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alstry (35.46)

What TMF could have been

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February 15, 2009 – Comments (16)

For the past year...a number of the TMF bloggers have said this blog provided little investment insight.  That it was too negative....that it didn't provide much benefit or solid ideas.

Let's look back and see what Alstrynomics warned about....

It warned that the banking system was insolvent.

That residential real estate was going to implode and likely not recover for many years.

It warned that unemployment was going to skyrocket.

That the earnings on the S&P were going to turn negative.

That cities and states would likely go bankrupt.

It indicated that unemployment would skyrocket.

Commercial RE vacancies was going to be huge.

Retailers would shut down in numbers we have never seen before.

Airlines would go out of business.

Hotels would be in trouble.

Technology spending would slow.

Bankruptcies would reach levels we have never seen before.

CRE debt would start defauting and ever increasing rates......

That wages and prices of just about everything would decrease and Deflation would follow

So what did Alstry do.....basically red thumb everything in sight and go to cash for safety......it ain't to difficult to guess what to do when the mother of all economic tsunamis is coming........run to higher ground.....it ain't too complicated.

Now..... the wave is just hitting the shore and the visible destruction is about take place.

Instead of TMF being the Nuriel Roubini or Nasim Taleb of the media investment world...it chose to ridicule Alstry and Alstrynomics.....now most of the TMF CAPs players are under performing the market and experiencing negative ACTUAL returns in real life.....

It is not that Alstry is laughing nor is he ridiculing TMF or its writers....on the contrary......he feels bad for TMF and those that chose to follow the advice.....but the next time TMF or its writers chose to make fun of another player or his ideas.....make sure it or they look at themselves first........some of the predictions have been pretty funny and the results even funnier.

Who knows what the future holds.....but I have little doubt about one thing......it is highly likely when most of you become very bearish and the whole world looks dark.......Alstry will be one of the first bulls in the ring with a very very optimistic outlook.......

Fool on my fellow Fools......

16 Comments – Post Your Own

#1) On February 15, 2009 at 1:53 AM, Seano67 (80.07) wrote:

Alstry, I've got to be honest with you. I tease you, but that's all in fun. There's no mean-spiritedness or malice involved in that at all, on the contrary, I think you're a very entertaining character, and I wouldn't even bother responding to your blogs if I disliked you or thought you were a creep.

Anyway, I wish I'd found the Motley Fool, and more specifically the blogs on this site much sooner than I did. Had I done that and been made aware of the warning signs which were apparently everywhere, I could have saved myself a hell of a lot of money by pulling out of the market before it collapsed. You see, I was an entirely disengaged investor, meaning I bought stocks, held them, and then just failed to pay attention to my stocks or to the larger macroeconomic environment overall.  I was not a hands-on investor by any stretch, because I figured that buy and hold was a proven strategy that could not fail. I'm not a trader, as I have nowhere near the expertise for that, and beyond that I just didn't want my investments to become my life, if ya know what I mean. I've got a job, I teach English and History to 6th graders, I've got three young sons to raise- in other words I felt I have more than enough stuff going on in my life to where I didn't want to nor did I feel I needed to pay much attention to my stock portfolio or what was happening in the larger economy...and so that willful cluelessness is what caused the value of my portfolio to become nearly sliced in half, and what caused me to ride GE, BAC and every other stock I owned literally ALL the way down, as opposed to getting out early enough to where even if I didn't get a capital gain, I could have at least cut my losses to a reasonable level. But as it is, my losses are about catastrophic. I feel an absolute fool in hindsight, but all I can do is take this as a very painful lesson learned, and start freaking paying attention to things from here on out. And that's why I'm so glad I found the Fool, these blogs, and free access to the thoughts and opinions of people who are far, far more knowledgeable than me about business, economics and the stock market.

So, keep doing what you do. That's all....

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#2) On February 15, 2009 at 9:57 AM, alstry (35.46) wrote:

Young Broadcasting files petition under Chapter 11

Trump Entertainment may face forced bankruptcy filing

UK's ITV may cut at least 500, or 10%, of jobs

Charter Communications.........

