Investing

[silvercitytile]

good lookng out Jim

[Mr.Miyagi]

I have serious doubts about any real future gains in the stock market. This recovery is largely due to the money printing of the central banks, as will any future "recovery". The Boomer generation is now at retirement age and will be looking to liquidate their holdings for cash positions and the younger generations will be unable to absorb the current stockpile of watered down paper. The middle class has been decimated and the youth are going to have problems finding jobs which will allow neither one of them to have discretionary income in which to invest with, at least en masse. The stock market is nothing but a gigantic Ponzi scheme built on a generational platform. The typical capitalization ratio 10:1, Fractional reserve banking ratio 10:1 There are definitive winners and definitive losers in the stock market. Simply put, everybody cannot put $1 into the pot and pull $2 out.

[Davestone]

Well if you've noticed this year the market players have not been affected by the world issues,diminishing middle class,the lack of jobs or a crumbling Europe.By now everyone should know how i feel,so if (i) think it's going to be a bull run ya gotta think twice.
The only thing i think that can drag it down is the European problem or a disaster.

But keep an eye on bank stocks, they are tanking,this could mean something is coming.Or it could be the housing and bailout situation.

[Tiger Mountain Tile Inc]

Cary makes a good point, but, in my opinion, it is a very long term outlook. I'm looking a year or two down the road. For the next couple of years I think the stock market will do well just for the reason mentioned: money printing.

There's two angles on this: 1) With the money supply growing at an increasing pace, there's more money to invest in the market, and 2) people will use the market as an inflation hedge rather than keep their money in a bank account.

But eventually with the retirees pulling money out, amongst other things, stocks could go into a long term bear market.

[pitterpat]

Get the book "I Will Make You Rich" by Ramit Sethi, good read and good practical advice. Read it first then start your investing strategy.

[ob1kanobee]

Retirees are looking for longevity and guarantees. I know because I see it often and that is why the sudden uptick towards insurance products. How do you make 200k of cash last till you die? It's fairly easy with insurance products but you have to have realistic expectations.

Another neat unknown that most retirees don't know about or have access to is something called 'After-Market' annuties. These are proceeds from structured settlements, lawsuits, lotteries and old annuity contracts which are bought. Then they are set up as annuities once a law group and an insurance company get it approved by the court. There is absolutely no liquidity even if the owner dies.

So if you purchase one for instance with a lump sum payment, it is for a certain period of time and some have cost of living adjustments but when you die, the beneficiary continues to receive the money or payments instead of the actual cash remaining value. They are almost like buying a house and tricky to sell because you have to be able to 'sell' the concept. Reason being is by the time I get the list and present it to a client, they are sold. So I sell the concept then throw an offer to the market and wait. They are not for everyone because of the limitations but some pay out as much as 9% to the client. Average is 4% to 7%. Some pay out lump sums and some pay out monthly. Some are yearly, all depends.

When you here those JG Wentworth commercials, that is what they are buying. Then they get resold. Some are reserved for select individuals and never hit market. It's like buying a foreclosure. It's too complicated for even some seasoned agents. I just happen to have a good group of lawyers and custodial managers to handle the transactions and understand how they work. Most folks will never even here about this sorta thing.

Here is an example of one I'm looking at now (it's probably sold already):
You stroke a check for $138,694 in return you receive $1,600 per month for the next 180 months which comes out to $288,000 over 15 years. That is 7.5% interest with no risk from one of the largest life insurance companies in the world (A- carrier).
You have to remember insurance companies must have more cash reserves than cash going out. Banks only have to have 10 cents on the dollar if I'm not mistaken. Heck, a few months back, I met a guy whose son just started a bank. If you want to get rich, don't play the stock market, go start a bank LOL All kinda risk there though in starting a bank. Plus you might get accused of being in a Ponzi scheme too!

Every so often I run into really rich people. People who somehow just seem to know what is gonna happen before it happens. Recently one of those people actually owns a NFL football team. I was introduced to him and was kinda embarrassed because I didn't who he was much less about football but I do know he smelled like money and I know what a lot of money smells like when I am standing next to it. Anywho, the day I start to see these people doing odd stuff, like buying a bunch of food supplies, I know we have problems. Frankly, it doesn't even take that kind of caliber of person to give the clues but I can't go into that. All I know is some people seem to know stuff before it happens and the rest are shilled by guys like Jim Cramer. If Cramer and these charts had all the answers, do you think some of these guys would be paying HUGE bucks when they could get advice for free? Watch out for the man behind the curtain is all I can say without stepping into scary waters. Gonna get my securities license here in about a year and I won't even be able to talk about this stuff as 'they' don't really allow you to on forums and if you do you are monitored.

[Mr.Miyagi]

There's two angles on this: 1) With the money supply growing at an increasing pace, there's more money to invest in the market, and 2) people will use the market as an inflation hedge rather than keep their money in a bank account.

Jim,

The problem with scenario 1 is hyper-inflation. Which is why the Fed is paying interest on reserves. I do agree on your short term outlook. When the debt ceiling is raised and the printing presses are turned back you'll see an uptick in the market. But as I stated before, these upswings are not based on anything of substance and are purely driven by monetary expansion. Unfortunately, as history has shown they simply will not stop printing money from here on out. I am troubled by how you came to the conclusion of the market being used as a hedge against inflation versus gold or silver.

