T Nation

Stock Market: Good Buy or Goodbye?


What say all of you?

What are the numbers on the y-axis?

Depends on how long you plan on investing, where you invest, diversification and risk tolerance.

If we are talking 40 years of investment, fuck yeah, and you should have been putting all 15,500 in your 401(k) last year and early 2009.

If you are talking 1-5 years, i wouldn’t. I think our economy is going to be bumpy as hell for awhile.

If you want inflated dollars then do it.

If you want real money buy Gold and Silver.

[quote]Anonymity wrote:
What are the numbers on the y-axis?[/quote]

Its the PE ratio.

Uh, I just made over 1k in 2 1/2 weeks, I think it’s doing ok.

[quote]waylanderxx wrote:
Uh, I just made over 1k in 2 1/2 weeks, I think it’s doing ok.[/quote]

But we are not really creating jobs…

There can’t really be a jobless recovery, well at least a lot of the gray hairs I know are skeptical.

These gains should rescind.

[quote]John S. wrote:
If you want inflated dollars then do it.

If you want real money buy Gold and Silver.[/quote]

I don’t know man, outside of the Carter administration and 2006-Today, it didn’t really offer a better return than anything else.

EDIT:

Also, you would be buying now at the highest price gold HAS EVER BEEN. That means you are gambling the economy keeps shitting hardcore, and the price goes up. If the market turns around, you will have to hold your gold for what, 35-50 years to get the same price you bought it at.

Gold was a good buy in 2006, not so much today.

[quote]countingbeans wrote:

[quote]John S. wrote:
If you want inflated dollars then do it.

If you want real money buy Gold and Silver.[/quote]

I don’t know man, outside of the Carter administration and 2006-Today, it didn’t really offer a better return than anything else.

EDIT:

Also, you would be buying now at the highest price gold HAS EVER BEEN. That means you are gambling the economy keeps shitting hardcore, and the price goes up. If the market turns around, you will have to hold your gold for what, 35-50 years to get the same price you bought it at.

Gold was a good buy in 2006, not so much today.[/quote]

Look at all the phantom dollars that are going to be pumped into the system next year. Gold/Silver and Asian currency’s are the only place to be.

[quote]countingbeans wrote:

[quote]John S. wrote:
If you want inflated dollars then do it.

If you want real money buy Gold and Silver.[/quote]

I don’t know man, outside of the Carter administration and 2006-Today, it didn’t really offer a better return than anything else.

EDIT:

Also, you would be buying now at the highest price gold HAS EVER BEEN. That means you are gambling the economy keeps shitting hardcore, and the price goes up. If the market turns around, you will have to hold your gold for what, 35-50 years to get the same price you bought it at.

Gold was a good buy in 2006, not so much today.[/quote]

exactly…one thing you can bet on…when all the infomercials start about how great a buy gold is…well thats generally about the worst time to be buying it

[quote]John S. wrote:

Look at all the phantom dollars that are going to be pumped into the system next year. Gold/Silver and Asian currency’s are the only place to be.
[/quote]

For the life of me, I can’t think of the English bank that went belly up betting on futures… Well it was blamed on one guy, but his bosses didn’t watch him.

I pretty much disagree with your investment strategy. I don’t buy high to sell low.

And what do you mean by phantom dollars?

The doubling of our money supply, the stimulus money that is being injected into the economy next year. The banks releasing the phantom dollars next year all leads to Gold rising.

We will see gold at 2000 an ounce next year.

[quote]morepain wrote:

[quote]countingbeans wrote:

[quote]John S. wrote:
If you want inflated dollars then do it.

If you want real money buy Gold and Silver.[/quote]

I don’t know man, outside of the Carter administration and 2006-Today, it didn’t really offer a better return than anything else.

EDIT:

Also, you would be buying now at the highest price gold HAS EVER BEEN. That means you are gambling the economy keeps shitting hardcore, and the price goes up. If the market turns around, you will have to hold your gold for what, 35-50 years to get the same price you bought it at.

Gold was a good buy in 2006, not so much today.[/quote]

exactly…one thing you can bet on…when all the infomercials start about how great a buy gold is…well thats generally about the worst time to be buying it
[/quote]

Except you have it backwards, all the infomercials I see are people who will buy your gold off you, which means it’s a good time to hang onto your gold or buy more yourself.

