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The Stock Room page 81
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(Continued from page 80)
I really want to say more, but all I can do is just repeat myself: BUILD.. BUILD.. BUILD. DRILL.. DRILL.. DRILL. _______________________________________ apppro’s take for 10/27/2008 @7:30 am EST: Everyone should watch this video from 60 Minutes on how the credit crisis began. It is probably the clearest and simplest depiction I have seen. It misses out and really doesn’t stress the importance of short sellers in the problem, but does mention them briefly at the end. They deserve far more credit, or should I say blame in all of this then they are getting.
A truly must see: The Bet That Blew Up Wall Street
And please everyone, let’s not lose sight that oil is now at $60.00!!!! BUILD.. BUILD.. BUILD. DRILL.. DRILL.. DRILL. _______________________________________ seeker’s take for 10/25/2008 @8:30 am EST: seeker’s website: PointofLife.com
The Sweet Aroma of Value Investing by Michael Levy
There is a sweet aroma in the air flowing from many individual stocks in almost every sector of the USA stock market. The latest stupidity coming out of the negative mouth of so-called stock mavens is... "How do we know what a stocks PE (price to earnings) will be worth in the future."
Well, there is no doubt that we are in a recession right now and it may get worse in the coming months. However, with PE's at historical lows, only folks who believe the end of the world is near will talk about PE's that may never go up again. After all is said and done, here is an example, from many questions, a six year old will have no difficulty answering but may stump clever negative experts who cannot see the woods for the trees.
• With three million people in the USA... Will digital TV take the place of analogue TV in February 2009. If so, which companies make the insides of the flat screen TV's and how low are their stock prices? • With six billion people in the world ... Will people in work stop buying computers, and cell phones? Also, who are the companies that make the best? Also who are the companies that provide the best service and do any pay good dividends? • Will people still need to put gas in their car and how cheap are the leaders in that industry? • Will people still need to eat, if so, how cheap are stocks in that industry? • Will people still be living in houses in two years time, will their circumstances change and will they need to move to bigger or smaller houses... Or do you think houses are going to disappear?
These questions are only a small sample of many. They may seem a little dumb to a six year old but clever experts are giving their negative slants as though people are going to stop enjoying themselves with all the modern day trappings. Money may be only the icing on the cake for describing a successful lifestyle but people will always have a sweet tooth.
Most folks will still have a job in six months time and the mayhem and confusion will pass. The smart people who understand you have to time the market to buy low and sell high will be enjoying the aroma of prosperity that started when they bought stocks from a low point and averaged down if the stocks went lower... They also understand when to sell them when the stocks reach a level that they are satisfied with without waiting for a home run. The time to sell is usually when the doom and gloom experts all start to say it is time to buy because the future looks bright and the PE's are trading at the low level of 18 times future earnings ... Enjoy Sweet Aroma of Value Investing! _______________________________________ apppro’s take for 10/20/2008 @6:30 pm EST: Just as a quickie, I wanted everyone to hear what Superintendant Eric Dinallo had to say in support of my plan. 2nd link Well, he didn’t say it was my plan, but we all know where he got the ideas – thank you very much! Basically, he confirmed that all the States needed was to get about $20 billion of that ‘Rescue’ moneys to recapitalize the monoline insurers so that the States could issue bonds and: BUILD.. BUILD.. BUILD. Governor Patterson was saying the same thing, but then CNBC's Charlie Gasparino came on and started up again with his same old bull!