Scary

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B24
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Ron 14's picture
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What is scary about it ?

B24's picture
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Oh, I don't know.  Maybe the eerie similarity between 2000+ and 1929+.  If history is a guide, and we continue tracing the same path we have the past 9 years, and follow that trend, we would be sideways for the NEXT 9 years.
 
Are you just trying to be a punk, or were you seriously wondering?

jkl1v1n6's picture
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That is scary for the 55+ crowd.  I think for anyone younger that it means we have more years to stuff as much away as we can at lower prices and then HOPEFULLY watch it explode higher at or near retirement.   

troll's picture
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Now you know why Indexed Annuities make more sense than anything else. 

Ron 14's picture
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B24 - Trying to be a punk because I am so tired of this gloom and doom crap. If we move sideways for 10 more years the only person that shouldn't be in the market is someone who is 80. If you are 70 take your dividends and income and smile.

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I wouldn't call it doom and gloom.  If someone could go back and tell you that the market would crash in 2000 for 3 years, and again in 2008, would you call that "doom and gloom"? 
 
Trying to be realistic here.  It's about economic indicators.  Unemployment, PE ratios, inflation instability (both low and high), real estate values and liquidity, credit availability, etc.  There's plenty of things to be concerned about.  But by understanding these things, we can actually help our clients profit from (or be "less hurt" by) this instability, rather than just sit back and be victims and whine about all the "doom and gloom".
 
So what if you are 50?  You just wiped out a lifetime of investment growth in the past 10 years (most didn't start investing until their 40's, so they spent the past 10 years most likely losing money, since it's all in their 401K's, which are generally terrible).  So if the NEXT 10 years goes sideways, then that means 20 years of no growth, and puts them close to retirement age.  Wouldn't you rather have a PLAN than just hoping for the best in market?
 

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How exactly have they lost money over the last 10 years ? If they were 40, were contributing each and every month into their 401k's in a generic balanced asset allocation fund they are up a 1% or so and have accumulated a ton of shares. You can read economic indicators, PE ratios, unemployment and all the jazz until you are blue in the face, it wont change the fact that systematically making deposits and systematically making withdrawals, while keep clients in an allocation they can stomach is the only way to succeed over time. Most people won't do that, won't stick to a plan and that is where we come in. Not to read economic indicators and play bozo buckets with their funds.

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B24 wrote:Oh, I don't know.  Maybe the eerie similarity between 2000+ and 1929+.  If history is a guide, and we continue tracing the same path we have the past 9 years, and follow that trend, we would be sideways for the NEXT 9 years. 
 
I can only wish!!!! Talk about arb heaven. While the trend traders are sniveling I'll be making huge amounts of $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

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Ron 14    "ONLY WAY"
 
Dude I hope you are not so narrow minded as to think that same old schtick is the only game in town.

Ron 14's picture
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We have gone over this before. For long term retirement money I believe that is the best game in town, is it the only game, no.

Gaddock's picture
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Well, you said "only way"

Ron 14's picture
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Well it isn't possible to make systematic withdrawals from options that haven't expired

Ron 14's picture
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I am not convinced that discretionary trading of options within clients retirement accounts will succeed over time. If that makes me closed minded so be it.

Gaddock's picture
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Ron 14 wrote:
Well it isn't possible to make systematic withdrawals from options that haven't expired
 
?????? AND ????????
 
You can't spend a dividend until it's paid so WTF is your point?
 
Not trying to convince you Ron.
 
 

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Ron 14 wrote:
I am not convinced that discretionary trading of options within clients retirement accounts will succeed over time. If that makes me closed minded so be it.
 
I think the words "closed minded" is being kind.
 
Whatever blows up your skirt Ron. 

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Gaddock wrote:Ron 14 wrote:
Well it isn't possible to make systematic withdrawals from options that haven't expired
 
?????? AND ????????
 
You can't spend a dividend until it's paid so WTF is your point?
 
