Aske
Lederhosen
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Re: What would you do?
« Reply #15 on: November 14, 2008, 09:58:48 AM » |
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The problem with the market is there really aren't any bluechips left that trade like bluechips. They're just as volatile as tech stocks right now. What day or even the hour of the day you jump in could mean the difference between making a profit on Day 1 vs. being stuck with the stock for several years just to make your money back.
Agree. I have no doubt that (assuming we do) when we come out of this nasty hyperpression, about 18 months from now.... you'll instantly see a new class of equity products or some other insane rampup in bubble standards (like commodities) and we'll see a 10k jump in the DJIA in less than 4 months. Followed by another massive crashback 2-3 years later.  |
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century. -- Chimpy McFlightsuit, CEO of Bu$hco Industries of 'Merka |
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Blader
Straitjacket
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Offlinevagazzling vajayjays since 1876!!
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Re: What would you do?
« Reply #16 on: November 14, 2008, 11:12:12 AM » |
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So Buffet essentially thinks that, if he is buying big companies broadly (who knows if he is) that around 1985-1990 an essential shift in the value and behavior of DJIA (as a leading indicator of overall domestic equity performance)... such that a disjoint in the DJIA for example occurs and a new (log) slope should be present-- that we have truly floored out at around 8000-8500. I wonder who else called this as a floor a while ago?  Now if only I really understood the background on why this fundamental disjoint happened... it's pretty obvious (to me) that it did... at this point. (yes, it's a combination of many things, credit expansion, electronic trading explosion, equity bubbles, new derivative products, expansion in use of derivatives, different FED policies, many others, etc... but how do all these tie/work together... I need to research this more if I can find the time)  If you truly believe there is no disjoint, then the plot says we should floor out around 4000 or so. SELL SELL SELL This relationship, and what it might mean, is no more impressive than what can be derived by analyzing leaves scattered at the bottom of my noon tea cup. |
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gleek
Flak Jacket
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OfflineE chu ta!
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Re: What would you do?
« Reply #17 on: November 14, 2008, 11:17:26 AM » |
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I actually didn't want this to be discussion that's solely about how much money you can ultimately make. There are other things to consider. If you pay off all your debt, there's got to be feeling of having a huge burden being lifted which you can't really quantify in monetary terms. Of course, there's also a feeling of security by having extra cash around. If you pay off the house, you lose immediate access to those assets, but it puts you in a position to accumulate money (through wages) much more quickly as well.
On the other hand, if you invest the money you continue having the burden of monthly mortgage payments plus you essentially start off 4-5% in the hole every year. But obviously you have the potential to earn much more than that. Most investment instruments are more liquid than a house, but you also don't want to be forced into selling any of those investments at the worst possible time should you not be able to pay the mortgage for one reason or another.
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Woman, open the door, don't let it sting. I wanna breathe that fire again.
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Spanky
Full Metal Jacket
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Re: What would you do?
« Reply #18 on: November 14, 2008, 11:20:04 AM » |
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So Buffet essentially thinks that, if he is buying big companies broadly (who knows if he is) that around 1985-1990 an essential shift in the value and behavior of DJIA (as a leading indicator of overall domestic equity performance)... such that a disjoint in the DJIA for example occurs and a new (log) slope should be present-- that we have truly floored out at around 8000-8500. I wonder who else called this as a floor a while ago? Now if only I really understood the background on why this fundamental disjoint happened... it's pretty obvious (to me) that it did... at this point. (yes, it's a combination of many things, credit expansion, electronic trading explosion, equity bubbles, new derivative products, expansion in use of derivatives, different FED policies, many others, etc... but how do all these tie/work together... I need to research this more if I can find the time) If you truly believe there is no disjoint, then the plot says we should floor out around 4000 or so. SELL SELL SELL You can make an argument that from 1985 - 2000 the growth is as your red line shows (or steeper) and from 2000-now it is much less. It's just a graph. Break it down any way you want and get different results. Either way if I invest some money now in 20 - 30 years I will have more. Even if in 2 years we have aonther sell off it will grow again. You can see it happen all the time. I can count 11 in this chart alone if not more. |
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Spanky
Full Metal Jacket
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Re: What would you do?
« Reply #19 on: November 14, 2008, 11:23:04 AM » |
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I actually didn't want this to be discussion that's solely about how much money you can ultimately make. There are other things to consider. If you pay off all your debt, there's got to be feeling of having a huge burden being lifted which you can't really quantify in monetary terms. Of course, there's also a feeling of security by having extra cash around. If you pay off the house, you lose immediate access to those assets, but it puts you in a position to accumulate money (through wages) much more quickly as well.
