Fear

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Shania Twain's picture
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Joined: 2009-09-23

In 26 years. 
 
I have NEVER seen clients/people so negative and afraid.
 
So many are sure their is another shoe to fall.
 
Is it the same for you?
 
 

Moraen's picture
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Joined: 2009-01-22

Not really.  The most I've seen are people being skeptical that the returns on their statements are actually real.Of course, they get a statement from me, and a statement from Fidelity, so they will call Fidelity up and verify with them.  But it gets a little old after a while.  Their "friends" are all "losing money".  So they don't see how it is possible that they aren't.

snaggletooth's picture
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Joined: 2007-07-13

I have never seen so many people procrastinate and not return phone calls and emails...and these are clients as well as prospects.
 
They all have excuses, but it's frusturating.  I've got about $50,000 in commissions sitting out there that should've been closed by now.

Northfield's picture
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Joined: 2007-04-10

Yup....
 
It's a fairly grim outlook from retail right now. If a client got out at some point they haze zero interest in getting back in. If they stayed in they are very wary of any  equity exposure.
 
Fortunately I have discretion over 80% of my accounts and control the allocation. I would hate to be a traditional broker right now having the same conversation with every client only to have them buy yet another 20 year muni.
 
Closed end fund IPOs are coming back on line and almost all of them are geared toward yield.
 
Every mf wholesaler tells me the flow of funds is almost entireley towards bonds.
 
Immediate annuities are apparently flying off the shelf.
 
Everyone is chasing yield. No one wants to be an "owner."
 
Your point is well taken. Retail is never right.
 
I want to be an "owner" here and buy equities.
 

NYCTrader's picture
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Joined: 2009-11-20

Many of my clients are very conservatively allocated (only hold high quality bonds and have invested this way for many, many years).  Their main concern right now is interest rate and credit risk.   My clients that hold equities seem like they have gotten a bit complacent.  They seem to think the worst is over.  I don't subscribe to that view, so I have to constantly remind them that things may get worse.  Got some pushback from a few clients in November and December when I suggested taking profits and playing defensive.  They wanted to stay long.  Convinced them it made sense and these clients are now coming around to the fact that taking risk off the table in this environment might have been a good idea.   I haven't had a single client ask to get completely out of equities.  I also haven't had anything near the kinds of terrified, deer-in-the-headlights conversations I had in '08. 

Spaceman Spiff's picture
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Joined: 2006-08-08

The only reason my phone rings these days is because some client wants their 1099.  Or they need cash. 
I can count on one hand the number of clients who have proactively called me and asked if now was a good time to be buying stocks.  That tells me I've not done a good enough job educating my clients on how the market works and when the right time to buy equities would be.

Kudlowfan's picture
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Joined: 2009-04-22

I hear how bad the economy is doing everyday.  I don't think prospects realize the market has rallied 70% from the March lows.  A lot of people don't believe the positive economic data.  I've also noticed prospects start returning phone calls and get interested after the market goes through a nice bull run without any negative headlines.  Around Jan. 19th my phone was ringing off the hook and had I had walk ins.

JackBlack's picture
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Joined: 2008-08-26

Stock is a funny think, it is the only thing (that I know of) that is harder to sell when it is on sale, and easier to sell when is it is selling at a premium.
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
As my grandfather use to say, bear markets move stock, from weak hands to there true owner’s hands.
 

snaggletooth's picture
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Joined: 2007-07-13

We are in such a weird market environment when you think about it.  Many of the corporate earnings and forecasts are positive and they expect growth.  U.S. and world GDP is also expected to increase and not just minimally. 
 
That being said, what people see and hear every day is:  people continuing to get laid off, houses continuing to get foreclosed on, businesses continuing to go out of business, etc...
 
2009 was great for prospecting, people were looking for answers.  Now I feel like 2010 people are 1. not trusting, 2. not believing, 3. would rather do nothing than anything, 4. lazy, 5. not motivated.
 
The only success I'm really seeing are through introductions to friends of friends and people who have realized they are retiring soon and have no idea how to allocate their money and distribute it.  Other than that, there is zero interest.

Shania Twain's picture
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Joined: 2009-09-23

JackBlack wrote: Stock is a funny think, it is the only thing (that I know of) that is harder to sell when it is on sale, and easier to sell when is it is selling at a premium.
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
As my grandfather use to say, bear markets move stock, from weak hands to there true owner’s hands.
 

well put.

You love/want
Brand new 911 Turbo.    
Midnight Blue.
they cut the price 20%
What would you do?

JackBlack's picture
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Joined: 2008-08-26

Ms. Twain:
LOL. I use that exsample.

howboutshoeshine's picture
Joined: 2010-01-29

JackBlack wrote:
Stock is a funny think, it is the only thing (that I know of) that is harder to sell when it is on sale, and easier to sell when is it is selling at a premium.
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
As my grandfather use to say, bear markets move stock, from weak hands to there true owner’s hands.
 
 
I agree with your grandfather!!! Smart man. How many people had a sizeable portion of their book bail out of equities? I had none, but I also got short at the correct time. I have quite a few"traditional" broker friends that tell me it ws hardly any?

