esrosedotblog

THE WISDOM OF THE MARKET

This is funny. Actually, so funny that I probably made as much paper money on bonds as I may have lost on stocks yesterday. I am 50/50.

WHO'S AFRAID OF STANDARD AND POOR?

So look. The move accomplished two things.

It showed Wall Street's opinion of the GOoPers playing around with the debt stuff and, at the same time, it stirred the market to revive its interest in US Government Bonds.

Not bad.

The "invisible hand" moves again.

Labels: economy, market, Republicans

A REVERSAL OF FORTUNE?

For several weeks, the stock market has opened high on a day and then, by the end of the day, collapsed into the red.

Now, for a few days, the trend has reversed. We start with futures in the cellar, open low and then, by the end of the day, end up in the green!

I have to feel good about this but my brain tells me that the market is still a stew that can be either too hot or too cold but not just right. No more money into it than I already have thanks.

Labels: market

MARKET TERMS

OK.

This morning on CNBC and in the NYT, they are talking about how yesterday's market plunge is a "correction".

That left me in the dark.

I have heard this term before but just pretended to myself, the ultimate form of delusion, that I knew what it meant.

I looked it up.

It is when the market drops 5-20% and no one has a specific reason why it happened so they just call it a correction.

I suppose it is like when my bank book doesn't balance and I can't figure out why.

Quicken allows me to "adjust" the register.

I suppose it is the same thing.

A formalization of "I don't know".

There is a small "recovery" today. I am not going to look it up.

Labels: economy, market

DOWNER

The market is doing the down dive again today despite very encouraging news on the US economy.

It is all about the worry in the European markets that government budget cuts will dampen their recovery.

Well, duhhh.

So here we are in the global economy. Like it or not.

I read, the other day, that if you have stocks in your portfolio you had better develop a tolerance for volatility or get out of the market.

I must admit that I seem to have less tolerance for volatility than I do risk.

Strange but true.

The highs and lows, the roller coaster the market has become, is more unsettling than mere losses in a particular segment.

But there is nothing to do about it. But get out.

My slogan is "what goes down must come up" and that has "always" been the case. It is just happening with a greater frequency just now.

I don't like it to go down on Friday because Saturday is the day that I review my accounts. Weekly.

If this keeps up there will be a sad Saturday review.

Not for long. I have other stuff in my life.

Today's concern has lasted just about as long as it has taken to write this little piece and now I am ready to move on.

One more reason to have a blog. Write out the kinks and clinks in the day.

Labels: economy, life, market

SLUMP

The markets took a dive today as a result of the downgrade of Greek and Portugese bonds.

I don't really understand the dynamics but it would seem that what happens in Greece and Portugal is right up our street and affects us.

The global economy in action? Or just a bunch of nervous nellies who jump at the sound of a shot?

Either way, I stay, as usual.

As I have said before, I am a stayer.

What goes up must go down and what goes down must go up.

The trick is to stay alive through the cycle and not spend it all at either end of the wave.

Surely there will be cycle that I will not live through and that will be that. In the meantime, I stay.

Labels: economy, market

THEATER OF THE ABSURD

When you sign up to own a stock portfolio, they ask you about your risk tolerance.

I put down "medium" in these later years.

It used to be "high".

I was, after all, an entrepreneur. I started two businesses. One folded into the other one, sort of, but was really a failure.

I have taken a lot of life risks from time to time. Some wise. Some foolish. Some merely for the adrenaline rush.

But, when it comes to the stock market, I have very little tolerance for the absurdities that sometime run it.

Take this headline this morning on CNN Finance (not a bad web site, actually).

Stocks set for opening drop

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a lower start Tuesday as investors expressed uncertainty about the outlook for markets on the anniversary of the bear-market low.

You got to be fucking kidding me. Doubt? Because of an anniversary? In the middle of a moderate bear market recovery?

A great week last week.

But this is what drives a lot of the market swings.

Like it or not.

A lot of people run in and out of the market (costing themselves a lot of cash in fees as well as peace of mind) on just this kind of thing.

I have to damp the curves out for myself.

Yeh. I admit it. I look at the market every day. Three or four times a day.

But I only really look at the results on my income by the week.

My investment lady says that a month would be better.

I may have medium or higher risk tolerance but I am not a fool.

I have never pulled out of the market though.

And that doesn't mean that my risk tolerance has not been tested. It is one thing to fill out a form and another to see your savings evaporate to the tune of 30-40 percent. Which they did. And now are half recovered.

I have a friend who though he had risk tolerance and he didn't. He couldn't stand it and cashed out. Now he can't get back in.

I have this idea the what goes down must go up. This applies to a lot of things. Not just markets.

I know the reverse of this is true as well. But, on the up, you have to know when to pull back. I never have. Even when I knew it would not hold.

I have made mild adjustments.

I told the managers (it is a managed account) to split out and put a bunch of cash in the internationals a few years ago. I don't think it mattered.

They do pretty well by me no matter what.

I pay a management fee. No commission.

The "automatic" buys and sells that they make on my account are dizzying.

