Economic stimulus

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RD-Sam

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skyline":3czyb0n0 said:
Stocker Steve":3czyb0n0 said:
For some folks this is just a paper loss of assets they do not need, and would end up being willed so someone else in their estate.

For most folks who don't buy lottery tickets - - this is or was part of their retirement plan and now they are going to have to revisit that.

I'm 47. For me, it was the bulk of my retirement and my ability to survive when I'm too feeble minded to work my regular job (the feeble minded part seems like it might be coming sooner than later... :) ).

I started pondering the idea last night of cashing in my 401k and paying off my house note. What's to lose? I'd pay a 10% penalty on the 50% of the account that is left. There won't be much in the way of capital gains to pay, and I hear those are going up at some point anyway... Is that a stupid idea? At least I'd be assured they don't take the house from me when all heck breaks loose.

It's pretty simple, look at the interest you will save on the house note vs. how long it will take to make anything in a 401k plan. I have heard a few say it will take 25 years to recover what was lost in the 401k programs. Also, in tough times, if it's paid for you don't have to worry about it. Look for other right offs to make up for the house on year end.
 

HerefordSire

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HerefordSire":1pe8f47h said:
1982vett":1pe8f47h said:
Hereford, where would the bottom be IF: "Investors" stop paying a premium for forward earnings (speculating) and returned to paying for actual earnings or book value (investing)?

1982vette...what is published and reality are two different things. Consider a railroad company. On their books, the actual railway line likely shows a book value of allot less than replacement value. I don't believe the published book values of any company. Just guessing, without finding the historic average EPS or book value, I would say we are close to the bottom or maybe even surpassed the bottom. I am more interested in the probability of future mental perception of an investor for an asset relative to its actual value. Then get there first before the masses. The mind is a funny thing. Charts reflect the past total mental perception of the investor community. People always overreact.


Here is what many people believe to better answer your question...

Value Still Exists in the Dow
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Using 10 year average EPS, the Dow trades at a weighted multiple of 16 – a level that argues for sub-par returns going forward, as demonstrated by Yale’s esteemed Robert Schiller. However, largely impacting that are CVX and XOM, whose earnings are up eight and eleven-fold. While a decline in profit for these stocks will be in order, they’re not headed back to 1.00 per share in earnings, and their mini-PE’s discount the earnings drop. IBM trades at a trailing 9 times earnings, and PG and JNJ trade around 12 times both forward and trailing estimates – amazing values for these best-of-breed companies. The Dow stocks trade, on average, at a 63% discount to 10 year their average trailing PE ratios. There are numerous potential double’s and triples in the Dow, including HPQ and BA at 8 and 9 PE’s.

Leaving aside PE’s, the Dow 30 is attractive on a Free Cash Flow basis as well, with the top two stocks’ FCF yielding 11 and 12% of their (net of cash) Market Caps. I’m not one to ignore debt in the capital structure, but the interest coverage ratio’s of the Dow stocks are lavish – the top 83% of the index has an average EBITDA/Interest ratio of 49, thanks to the oil majors.

http://seekingalpha.com/article/122302- ... in-the-dow
 

HerefordSire

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Here are George Soros hedge fund holdings. Jimmy Rogers used to work with Soros before he became wealthy.

Top 20 Holdings (by % of portfolio)

Petroleo Brasileiro (PBR): 19.53% of portfolio
Potash (POT): 9.4% of portfolio
Merrill Lynch (MER): 5.84% of portfolio
Best Buy (BBY): 5.79% of portfolio
Hess (HES): 4.74% of portfolio
Conoco Phillips (COP): 3.84% of portfolio
Union Pacific (UNP): 1.77% of portfolio
Arch Coal (ACI): 1.7% of portfolio
Schlumberger (SLB): 1.56% of portfolio
RR Donnelly (RRD): 1.48% of portfolio
Homex (HXM): 1.37% of portfolio
Consol Energy (CNX): 0.75% of portfolio
Map Pharmaceuticals (MAPP): 0.62% of portfolio
Wal-Mart (WMT): 0.57% of portfolio
Hologic (HOLX): 0.57% of portfolio
Heinz (HNZ): 0.53% of portfolio
JetBlue Airways (JBLU): 0.52% of portfolio
Home Depot (HD): 0.52% of portfolio
Lowes (LOW): 0.51% of portfolio
Citi Trends (CTRN): 0.29% of portfolio
 

HerefordSire

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HerefordSire":fwvwvty7 said:
RD-Sam":fwvwvty7 said:
Hang on to your hat, many say the DOW is headed for 6000. I saw on the news tonight that many Republican state govenors may not take any of the stimulus money, they say the rules are counter productive for the long haul and they would be better off without it. They are talking about a tea party in Chicago! :lol2:

11 year low now! This chart shows your 6000 DOW.