Shania Twain's picture
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Joined: 2009-09-23
howboutshoeshine's picture
Joined: 2010-01-29

howboutshoeshine wrote:JackBlack wrote:
Stock is a funny think, it is the only thing (that I know of) that is harder to sell when it is on sale, and easier to sell when is it is selling at a premium.
<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
As my grandfather use to say, bear markets move stock, from weak hands to there true owner’s hands.
 
 
I agree with your grandfather!!! Smart man. How many people had a sizeable portion of their book bail out of equities? I had none, but I also got short at the correct time. I have quite a few"traditional" broker friends that tell me it ws hardly any?
 
It's a question Shania

BL6's picture
BL6
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Joined: 2008-10-07

The general public does not feel good right now.  Many folks have faced rough periods before, but never felt our country was out of control.  The last 18 months have forced people to question many of their beliefs and they are scared of the future.  Americans, generally always optimistic may for the first believe our best days are behind.Many know friends who have lost jobs.  Every town has lost major manufactors.  Few can see where jobs will come from in the future.  There is absolutely zero leadership (beside us) that portray positive things ahead.  As they turn to televison news for clarification, it scares them further.  Never before have so many Americans so closely watched their Gov't in operation, and its unsettling.Many clients have become complacent as statement values have increased every month since last March (ex Jan 2010)  All of my clients are very open to my guidance.  However I have noticed some of the smartest business people I know are frozen in cash.  They don't get it right now and are scared of all uncertain messages coming from Washington.So the general public has been buying bond funds at historic low interest rates for stability /safety.  Stocks trading at very modest forward PE's are ignored.  Fast forward, as economy slowly comes around & people begin to feel better, more will shift to equities.  When everyone feels great again and PE return to avg. or above avg, PE the public will shift back into equities toward the next peak.  Weird thing; what has been historically safe Gov'ts &  muni's are the entities that are deeper and deeper in debt.  What says CA, IL, NJ, MI can pay back the money they keep borrowing?  So who has cash on hand & doesn't need to borrow?  Check your list of boring blue chips - 2-3% dividends, consistent increases and good upside.  I'm a buyer; quality stocks, Int'l funds, Emer Mkts.  It will be a more difficult year, but will surprise to the upside. 

Shania Twain's picture
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Joined: 2009-09-23

howboutshoeshine wrote:

It's a question Shania

(All we do is accounts run by us discretionary)

We fight like mad to keep people in, in sell offs.

4 said "No mas" in march.   

"get me out. i dont want to hear anymore of your BS.   
Fukc you. sell it now"

kept accounts. dust settled. got them back in with much more conservative allocation.   learned new piece to their financial puzzle: they cant handle the risk they said they could

had 2 recently just bail from stocks.   (new phenomomon-interesting). more or less "if I ever get back to X amount-I'm done)
I hate stocks.   I have not made money in 10 years.
im buying real estate , paying off debt- whatever.
thanks for the memories.
It's not you love ya I'll be back blah blah blah

NEVER have had people bail like this :

"stocks dont make money ever"

We try very, very hard to set low expectations when we open accounts.    

Pretty rough for newer 06,07 accounts when your down 15-40 MF % right out of gate.
Some of those Envisions that we ran just said "TILT". We never give up trying to get people to focus on long haul.   

This biz aint easy.    
Thats why you can make as much as a heart surgeon.

The more people tell me how much they hate stocks.........................................................................................the more bullish I get...........................................................................supply and demand

howboutshoeshine's picture
Joined: 2010-01-29

It seems Shania........that you also have had very few bail? Correct me if I'm wrong. I think that more attrition of the weak hands, in order for the rally to continue. that means another fall.

rankstocks's picture
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Joined: 2005-02-10

-shoeshine = broken clock....right twice a day.  Always bearish means 1 of 4 years you're right, 3 out of 4 wrong.  What a way to live life, glass half empty.
 
-I'm moving 1/2 the money I was prior to end of '08, but more people are starting to talk.  Once money motion starts up, I'm going to kill it some more.

bspears's picture
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Joined: 2006-11-08

Well, lets see...the Gov't is trying to ram trillions of dollars of new debt onto the clients backs.  Most know of friends or family who have permanently lost positions they've held for years, with great pay and benefits.  Too much consumer debt, no budgeting, overweight...coldest winter in a long time...etc..etc...etc.
You can spout as many token 1 out of 4 are down, why miss the other three..sales pitches..but I find my best success is to give the clients a plan of getting the other parts of their lives in order.  If they feel they are progressing in something, mainly handling debt and getting their other financial life together, they feel in more control and less frustrated and hopeless, which in turn makes talking about their investments less emotional. It makes the relationship more about helping the client than selling a product. 
 