5 Banks shut down over the weekend......

GM to say more aid or bankruptcy

We are now in a new phase of Alstrynomic's Concentric Contraction....the reorganizatioin phase.....it is very possible that over 50% of all American corporations and over 75% of state and local governments will be forced to reorganize/file bankruptcy. 

This is the point where layoffs will really start  to accellerate.

It is not the end of the world....just the next phase.  For those who are not prepared, many will lose their entire life's savings.... but after we go thru the process, the nation will be purged of the debt cancer and positioned for a recovery....unless we are forced down a different path leading very likely to a protracted conflict.

For the past year....Alstry has been warning you hour after hour, day after day, week after week, and month after month that we were going to reach this point while many TMFBloggers just ridiculed or remained conspicuously silent while a host of CAPs blogger initiated attacks against Alstry. 

Alstry didn't mind the attacks from other CAPs bloggers, that is part of the socratic process and can be fun in the heat of a game......but was a bit disappointed that attacks or acts of omissioin that also came from TMF. In looking back....I should have appreciated that a bunch of English majors would have had a difficult time seeing the entirety of the distress about to hit the shores of our country....so I hold no grudges....just disapointment at the countless members who could have been helped had TMF been a bit more proactive.

But maybe TMF can learn from this experience for the future.

Others on CAPS have sounding the warning bell as well.....DWOT comes to mind first as one of the most comprehensive. 

I would love to give Sinchi more credit about metals...but the data remains inconclusive at the present.  As far as the calls for inflation/hyperinflation......it just currently seems so far removed from any possiblity of reality that making that the basis for a rise in metals seems intellectually challenged at best.....but that doesn't mean metals can't skyrocket because people "emotionally perceive" it to be a safe haven....and I am sure Sinchi will keep us updated with solid info on the subject.

Now that I have started buying a bit of silver....I can see its intoxicating effects on those that play in the physical space.  I have always preferred the real thing over watching my whole adult life.

Demon is my common sense buddy......it may take a while to convince him...he sure puts up a solid and cogent fight protecting his position, but he is honest enough to call a spade a spade when he finally sees it in his hand. 

This is how many of my past and current friendships were formed with opposing counsel or CEO's of corporations that I invested into.....occasionally.....it was Alstry holding the spade.

The past is now behind us and the mother of all economic tsunamis is hitting the shore....we are going to be seeing and reading about some pretty amazing things.  As I see it there are two probable paths we may go down....one painful leading to a strong foundation for recovery.....and the other one.....let's just say not nearly as positive.

Thanks to all of you who have come along for the ride....for those of you that are choosing to short this game like Alstry....make sure your surfboard is in good shape and waxed ....BUT PLEASE BE VERY CAREFUL....it is far more difficult to be a successful shorter than I ever imagined.......even if you are a fantastic fundemental analyst....too often you are DEAD before you are eventually proven right.

For the rest of you...think about going to high ground and maintaining at least one year supply of cash, two is even better.....Tsunamis suck and you are better off taking your family to high ground while watching people wash out to sea than trying to swim thru it.....

At this point, very little about what I post is much fun....I have tried to tell you that.....but soon....hopefully very soon....PostiveAlstry will emerge with a very different perspective on the future.

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#3) On February 15, 2009 at 12:51 PM, Jimmy2008 (< 20) wrote:

Alstry,

Now that I have started buying a bit of silver....

Why did you buy physical silver? Dollar devaluation? Bank holiday?

For the rest of you...think about going to high ground and maintaining at least one year supply of cash, two is even better.....

Most people wouldn't have enough cash for 2 years expense. Also, what could happen if the dollar suddenly devalues and cash suddenly becomes trash? How would you keep your 2-year cash? In a foreigh currency like Swiss Franc, CAD, Aussie dollars? Or just USD?

I would like to know your thought. Thanks.

 

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#4) On February 15, 2009 at 2:26 PM, alstry (35.46) wrote:

I am purchasing a little physical silver because its fun and relatively cheap.  It comes in different sizes, shapes, and makes a great poker chip set. 