On the other hand, if you invest the money you continue having the burden of monthly mortgage payments plus you essentially start off 4-5% in the hole every year. But obviously you have the potential to earn much more than that. Most investment instruments are more liquid than a house, but you also don't want to be forced into selling any of those investments at the worst possible time should you not be able to pay the mortgage for one reason or another.
How long do you plan to stay in your house? 3 to 5 years? 20 years? Till you die? Consider that. |
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Clive
Full Metal Jacket
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Re: What would you do?
« Reply #20 on: November 14, 2008, 11:33:21 AM » |
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I actually didn't want this to be discussion that's solely about how much money you can ultimately make. There are other things to consider. If you pay off all your debt, there's got to be feeling of having a huge burden being lifted which you can't really quantify in monetary terms. Of course, there's also a feeling of security by having extra cash around. If you pay off the house, you lose immediate access to those assets, but it puts you in a position to accumulate money (through wages) much more quickly as well. Which is why I agree Hobbit is right in what he posted, but why I wouldn't follow that path. Warren Buffet isn't the slightest bit worried about getting laid off next month, and he has an assload of cash to tide himself over if he suddenly gets unplugged from the market game. I do have the concern but not the cash-assload. I do what I think best to position my family for a negative event in the near term. (And I never said I wasn't continuing to pour money into retirement accounts. Just not that hypothetical extra-extra cash.) |
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Blader
Straitjacket
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Offlinevagazzling vajayjays since 1876!!
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Re: What would you do?
« Reply #21 on: November 14, 2008, 11:34:00 AM » |
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I kind of look at paying off the home mortgage as taking money out of my left pocket and putting it into my right pocket.
It's basically just a different place to park some cash.
However, I bet its a good feeling to most, that once the title is owned free and clear, you can't be driven out except by military force.
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hobbit
Tartan Jacket From: The Shire
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Re: What would you do?
« Reply #22 on: November 14, 2008, 11:42:16 AM » |
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I actually didn't want this to be discussion that's solely about how much money you can ultimately make. There are other things to consider. If you pay off all your debt, there's got to be feeling of having a huge burden being lifted which you can't really quantify in monetary terms. Of course, there's also a feeling of security by having extra cash around. If you pay off the house, you lose immediate access to those assets, but it puts you in a position to accumulate money (through wages) much more quickly as well.
On the other hand, if you invest the money you continue having the burden of monthly mortgage payments plus you essentially start off 4-5% in the hole every year. But obviously you have the potential to earn much more than that. Most investment instruments are more liquid than a house, but you also don't want to be forced into selling any of those investments at the worst possible time should you not be able to pay the mortgage for one reason or another.
No doubt there are emotional appeals to paying off the house and ridding yourself of mortgage payments. But I did answer the question of "what would you do?". I would invest it - my opinion. I have no idea how stable and secure your employment is. I have no idea what other debt you may be carrying. I have no idea how old you are or when you plan to retire. I have no idea if you have kids' educations to fund. All of these things can affect a decision. I have a pretty secure employment position, have at least 15 years before retirement (probably 20, or more), have no kids, and answered accordingly. YMMV, but my answer/opinion remains the same. Because yeah; for me, it was about how much money can I ultimately make  |
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I've gone to find myself. If I get back before I return, keep me here.
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gleek
Flak Jacket
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Re: What would you do?
« Reply #23 on: November 14, 2008, 11:53:50 AM » |
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I kind of look at paying off the home mortgage as taking money out of my left pocket and putting it into my right pocket.
It's basically just a different place to park some cash.
However, I bet its a good feeling to most, that once the title is owned free and clear, you can't be driven out except by military force.
That's an interesting way of looking at it. An analogy that I thought of that has a shorter time horizon (which I realize may make all the difference in the world) is one of those 24 month no interest no payment financing dealies at Best(Butt)Buy. If you had the cash to pay for a plasma TV upfront, would you still opt for the financing deal just to have the extra cash around? Heck, you could put the money into a 2 year CD and make 5% on BestBuy's dime. |
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Woman, open the door, don't let it sting. I wanna breathe that fire again.
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spacey
Amazing Technicolor Dreamcoat From: Group W Bench
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Re: What would you do?
« Reply #24 on: November 14, 2008, 11:54:26 AM » |
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So no one else would buy mag wheels, then?
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gleek
Flak Jacket
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Re: What would you do?