Not trying to convince you Ron.
 
 
 
My F'in point is that systematic withdrawals are something I use for clients in retirement. It isn't possible to make systematic withdrawals from options that haven't expired. And because I still don't agree with you after all of these discussions and you don't agree with me you play the tough guy routine. Like I said, let me know when you fly into Chicago, I will meet you at the airport.
 
 

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Tough guy routine?????? Is your skin that thin? What are you going to do Ron? Beat me up?????? 
Perhaps if you would refrain from making moronic statements like my way is the "ONLY WAY" you would not be so easily picked apart.
 
I do enjoy your excitability. It's really quite amusing.

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B24's picture
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Ron 14 wrote:How exactly have they lost money over the last 10 years ? If they were 40, were contributing each and every month into their 401k's in a generic balanced asset allocation fund they are up a 1% or so and have accumulated a ton of shares. You can read economic indicators, PE ratios, unemployment and all the jazz until you are blue in the face, it wont change the fact that systematically making deposits and systematically making withdrawals, while keep clients in an allocation they can stomach is the only way to succeed over time. Most people won't do that, won't stick to a plan and that is where we come in. Not to read economic indicators and play bozo buckets with their funds.
 
OK.   Just keep doing what you're doing. 
 
 

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I will thanks. This time is different. When I made a post about what to do with 200k at Dow 7000 you wouldn't even go full boat into equities. Didn't your "indicators" and "ratios" signal buy buy buy ?

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Ron 14 wrote:How exactly have they lost money over the last 10 years ? If they were 40, were contributing each and every month into their 401k's in a generic balanced asset allocation fund they are up a 1% or so and have accumulated a ton of shares. You can read economic indicators, PE ratios, unemployment and all the jazz until you are blue in the face, it wont change the fact that systematically making deposits and systematically making withdrawals, while keep clients in an allocation they can stomach is the only way to succeed over time. Most people won't do that, won't stick to a plan and that is where we come in. Not to read economic indicators and play bozo buckets with their funds.
 
What's a bozo bucket?  Serious question, Ron.

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Ron 14 wrote:
I will thanks. This time is different. When I made a post about what to do with 200k at Dow 7000 you wouldn't even go full boat into equities. Didn't your "indicators" and "ratios" signal buy buy buy ?
 
Poor little Ron. 

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Bozo the Clown is a show I watched before school growing up. Basically Bozo the Clown would pick a kid out of the audience and they would get a ping pong ball and stand at the foot of six buckets. Each one you made you got a prize and the chance at the next bucket. A majority of kids would get 2 or 3, miss and go crying back to their parents in the seats. Very few would get the bicycle after the 6th bucket, the best prize of them all. It is kind of like market timers. They read all of these indicators, ratios, commentary etc. They may hit on a few, but in the long run they go running back to their parents crying.

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Ron 14 wrote:Gaddock wrote:Ron 14 wrote:
Well it isn't possible to make systematic withdrawals from options that haven't expired
 
?????? AND ????????
 
You can't spend a dividend until it's paid so WTF is your point?
 
Not trying to convince you Ron.
 
 
 
My F'in point is that systematic withdrawals are something I use for clients in retirement. It isn't possible to make systematic withdrawals from options that haven't expired. And because I still don't agree with you after all of these discussions and you don't agree with me you play the tough guy routine. Like I said, let me know when you fly into Chicago, I will meet you at the airport.
 
 Ron, I'm going to Milwaukee this summer for weekend (TBD) of Brewers Baseball.  I'll let you know when I'll be there.  We should meet half-way in Racine and have a chat...

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I am in. It won't be hard to find the guy carrying around the Favre blow up doll.

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BerkshireBull wrote:
Ron 14 wrote:Gaddock wrote:Ron 14 wrote:
Well it isn't possible to make systematic withdrawals from options that haven't expired
 
?????? AND ????????
 
You can't spend a dividend until it's paid so WTF is your point?
 
