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Old 24-01-2008, 01:21   #91
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I can see 2008 a bigger financial disaster than 1987 ever was. The market is ruled by sentiment which has nothing at all to do with practicality or common sense, the herd is in full flight dont get caught in the stampede stand back and watch.
When was the last time the DOW dropped 2% then shot up 5% to finish the day almost 3% up?. The smart money will be pulled out, the dummies will jump in to quick for bargains. The end result as i see it there will be lots of losers to buy shares off after it all comes to a crunching head in the distant future.
Be cashed for the crash.
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Old 24-01-2008, 01:24   #92
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Just jokin,

if you are an investor, do nothing.....it is the traders who love this sort of stuff. Go boating and check your shares less often.
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Old 24-01-2008, 01:38   #93
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Just jokin,

if you are an investor, do nothing.....it is the traders who love this sort of stuff. Go boating and check your shares less often.
no. it would seem that by acident we ended up in the best position.
living abord, boat paid for some cash in the bank not enough to live on but enough for 5ish years. at the moment we are going to sit it out, and cruse part time in northan europe and work in the winter to build the kity.Then hope we can catch the next boom and buy low and sell high! (a first for us we are normaly in the wrong place at the wrong time)
my wife is due to have a major op next week and we hope her helth problems, of the past two years will be over. then our lives can get back on track whatever that meens.
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Old 24-01-2008, 02:57   #94
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It's gonna be fun to watch for me as I am completely debt free and cash flow positive.

Honestly though - You, me and Dupree are deer in the headlights. Check out all the othjer forums. Everyone is talking the same way. We are standing by the watering hole and the lions are circling. We will definitely get eaten if we try to outguess the market. in? out? in? out? Who the hell really knows.

Watch out though when the big boys (like retirement fund managers) get spooked. Then we all get slaughtered. My brother is on the periphery of this. He say when fund managers he works with move positions, there are tracks to be laid, disclosure stuff to file and when one of them moves they all know it and start wondering why they aren't moving.

Don't forget - you can't lose money in the market until you sell.

My advice? Batten the hatches, set the storm sail, put out the parachute, make a cuppa cocoa, go below and hibernate. It will all blow like hell, some will die and then it will all come back and the sun will come out...

As for me? I'm still buyin'.
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Old 24-01-2008, 10:53   #95
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Rangiroo,

You said,
"I really could care less if I'm saying "Welcome to Walmart" when I'm 75...as long as I have spent the previous 20 years floating around the planet...."

and you nailed it exactly. I'm 62 and only working part time with not much money, but I fondly think back on my cruising years every single day.

Steve B.
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Old 24-01-2008, 11:33   #96
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Don't you just love it when people make these sort of statements then offer no alternative?

I know, you leave your money under your pillow and the tooth fairy gives you 10 percent interest! or are you both Mafia?
Sorry, but I'm not a financial advisor! What people do with their own is their choice!

What the bank paid me in interest on my checking and savings was a joke. I could sell all the pop cans I used last year and get more $ back.

Here's a joke GordMay posted a few years ago that could still stand true today.

Quote:
Here's another view on investing:

If you had bought $1,000 of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.
With WorldCom, you would have less than $5.00 left.
If you had bought $1,000 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit (Canadian), you would have $214.00.

Based on the above, my current investment advice is to drink heavily and recycle. This is a new retirement program, it's called the 401 Keg Plan.
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Old 24-01-2008, 12:01   #97
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Now that is funny. I don't know how I missed that originaly. Maybe because I don't read anything much when it is related to investment.
I heard last night on the news, that apparently NZ's interest rate is about 5% higher than the US interest rate. Now seeing as I always come up with these "I heard on the news" comments and Gord comes along with a different tail;-) :-) I will take the news item with a grain of salt. But one thing is for sure, the NZ dollar is getting waaay to high and is killing NZ exporters.
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Old 24-01-2008, 16:35   #98
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A bit of factual infomation about U.S. banks

Banks in the U.S. are allowed to loan out ten times the amount of money they have on deposit or put up themselves. THis is called discount banking and makes banks inherently unstable and is why, when there is a "run" the banks end up folding.