« Reply #25 on: November 14, 2008, 12:30:43 PM » |
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I actually didn't want this to be discussion that's solely about how much money you can ultimately make. There are other things to consider. If you pay off all your debt, there's got to be feeling of having a huge burden being lifted which you can't really quantify in monetary terms. Of course, there's also a feeling of security by having extra cash around. If you pay off the house, you lose immediate access to those assets, but it puts you in a position to accumulate money (through wages) much more quickly as well.
On the other hand, if you invest the money you continue having the burden of monthly mortgage payments plus you essentially start off 4-5% in the hole every year. But obviously you have the potential to earn much more than that. Most investment instruments are more liquid than a house, but you also don't want to be forced into selling any of those investments at the worst possible time should you not be able to pay the mortgage for one reason or another.
No doubt there are emotional appeals to paying off the house and ridding yourself of mortgage payments. But I did answer the question of "what would you do?". I would invest it - my opinion. I have no idea how stable and secure your employment is. I have no idea what other debt you may be carrying. I have no idea how old you are or when you plan to retire. I have no idea if you have kids' educations to fund. All of these things can affect a decision. I have a pretty secure employment position, have at least 15 years before retirement (probably 20, or more), have no kids, and answered accordingly. YMMV, but my answer/opinion remains the same. Because yeah; for me, it was about how much money can I ultimately make Obviously, everybody's risk tolerance is different based on their employment and family situation, but to me this is more of a philosophical question about where to draw the line between wanting make money and just flat-out being greedy. Given reasonable employment security, it seems to me that continuing to pay a mortgage in order to have investment money is really no less risky than taking out a cash advance on one of those 3% forever credit cards and investing the money. The difference is that if you default on the mortgage they take your house. If you default on the credit cards you can tell them to *fudge* off and just have your credit ruined for 7 years. |
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Woman, open the door, don't let it sting. I wanna breathe that fire again.
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hobbit
Tartan Jacket From: The Shire
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Re: What would you do?
« Reply #26 on: November 18, 2008, 11:00:03 PM » |
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Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
But which ones? He didn't really say. Guess that's what makes him savvy. Buy American. I am.Just wanted to revisit this after a discussion today with someone. No idea what Buffet is buying, however..... GE - a company that's clearly not going away, prices are down right now, dividends are up. BP - same as above. BP is also one of the few oil companies that actually IS putting money into alternative energy. DHI - one of the largest home builders in the nation ('the' largest probably). Housing will be respectable again one day, this company will be there. * The above is being shared with a safe harbor wrapper around it. |
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I've gone to find myself. If I get back before I return, keep me here.
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birdymaker
Straitjacket From: a third world country in the making
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Re: What would you do?
« Reply #27 on: November 19, 2008, 03:11:24 AM » |
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after spending many nights lately wondering how we are going to pay the mortgage, i think you can guess what i would say. you never know what the future will bring.  |
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women are like tornados. In the beginning there's a lot of sucking and blowing. In the end, the car's gone, the house is gone..
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Walfredo
Straitjacket
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Re: What would you do?
« Reply #28 on: November 19, 2008, 07:01:41 AM » |
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I'd invest it no question. Either that or I'd add a new wing to the current house with it and invest the rest.
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For hither not, I am the stallion.
Come fear, come love, I am the stallion.
You know that I am the stallion, mang.
I am, I am the stallion, mang.
You know that I am the stallion, mang.
I live, I walk, I am the stallion, mang.
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campy
Vest & Plus Fours From: Work :(
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Re: What would you do?
« Reply #29 on: November 19, 2008, 07:12:45 AM » |
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Oh - and Warren Buffet says he's investing in the markets again too. Right now. One of the worlds savviest investors is buying US stocks right now. So no matter what you think of me - there ya go.
But which ones? He didn't really say. Guess that's what makes him savvy. Buy American. I am.Just wanted to revisit this after a discussion today with someone. No idea what Buffet is buying, however..... GE - a company that's clearly not going away, prices are down right now, dividends are up. BP - same as above. BP is also one of the few oil companies that actually IS putting money into alternative energy.DHI - one of the largest home builders in the nation ('the' largest probably). Housing will be respectable again one day, this company will be there. * The above is being shared with a safe harbor wrapper around it. You're wrong about that one, but I do agree with your other points. Every major oil company is spending money looking into alternative energy, and you can expect those expenditures to increase heavily in the coming years. Two of the largest projects I am involved with now deal exclusively with alternative energy sources, and I have been told to expect more capital $ being funneled in that direction. Sorry I can't elaborate more, but believe me there isn't an oil company around that believes in long term sustainability with fossil fuels. |
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