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OT: My two cents on the current Stock Market.

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Old 07-19-2002, 05:33 PM
  #21
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Quote:
Originally posted by Neverfastenuf
UT and Shane, you guys buying right now????? Killer values now(down 433???). The making of new millionaires.
You got that right.. Show me the $$$$$$
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Old 07-19-2002, 05:46 PM
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Any buy suggestions?
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Old 07-19-2002, 06:56 PM
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I've always felt that real estate has been more stable and safe..

Over the years we've been in the financial markets our real estate has always returned more in the long term.

Pulled out of the aggressive funds months ago and returned to a portfolio composed of more real estate and bonds than anything else and after watching the market tank 400 points today , I'm glad I did.

However , I might think of jumping back in when the Dow falls below 7600 and I think it just might..

Just my .02 !
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Old 07-19-2002, 07:13 PM
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Real estate payes most of my bills with just 3 rental homes and one Quad apartment.My goal is ten homes!
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Old 07-19-2002, 07:32 PM
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Cobra Marty – Sorry, can’t offer specific information. That would put me in conflict with what we do for our clients. I need to keep this on a philosophical level.

Philip – Your gambling analogy is right on! In all my years I have never casually ran into a true speculator. True speculation is neither illegal nor immoral; it is a full time business. What I typically hear (or at least use to hear) at the cocktail hour is something like, “Oh, you’re an asset manager. Well I am a doctor (accountant, engineer, business owner, whatever) but I make more money buying and selling stocks – or – I just love to trade XYZ.” I never have, but I would like to come back with, “Well, asset management is my day job, but on the weekends I like to dabble in brain surgery.” The point is, true speculators work hard at what they do and it is a 100% full time profession. The rest are probably just gamblers who don’t get free drinks!

32fever – You touched on a couple of important issues: the SEC and management compensation. First, the SEC is there to ensure investors have the information they need available to them so they can make inform decisions and to police the rules resulting from that intent. They do a reasonable job and I can tell you from first hand experience, they are vastly superior to what others countries offer! But don’t hold your breath. They can no more stamp out injustice in investing than Troutly can stamp out drunk driving.

Accounting, which is the real issue, is the art of giving concise summaries of ungodly large amounts of data. When you look at financial statements, you are actually looking at answers. However, if you don’t know the questions, what good are the answers?

Auditing, which is performed by public accounting firms, was never set up to catch fraud. It is based on the idea of offering an opinion on the reasonableness of the numbers MANAGEMENT has presented by performing statistical sampling. I will admit that having auditing and consulting under the same roof is inviting conflict. Especially when auditing is such a low-margin business and consulting is such a high-margin business. Who do you think is going to do the saluting?

Second, management compensation is critical. What you have described is the age old, heads I win, tails you loose. Typical compensation schemes are not structured to make management think like business owners. Stock options are the classic example. I believe Warren Buffett describe them as free lottery tickets on the stock market having little to do with the business fundamentals for which management is responsible. We saw this in the extreme with the savings and loan disaster in the late 80’s. Management could take all the risk they wanted with depositor’s money. What the hell, if it goes bad, the government bails out the depositors.

Knowing all of that, how do you decide when to invest? As Benjamin Graham said, when you have a significant margin of safety in your favor. In fact, he considered margin of safety the central concept of investing! In other words, when investing, you need a big cushion against the negative unforeseen event(s). Key emphasis here should be on the word “significant!”
 
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Old 07-19-2002, 09:26 PM
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Default It's an opportunity!

When the market fell to 8600 in April of 2001, I took most of my Money Market funds and invested it in a variety of mutual funds. I would kill for a boatload of cash right now to be able to do the same thing again.....

"Buy low and sell high."

Hint: It's "Low" right now.
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Old 07-19-2002, 09:51 PM
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Default Re: It's an opportunity!

Quote:
Originally posted by C_Spray
When the market fell to 8600 in April of 2001, I took most of my Money Market funds and invested it in a variety of mutual funds. I would kill for a boatload of cash right now to be able to do the same thing again.....

"Buy low and sell high."

Hint: It's "Low" right now.
How much you need.$$$$$$$$
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Old 07-19-2002, 09:59 PM
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Default Done well in the Market

LOve these corrections ..great time to buy..
Good info Uncle T
My 2 cents .. If you dont know what a P&E ratio is forget it ..This is the best indicator of how a business is doing !
My favorite by Gerrold Lobe " Battle for investment survival" a must read ..
" Pigs get fat , HOGS get slaughtered"
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Old 07-19-2002, 10:20 PM
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Default Re: Re: It's an opportunity!

Quote:
Originally posted by bajabob38
How much you need.$$$$$$$$
20% of your net worth. I'll pay you 2%/year - After all, that's what the bank tells me my cash is worth....
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Old 07-20-2002, 11:21 AM
  #30
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Wes Smith – Real Estate is a great example. No one gets a monthly/quarterly statement on their home.
 
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