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Conservative Greed

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November 24, 2007 – Comments (7)

I have conservative greed... 

I have zero desire to find a top. 

I'll leave the tops for someone else. 

If I make a good return on a stock that I sold, I am happy and I couldn't care a less if that stock carried on to double again.

I'd rather leave the party early than late.

I'd rather watch the market in times of turmoil than risk my hard earned money. 

I'd rather be the first to panic.

I'd rather not be a victim to speculative greed.

GOOGLE'S GOING TO A $1000...

THE EMEGING MARKETS ARE THE PLACE TO BE...

GOLD'S GOING TO $2000...

IF YOU DON'T BUY A HOUSE NOW YOU'LL NEVER AFFORD ONE...

TECHNOLOGY IS THE PLACE TO BE...

HARD ASSETS WILL SAVE YOU... 

TECHNICAL ANALYSIS SAYS OVERSOLD, BUY, BUY, BUY... 

Sometimes we get what we deserve. 

7 Comments – Post Your Own

#1) On November 24, 2007 at 12:14 PM, GS751 (27.27) wrote:

Well Said.  I find it hard to sift through all the B.S in finance.

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#2) On November 24, 2007 at 1:22 PM, MakeItSeven (32.41) wrote:

I agree completely.  I couldn't care less about finding a great stock which will make me wealthy in 10, 20 years because I can do that in half the time and without relying on any "great stocks" to get there.  The only thing I care about is to meet my portfolio performance target of (unspeakably large percentage) gain each year.  I can usually meet that target after 8 months and then sell everything (I don't trust the market if I don't follow the news) and spend the rest of the year playing games. 

The only reason I'm still hanging around the stock market at this time of the year is because taxes (fed + state) are getting to be almost 50% of my gain so I work a little extra to pay for the taxes.  I don't care if I had a 2-bagger, or 10-bagger at some point in my life at all.

Since so many people mention Buffett around here.  Buffett said about 6 months ago (probably in response to some criticism) that he could have doubled his portfolio each year too if he had managed a smaller portfolio.   However, it seems a lot of people are trying to simulate what Buffett is doing, constrained by the lack of maneuverability due to his large portfolio, rather than what he said he could be doing otherwise,

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#3) On November 24, 2007 at 2:35 PM, dwot (54.27) wrote:

I tend to be more of your kind of investor MakeItSeven...

I absolutely agree with Buffett's position that he could have doubled his portfolio managing a lessor amount.  Anything he touches he changes the share price, up when he buys and down when he sells.  My investments of generally $2-20k per stock don't change the price at all.  He has no choice but to do long term investing because of how he moves the share price with investing. 

I have no doubt that had I been in the market and managing my investments like I did starting in the summer of 06 I'd have doubled each year, but I also have zero faith that I could even maintain my investments in today's market, hence I am in cash.

The market conditions have so changed I think a number of my former picks will simply give back all gains.  The market conditions have change far more rapidly than I ever expected, yet a lot people still don't seem to realise how much they've changed.

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#4) On November 24, 2007 at 4:54 PM, dwot (54.27) wrote:




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#5) On November 24, 2007 at 4:54 PM, dwot (54.27) wrote:

Nope....

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#6) On November 24, 2007 at 11:37 PM, MakeItSeven (32.41) wrote:

The problem with a lot of bullish argument I've heard is that they based a lot of their reasoning on empirical knowledge, i.e. from their own experience.

In a way, their reasoning is not too different from the values of the mark-to-model CDOs which assumes that default rates never exceeds a certain percentage, even in the worst of time and housing prices never go down nationally, all based on factual historical precedence.   Or, the assumption from the homebuilders that housing market could never go down without a recession and with a low unemployment rate.   Only after things go in the opposite direction, they started to realize that their "expert" experience deceived them.   It's sad to hear people quoting their 20, 30, 40, 50 years of experience and then said they had never seen anything like this.

For the future of the market, I have a hunch that it will be another case of "Nobody could have expected it, we've never seen anything like this.", despite none of the new facts matched what we have experienced before. 

Anyway, this is one of the things we have not seen before: Americans start to think that their inability to handle their excessive debt is a bigger problem to the economy than the scary terrorists:

"NEW YORK - Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday.

Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics.

NABE, a Washington-based association, said 32 percent of its
surveyed members cited loan defaults and excessive debt as their biggest near-term concern."

That's definitely a change.  Who could have expected that excessive debt could be detrimental to one's financial security ?  At both the national and personal level, we've been doing that for over 20 years and no harm has ever come out of that apparently.

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#7) On November 25, 2007 at 4:29 AM, dwot (54.27) wrote:

Linked page is gone...

I guess I have experiences that tell me otherwise.  It is interesting how you put it to emperical personal experience.  I just figure what I've seen in the economy here in Vancouver from our last housing top, which I bought in, and having the very personal experience as to how it robs you of way too much disposable income and many of the things you wanted to do, and in the bigger picture, how withdrawn you are from doing anything to stimulate the economy. 

I think the affordability figures from Vancouver's last top probably match many of the affordability figures in the lessor hit communities thought out the US.  I would estimate the median house price/median household income ratio was probably around 4ish back then, maybe a bit higher.

Additionally, in my working life our wages have been grossly flat here.  Lots had a few years where they had zero increases.  A lot of that emperical data is based on seeing growing wages relative to debt.  Getting on top of the debt when wages are flat is hard, especially when costs are going up considerably around you.

My personal experience says that this subprime mess is going to suck the life out of the economy for years.  Many people that don't lose their homes will be debt slaves to their homes, and they will not be doing much spending in the economy.

The US has 14 of the 25 most unaffordable housing markets.  Out of 107 cities looked at in "3rd Annual Demographia International Housing Affordability Survey:  2007 Ratings for Major Urban Markets," the US has about 35 affordable, 28 moderately unaffordable, 17 seriously unaffordable and 27 severely unaffordable.

You can not have this wide spread degree of spending power sucked from the economy and not expect it to not have serious implications to wage growth, to corporate margins.

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