 

Shania Twain's picture
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Joined: 2009-09-23

bspears wrote: Well, lets see...the Gov't is trying to ram trillions of dollars of new debt onto the clients backs.  Most know of friends or family who have permanently lost positions they've held for years, with great pay and benefits.  Too much consumer debt, no budgeting, overweight...coldest winter in a long time...etc..etc...etc.
You can spout as many token 1 out of 4 are down, why miss the other three..sales pitches..but I find my best success is to give the clients a plan of getting the other parts of their lives in order.  If they feel they are progressing in something, mainly handling debt and getting their other financial life together, they feel in more control and less frustrated and hopeless, which in turn makes talking about their investments less emotional. It makes the relationship more about helping the client than selling a product. 
 
 

wow. you're really something special.

stfu you tool

"coldest winter in a long time?"     

did you really say that?

you GD idiot

LockEDJ's picture
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Joined: 2009-07-06

I don't have ten years behind me in this business, or $40MM to work with in my book. But I know this much about fear; it operates best in a vacuum.
 
My clients like one story from me ... how is my income proceeding? At least once a quarter, they get to hear from me ... MKC just increased it's dividend. T increased it's dividend. We can swap out bond A for bond B, get more interest and a shorter term. MDU beat expectations. MMM increased their dividends for the XXth straight year. Since January of 2009, the S&P is up 14.7%, and you are up 18.6%. Hey, that CD is coming due, and I can increase your income.
 
Clients need an unrelenting string of positive news. You have it in your power to give them that news - and you needn't wrap that news up with a request for more money.
 
Try telling them something good for once. Brian Williams sure as sh*t won't.

BL6's picture
BL6
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Joined: 2008-10-07

ah, DSIP

Jonesness's picture
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Joined: 2008-02-26

If you dont think the biggest shoe in the history of mankind is about to fall, then you are a FOOL

rankstocks's picture
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Joined: 2005-02-10

Jonesness, I'm curious, exactly what point in time (give me a specific date), did you decide that the biggest shoe in the history of mankind was about to fall.  And because you can tell the future, let me know when this proverbial shoe will fall.
 
With this type of prognosis, I am also curious what you are recommending your clients buy, and how you are getting new clients to invest with you with such a doom and gloom forcast.
 
Finally, since I am a FOOL, and rotated aggressively into more stocks for clients in the end of 2008 and early 2009, should I rotate everything into cash now because I'm sure there is 1.  Zimbabwe inflation coming, 2.  another great depression looming, 3.  gold is the only thing that you can hold onto that will be worth anything, 4.  make sure to go to the liquor store to pick up little shot bottles so I can trade for goods later, 5.  buy a gasoline storage container because MAD MAXX lawlessness will soon be the norm, 6.  can't trust anyone because it is a giant conspiracy to create a one world government, 7.  Dow will go to less than 600, 8.  Buy ammunition for trade, 9.  Tell clients to dig a whole to put all their old silver coins in it with a treasure map hidden behind a painting, and 10.  Make sure my home is self sufficient with solar energy for when the grid fails.

Northfield's picture
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Joined: 2007-04-10

Jonesness wrote:If you dont think the biggest shoe in the history of mankind is about to fall, then you are a FOOL
 
Why are you in the investment business with such a view?
 
With such an end-of-times view of the world it would seem a very unsatisfying career to tend to investments. Alll of which will no doubt turn out to be worthless.
 
 

Renter's picture
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Joined: 2007-09-12

One of Shania's quotes from a client was "I'll be back".  Reminded me of one of my dumbass clients who, last year, took all of his $30k out (IRA's & all at age 42) and said "THE DOW IS GOING TO 3500, AND I WILL THEN GET BACK INTO THE MARKET."
I said "Really? you're getting out at 8500, but when things get even worse, THEN you'll get back in?" He's a tool, too. Was glad to see him go. Always wanted run his retirement scenario every time he dropped off his biannual $200 IRA contribution.
He had $30k with me (age 42) and his goal was, I'm not kidding, to get to $10 million. Sure, that's an admirable goal, but not really realistic for a 42 y/o tool making $50k a year while depositing $500/year into his IRA. I asked him to focus on, say, a million first.
"NO WAY MAN, 10 MILLION. I'M NOT STOPPING TILL I'M THERE." Oh, except if the market drops. Dumbass.
 

Renter's picture
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Joined: 2007-09-12

Oh, and Jonesness, I have a sh!tload of "Y2K meltdown" books I'd like to offer you. They're reasonably priced.

CORR's picture
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Joined: 2010-02-02

Fear.....I know of quite a few clients who "want high returns with NO RISK." Sound familiar? I have the advantage of working for Wells Fargo & Company, so I get to see both the bank side, and the advisor side when it comes to "FEAR" with clients. It's funny to me how people flop back-and-forth from "all-in" to "no-way." It amazes me, how so many are SO uneducated about retirement, finances and budgeting. It's like 'Renters' client who wanted a $10M portfolio and only had $30K at the age of 42. Probably, he wanted everything with a >6% yield, and extremely liquid with NO risk. Most clients are TOOLS.

Jonesness's picture
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Joined: 2008-02-26

  
I have had a very lucurative run in this business for the past decade and a half.   The writing was on the wall for me about 3 years ago.   I have sold off my book.  And I now hold a series 3.   Bond/equities dislocation and sovereign debt defaults coming soon.  Do NOT be a fool.

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