Comments on: Ugly Day in the Markets http://www.canadiancapitalist.com/ugly-day-in-the-markets/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: An Example of How Reacting in Fear Can Hurt Portfolios : WhereDoesAllMyMoneyGo.com http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156400 An Example of How Reacting in Fear Can Hurt Portfolios : WhereDoesAllMyMoneyGo.com Thu, 18 Sep 2008 17:51:39 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156400 [...] short term performance if you expose yourself to equities. As Canadian Capitalist put it, “…the higher returns from equities come from bearing the risk of holding stocks through times s...“ Share and [...] [...] short term performance if you expose yourself to equities. As Canadian Capitalist put it, “…the higher returns from equities come from bearing the risk of holding stocks through times s…“ Share and [...]

]]> By: NN http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156344 NN Thu, 18 Sep 2008 12:03:16 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156344 Denial - having a 20% allocation to a single commodity such as gold, AFTER it has appreciated in price because of investor's FEAR is the truly risky strategy. I sincerely hope your timing is spot on, else your losses on that holding could be considerable. (Market timing is, in my humble opinion, another very risky strategy) Denial – having a 20% allocation to a single commodity such as gold, AFTER it has appreciated in price because of investor’s FEAR is the truly risky strategy. I sincerely hope your timing is spot on, else your losses on that holding could be considerable. (Market timing is, in my humble opinion, another very risky strategy)

]]> By: Denial http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156228 Denial Wed, 17 Sep 2008 21:51:20 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156228 Canadian Capitalist, you might want to look up the word "derivatives" and google "quadrillion", next read this ... http://www.youtube.com/watch?v=xV7E_tzxdNs ...entire article about Canadian banks barely dodging an $800 BILLION nuclear warhead, and how 3 month US treasury bills are effectively WORTHLESS as of today. http://globaleconomicanalysis.blogspot.com/2008/09/3-month-treasury-yields-effectively-hit.html Where you gonna put your money now? I'll give you two ideas: 1) Physical Gold 2) Shorting just about any large US financial institution. PS. I bought physical gold Sept 15th equivalent to 20% of my total networth. I'm not a genius, but at least I pay attention to what people smarter than me are saying. I would definitely consider you more experienced and knowledgeable in the market and economics than me; however, I also consider your approach significantly risky. Good luck! :-) Canadian Capitalist, you might want to look up the word “derivatives” and google “quadrillion”, next read this …
http://www.youtube.com/watch?v=xV7E_tzxdNs
…entire article about Canadian banks barely dodging an $800 BILLION nuclear warhead, and how 3 month US treasury bills are effectively WORTHLESS as of today.
http://globaleconomicanalysis.blogspot.com/2008/09/3-month-treasury-yields-effectively-hit.html

Where you gonna put your money now?

I’ll give you two ideas:
1) Physical Gold
2) Shorting just about any large US financial institution.

PS. I bought physical gold Sept 15th equivalent to 20% of my total networth. I’m not a genius, but at least I pay attention to what people smarter than me are saying. I would definitely consider you more experienced and knowledgeable in the market and economics than me; however, I also consider your approach significantly risky.

Good luck! :-)

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156200 Canadian Capitalist Wed, 17 Sep 2008 16:51:22 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156200 Denial: I guess you favour market timing -- moving between cash and stocks depending on market/economic conditions. I can only wish you luck because there is no evidence that market timing works. In fact, there is plenty of evidence that investors (professional or retail) do precisely the wrong thing at the wrong time (unfortunately, this is evident only in retrospect). I wish I had a dime for every suggestion for adjusting the strategy I've had over the years. A few months back, it was buy gold because inflation was going to skyrocket. Today, it is "oh my god! It's a depression! It's worse than 1929", which by the way, is what they said about 1987. Denial: I guess you favour market timing — moving between cash and stocks depending on market/economic conditions. I can only wish you luck because there is no evidence that market timing works. In fact, there is plenty of evidence that investors (professional or retail) do precisely the wrong thing at the wrong time (unfortunately, this is evident only in retrospect).

