. As a "Generation Xer", this issue looms large for me. Right now, I'm basically being forced to pay into a system that is all but assured to not be there if I make it to retirement call it taxation without justification. I would not "mind" paying into SS IF it was projected to be there at retirement. But it is not.
The current system is skewed in favor of the current, and near-current, recipients. If I understand the fundamental arguments correctly, it will begin to unravel (statistically speaking) for the Boomers. Certainly, it will be unviable (in its current form) for Americans following the Boomers. The AARP (American Association of Retired Persons) is a behemoth in American politics it has no rival representing younger generations.
Maybe I'm too pessimistic. Maybe Americans will pull together to reform SS with an understanding that everyone has a stake in getting this done - but, I doubt it. America has never been more politically polarized, and the current system is too skewed against the "young".
To start with, let me offer a couple of "close to home" examples as to why America must(?) 1) increase the age requirement and 2) "means test":
Social Security
My father still works. Within the last year, 2 very quickly discussed items came up SS and Medicare. First, SS: Pops: "Chris, I'm eligible for SS. I know I'm going to get taxed on it, but so what? I'm taking it. Why let the government keep it?" Chris: "Absolutely, Dad. Why wouldn't you? It won't be there for me, so someone in our family unit should take it while it's still there." Now here's a guy that doesn't need SS based on age (or based on his desire to continue to work), based on current income, and marginal benefits due to taxation. What's wrong with this picture?
Medicare
Pops: "Chris, your mother and I are now eligible for Medicare. We are going to come off the business health plan, and take the Medicare. It will cost a lot less, and the benefits are great. Our [small] business will benefit by significantly lowering the average age of the plan." Chris: "Of course, why not a no brainer, Dad". Keep in mind that his decision comes on the heels of a very costly, if not generous, prescription drug benefit law negotiated with the AARP (that says, "good start, but we'll be coming back for more"). Our HMO is a near nightmare to work with. My guess is that mom and dad will receive much better service on Medicare than with our current HMO. I don't know about the tax ramifications I'm assuming that their Medicare premiums will not be (business) deductible but there is no question that our "unit" will save. Again, here is a guy who still works. Yet the system pays him for opting for Medicare, when it doesn't have to. Again, what's wrong with this picture?
Closing Thoughts
Ed, I've taken a slight detour from the intent of your post. Please excuse the (related) diversion. But the US SS and Medicare issues falls well within the topic. It also occurs to me that the immigration issue comes into play once again concerning "matured"/graying societies. Americans are not reproducing enough to support a growth economy. Thoughtful, positive, immigration must be incorporated. Unfortunately for the US, it took 9/11 to force the issue's serious contemplation. For me, the issue comes down to successful assimilation.
OK, I've written enough. I've been wanting to get this off my chest on this board for a while now. If it would be best to start a new thread, lets do it. Ed's post was an excellent opportunity.
I would expect to hear from a few folks on this, including Finster, James Hyland, and The Reaper !.
Let's try to keep it civil. OK, shoot away.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168804)
Date: July 25, 2004 04:50 PM
Author: Finster
Subject: Okay, I'll Bite
Just sorting through all the point and counterpoint makes my head spin. So let me just back up and see if there's one or two core issues that, if addressed, would simplify things.
Seems the central problem is the number of people receiving benefits relative the the number paying in. It also seems that this didn't used to be such a big problem. What changed?
The main thing is people are living longer. So if people are living longer, why hasn't the age for benefit eligibility changed, too?
Well it has, but just a mere token of two years. The balance of payees to payers has changed far more than that. So if this is the problem, then isn't the solution obvious? Phase in another increase in the eligibility age? Except this time, make it enough to count?
This could be structured so that most people already in the work force are affected little, if at all. That would mean there would still be some strain on the system in the 2030s or thereabouts, but at least a temporary one instead of a one way spiral out of countrol. This would probably place SS benefit eligibility somewhere in the 70-75 range. Some people of course are still going to want to retire youger, but nothing in the progam should prevent those who want to allow for that to set aside private savings for that purpose.
It's important not to mess around with other parameters, like benefit amounts or means testing. They would invite the exact sort of political mayhem you fear, and the result could be a real mess. Moreover, means testing is about the worst thing you could do since that disincentivizes folks on the margin from taking their own prudent actions. Not to mention we've already got a whole maze of "progressive" take-from-Peter-to-pay-Paul programs built into the tax system, and layering multiple systems together will just make things more confusing. If you simply must have more progressivity, just make the income tax more progressive.
