gderek

I just couldn't resist and bought 100 FDX shares today. I may buy more in the next couple of days but I'm allocating other cash to S&P index funds. If they get much lower than they are now, I've got far worse problems than losing a few dollars in the market. And I wouldn't touch gold with a 10 foot pole. If you think you can beat the Goldman Sachs commodities desk be my guest. Then again that Ferrari worth of stock that I've lost over the last 4 months would look mighty good in the garage. We could have had the Cargo pilot's sports car club if we just timed the market right

renman95

I sold almost all of my FedEx stock August 2007, around $113. What little I had left I sold this past November for around $66. I think we will visit the $30's. I may be a trader at those levels.

As far a Dave Ramsey, I like his idea of being debt free only because of the financial perfect storm we're heading into. If we were in a nice normal bull market having Real Estate right offs are needed. But who knows what kind of tax breaks will be left with Chairman Obama at the helm. Ramsey's buy and hold forever is a scam that has been perpetuated by so-called financial gurus to sell books and to keep the market buoyed for the "big boys." The book, Stocks For The Long Run is a good read but what happens when you are a baby boomer and you run into a period like 1966-1982 where stocks went no where. The book, The 401k Hoax explores many other scams but one result is that after a few years the market was buoyed by retail investors. As more and more companies rid their pension plans and Joe-retail had no where to go the great stock market boom began...1982. Of course other factors were involved.

Most of the "old guys" have been told to buy and hold. Well, that's correct when your stock indexes live above the 200 day moving average and use it as support. You were told by your financial advisor to buy the dips, it'll come back. A funny/sad thing happened around November 2007 to January 2008, the 13, 50 and 200 dma rolled over. Now the 200 dma is resistance. Using the same rules as before is financial suicide. Buying the dips mean nothing and the buy and hold yields double digit...loses.

As you've probably guessed, I'm a chartist. For my major retirement holdings I use Clearstation.com and Stockcharts.com. It takes the emotion out of stocks. Most investors buy high and sell low. Take a look at a chart and you can instantly see where you are in the cycle.

I also practice what I preach. I rolled out of my stocks in Jan 2008 because I recognized the roll over. I read everything in sight about this event because I couldn't believe what was about to happen. I was 95% cash by Bear Stearns implosion. In July of 2008 I thought I would do a big trade...anticipate the recovery. I got scared out of my wits when the curve flattened in August. Before September rolled in I was totally out. At the end of the year I wanted to play an Obama rally which never materialized...it cost me a half percent. All in all, I was flat for the year. This year I'm down less than 1% because of the ill fated Obama No-rally. The Dow for 2009 is down 17.15% as of today.

I wish we had more options in the Vanguard Group. Like a short fund and ETF's.

As far as gold I bought in 2001 when it was in the $200 to $300 range. I have been buying since. I have also been a seller of gold, silver and platinum (Numismatic type) the past three years.

Ramsey's comparison of stocks, gold and bonds idiotic. If you are a passive investor you have no business being in stocks. Looking at your Vanguard once a year, or even quarter is financial abuse. The buy and hold philosophy is flawed. One might get lucky to hold during a long uptrend but who has that luck. Business is cyclical. Countries are cyclical.

Where is the market going forward...down. We are in a grizzly of a bear and will stay in a bear market until proven otherwise. Just look at the 200 dma on any major index and you will see that we have a long long long way to go. Any stock rally that goes up the the 200 dma is a time to sell if you have not done so yet.

Earnings for the S&P 500 have been recalculated to about $50 for all 500 stocks. During the last major recession, 1981-1982, the P/E ranged from 6 to 10. So, multiply $50 by 6 and 10 and the years range of the S&P 500 between 300 and 500. Today it sits at 764.90! In the same vein I could see the Dow 4,500-5,200.

Long term: I have no clue. Which is sad. It's because in the past after every recession there was hope of our Republic coming back stronger. I look forward and I wonder how to invest in a Neo-Socialist America. How do you put a valuation on Citigroup when the government owns 40% and strong arms the company at will. Do average French citizens own stock? Why would they? The "state" will take care of them. Look at any major index...look at the 200 dma...that is the "slope of hope."