Here is an example:
http://www.resourceinvestor.com/News...-to-Gold-.aspx

[Tiger Mountain Tile Inc]

I don't think we're that far off in our views. I think the majority of the current run of the stock market is a consequence of money printing. If you look at a chart of the S&P and compare the dates of the bailouts, you'll see that the market takes off around the times the money enters the market. I think this will continue.

In a hyperinflation scenario, which I think is a guarantee, I believe there will come a time when people want to get their money out of cash and into assets. Obviously gold, silver, and other commodities will benefit from this, but I also think people will put it into stocks, real estate, and collectables, such as art. When people realize that the money they hold is losing value, they will get it into whatever is not cash.

I've read a little bit about economies that go through hyperinflation and the behavior shifts. People get their paychecks and spend them immediately. They go to the grocery store and stock up on food.

There's only so much gold and silver to go around. They will become scarce. One of the reasons I think stocks will benefit is simply because they aren't cash.

[Tiger Mountain Tile Inc]

I've attached a chart of gold that was printed up over the weekend. Today (Wednesday) gold is $30-40 higher than what the chart shows. The top of the channel is approx. $1700. It will be interesting to see if it gets that high.

Just to update a couple of the past posts: the SPY (sort of the S&P500) did end up breaking down in that chart that I posted earlier. Also, in regards to the trading scenario that I mentioned with Freeport (FCX), you would have been stopped out the very next day with approx. a 1% loss.

I would like to give a congratulations to a Jim Sinclair of jsmineset.com. Back in 2002, when gold was around $275, after it had done nothing for 20 years, he predicted gold would run to $1650 in 2011. Gold closed above 1650 yesterday, for the first time ever. His prediction was a little off, however. He said it would reach 1650 by Jan 13(?),2011, and he ended up being 7 months off. If someone were to follow his advice and buy gold 9 years ago, I don't think they would be too upset by the timing part of his prediction. I've read his blog everyday since 2005 and have a great amount of respect for him and his views.

By the way, he's made another prediction as to gold, if anyone cares. He predicts it will reach just shy of $12,500.

[jondon]

Jim, so what you are saying is to not cash it in now. Wait till it gets to 12,500.00 When exactly does he predict this will happen or doesn't he give a year. If it is gonna hit that amount in our lifetime then I would say wait

[cx]

Originally Posted by Jim

Back in 2002, when gold was around $275, after it had done nothing for 20 years, he predicted gold would run to $1650 in 2011. Gold closed above 1650 yesterday, for the first time ever.

Only problem I have with that sorta prediction reliability is not having any idea upon what the guy might have been basing his prediction. Knowing, in hindsight, of course, some of the rather bizarre and unpredictable things that happened in the political and financial arenas during that period, one might find it rather easy to credit his success to Blind Squirrel/Acorn syndrome.

Last time I considered buying gold bullion it was trading at about $285. I didn't buy at that price. I would have done well, of course, to listen to your fella, but I didn't know your fella from alla other "experts," many of whom thought gold was actually pretty high at that price. Makes you wonder if his coin toss was just better or if he actually knew some things the others didn't, eh?

Well can I recall back in 1980 when gold hit $800 and some experts were predicting $3,000. A few thought it would go back down where it more reasonably belonged. Nobody gave much credit to the correct forecasters of the change when it got back down about $200, as I recall, but they were correct and their forecast accurate.

Dunno. My personal prediction is that gold will go either up or down. But that's just a guess.

[Tiger Mountain Tile Inc]

I understand you guys apprehension and you are wise to be. Here's a little more about Jim Sinclair's history. Forbes did an article on him about 10 years ago. http://www.forbes.com/forbes/2001/1210/190.html

Jim was the biggest independent gold trader back in the 70's. He had predicted that gold would reach $900. It never got there, but it did reach $887.50 interday. Sinclair recognized this to be the top and stayed up all night trading overseas and unloaded his gold position.

He then spent his time in other industries (such as fiber optic) until about the late 90's when he got back into gold again.

In looking at the article I don't see his $1650 prediction in it. It's probably in a different one. I'll see if I can find that one.

Keep in mind, I am not giving investment advice to anyone. This is simply stuff that I am interested in and so I post about it.

[ob1kanobee]

Pretty good interview with a hedge fund manager who says right now (6 months ago till.............whenever) it is NOT a good idea to own stocks. I like he treats the market and how they handle their investments however they are huge and smart but it is an interesting perspective on how hedge fund manager hide their money under the mattress.

http://finance.yahoo.com/video/cnbc-...BsYXl2aWRlbw--

[Tiger Mountain Tile Inc]

It's been a while. Originally, I thought the S&P would come down to 1050 (10,000 on the Dow) but it never quite got there. That being said, I think the worst is in, as far as the downside is concerned. In my opinion, now is the time to buy.

I don't expect a lot out of gold, though. 'Till next year, anyway.

[ob1kanobee]

Something interesting I was reading.

"the Nikkei is still down 70% today – nearly 19 years later" ...............Makes you wonder, could it happen here?

http://www.dailywealth.com/563/The-C...de-in-America-