Inflation-Deflation cycles are where the big money is made. One or two percent inflation doesn't seem like much, but over twenty years it mean twenty to forty percent inflation. When the economy inflates more money and credit are required. The way more money and credit is made is by the privately owned Federal Reserve telling the governement to print X number of dollars, which the Fed Reserve pays only the printing cost on. They then take this money and sell it, at interest, to the dozen Federal Reserve charter banks, who in turn further sell it more banks.

So, 1) there is a lot of money to be made by inflation and increasing the money supply. Second, when the whole game folds up and serious deflation occures, the people who have been making huge sums of dollars as things inflated, now have huge sums of dollars worth hundred of times more in buying power. Imagine paying $600 for a prime 24 unit apartment building, or 800 dollars for a 48' Ketch in like new condition. That's what serious deflation did in the thirties. I met a banker when I was a boy who'd sold a Duesenburg with less than 5,000 miles on it for $50 dollars. It kept his bank open, paid the utilities and cashiers, for two months! I also knew a guy who'd been a young accountant at that time. He and his wife drove a new car, lived in a big apartment and ate steak whenever they wanted. He made $6.25 a week.

Of course, we would not want to think these cycles are manipulated!
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Old 24-01-2008, 16:57   #99
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Banks in the U.S. are allowed to loan out ten times the amount of money they have on deposit or put up themselves. THis is called discount banking ...
It's called fractional banking and the reserve requirement is currently much less than 5%.

The discount window is a euphemism for the Federal Reserve Bank mechanism used to inject liquidity into the system. They don't physically print money - there is only about $800 billion of actual physical cash in circulation.

But they don't call economics the 'dismal science' for nothing...
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Old 24-01-2008, 17:37   #100
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So, if you had recently cashed out and had a million or more (usd) sitting in the bank…… what would you do with it in today’s uncertainty?
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Old 24-01-2008, 18:34   #101
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So, if you had recently cashed out and had a million or more (usd) sitting in the bank…… what would you do with it in today’s uncertainty?
Easy. Set sail.
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Old 24-01-2008, 18:47   #102
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what would you do with it in today’s uncertainty?
Well, and this is serious, there are times in the market where it is difficult to work out where the best area could actually be capital expenditure of a personal nature. Yep, the time to see what equipment may be cheaper than normal. In a recession maybe car makers will need to cut the price to move stock so it could be a good time to buy a new family car that you intend on keeping for 10 years. cars have to be bought at some time. Or, in our case, and I don't intend this as a joke, now might be the time to buy another boat.
Look at these factors that people keep mentioning (whether they are correct assumptions or not)
1) Realestate down
2) Shares Down
3) Boat prices down

So if you are not in realestate and don't intend investing at the moment; if you are out of the sharemarket or feel it will go down further and want to sell, you will have liquid assets to help negotiate the price of a second hand boat, or even knock down the price on a new boat.

The end effect is you have bought a high captial cost item at low interest at below market value and even though it may depreciate so it would depreciate if bought at any other time too.

All in all: Whoever says "Go Sailing Now" might be giving excellent financial advice for this market


Mark

(I would steer people away from pesimism about the sharemarket. Ours is up again today All Ords +175.20+3.13%but as someone pointed out I may be being paid to say that )
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Old 24-01-2008, 19:51   #103
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Thanks, yes, it is Fractional reserve banking. The U.S. fed reserve doesn't physically print the money, they tell the government how much credit they want to inject, and buy the money from the Gov. - I've read somewhere around 5 cents per thousand is their cost. I have never seen the 5% figure for the reserve part of fractional reserve banking.

The reason I feel sure this situation will tank is that everyone, including the Government is over their head in debt. And one of the very wild cards, is the 10 TRILLION dollars in credit derivatives.

And to give an answer to Pelagic's question, whatever I did with cash, it would be no where near a bank.

Every month I do what Delmarey does, put enough in the bank for a month. I fully expect to lose that money some month, but that's all the banks will get from me.
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Old 24-01-2008, 19:55   #104
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Mark,
You are the only person I know of who is still putting money in the Stock market. Smart money was out there a while ago.
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Old 24-01-2008, 19:58   #105
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So, if you had recently cashed out and had a million or more (usd) sitting in the bank…… what would you do with it in today’s uncertainty?
75% in the US and 25% overseas.

+5% CDs spread around and then...

Go sailing...

I could seriously live on 50k a year..

And if the world melted down and the money became worthless I'd beach the boat on some island somewhere and live on bananas, fish and coconuts.
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