I wish I had a dime for every suggestion for adjusting the strategy I’ve had over the years. A few months back, it was buy gold because inflation was going to skyrocket. Today, it is “oh my god! It’s a depression! It’s worse than 1929″, which by the way, is what they said about 1987.

]]> By: Pol http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156182 Pol Wed, 17 Sep 2008 15:51:48 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156182 Wow, my 3-line post on my averaging down strategy has surely attracted a lot of condemnation..8)) So, here's a disclaimer - this is not an investment advice, just my personal preference. Please, don't follow me down my slippery slope! Though, as I'm typing this, my portfolio is currently up 1% while the TSX is down almost 4% ..But like I said, my post was never meant to be an advice of any kind, and I absolutely mean it.. Wow, my 3-line post on my averaging down strategy has surely attracted a lot of condemnation..8))
So, here’s a disclaimer – this is not an investment advice, just my personal preference. Please, don’t follow me down my slippery slope!
Though, as I’m typing this, my portfolio is currently up 1% while the TSX is down almost 4% ..But like I said, my post was never meant to be an advice of any kind, and I absolutely mean it..

]]> By: brad http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156153 brad Wed, 17 Sep 2008 11:35:20 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156153 Denial, nobody knows what the future will bring; a lot of people think they know but the fact is it's anyone's guess. A lot of people also think they understand the market and how it will behave. But if the market were perfectly understandable and predictable, we'd all be zillionaires. Any investment carries risk. Putting your money into guaranteed investments ensures that you won't lose what you put in, but in the long term it also makes it likely that inflation will overtake whatever growth you achieve, leaving you with what you put in and no more (in terms of buying power). If you're a big saver today and can live frugally in retirement, that might work for you. Those of us investing in the market take the risk that we might lose it all (losing it all today is no problem as long as the markets recover and grow before we hit retirement); we feel that the risk is worth taking because the potential for beating inflation and achieving significant growth is higher. The world is a very different place than it was in 1929, and while I have no doubt we're headed for some very rough sailing I also have little doubt that the markets will eventually recover. The key questions are "how long will it take" and "at what level will they recover to." Nobody knows the answers. In light of that uncertainty, I think it makes sense to keep buying shares at bargain prices while the market is down. So what if you put in $1000 this week and it's worth $500 next week? You're not "losing money," you're amassing shares in the expectation that a few decades from now those shares will be worth more than they are now. What they're worth today doesn't matter at all. Denial, nobody knows what the future will bring; a lot of people think they know but the fact is it’s anyone’s guess. A lot of people also think they understand the market and how it will behave. But if the market were perfectly understandable and predictable, we’d all be zillionaires.

Any investment carries risk. Putting your money into guaranteed investments ensures that you won’t lose what you put in, but in the long term it also makes it likely that inflation will overtake whatever growth you achieve, leaving you with what you put in and no more (in terms of buying power). If you’re a big saver today and can live frugally in retirement, that might work for you. Those of us investing in the market take the risk that we might lose it all (losing it all today is no problem as long as the markets recover and grow before we hit retirement); we feel that the risk is worth taking because the potential for beating inflation and achieving significant growth is higher.

The world is a very different place than it was in 1929, and while I have no doubt we’re headed for some very rough sailing I also have little doubt that the markets will eventually recover. The key questions are “how long will it take” and “at what level will they recover to.” Nobody knows the answers. In light of that uncertainty, I think it makes sense to keep buying shares at bargain prices while the market is down. So what if you put in $1000 this week and it’s worth $500 next week? You’re not “losing money,” you’re amassing shares in the expectation that a few decades from now those shares will be worth more than they are now. What they’re worth today doesn’t matter at all.