%?!, questioning why the monlines should get squat. Patterson really wanted to tell him to shove it, but he’s a politician. Late today Rep. Barney Frank came on and validated the part of my plan that calls for government participation by saying we needed a 2nd stimulus plan geared towards: BUILD.. BUILD.. BUILD. Why does any of this matter you ask? It matters, because unless we have a local/grassroots plan to get people working and that actually benefits our economy; any and all of these ‘Rescue’ plans will just lay a big fat goose egg. We all really should be calling/writing/ emailing our Government Reps and tell them to get it together. New York residents especially so! (See links in prior blogs.) BTW: where the hell are Senator Schumer and Senator Clinton during all of this? BUILD.. BUILD.. BUILD. DRILL.. DRILL.. DRILL. _______________________________________ apppro’s take for 10/18/2008 @8:30 am EST: There’s a lot of talk now over establishing new regulations, getting even with CEO’s, who’s to blame, putting limits on companies, etc., etc. all because of this crisis that we brought upon ourselves by ourselves. We are all responsible – it was all of our collective greed that caused this. Yes, it didn’t have to be this bad and the few Me’ers who had to bring it down so quickly and so horribly should be held accountable. They won’t be, but they should be. But no matter what does come out of this, I hope that somehow we come out the other side with a more stable and calm market that people can have faith in and invest in with peace of mind. This entire trader mentality needs to come to an end, and the decade of the trader brought on by computers, the high speed Internet, and cable TV will hopefully fade into the sunset, too. Again, doubtful! Let me harken back to my “I’m Not Smarter Then a 5th Grader” blog from 2/23/08. We need a simple and transparent market that anyone can understand and invest in. We need a market that is even tempered and with less swings. A market that if I want to invest in a company that makes widgets, I can invest in that company without worrying whether a !%?!load of other people are trying to bring it down. A market in which that if I want to know everything relevant about a company I can without having others spread rumors and lies in order to promote their own positions. I just want a simple and transparent way to invest and make my portfolio grow, all at the same time making my country and society grow with it. Something that has been lost in all of this. What has been going on for the past couple of months has been especially deplorable. The swings in market values in both directions have hit new highs and lows, all at lightening speeds. Up 500 points then down 500 points, and all in the past 10 minutes. Deplorable, just deplorable! This volatility, measured by what they call the .VIX is at an all time high. Normally this index of fear and panic hovers around 18 or 20, but for the past month it’s been around 70. That’s major! CBOE Volatility Index Honestly, I have no idea how they figure the .VIX, I think it has something to do with options (more complexity that needs to stop). Personally I think they measure it by how often and how bad the toilets at the New York Stock Exchange get clogged up. The more crap trying to be flushed >>> therefore the more clogged the pipes get >>> therefore the higher the volatility! Hey it’s as good of a measurement as anything else! Bodily functions are a true insight into your soul. Where was I, oh yeah cutting down on volatility. How we do this, not exactly sure – human nature is human nature and we’ll ALL probably do this ALL over again in 10 years. I did blog ‘The Fix’ back on 3/22/08 using taxes and the IRS which I think still would be best. Get ‘em where it hurts – the wallet, and maybe they’ll stop! Maybe not, but at least it helps pay for the mess afterwards. John Bogel of Vanguard believes in the same thing. Listen to John Bogle of Vanguard. Hey, whom would you rather listen to? Me? John Bogle? or You choose, but choose wisely!
And everyone please don’t neglect the fact that oil has come all the way back to quasi reality at $72 per barrel. Yeah, there were never any speculators in this market driving the price way up. Right! We must all take this opportunity to keep the price down and switch over to alternative or reasonable energy sources: BUILD.. BUILD.. BUILD. DRILL.. DRILL.. DRILL. _______________________________________ apppro’s take for 10/15/2008 @6:30 pm EST: Deplorable! Just deplorable! I hope everyone read seeker’s last blog from 10/14. He’s correct when he says this all has become a self-fulfilling prophecy; I just don’t agree with him on how we are getting there. Usually, as he suggests, people convince themselves of something by telling themselves over and over and over again the same thing until that suggestion becomes reality. Its just in this case we’re not saying it, but rather we’re allowing others to shove down our throats that things are very bad and we must pay the price. WRONG! “The future has not been written. There is no fate but what we make for ourselves.” A recession (depression) is not inevitable. We are allowing others to convince us of such, all for the sake of ratings. Face it – fear, destruction, catastrophe, etc. sells, and nothing sells better then someone else’s pain and suffering. Just pull CNBC off the air for 1 week and the entire ’crisis’ will go away. Overly simplistic, maybe, but the point is still there and we need to stop all this negativity and hysteria. Instead of coming up with some reasonable alternatives, these TV personalities just keep harping on placing blame, and finding a villain sells. CNBC needs to take a long, hard look into a mirror when it comes to assessing blame. I remember several incidents over Beare Sterns when a reporter (Charlie Gasparino) would come on, rumormonger something important or not, and you could watch the stock price move 15% in 15 seconds. Even their own reporters would comment on it as it was occurring! CNBC stopped reporting the news and went to making the news a long time ago! I’m not naïve and I know the financial system has many flaws, but trying to correct decades of well-meaning errors overnight is not healthy either. The current crisis is proof of that. Deplorable! Just deplorable! BUILD.. BUILD.. BUILD. DRILL.. DRILL.. DRILL. _______________________________________ apppro’s take for 10/15/2008 @8:30 am EST: Now my friend who doesn’t buy stocks and doesn’t care whether the market goes up or down, owns a stake in the 6 ‘Must Not Fail’ banks; and that’s in addition to the rest of the crap Paulson has been spending his future on. For some stupid ass reason, Paulson thinks that enabling the banks with more free cash will actually get them to loan it out. Bull!%?!! They’re not loaning out the money they have now: JPM buys Beare Sterns & WAMU, Bank of America buys Countrywide & Merrill Lynch, and Wells Fargo buys Wachovia. Short on cash to loan – yeah right! Hey Hank, get it together and: Take a small amount of that ‘Rescue plan’ = maybe 30 billion and buy back the CDO’s of the muni bond insurers (Ambac, MBIA) – RIGHT NOW! Recapitalize them, as Sec. Dinallo of NY wanted to do 10 months ago. Make sure the ratings agencies then immediately upgrade the ratings to AAA, which they said could happen. Have the FED give an implicit guarantee to ANY NEW insurance policies written on the bonds. Basically guarantee the bond’s triple A, not the policy or the company. Doesn’t cost a nickel. Maybe the Fed could kick in an incentive for any bonds issued for Capital Projects to help with employment and infrastructure. NOW the municipalities can issue bonds and BUILD.. BUILD.. BUILD. Puts people back to work. Pays our bills, etc. We need the bond insurers restored back to normal and we need it now. Solves ALL the issues at little or less costs. I hope everyone had a chance to read over seeker’s latest article below. Uplifting! He says, “Everything good, bad or indifferent passes with time and this too will pass.” “…this too will pass” yeah, and so will a kidney stone, but it will hurt like hell until it does. What’s more, if it doesn’t get flushed out quickly enough the damage and lasting effects can be terminal. Fiber baby…. FIBER! Cramer was at it again, but this time he gave an excellent talk on the role shorts played in all of this. Cramer's short rant. A must see! He missed the point however by not discussing the monoline role and his participation in their destruction. Exactly what he said was done to the big banks and has brought everyone to their knees, was done by him (along with his crony Bill Ackman) to Ambac and MBIA over 12 months ago. The start and cause of all this!!!! Meanwhile, here’s another great article on how the ratings agencies helped to really screw things up. Moody's: Simply Irresponsible They’re still at it too, but now they moved on to the big industrials. Just take a look at what they did to Alcoa (AA). Remember that a company’s ability and cost of borrowing money is determined in part by their ‘credit rating’; just like you and me with our FICA score. Yesterday, the ratings agencies downgraded AA because they say their debt was too high now in relationship to the cost of financing that debt. Great – downgrade them because of high debt interest rates – ONLY to make their interest rates GO HIGHER because of that downgrade! Now that makes sense – NOT! Finally, getting lost in all this financial madness is the fact that oil is back under $80.00 as I predicted, thank you very much. If we have any chance of getting out of this financial mess, oil MUST stay down. We desperately need an energy plan. Here’s an idea: take some of that $700 billion and let municipalities upgrade their natural gas infrastructure in order to accommodate NG cars and trucks. Nah, that would put people back to work, cut down our independence on foreign oil, clean the air, cost less to fuel our cars, etc. etc. Nah, that won’t work! (Continued on page 82) |