Better yet, implement a tax system like HR 25. Under this consumption tax plus rebate system, everybody gets a monthly check. Simultaneously, phase out SS altogether.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168814)
Date: July 25, 2004 06:27 PM
Author: Chris
Manougian
Subject: 72.5 and Class Warfare?
Finster, the social science crowd would probably jump all over this one. My guess is that they would look at the economic strata, and conclude that poorer folks don't live as long. "Once again, the poor are getting screwed."
A jump from 65 (give or take) to 72.5 (give or take) is huge, even without the "the poor are getting screwed" argument.
Some people of course are still going to want to retire youger, but nothing in the progam should prevent those who want to allow for that to set aside private savings for that purpose.
I like this.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168836)
Date: July 25, 2004 06:39 PM
Author: Finster
Subject: Class Warfare
If that's the case, then there's probably no way to avoid class warfare. At least with the eligibility age, you have something that's already proved its political legs (it's already been raised to age 67), is not an overt wealth transfer parameter, and even if true, could be countered by showing that the poorer folks would probably still disproportionately benefit from the program as a whole even after the change. Tinkering with benefit amounts is likely to be impossible without directly confronting class warfare hawks.
As for the jump, you do it like before, a gradual phase in. Like for each one year born after 1980 or whatever, the eligibility age rises one month until the completion of the transition, presumably set so that the program is actuarially in balance.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168839)
Date: July 25, 2004 06:39 PM
Author: dud
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168840)
Date: July 25, 2004 05:22 PM
Author: The Reaper !
Subject: Chris Manougian & SS
Your parents I take it are self employed , as was I before retiring a couple of months ago . Am I going to take my SS benefits at age 62 ? You bet ! Do I need it ? NO ! But like your parents , all of my life I had to pay double into SS because I was self employed . What I plan to do with my benefits is just give it to my 2 adult children . I figure that way they kind of break even . Lets not forget , that the Boomers have paid for their parents retirement and have also paid in nearly 3 trillion dollars on top of that towards their own SS . The U.S. government has borrowed that 3 trillion dollars to finance the tax cuts for the richest Americans . Chances are Cris that when your parents die you will inherit those SS payments in the form of their estate . Right ? The Reaper !
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168823)
Date: July 25, 2004 05:31 PM
Author: Finster
Subject: Reaper !
Hockey pucks. The US government does not pay tax money to the "richest Americans". This is merely a reduction in the amount it shakes them down for. What is happening to that money? It's being used to fund the ever-increasing size of government. Everything from corporate welfare to ineffectual educational programs to pork barrel spending to medical care and education for illegal immigrants. Cut the size of government, and the deficits will take care of themselves.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168826)
Date: July 25, 2004 09:44 PM
Author: The Reaper
!
Subject: Finster & Government Debt
Listen dude , a far as I am concerned the government can cut taxes to zero , that is of course , if they cut the spending to match . But that is not what Bush is doing . He is cutting the taxes on his rich friends and creating the biggest deficits in the history of this country . What he is doing is sending my kids and yours the bill . Let me give it to you in plain English , as long as this government wants to spend big , then they should tax big . And since the poor don't have any money , they will have to tax their rich friends , GET IT ??? The Reaper !
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168886)
Date: July 26, 2004 07:56 PM
Author: Finster
Subject: Reaper Dude
I have no problem with cutting spending. But you said that the U.S. government has borrowed 3 trillion dollars to finance the tax cuts for the richest Americans. You say you only talk about facts. That is not a FACT!
For one thing, that 3 trillion dollars is only an estimate of the forward impact of the tax cuts over a period of years. Ever follow up on how close past estimates like that have come out? Not even close! The only thing we know for a fact about a change in tax rate from 35% to 30% is that it's a rate change from 35% to 30%. All else is CONJECTURE!
Then it is simply gross distortion to imply that tax cuts are some kind of giveaway. The FACT is that all of that money belonged first to the people who earned it. If the politicians take less, they still took.
How about this? If I took $100,000 from you last year, and then cut my take to $50,000 this year, would you say that I gave you $50,000???
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169232)
Date: July 26, 2004 08:04 PM
Author: The
Reaper !