I do not look at that. I cannot comprehend it.

Now show me a small management training company that you want to start up and want to make a going concern worldwide. I am up for that.

Funny. Just a moment ago, the market was not down at all. It was in the green. Up. Headlines notwithstanding.

Labels: market

PREDICTED

I read somewhere that every recovery in the market includes a deep dip somewhere in the middle.

Today was that dip.

I am just saying.

I think that I already said this in the blog before.

Labels: economy, market

UNWINDING

Today's stocks continued the fall this week.

I have read that this is quite common after a long runup after a recession or still in it.

The market is the first institution to recover but runs into fear and doubt along the way and gets to be very volatile.

This is the worst week in five months. They say. I have not fact checked. I will take their word for it.

The given reason is that Obama has signaled strong regulation of banks but that is not enough to push the entire market down. People are spooked.

In fact, Obama's proposals would strengthen the system and aid consumers including those of us who hold pretty big swaths of blue chip stocks.

What is more, I have to remember that this is just paper money. I do not plan to cash in so the numbers are irrelevant to me today. I may never cash in. Until I cash in, of course. Then it is someone elses problem.

Labels: Administration Obama, market

A LOT OF BULL

Goldman Sachs' Cohen: New bull market has begun

I don't put a lot of "stock" in such reports and I know the bulls will run sooner or later but this is nice to have psychologically. It has been all down beat until recently.

As in the past I will do nothing about this one way or another. My ship plows the waves and.........oh oh. Mixed metaphor.

I will run whichever the bulls go. I don't change nothing. I am a stand-patter. Close friend got scared and left the market way back low. Now he really can't jump back in. Market has gone up "too much". More fearful than he was when he jumped out.

He has become, by default, a mattress stuffer.

Labels: market

HMMMMM

Earlier today it seemed that I had no time for blogging so I did a speed blogging item.

I see that I have written, maybe, more than average.

No movie. That did it.

I had a lot of stuff, people coming and so on, so I scuttled the film.

OK

And the market ended up 151 and a few.

Labels: blogging, market

WHIPLASH

I don't know why I watch the market gyrate all day long.

I have a widget on the Mac that allows me to tap in at any time.

Today it was down almost 400 at one point and ended UP at 553.

My Smith Barney person says it is crazy.

She is right.

This is the "do nothing" environment'. As in "if in doubt do nothing".

Labels: market

PREDICTABLE

I was amazed when everyone freaked out over the 'bailout' proposal which couldn't have been handled worse politically or PR wise.

People were outraged at 'bailing out' those bastards on Wall Street.

Didn't they know that they were the bastards getting bailed out?

Shit, everyone has an IRA or a 501K or something.

And Congress. They got the nervous shits at the same moment. It is an election year.

Well, of course, the Dow took a dive.

And everyone called up their broker or administrator or went on line to see what had happened. And they were not amused.

Whip saw.

Now, the Congress were the bastards. And rightly so.

The Republican party is in the hands of the barbarians. The red meat conservatives and the christers.

Amusing to say the least. And at this moment when the Senate has acted, Wall Street is sending another message to the House Republicans. The Dow is at minus 200. Back to the deep dive levels.

Word Reaches Congress: As the Market Goes, So Goes the Electorate

I am sitting still. Watching the show. What goes down must go up. My friend who cashed out is looking at a 10% loss on his retirement funds and is now scrambling to find another place to put the money as he went to 30-day notes at a big 9% interest but they are not being renewed. Lucky if his bank will let him put the dough in his savings account.

Well, that is an exaggeration, but still.

Labels: market

MORE DOW(N)

I would jump off the building but I live on the first floor.

Besides, I was happy enough to stay here for my paper highs, I might as well stay here for my paper lows.

Like I said the other day, it is not as though I am going to cash anything in. This would be the worst time to do it anyway.

Nonetheless, I have a friend who did just that yesterday against all advice. Low tolerance for anxiety over a situation he can't control.

Well, he has that right. But I have been anxious about stocks for many years and so this is nothing too new.

I am not happy about it.

But I can take it.

I think.

I am moving on with the rest of my life and letting the stocks take care of themselves. I assume that the people managing my account, who also have money invested the same way I do, are working in my best interest. Well, enough that I am not going to take over the reins any time soon.

My friend's history is in real estate investment and he has done pretty well. Actually, given his skill, it might be a good decision as this is definitely a time to start considering the bottom of the real estate market and taking advantage of it.

He wants something that he can watch and even mess with.

I can understand that.

And I also know that it would have been better for him not to sell at the bottom of the equity markets.

To each his own.

Labels: market

DOW(N)

Today, the Dow composite had its biggest drop in one day since the market reopened after 9-11.

So much for McCain's assurance that the economy's fundamentals are strong. Which he said again today in Florida.

Tell that to all the retirees there.

I have long joked about being on a fixed and declining income. But it is no joke. As there is inflation, the fixed rate of payment that I have devised is worth less every year.

Now, the portfolio from which my income derives is shrinking. Two ways now that it is fixed and declining.