Lastly, and most scary is that the government has been eyeing our 401k's since the Clinton days. One of Bill's plan was to nationalize the k's and to do a 10% distribution to those who were unfortunate to save. Guess what, these Keynsians are looking at it again. All they have to do is nationalize the banks and strong arm the Vanguards and Fidelitys. The argument will be that we need to have access to this money for fair distribution for the retired. Much like social security many of us will not see. Argentina is doing this as we speak. If I see this coming I will withdraw, pay the penalty and run for the hills so to speak.

⌐ AV8OR WANNABE

Well, he liked the idea of being debt free long before the "perfect storm" - it started some 20 years ago when he and his wife filed for bankruptcy because of the common mistakes most Americans make every day in personal financing...

Tax write-offs can never make up the power of a totally debt free person's ability to invest the money he/she normally would be paying each month is mortgage, credit card, etc payments… I’m not there yet and it will be a while but that’s my ultimate goal…

From his website...

Two Costly Tax Deduction Mistakes

I hate doing taxes. That's why I hire someone to do them for me. However, I do know the outrageous lengths people go to in order to get deductions - even if the deductions don't make mathematical sense. Here are 2 that I hear most often:
"It is wise to keep my home mortgage to get the tax deduction."

WRONG! If you've listened to me for any amount of time, you know I strongly encourage people to pay off their mortgage so they have their entire income to use for wealth building. (This is, of course, AFTER you've paid off all your other debts, have an emergency fund, and started investing for retirement and your children's college funds.) But when I talk about paying off the mortgage, I almost always hear from someone touting the tax deduction.
Let's do the math. If you have a home with a payment of $900, and the interest portion is $830 per month, you have paid around $10,000 in interest that year, which creates a tax deduction. If, instead, you have a debt-free home, you would in fact lose the tax deduction, so the myth says keep your home mortgaged because of tax advantages.

If you don't have a $10,000 tax deduction and you're in a 30% tax bracket, you will have to pay $3,000 in taxes on that $10,000. According to the math, we should send $10,000 in interest to the bank so we don't have to send $3,000 in taxes to the IRS. Personally, I think I will live debt-free and not make a $10,000 trade for $3,000.

"I can write off my car lease as a business expense."

If you own a business and lease a car, your business can write off that car as a business expense. First you should know that Consumer Reports, Smart Money, and my calculator say that leasing a car is the worst possible way to acquire a vehicle. Creating an unneeded business expense for the sake of a tax write-off is bad math just like the mortgage deduction.
My company owns my cars, which were purchased (with cash) used. We are able to straight-line depreciate those cars or write off the mileage. If you drive inexpensive cars in your business and put high mileage on them, take the mileage deduction. If you drive expensive cars but don't put many miles on them, take the straight-line depreciation. Both tax deductions are available to you without having a stupid car payment.

If you don't own a business and didn't understand anything I just said about tax write-offs, don't worry. Just know that, as a wise business owner, you don't want to lease a car.

Here's the key to tax deductions: do the math. If what you do to get the deduction costs you more than the deduction is worth, DON'T DO IT.



That's A Stupid Tax Write-Off
QUESTION: Steve’s condo will be paid off within the year. He wants to know if he can get a tax write-off, so they can begin saving to have children. Dave advises him to give more to charities, but cautions him against doing anything just for tax write-offs.

ANSWER: You can give more; that will create a tax write-off. That’s the easiest thing to do, but don’t take out a mortgage for the tax benefit. If you have a $200,000 at 5% interest rate, you would pay about $10,000 in interest. If you made $70,000 and wrote off $10,000, you’d pay taxes on $60,000. If you made $70,000, you’d be in a 25% tax bracket. If you didn’t have the write-off, you’d pay $2,500 in taxes on that extra $10,000. That means you’d send the bank $10,000 to keep from sending the government $2,500. If you want the tax deduction without the debt, give more to your church. You can also adopt a child and get a tax credit. Just beware of doing things from a tax viewpoint; that’s a bad plan.

⌐ AV8OR WANNABE

It's very obvious you know nothing about Ramsey and his so called "buy and hold for ever scam" - I've been listening to him for almost two years and have no idea what you're talking about....

⌐ AV8OR WANNABE

Yes they do and their retirement is tied to the stock market just as much as it is here...

You know, I'm a conservative myself and don’t like most of the ideas "The One" has so far come up with; I don't like them because being from Europe I've seen many of those proposals in real life and know they don't work very well...