Subject: Finster Dude
The three trillion dollars is what has been borrowed from the SS fund ! That is what has financed the tax cuts . Look it up . The Reaper !
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169236)
Date: July 26, 2004 08:11 PM
Author:
Finster
Subject: Financing Tax Cuts
Nobody paid three trillion dollars to anybody. You can't "finance" something that hasn't been paid!
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169241)
Date: July 25, 2004 05:52 PM
Author: Chris
Manougian
Subject: Reaper !
Lets not forget , that the Boomers have paid for their parents retirement and have also paid in nearly 3 trillion dollars on top of that towards their own SS .
Good! I was looking for this type of counterpoint.
Chances are Cris that when your parents die you will inherit those SS payments in the form of their estate . Right ?
Reaper !, another good one. However, my case is not typical. You could also argue that the Boomers get double benefits with your line of reasoning.
Let's assume we're talking about a lot of other "youngsters" that do not stand to inherit an estate. Their prospects look awfully bleak.
I was definitely looking to flesh out the fairness issue. You've done a nice job. How would you fix the system?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168832)
Date: July 25, 2004 07:32 PM
Author: The Reaper
!
Subject: Chris Manougian & The Fix !
Cris , first off fixing it to me is more important than what some would consider fair . We have all ready upped the age of retirement , you may get another year or so out of that end of the spectrum but that's about it . Then I would immediately raise the amount of gross wages that a person pay SS taxes on , say to $150,000 of income . Then I would seriously consider means testing the benefits , lets say any one who has assets over 2 million dollars and or has a retirement income of $200,000 a year , gets ZERO . Then I would take back the Bush tax cuts and begin paying back the 3 trillion dollars that was borrowed from the fund . Last and certainly not least , I would put a stop to the medical heroics preformed on 90 year olds who have only a few weeks to live regardless of the treatments . Now , I warned you that this is not fair , but it is just , and it will prevent the country from going broke . The Reaper !
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168850)
Date: July 25, 2004 08:07 PM
Author: Chris
Manougian
Subject: Medical Heroics
A year and a half ago my 82-year-old grandmother had a heart attack a rather mild attack. My mother rushed down south to take care of her. The "Doctor" performed a CAT scan, and found problems (which was to be expected).
Without giving her any time to recuperate, the genius "Doctor" tells my mom that my grandmother needs a quadruple bypass. If it wasn't performed, she might last another "6 months".
How does the old saying go, "I don't like going to hospitals. People die in hospitals"?
Well, the "Doctor" performed her 4-way 48 hours after my grandmother's relatively mild heart attack.
The surgery was too much for her (hard to imagine, eh?). My grandmother suffered a stroke on the operating table and passed within 24 hours.
The "Doctor" got paid.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168859)
Date: July 26, 2004 09:04 PM
Author: Lucius Foster
Subject: I dumped my assets, fun to watch my children circle
the wagons
Dear Sir Edwards,
As a child watching the strange pudding drip from the ceiling of the dining hall at Winchester, I being the only "Colonial", I came upon a great truth.
"Mad Dogs and English Men Go Out In The Noon Day Sun!"
About a year ago I distributed all of my assets to all of my many children who have not been sucessful as accepted in this the merchantile society. The one young lady in the film business who averages a steady $10,000,000 a year I left untouched. But the lady Doctor who has this strange desire to save the people of an island rain forest from the forest itself, She can now play female godess to her hearts content and not short in funds for sun tan lotion. The Son who also has a feeling that he can do more then the Habits for Humanity he can now buy new saws and hammers to continue his quest for the holy grail achieving proper rain on the roof not on the heads of the unprotected. The son who is an attorney dedicated to no income and warm and fuzzy thoughts he can continue his fruitless law suits against the rich and infamous. Whatever. Besides it gives me a challenge to play once more in the grinding mess of woodchips at the bottom.
So Sir Edward; bar tet, be advised that some of the elderly flaunt the song of security and do not give into timidity. In other words dear sir, some of us are stark raving nuts. I enjoy it. On my last visit to London I went into my club and demmned me eyes if the same elderly gentlemen was not sitting in the same seat as last I saw him some ten years ago. "Hmm," he says, "The Yank Pilot, I see you changed your shoes." Go Figure.
Cheers Lucius
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169260)
Date: July 25, 2004 07:17 AM
Author: Arthur Gibson's Rabbit
Subject: Another facinating point.