Not trying to convince you Ron.
 
 
 
My F'in point is that systematic withdrawals are something I use for clients in retirement. It isn't possible to make systematic withdrawals from options that haven't expired. And because I still don't agree with you after all of these discussions and you don't agree with me you play the tough guy routine. Like I said, let me know when you fly into Chicago, I will meet you at the airport.
 
 Ron, I'm going to Milwaukee this summer for weekend (TBD) of Brewers Baseball.  I'll let you know when I'll be there.  We should meet half-way in Racine and have a chat...My wife just called me a dork for laughing out loud 3 times reading a RR forum post.  I need to get a life. Actually, judging by the number of people still posting I think a lot of us do.

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B24's picture
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Ron 14 wrote:
I will thanks. This time is different. When I made a post about what to do with 200k at Dow 7000 you wouldn't even go full boat into equities. Didn't your "indicators" and "ratios" signal buy buy buy ?

 
Owned.
 
My 7 year-old has calmer tantrums than you.  A little red in the face, Ronnie?

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Ron 14 wrote:
I will thanks. This time is different. When I made a post about what to do with 200k at Dow 7000 you wouldn't even go full boat into equities. Didn't your "indicators" and "ratios" signal buy buy buy ?
 
No they didn't.

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Ron 14 wrote:Bozo the Clown is a show I watched before school growing up. Basically Bozo the Clown would pick a kid out of the audience and they would get a ping pong ball and stand at the foot of six buckets. Each one you made you got a prize and the chance at the next bucket. A majority of kids would get 2 or 3, miss and go crying back to their parents in the seats. Very few would get the bicycle after the 6th bucket, the best prize of them all. It is kind of like market timers. They read all of these indicators, ratios, commentary etc. They may hit on a few, but in the long run they go running back to their parents crying. It was called "The Grand Prize Game."

Ron 14's picture
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Bingo. Thank you.

troll's picture
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Ron 14 wrote:Bingo. Thank you. You're showing your age. When  I was little, it was on at noon.

Ron 14's picture
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The show was on for about 50 yrs, but ok.

Ron 14's picture
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Back to B24's original point. I just read the June 15 article in WSJ, Is This Bull Cyclical or Secular ? 4 different managers were talked to and they all had different thoughts. How the hell are we supposed to establish a valid market viewpoint ?

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Ron 14 wrote:Back to B24's original point. I just read the June 15 article in WSJ, Is This Bull Cyclical or Secular ? 4 different managers were talked to and they all had different thoughts. How the hell are we supposed to establish a valid market viewpoint ? You work for a bank. You don't get a viewpoint. THe market will go up, down, and sideways. Prepare for all possibilities.

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I know this and that is the side of the argument I am on. It seems as if I am in the minority. Most guys on here have a market viewpoint and are advising to it.

troll's picture
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Ron 14 wrote:I know this and that is the side of the argument I am on. It seems as if I am in the minority. Most guys on here have a market viewpoint and are advising to it. Most guys have been wrong for 9 years. Do you want to be like them?

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No

Gaddock's picture
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Market neutrality; I don't care what way it goes I get a desired effect. When somebody asks me where the market is going. I break out my magic eight ball, for real.
 
The ONLY thing I know for certain is I have no clue where it's going.

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Ron 14 wrote:
Back to B24's original point. I just read the June 15 article in WSJ, Is This Bull Cyclical or Secular ? 4 different managers were talked to and they all had different thoughts. How the hell are we supposed to establish a valid market viewpoint ?
 
It's secular, no doubt.  I didn't read the article, but I am guessign the bulls have a vested interest in it going up, and the bears have a vested interest in it going down.
 
You have to look at history, PE ratios, and inflation (not just high inflation). 
 
