Charts and table up. More to come.....
International diversification, which I recommend for the sheer thrill of losing money around the clock in all sorts of different countries for reasons you cannot articulate, inevitably involves currency risk.
Howard Simons
So's here's where I am and how I got here. As noted below, I'm aggressively set up in how I invest my 401a money. My pension is not what I think it should be, my IRA's got dinged in the dotcom meltdown, and I'm intent on doing something about it. So I'm using some readily available stock tools to chose what I feel are the best 401a funds and I'm concentrating my money there.
Risk and reward are the two faces of the same coin. My 401a results have been smokin' to date. That's the reward part. But what goes up like a rocket also comes down like a rocket. That's the risk part. So, as much as I want to be big time in up markets in the best performing funds, I also want to be out of the market when it goes down. So I have gone heavily to cash a handful of times over the last 2-1/2 years. Most of those times have been short term and of a secular bent; like times of political risk like elections and financial scandals, and times of greater risk of terrorist activities, etc. Some of those times, I went to cash because of junior cycles; the end of the holiday season, the end of a particularly good earning season, summer time, when I was looking for a hot market to consolidate etc. Lately I've been looking for a big cycle downturn; like the beginning of a recession or an overall downturn in the economy. Recoverys tend to average about three years in length and the current recovery is about four years old. The downturn looked to be here in February.
Greenspan launched the bubble of 2000 with too much money and he countered its' popping with even more money and way lower rates. This led to the inflation of the real estate bubble and drove the car manufacturers into a lather, making cars and houses cheap in terms of monthly payments. That came to an end last year and we are now seeing it unravel. That led to the subprime, Alt A, securitized mortgage bond bruhaha of Feb-March and major pain in Ford and GM. That combined with the end of the holiday season to start a whosh down in Feb. I got outa Dodge and outa harms way at the end of Feb. It turned out to be unnecessary and cost me some significant money. Check out the charts. Stocks went right back up like a rocket in the face of just horrible news and my 401a returns looked absolutely limp. Why? Well....
Part of it is too much money chasing return. Only heros and fools are putting money in real estate nowadays. But retirement investors amd big money investors have money that they have to do something with and are putting it somewhere and that appears to be in stocks. It's all about hedge funds, private equity and takeovers too. And the dollar has turned to mush over the last quarter. So away from cars and real estate, the economy is doing OK as there is a ton of momentum built in. When company's stocks go down they get bought out at a premium as buyout money litters the landscape, and big corporations who invested a pile of dollars in the world economy last year are getting paid back in cheaper(more) dollars on top of what they made. So corporate earnings, the kind that makes headlines, have been burning up the reports. AND the Republican administration is pumping up a war economy without taxing to pay for it. So I'm almost all the way back in the market as of a week or two ago and making money again.
But I've got no confidence that this can last. We're prolly gonna have a recession and it's prolly gonna be ugly. I just don't know when. As a worshipper at the Church of What's Happenin' Right Now This Very Second, I'm partyin' like it's 1999. But I've seen that movie and I didn't like the ending. So I'm next to the door and listenin' for sirens and footsteps. I thought I heard something in Feb. But I was wrong. I'm still listening....
[ view entry ] ( 856 views ) [ 0 trackbacks ] permalink International diversification, which I recommend for the sheer thrill of losing money around the clock in all sorts of different countries for reasons you cannot articulate, inevitably involves currency risk.
Howard Simons
So's here's where I am and how I got here. As noted below, I'm aggressively set up in how I invest my 401a money. My pension is not what I think it should be, my IRA's got dinged in the dotcom meltdown, and I'm intent on doing something about it. So I'm using some readily available stock tools to chose what I feel are the best 401a funds and I'm concentrating my money there.
Risk and reward are the two faces of the same coin. My 401a results have been smokin' to date. That's the reward part. But what goes up like a rocket also comes down like a rocket. That's the risk part. So, as much as I want to be big time in up markets in the best performing funds, I also want to be out of the market when it goes down. So I have gone heavily to cash a handful of times over the last 2-1/2 years. Most of those times have been short term and of a secular bent; like times of political risk like elections and financial scandals, and times of greater risk of terrorist activities, etc. Some of those times, I went to cash because of junior cycles; the end of the holiday season, the end of a particularly good earning season, summer time, when I was looking for a hot market to consolidate etc. Lately I've been looking for a big cycle downturn; like the beginning of a recession or an overall downturn in the economy. Recoverys tend to average about three years in length and the current recovery is about four years old. The downturn looked to be here in February.
Greenspan launched the bubble of 2000 with too much money and he countered its' popping with even more money and way lower rates. This led to the inflation of the real estate bubble and drove the car manufacturers into a lather, making cars and houses cheap in terms of monthly payments. That came to an end last year and we are now seeing it unravel. That led to the subprime, Alt A, securitized mortgage bond bruhaha of Feb-March and major pain in Ford and GM. That combined with the end of the holiday season to start a whosh down in Feb. I got outa Dodge and outa harms way at the end of Feb. It turned out to be unnecessary and cost me some significant money. Check out the charts. Stocks went right back up like a rocket in the face of just horrible news and my 401a returns looked absolutely limp. Why? Well....
Part of it is too much money chasing return. Only heros and fools are putting money in real estate nowadays. But retirement investors amd big money investors have money that they have to do something with and are putting it somewhere and that appears to be in stocks. It's all about hedge funds, private equity and takeovers too. And the dollar has turned to mush over the last quarter. So away from cars and real estate, the economy is doing OK as there is a ton of momentum built in. When company's stocks go down they get bought out at a premium as buyout money litters the landscape, and big corporations who invested a pile of dollars in the world economy last year are getting paid back in cheaper(more) dollars on top of what they made. So corporate earnings, the kind that makes headlines, have been burning up the reports. AND the Republican administration is pumping up a war economy without taxing to pay for it. So I'm almost all the way back in the market as of a week or two ago and making money again.
But I've got no confidence that this can last. We're prolly gonna have a recession and it's prolly gonna be ugly. I just don't know when. As a worshipper at the Church of What's Happenin' Right Now This Very Second, I'm partyin' like it's 1999. But I've seen that movie and I didn't like the ending. So I'm next to the door and listenin' for sirens and footsteps. I thought I heard something in Feb. But I was wrong. I'm still listening....
( 3 / 1025 )
Calendar