I have been exercising my mind about the period 1922-1942. This was the two decade period prior to the first period that I examined. As we would expect, the DOW started and finished this period at exactly the same level! It was a period when the value of money was increasing compared to assets such as shares. Yet this period contains the immense stock bubble and crash of 1929! Could it be that this bubble and crash was just a very violent flux in the Matrix? It obviously was not part of the overall trend for the time, because the DOW returned to it's twenty year starting point when it was all over.
If we include this period, we have a simple formula that has been operating since the end of the First World War.
1922-1942 DOW makes 0% gain. 1942-1965 DOW makes 1,000% gain. 1965-1982 DOW makes 0% gain. 1982-1999 DOW makes 1,000% gain. 1999-202? DOW makes ?% gain.
Very odd!
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168613)
Date: July 25, 2004 10:02 AM
Author: Vinnie B
Subject: You guys sound like a bunch of preachers on Sunday morning
Like most preachers who happen upon a new "discovery" and shout it like you just found the holy grail, one thing is obvious to all.......
You're all still trying to figure it out, when in fact the one thing you have in common is.......
"I don't get it!"
Surfers know about timing and about waiting for those rogue waves.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168652)
Date: July 27, 2004 03:42 AM
Author: Agent Tokyo
Subject: surfing analogy... cont.
You are right. Most of surfing is about being at the right place at the right time. Its about watching the breaks, and when/where the more experienced riders paddle out. Tough part is, most of the predictable breaks are crowded. Even when the wave is good, you can have a bad ride. This does make those rogue waves very sweet indeed, when you happen to catch one. However, one thing IS obvious: even the most experienced riders have days when they "dont get it". Everyone is still trying to "figure it out", no matter what they think they know. Everyone still misses a wave now and then. Some of us talk about all this stuff (surfing and/or finance), and learn together. It helps make us better surfers and better investors (so we can spend more time surfing!) Don't knock us for it.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169391)
Date: July 27, 2004 06:38 AM
Author: SirEdward
the best pilot in the world won't get it on an IFR approach is he doesn't pay attention to his instruments for more than a few seconds. Etcetera.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169414)
Date: July 25, 2004 04:42 PM
Author: m.
Subject: clever little rabbit
Could the Dow bottom in 2007/2008? Then do the same pattern it made between 1932 and 1942, between 2008 and 2016ish?
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168813)
Date: July 26, 2004 08:17 PM
Author: Arthur Gibson's
Rabbit
Subject: The bottom for the DOW
I am convinced that the DOW has not bottomed from the boom yet. I am absolutely convinced of this. There are good buying opportunities, but overall, we are still on our way down from Y2000 and will be for many years to come.
We need to "stitch" the buying opportunities together to create our own bull market. But that is not easy.
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169246)
Date: July 26, 2004 09:23 PM
Author: Lucius Foster
Subject: One small missing consideration
1922 The Weimer Republic which created a no income situation for the Junkers of East Prussia which led to the backing of National Socialism and ooops Hitler and World War II.
I mean if I were a Junker of an old Military Family and suddenly all those nice mortgages created during 1915 to 1918 as they sold income property and came back with mortgages and then got paid off by the new owners pushing wheel barrows of worthless money I might be a little upset. Worst of all most of the new property owners were those that could see a good bargain and bought the apartment houses and commercial buildings with the Junkers taking back heavy mortgages up to and including 80%. Of course those seeing the value and buying were the backbone of the merchantile society. Mostly Jews who had been denyed almost every opportunity except money lending, banking and fix funds.
Could this have had an effect on the DOW? Did on everything else. The dump of trade in England. And poor France they practicaly had to drink their own wine. Hmm not too bad.
Think on this one of several events which while not resident in the US was of tremendous influence in all financial matters.
Cheers Luicus
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169266)
Date: July 25, 2004 02:42 PM
Author: Davis May
Subject: looks good
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(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=168767)
Date: July 26, 2004 09:54 AM
Author: gosfield
Subject: Take Cover - Worst Case Scenario
From Safe Haven July 26 by Charles Meek (be patient with me please, I'm trying to figure out how to post this correctly using Popeye's guide - Thanks Popeye)
Safe Haven article - Worst Case Scenario
I did it! Yahoo!
(http://65.88.90.51/forums/Index.cfm?CFApp=3&Message_ID=169027)