In addition, metals can rise in value unexpectedly and rapidly if fear increases....regardless of inflation or whether currencies strengthen or weaken.  So, if I were to make a bet on metals rising in price...it would be based on my expectation on an increase of fear and negative emotion rather than a weakness in the dollar or inflation.

For those that don't have a few years supply of cash.....than put away as much as you can.....if the dollar suddenly devalues...my guess is all other currencies will devalue even more.

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#5) On February 15, 2009 at 2:27 PM, RonChapmanJr (94.18) wrote:

saving up 1-2 years worth of expenses is not realistic for most people.

here is a site i run - www.survival-information.com - that is helpful in getting people to prepare for any type of disaster that may come their way.

peace,

ron

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#6) On February 15, 2009 at 2:38 PM, alstry (35.46) wrote:

Ron,

I have little to challenge your perspective of a solution.  Quite frankly, if the world gets to the point where you contemplate, first, the distress could be so bad that I have little confidence that your proposed solutions would help (ie.  a nuclear war or mass rioting), and second....if it really did get that bad....I am not sure it would be a world I would really enjoy living in.....

I love life...I love solving problems....I am confident there is a human solution to the current problem, and I think I know what it is......it is just getting there will be a bit painful and in the end the future will look even better than before we started.

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#7) On February 15, 2009 at 3:51 PM, Jimmy2008 (< 20) wrote:

Some visitors to this website are very worried about dollar devaluation that they don't keep much cash in USD. For 1-2 years emergency cash, I would not keep all of it in USD. Maybe some in Aussie dollar and some in CAD.

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#8) On February 15, 2009 at 7:30 PM, RonChapmanJr (94.18) wrote:

alstry,

i think you may be adding something to my ideas.  i have never mentioned nuclear war or even mass rioting.  yes, in those situations, 6 months worth of food isnt going to help, but in slightly less severe situations, it could be life saving. 

i am interested in what advice you have that is actually feasible for the average guy. 

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#9) On February 15, 2009 at 7:44 PM, tx2346 (< 20) wrote:

RE: Beware of 'Short' strategy.  before you leap, do this:

Get a list of ETFs that use shorting. Here is the Yahoo Finance 'Bear ETF/ProShares' list for example:

http://finance.yahoo.com/etf/browser/mkt?k=6&c=etf_bm&f=32&cs=1&ce=40

at YahooFinance, get a Quote screen for SPY (S&P500), make a 1-year smart chart, then add a few of the bear ETFs to compare:  start with 'SH' which is supposed to be the inverse of SPY. Note that it would've taken a magic sense of timing to gain anywhere near the full benefit. Now try DDG -- Oil&Gas, which have continued to plunge still... yet, even more so, it would've taken magic timing to profit via DDG. Now try the 2x leveraged version, DUG:  massive loss to those who naively thot shorting OIL would be an easy gain!

 

 

At Ya

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#10) On February 15, 2009 at 7:52 PM, tx2346 (< 20) wrote:

I can 'second' Seano67. I'm in the same half-sunk boat. Now that i'm convinced of the foolishness of blind-faith 'buy-and-hold', i'm looking for that rarity: good timing advice. I'm only interested in someone who proveably anticipated the market meltdown, and whose personal investments have avoided major loss (bonus points for actual gain). There are alot of liars who are claiming wisdom in hindsight; and some who gave advanced warning but didnt really adjust their own investment strategy and so lost as much as I did.  However, i may be that you ALSTRY are the real deal, so i am now following. Thanks!

PS: i'd really appreciate feedback on some ideas about the crisis which i've posted:

http://bright-ideas-thomas.blogspot.com/2009/01/what-is-money-why-we-need-national.html  

any non-sarcastic comments would be welcomed. THANKS!

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#11) On February 15, 2009 at 10:45 PM, ColoCdn (< 20) wrote:

Alstry, I've been following your blogs for some time and have always appreciated your perspective.  To your critics, I say fear is driving them to ridicule.

I have a wealthy friend who was very worried about Y2K.  He took extraordinary precautions, because he could.  While being ridiculed for taking the threat seriously, he slept soundly at night knowing that he had at least done all he could.  I'm not sure his critics could claim the same, but I am sure that if worse had come to worse, those same critics would have come knocking on his door looking for help.