]]> By: Denial http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156135 Denial Wed, 17 Sep 2008 09:48:28 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156135 Ok, before I get started, I just wanted to actually say thank you first for providing this blog. Before the whole markets started crashing, I think I actually learned a thing or two from your blog and I believe that in general your approach to investment _made_ sense (emphasis on past tense). The problem is that the markets have done a 180 (from bull to bear), and then a 90 turn from there (from high energy to low energy), and now are going in two directions at once (down in EVERY asset class, and down in traditional hedges against deflation (i.e. gold)) and in short, is very unpredictable in the long term though in the short term one can almost say the opposite with some new bank/investment firm/insurance firm on the brink of collapse every couple of days. And now for some other commentary: 1) "If you’re worried about the markets, just buy the indices" - Are you serious? ALL indexes are trending down in ALL countries. Please point me to one that you think will rise against the massive downward spiral we are in. 2) Averaging down in an 18 month long bear market that is poised to last another 1 to 1.5 years, is nonsensicle advise. If this were a short lived 6 month or so bear market, I'd be ok with that kind of advice, but this is a massive downward spiral that just picked up significant acceleration in the past few weeks, and unless you want to go down the drain, you're better to just drop your monthly $100 investment pennies into a GIC/T-bills/Cash, until there's a light at the end of the tunnel - that's not an oncoming TRAIN! 3) Want to really know WTF is going on out there? Here's a few links that will take some of the guess work out: 1) Mish's blog: Updated daily, often 2 or 3 times. Outstanding quality content that quotes respected sources (i.e. bloomberg, NYTimes, etc) and offers counter-spin backed up by significant research, and more importantly a great track record of being right - even if it means questioning the statements of other bears in this bear market. http://globaleconomicanalysis.blogspot.com/ 2) Charlie Rose - High quality interviews with some of the best financial experts out there. Tough questions, expert panalists that tell it like it is without bias. Sample (skip to about 13:40): http://www.charlierose.com/shows/2008/9/15/1/a-discussion-about-the-crisis-on-wall-street 3) Financial Post - Thank god we still have a newspaper that tells it like it is in Canada and which does not see the world through rose colored glasses like just about every local newspaper. Read daily, refresh 2 or 3 times a day for new content. http://www.financialpost.com/index.html 4) Globe and Mail - A great start, if you're new, but be sure to read other sources too. http://www.financialpost.com/index.html 5) Bloomberg.com - Excellent for all the latest big headlines, and several bonus points for providing a FREE 24/7 streaming TV over the web. The streaming video quality isn't great, but it's great that the content is decent and that it's free and that's good enough for me. 6) itulip.com - Not 100% free, but I check it a few times a week as there's always some interesting little video clip that captures the sense of what is going on. The editors have an exceptional track record of being right, WAY ahead of their time. The forums are decent quality with several regular posters that actually do in depth studies of the market and share their analysis. Overall, I'm a 'buyer' of their "Ka-Poom theory". 7) Crash Course - The best 2-3 hours of FREE training videos about how the market really works that you will ever watch for free on the web. If you are new, this is the number 1 starting point. Believe me, your time is well spent here. This site really opened my eyes to certain market factors that I assumed worked differently. http://www.chrismartenson.com/three_beliefs (video#1 of 20) 8) http://www.dollarcollapse.com/ - Great for reading up on the latest major eye-popping headlines from various usually reliable sources (Mish, Reuters, NYTimes, Bloomberg, etc). Bookmark these, and visit them frequently. Ok, before I get started, I just wanted to actually say thank you first for providing this blog. Before the whole markets started crashing, I think I actually learned a thing or two from your blog and I believe that in general your approach to investment _made_ sense (emphasis on past tense). The problem is that the markets have done a 180 (from bull to bear), and then a 90 turn from there (from high energy to low energy), and now are going in two directions at once (down in EVERY asset class, and down in traditional hedges against deflation (i.e. gold)) and in short, is very unpredictable in the long term though in the short term one can almost say the opposite with some new bank/investment firm/insurance firm on the brink of collapse every couple of days.

And now for some other commentary:

1) “If you’re worried about the markets, just buy the indices” – Are you serious? ALL indexes are trending down in ALL countries. Please point me to one that you think will rise against the massive downward spiral we are in.