Having said that, fear mongering will get you nowhere, especially if you don't do your research first... It's so easy to keep throwing labels and epithets at the way things are done elsewhere because God knows we are right so they must be wrong…

Not from France but I venture to say that the Republic of France is way more capitalistic than the Republic of California… Since California is part of the US, does that make our country a communist enclave?

In the past, the Swedish government owned about 10% each of both SAAB and Volvo car companies... Then GM and Ford took over and look where it got them... The failed approach of GM and Ford’s management resulted in SAAB filing for bankruptcy protection as of last week...

My point is, let’s argue and discuss but knock off the vilification process… It just doesn’t work, especially in this group. Remember, many pilots here have lived in other countries so using general statements such as “watch out, they have socialism over there” sounds way too simplistic…

renman95

Criticism noted. I was a bit too harsh on poor Dave. My wife and I have also listened to him for two years. I catch his show off and on. What irks me about him is his stock market advice. One has to be nimble, more now than ever. We are in a traders market. It's not one to put money into and forget...unless you are your twenties and have the time to invest. For BB's, they may not have enough time to recoup their loses. This will be a long down and sideways market imo. There is far too much debt that needs to be resolved. We, as a country, haven't even addressed the drag of commercial RE, credit card debt, auto loan debt, credit default swaps, and interest rate swaps. Housing is merely a blip that first showed the derivatives crisis. It's by no means the biggest percentage of toxic mess. It's less than 2% of the total problem...but it does affect the most people, so far.

⌐ AV8OR WANNABE

What kind of "stock market advice" are you talking about?

The only advice he ever has is to avoid individual stocks and focus on mutual funds instead. Also, those funds must have been around for at least 10 years and have a good tracking record. IF you have more than 10 years before your retirement he thinks you should save in moderate to aggressive growth mutual funds... If less than 5 years you need to be getting out of the stock market all together...

His advice is very seldom about the stock market and 99% about building up the first $1,000 emergency fund, paying of your credit cards, building up a 6 months "Murphy's Coming" – all expenses fund, saving up for college, etc, and then paying of your mortgage...

Once you have no debt he suggests to save the money you'd be paying in credit card and mortgage bills to invest in the stock market (see above)...

It’s very obvious you’re an occasional listener as you’re missing his message for the message you want to hear…

renman95

......fear mongering will get you nowhere, especially if you don't do your research first... It's so easy to keep throwing labels and epithets at the way things are done elsewhere because God knows we are right so they must be wrong…

Not from France but I venture to say that the Republic of France is way more capitalistic than the Republic of California… Since California is part of the US, does that make our country a communist enclave?


Well, there has been an adage for some time that "as California goes so goes the country." I moved out of California in four years ago, I had been there for forty years. I love the place. I just don't like living with 40 million of my closest friends, some are even legal. But that's a sidebar. It's no longer a Republic, more of a People's Republic. I could go on and on with what is wrong with the politics in that state. Their fiscal mismanagement could bring down the entire country. We will end up paying for their mistakes. "They" have been very loud lately dictating social trends.

You call it "fear mongering" I call it a dose of reality. The "sheeple" need to wake up and smell the Constitution. It has been trampled upon for a couple of decades.

I was not born in this country. English is not my first language. I grew up hearing my parents speak of fascism and Marxism around the dinner table. Fortunately they left in time. I have recognized some of those elements poisoning our Republic for some period. Lately, it seems to be accelerating.

⌐ AV8OR WANNABE

That was my whole point, let’s stop bashing the Europeans for their so called ‘socialist ways' and let’s look at our own backyard socialism and see how it’s ruining the State of California.

Looks like you and I have similar backgrounds. My premise is that we cannot vilify everything different simply by calling it socialist, etc. because often it is not.

Sometimes it’s just different.

I have seen more 'socialist' ideas here in the US than I'd seen in Europe; affirmative action is one of them... Now the Europeans are slowly incorporating it into their culture as well so you could say we exported that discriminatory yet somehow 'liberating’ ideology to Europe.

Jetjok

Personally I don't care what the Europeans do or don't import, just so long as they continue to smoke cigarettes at the rate that they do. I find it so chic and quaint at the same time. Yeah, baby.

JJ