As for the day, I had a number in mind for the drop. It was 500 points.

Sure enough, I won the office pool. My financial manager at Smith Barney said they expected 300.

Optimists.

I weather through this stuff by reminding myself that the figures only matter if I was going to liquidate today.

Of course, that is not really true.

I depend on earnings for my income and the smaller the pot is the smaller the amount of soup you can get out of it. 7% of X is more than 7% of XC-whatever.p>And it isn't really 7% anymore. More like 5% return on whatever mixed portfolio people have.

Incidentally, the chart in the picture is from last year when the market was up in the 12 thousand area. Today it is below 11,000.

Don't get me wrong. I am not whining at all. I am in pretty good shape compared.

I sat with a guy this afternoon who is still hunting a job that will pay more than minimum wage and perhaps have some health insurance.

I am pretty well off. I am very diversified. But still. Low is low.

This is a good time for everyone to take a deep breath and decide whether 'more of the same' is really what they want. But you can't move an electorate with logic. Only feelings. If enough people feel the pain there will be a change. I think there is a lot of hurt out there.

Labels: Barack Obama, Democrats, election, market

BULL SHIT

So, the bull market is over.

Officially.

I have been looking the ass end of the bulls for a few months now, like everyone else.

The only trace of the bull market is now bullshit.

I have a mixed portfolio. It is managed. I pay people to do that job. No commission. Just a lot of bucks to provide broad services.

But they can't do much about the bulls.

They can minimize the damage.

I comfort myself by looking at the Dow over ten years and see that I have been in this kind of thing before.

But I don't think it was this severe.

I know.

We are all in it.

Us fixed income folks have nothing on the people who have to drive for a living and everyone pays the same at the grocery store.

They say that we are officially in a bear market now.

OK.

How long until the only sign of the bears is bear shit?

Labels: market

HOUSES OF CARDS

Slowly but surely the collapse of the real estate market is showing its ugly head in our neighborhood.

Signs "For Sale" are sprouting.

The thin financial facades of the flippers, the over achievers, the aggressive developers and, sadly, the overextended are slipping.

Since no one in their sound mind would have a house for sale at this time, the signs are of the times, not the usual good happy reason to be moving from one home to another.

It is not all sad news. A few homes have sold here recently.

It is a bit depressing but very few of the people involved here are innocents. They were playing with the market and they got burnt.

It is too bad. But it can't be helped.

The neighborhood will survive. Pretty soon, the prices will drop to a point where there will be buyers and the houses will be 'saved'.

The cycle will start again.

When we moved here in 1997, it was at the end of the savings and loan disaster which hit Southern California very hard.

There were 'For Sale' signs everywhere. In those days, no one put up a foreclosure sign. Today, that is not the case. It is right out there. It moves the offers!

There are still not as many around as there were then. It is not that bad. Yet.

We bought our home at depressed market prices. The people had to get out.

They already had left and were lucky to be renting it.

Cycles.

What goes up must go down but the converse is also true.

What goes down must, eventually, go up.

Labels: market

ELEVATION ELATION

Despite the fact that what goes up must come down, here is today's boost from the material world.

Wall Street Rallies to Record Close

I know that, rightly, this does not matter to a lot of people.

It surely is not a gauge of the state of the nation or its economy.

The economy actually sucks; distribution of income and all that.

But I am on the positive side of that divide and so I have to be a little thankful that my fixed income is enhanced.

A lot of this is phony of course.

It is Vegas in NYC.

The betting is that the Feds will loosen credit some more and that every boat will rise.

Of course, so will inflation.

And so on.

Push something here and something goes out of whack there.

It is the nature of intervention.

I don't play the market.

I have a fixed fee managed account. Someone else plays it. And does so conservatively.

I hope.

And it is spread.

It is not all in stocks by any means. And not all in the US either.

So the NYSE is only a bit of the total.

Anyway. It feels good not to be seeing the downs today. Only the ups.

I love that picture. Look closely.

Labels: life, market

STEADY AS SHE GOES

Small Stock Investors Sticking it Out

Yup.

"Dive May Not Upset Small Investors".

Labels: doomsday, market, retirement

WIPEOUT

I got a reduction in my nest egg yesterday as did everyone else. They didn't single me out.

Wall St. Tumble Adds to Worries About Economies

Anyone with half attention would have known it was coming.

I remember noticing a negative comment by Alan Greenspan yesterday, in a speech. I thought at the time that things might not be so certain.

I sure have enjoyed the runup, announcing how much we 'earned' this week and all.

I don't think that I will be running to my mate and saying we much we lost.

It comes and goes.

What goes up must come down.

More importantly, what goes down must come up.

This is good advice for many downers, not just the market.

I have been here before.

Each time there is a gyration I get less exercised about it.

It is all paper numbers anyway.

All I know is that I started retirement ten years ago with a certain nest egg and I have been taking out of it ever since and, today, I still have about the same amount in my fund as I did then.

That is the goal after all. Ain't?

The ever-normal granary. More or less, of course.

Labels: doomsday, market, retirement