I don't think the market is going down much from here.  I think it goes relatively sideways for the next 5-7 years until earnings can catch up with the PE ratio.  The market level never eases on the regression line, it typically bounces over and under.  1999/2000 saw the PE escalate the furthest above mean in history.  Long-term growth and inflation rates don't change.  The have been generally 3.5% and 3% forever.  The big variable has been the rise and fall of the PE ratio.  With so many large companies in the S&P losing money right now, the PE ratio is distorted, so it will take some time to work out valuations.
 
As a caveat, I am not saying I have all the answers as far as how to invest in this environment.  But it is safe to say that a more defensive, nimble approach works best in secular bears.  Buy-and-hold works the best in secular bulls (like 1982-1999, you could pretty much own anything and do well).

Ron 14's picture
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What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?

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Ron, do you have a link?  I can't find the article.

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Ron 14 wrote:
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
 
I doubt one would consider an annuity or mutual fund 'nimble'. I guess you could with bonds if you traded them.
 
Ron, ever hear of options?

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B24 - Let me try and find it
Gaddock - well played

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Ron 14 wrote:
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
 
Yes, yes, and yes, among other things.
 
In a sideways market, you need to lock in some returns.  Paying down debt, fixed annuities or VA income riders, intermediate/short bonds....I would stay away from Treasuries right now in favor of TIPS.
 
Emerging market equities and bonds, small caps, currency plays, gold and other commodities.
 
Mind you, I can't necessarily pick the right assets at the right times.  I tend to use managers that know how to do this.  IVY Asset Strategy (great asset allocator, uses alternatives/commdities/currencies/long-shorts, etc.), First Eagle Global (one of the best value managers ever, utilizes gold and international plays well, but need to watch closely since JM Eveilliard just retired for the 2nd time after 30+ years, but his apprentices have worked with him for years), PIMCO Total Return (bonds, currencies, shorts), Capital Income Builder (for traditional-only asset classes), Franklin Mutual Discovery (great int'l deep-value manager, very defensive, lots of cash, tobacco stocks, healthcare, etc).
 
My core holdings tend to be First Eagle Global, Capital Income Builder, and Mutual Discovery on the equity side (yes, CIB is generally 20-35% fixed income).  I then build satellites around them....small caps, emerging markets, bonds (several sub-classes - HY and IG Corp, Int'l, EM, Treasuries, TIPS).  Since my core is generally "global", I don't need to add much international or other equity strategies.  And I don't necessarily use everythign at once.  For example, I have no straight Treasury funds right now, other than TIPS and GNMA's (and whatever is held in my total return bond funds).  For smaller investors, I will utilize a total return bond fund like PIMCO or Franklin to get access to all fixed income classes in one fund (for the most part).
 
I would love to add managed futures, but we don't have any good options yet.
 
Generally, I like to just pick the great value managers/asset allocators and let them decide on the micro allocations.  I choose the stock/bond/cash mix.
 
Two funds I have been reviewing for about a month are PIMCO All Asset (more bond-oriented asset allocation fund, but uses some ecclectic asset classes as well) and Evergreen Asset Allocation.  These are both fund-of-funds, so it's tougher to get my head around them.  But the PIMCO fund is advised by Rob Arnott, and the Evergreen Fund is sub-advised by GMO (Jeremy Grantham).  Those both qualify for my "great manager" requirements.  So that (in addition to consistent performance) is what has piqued my interest.
 
Sorry for the ramble...

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Gaddock wrote:Ron 14 wrote:
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
 
I doubt one would consider an annuity or mutual fund 'nimble'. I guess you could with bonds if you traded them.
 
Ron, ever hear of options?
 
No, annuities are more the defensive, lock-in-returns portion for near-term spending needs.  VA income riders are also good for a portion of your income needs.
 
The last time I ran an option was in high school.

Ron 14's picture
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http://online.wsj.com/article/SB124501817200213499.html - try this, let me know if you get it

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That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.

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Ron 14 wrote:That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio. You should be selling the piss out of the 3 and 5 years. Forget the high commissions...give the people what they want.

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I was until the rates dropped below 3%.

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