And Now, Some Good News
In order to get rich, you have to know how to "sell high." But you also have to do another thing first, and that's "buy low." People often forget that part, and end up buying high and hoping to sell higher.
Buying low is a bullish thing to do. But it's also a risky thing to do, too. And with a country and an economy in a justifiably sour mood, people aren't taking the risks they used to.
So what's the case for optimism? Over at a fine economics blog, Calafia Beach Pundit (hat tip: Mark Perry) has put together an immensely cheering collection of 20 bullish charts. Here's his take:
Pessimism is rampant, and most of the articles and commentaries I see have some doom-and-gloom flavor to them; indeed, many pundits are already claiming to see a double-dip recession either in progress or as imminent. I think the "conservative" bull case—that the economy is growing at a sub-par trend rate of 3-4%, which will leave the unemployment rate uncomfortably high for some time to come—is not getting its fair share of the news.
And here are two of my favorite charts from his excellent post -- though I really suggest you click over there and see them all.Here's one for US Industrial Production from 1997:
And here's another one, the HARPEX Shipping Index, which I love because I'm a container ship groupie:
Pessimism is easy. Optimism requires maintenance. And being bullish means putting down some money. How bullish are you?
- Comment (7)
- · Quote
- · UnfollowFollow (1)
Comments :
Jul '10
Re: And Now, Some Good News
I'm bullish on gold and silver.
That's based on a simple investing philosophy: governments will do insane things that destroy wealth.
May '10
Re: And Now, Some Good News
I'm holding onto cash right now and waiting for certain opportunities to drift down into insanely cheap territory when people stop thinking rationally and start throwing out the baby with the bath water. For example, a few years ago everyone panicked and bank stocks went into the toilet. I was able to pick up Sun Trust shares at a price that put a lesser value on the entire bank than the enormous block of Coke stock that Sun Trust holds. At that point, I felt pretty comfortable about the stock's prospects.
May '10
Re: And Now, Some Good News
I haven't moved my 401(k) stuff out of equities at all. I may balance the allocation of the funds a little bit because of my advanced age. I'm also looking at increasing the savings rate; my most likely move is to add more savings and put that into lower risk instruments, not shift out of stocks.
But if things go wildly South, we are all screwed anyway, and it makes no sense right now to follow and force the market all the way down based on pure mass psychology when you can dollar-cost-average low purchase prices for some pretty decent companies. If the US isn't toast, this stuff will go back up eventually.
It makes no sense to me to speculate at very high commodity prices in minerals that have inherent value far lower than the current prices. Silver and gold have some limited (industrial) utility, along with their jewelry uses, but buying high is not the smart time to enter that market, just because people are suddenly building fallout shelters full of canned goods. Look at where gold was in the early '80's, and what happened to it after that.
May '10
Re: And Now, Some Good News
I have a cousin who has continued to profit through the past few years, thanks to a unique stock screener he developed on his own. He and his investment buddy run The Bean for fun, not for profit, so I don't mind passing it along. They remain very optimistic investors.
Aug '10
Re: And Now, Some Good News
Luckily, I'm young enough that (hopefully, God, and US Elections, willing) the markets will recover. I've seen this as an opportunity to get more for my money when it comes to contributions in my retirement fund. I'm not skilled enough, nor do I have the cash, to do day-to-day trading, but I'm confident in the long run it will recover. That is, of course, assuming that course the nation's economy is altered from it's current trajectory.
May '10
Re: And Now, Some Good News
I start my day reading Mark & Scot and they have been saying something similar for some time. I think they are right and that things will/are improve(ing). However I also think that the US govt. has created a toxic environment for domestic business growth and as a result, the improvement will be limited in the US. Higher taxes, regulation, compensation (salary + benefits), energy costs, with huge uncertainty in a 1-3 year horizon is not a formula designed to promote strong growth.
As a result, most of our investment has shifted offshore to other markets, where we expect growth to be significantly stronger short - medium term. I suspect that many US companies will put most of their investment in other places as well, where they can earn a better rate of return, keep more of it, with less hassle.
If there is a tsunami November 2, followed by a regime change in 2012, i will re-look at it. Right now it looks like the best we can hope for is govt. obstacles frozen as is for two more years. There are more attractive places.
Aug '10
Re: And Now, Some Good News
I've made good money in the last sixteen months by investing abroad (China and Hong Kong) and in commodities. No matter how bad the dollar - now in a bubble phase - becomes, commodities and high quality foreign stocks can boom. And I believe they will.
The sad fact is that radical Statists in Washington are waging covert war on us, both workers - except for union members - and capitalists. Whether it's intentional or not, the damage is done, and more is coming until they're disgraced and thrown out on their asses.
We're no longer the locomotive of world prosperity, the BRIC's are: Brazil, Russia, India, and China. We're now somewhere toward the back of the train.
Wall Street and American stocks may or may not stay in the toilet while the rest of the world generates great wealth. Bonds should be avoided, since high inflation is almost certainly inevitable.