V

[quote]John S. wrote:
The doubling of our money supply, the stimulus money that is being injected into the economy next year. The banks releasing the phantom dollars next year all leads to Gold rising.

We will see gold at 2000 an ounce next year.[/quote]

This shows little relationship between money supply and inflation.

Enjoy having bought your gold at 1,200+ and it only being worth 800 after the gold market corrects itself.

Buying high and selling low isn’t a great plan man.

I’m a little on the fence here. While I agree with the sentiment that the U.S. dollar is going in the tank because we keep jacking up the supply, currency is always relative to some other currency. Even though we are printing money by the bundle and theoretically devaluing our dollar, other currencies like the euro or yen have only gained some ground (but not a staggering amount) because their respective countries have also been hit by the global recession. So despite domestic economic upheaval, it seems to me that there is still a sense of status quo as far as currency risk. The U.S. is the only country that can truly print more money with little recourse.

Now getting to precious metals, they along with other hard commodities are generally viewed as a hedge against a falling dollar. But if the dollar isn’t falling relative to other currencies, then how effective of a hedge are these types of investments? This is why I have the opinion that although china holds a ton of U.S treasuries, they are essentially stuck with them. Yes, china has us by the balls because they can sink us if they so choose. But at the same time, we essentially have them because china has no feasible alternative. Should china dump a massive amount of treasuries (and really tank our dollar), it would be a case of cutting your nose to spite your face. This is why they are now stockpiling on the aforementioned precious metals and commodities. Thus, in spite of the recent rally, I am still somewhat bullish on precious metals and commodities. To me, it is more of an issue of simple supply and demand over the long term rather than hedging against the dollar. I do think that $2,000 gold is possible because china will horde it.

[quote]countingbeans wrote:

This shows little relationship between money supply and inflation.

Enjoy having bought your gold at 1,200+ and it only being worth 800 after the gold market corrects itself.

Buying high and selling low isn’t a great plan man.[/quote]

Your right it is not, that’s why staying in the stock market and the dollar is a bad idea.

How is the market going to correct itself? Is helicopter Ben going to raise interest rates?

Wait until you see stimulus 2.0(Job creation bill), you will never see so much printed money in your life.

Gold > Paper.

If one takes the Clinton-era bubble as being an anomaly that likely won’t be repeated anytime soon, then no time in the last 70 years has the P/E ratio been much higher than presently.

And if you exclude the peak of the Roaring 20’s, then it’s never been much higher than presently, and usually lower.

With regard to future earnings – which are ultimately, other than the possibility of sale for assets, what yields return on the investment – there is a political party in power that favors higher corporate taxation, higher costs of employing persons, things such as carbon taxes, and higher taxation of capital gains and dividends.

Thus giving reason to expect less cash in the pocket from each share of stock owned.

If the reverse were true, then I’d have an expectation of stock values rising, even after inflation.

[quote]John S. wrote:

How is the market going to correct itself? [/quote]

Let me know when you finish your economics class that covers this…

Otherwise I’m done. I listen to Millionaires, I’m not going to argue with someone in college about this.

[quote]countingbeans wrote:
Depends on how long you plan on investing, where you invest, diversification and risk tolerance.

If we are talking 40 years of investment, fuck yeah, and you should have been putting all 15,500 in your 401(k) last year and early 2009.

If you are talking 1-5 years, i wouldn’t. I think our economy is going to be bumpy as hell for awhile.[/quote]

It’s 16.5 this year. woo hoo!

[quote]Bill Roberts wrote:
If one takes the Clinton-era bubble as being an anomaly that likely won’t be repeated anytime soon, then no time in the last 70 years has the P/E ratio been much higher than presently.

And if you exclude the peak of the Roaring 20’s, then it’s never been much higher than presently, and usually lower.

With regard to future earnings – which are ultimately, other than the possibility of sale for assets, what yields return on the investment – there is a political party in power that favors higher corporate taxation, higher costs of employing persons, things such as carbon taxes, and higher taxation of capital gains and dividends.

Thus giving reason to expect less cash in the pocket from each share of stock owned.

If the reverse were true, then I’d have an expectation of stock values rising, even after inflation.[/quote]

That is pretty much why I said if you are looking 40 years down the road, yeah get in. But if you term of thinking is limited to the next 24-60 months I suggest staying away.

I am obviously talking about regular people here too. I’m not offering any advice for stock brokers and financial analysis here. If you are exposed to this and can watch and day trade, shit do what you will.