I believe the current situation has the potential to be much worse than the forecasts for Y2K, and I'm doing what I can.  You mention holding dollars in reserve, and I'm curious about that since the Peter Schiffs of the world are calling for a complete collapse of our currency.  I'm currently holding about 80% CAD - not exactly by choice; I'm a Canadian citizen living here in the US - but am hesitant to convert it... largely because of the current rate of exchange, but partly because I'm also not sure what the future holds.  Anyway I'd love to hear any further thoughts on why you believe the USD will hold up.

Thanks for helping to keep things real here at TMF...

-Rob

 

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#12) On February 15, 2009 at 11:12 PM, alstry (35.46) wrote:

Rob,

The answer is simple.  A nations currency is simply a non interest bearing note back by the NET assets of that nation.

There is no country in the world with a stronger asset base relative to the US.  Absent entitlement obligations, no country comes close to the NET assets of the US.

As such, America can easily confer value to to holders of its dollars whether it be mineral rights, oil, gold, land...you name it...the American government owns a lot of it and a lot more than the dollars issued.

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#13) On February 16, 2009 at 10:32 AM, nuf2bdangrus (< 20) wrote:

Alstry...I was short and still lost....because you have to be short at the right time.  I was as bearish as you, but allowed myself to be convinced that my views were extreme, and that the Fed was in control.  We now see how out of control they are.  that said, we are closer to the bottom than the top, although by no means have we seen total capitulation.  I have a diversified strategy, short US treasuries, long paper and physical gold, long select health care, long high quality preferreds JPM, and trading ultrashorts as a hedge.  There will be great opportunity on the other side....but we're not there yet

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#14) On February 16, 2009 at 10:58 AM, Jimmy2008 (< 20) wrote:

ColoCdn

I am Canadian living in US, too. Nobody has answered my latest question to this blog. What I am doing is the following:

Keep one month cash in USD; keep 50% of my emergency funds ( about one year expense) in paper silver and gold (so far, up about 20% in 2 months); keep 50% in physical gold/silver but keep them in CANADA. If I need cash in USD, it will only take a phone call. Gold and silver are very liquid now. And they appreciate, too. I will cash in some paper gold/silver and convert it to CAD. I have recently got a Visa from a Canadian bank and I can use it in the US. CAD is not likely to depreciate much, as it is cheap compared to USD and Cadana government and Canadian banks are in better financial shape than American counterparts.

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#15) On February 16, 2009 at 12:32 PM, ColoCdn (< 20) wrote:

Alstry - thanks for the follow-up comments; I prefer your explanation to those who say foreign countries will stop buying our debt.  I believe there will always be some safety in USD; in a world gone amuck, things might get bad here but they'll probably get a lot worse in other parts of the globe.

Jimmy2008 - the USD vs CAD issue is a tough one.  I'd like to think CAD doesn't have much more room to the downside, but I'm not sure.  As long as USD keeps holding up, I don't see the gap narrowing - and lots of speculation here that the rate will continue to widen in 2009.  Just the same I'm planning on following a similar strategy by keeping the major percentage of my Canadian physical assets and cash in Canada for the time being.  As you say a transfer is just a click away...

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#16) On February 16, 2009 at 12:47 PM, Jimmy2008 (< 20) wrote:

ColoCdn,

 I'd like to think CAD doesn't have much more room to the downside, but I'm not sure.  As long as USD keeps holding up, I don't see the gap narrowing - and lots of speculation here that the rate will continue to widen in 2009. 

That's why I keep most of my emergency funds in gold and particularly in silver. For now, I am not particularly worried about depreciation of gold and silver, as they have appreciated about 25% for me. 

Some people, including me, are very worried about devaluation of USD. We are paid in USD, Our house is denominated in USD. Have some CAD is a way of diversification. I believe that the downside risk to USD overweighs the downside risk of CAD.  Peter Schiff, in a recent radio show, preferred Aussie dollar and CAD over USD. 

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