2) Averaging down in an 18 month long bear market that is poised to last another 1 to 1.5 years, is nonsensicle advise. If this were a short lived 6 month or so bear market, I’d be ok with that kind of advice, but this is a massive downward spiral that just picked up significant acceleration in the past few weeks, and unless you want to go down the drain, you’re better to just drop your monthly $100 investment pennies into a GIC/T-bills/Cash, until there’s a light at the end of the tunnel – that’s not an oncoming TRAIN!

3) Want to really know WTF is going on out there? Here’s a few links that will take some of the guess work out:

1) Mish’s blog: Updated daily, often 2 or 3 times. Outstanding quality content that quotes respected sources (i.e. bloomberg, NYTimes, etc) and offers counter-spin backed up by significant research, and more importantly a great track record of being right – even if it means questioning the statements of other bears in this bear market. http://globaleconomicanalysis.blogspot.com/

2) Charlie Rose – High quality interviews with some of the best financial experts out there. Tough questions, expert panalists that tell it like it is without bias. Sample (skip to about 13:40): http://www.charlierose.com/shows/2008/9/15/1/a-discussion-about-the-crisis-on-wall-street

3) Financial Post – Thank god we still have a newspaper that tells it like it is in Canada and which does not see the world through rose colored glasses like just about every local newspaper. Read daily, refresh 2 or 3 times a day for new content. http://www.financialpost.com/index.html

4) Globe and Mail – A great start, if you’re new, but be sure to read other sources too. http://www.financialpost.com/index.html

5) Bloomberg.com – Excellent for all the latest big headlines, and several bonus points for providing a FREE 24/7 streaming TV over the web. The streaming video quality isn’t great, but it’s great that the content is decent and that it’s free and that’s good enough for me.

6) itulip.com – Not 100% free, but I check it a few times a week as there’s always some interesting little video clip that captures the sense of what is going on. The editors have an exceptional track record of being right, WAY ahead of their time. The forums are decent quality with several regular posters that actually do in depth studies of the market and share their analysis. Overall, I’m a ‘buyer’ of their “Ka-Poom theory”.

7) Crash Course – The best 2-3 hours of FREE training videos about how the market really works that you will ever watch for free on the web. If you are new, this is the number 1 starting point. Believe me, your time is well spent here. This site really opened my eyes to certain market factors that I assumed worked differently.
http://www.chrismartenson.com/three_beliefs (video#1 of 20)

8) http://www.dollarcollapse.com/ – Great for reading up on the latest major eye-popping headlines from various usually reliable sources (Mish, Reuters, NYTimes, Bloomberg, etc).

Bookmark these, and visit them frequently.

]]> By: Matt http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156096 Matt Wed, 17 Sep 2008 04:46:39 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156096 Market crashes are awesome, there's nothing better than buying a great business at a great price. Market crashes are awesome, there’s nothing better than buying a great business at a great price.

]]> By: Blogging About Money http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156085 Blogging About Money Wed, 17 Sep 2008 04:31:15 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156085 If you're worried about the markets, just buy the indices, or buy franchises that are pretty recession proof...you'll still be buying Coca-Cola, JNJ and Pepsi products...they should do well...the world isn't coming to an end...Also, people should really take the same road as the financial stocks: if you're not comfortable with your debt levels, start de-leveraging...pay down debts...You make money by saving interest (opportunity costs)... If you’re worried about the markets, just buy the indices, or buy franchises that are pretty recession proof…you’ll still be buying Coca-Cola, JNJ and Pepsi products…they should do well…the world isn’t coming to an end…Also, people should really take the same road as the financial stocks: if you’re not comfortable with your debt levels, start de-leveraging…pay down debts…You make money by saving interest (opportunity costs)…

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/ugly-day-in-the-markets/#comment-156051 Canadian Capitalist Wed, 17 Sep 2008 03:53:59 +0000 http://www.canadiancapitalist.com/?p=1283#comment-156051 Phil: The AIG news is simply stunning... Good thing I don't own it anymore. Can't believe I dodged two bullets (AIG and E*Trade) in one year. Phil: The AIG news is simply stunning… Good thing I don’t own it anymore. Can’t believe I dodged two bullets (AIG and E*Trade) in one year.

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