Yesterday's intraday Dow price down almost exactly 50% from all time high. Cooincidence?

It seems like a really long time ago now, but it was less than a year and a half ago that the Dow Jones Industrial Average hit its all time high mark of 14198.10 on October 11, 2007. Those familiar with technical indicators will recall that a 50% retracement is a very significant mark for the direction of the market going forward. A 50% retracement from 0 to 14198 would put the Dow at 7099, and we came very close today with the intraday low at 7105. This support line could prove to be bullish; if the Dow holds these levels then from a technician's perspective it could prove to be a market low. However, beware if the Dow falls below 7100 because once that support is broken it could fall very quickly.

The Dow Jones Industrial Average has not been at current levels since 1997, and the next few days could be key to understanding just how low it will fall. Tread very carefully in this sort of market environment.

http://seekingalpha.com/article/122143- ... sb_popular
 

RD-Sam

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Bernanke just said the recession will likely continue into 2010, after him saying something like that and Obomba's speach tonight, my guess would be it's headed for the toilet! :lol2:
 

HerefordSire

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Stock market trades ahead of the economy. It is a leading economic indicator. Dow could easily hit 8-9,000 before tumbling again. It is perfectly normal to have a bear market rally.
 

1982vett

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Having trouble getting my thoughts together without rambling. Talking from and investors view rather than a traders, the biggest problem I see with investing in wall street now days is that it is more so like gambling rather than investing. Sure investments of anykind all have risks, but investing in stocks, real companies with real businesses and earnings to back them up, has an appearance to be more like playing slot machines. I no longer see a point in being and investor in a public company if thay company can be so easily destroyed by traders.

Funny how 8-9000 on the Dow looks good now. Could be a godsend and an opportunity to get the he;; out.
 

HerefordSire

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1982vett":19baaqfw said:
Having trouble getting my thoughts together without rambling. Talking from and investors view rather than a traders, the biggest problem I see with investing in wall street now days is that it is more so like gambling rather than investing. Sure investments of anykind all have risks, but investing in stocks, real companies with real businesses and earnings to back them up, has an appearance to be more like playing slot machines. I no longer see a point in being and investor in a public company if thay company can be so easily destroyed by traders.

Funny how 8-9000 on the Dow looks good now. Could be a godsend and an opportunity to get the he;; out.

You just need to hit a nice lick 1982vette. That will adjust your attitude. What is your gold stock doing? Going straight up?
 

HerefordSire

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RD-Sam":1x04op1n said:
http://www.cnbc.com/id/29348325

While I was @ CNCB's web site I noticed a slideshow of leading economic indicators. The first was high hem lines on women's skirts and the second was snow accumulating in Boston, etc.
 

1982vett

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HerefordSire":36m1m2fm said:
You just need to hit a nice lick 1982vette. That will adjust your attitude. What is your gold stock doing? Going straight up?
:lol: Luckly, I sold it when I broke even (after a 51% run from it's low and about 15% higher than it is trading now). Only down 10% on the oil stock I rolled it into.

Made 5% didn't I. :lol2: :lol2: I wish. :(
 

HerefordSire

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1982vett":388swy48 said:
HerefordSire":388swy48 said:
You just need to hit a nice lick 1982vette. That will adjust your attitude. What is your gold stock doing? Going straight up?
:lol: Luckly, I sold it when I broke even (after a 51% run from it's low and about 15% higher than it is trading now). Only down 10% on the oil stock I rolled it into.

Made 5% didn't I. :lol2: :lol2: I wish. :(

Let me know what you think about this one (technically and fundamentally)....
Petroleo Brasileiro (PBR): 19.53% of portfolio
 

1982vett

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PBR - Hmm. Not one I watch but have herd several thumbs up on it lately as a snapback play on a rise in crude, short term negative as a lot of chatter and articles recommending a stock usually creates a trap. They have made a deal with China to develop some offshore reserves. Looks like the uptrend from November lows has been violated but it looks like the 50 day moving average has held as support (for now). Doesn't have a much of a dividend yield, major criteria for me is a safe dividend at the moment.
 

HerefordSire

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1982vett":355iztau said:
PBR - Hmm. Not one I watch but have herd several thumbs up on it lately as a snapback play on a rise in crude, short term negative as a lot of chatter and articles recommending a stock usually creates a trap. They have made a deal with China to develop some offshore reserves. Looks like the uptrend from November lows has been violated but it looks like the 50 day moving average has held as support (for now). Doesn't have a much of a dividend yield, major criteria for me is a safe dividend at the moment.

TY....and this one...AAPL (they have about $28B in cash)?
 

Stocker Steve

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skyline":3rbxlqed said:
[I started pondering the idea last night of cashing in my 401k and paying off my house note. What's to lose? I'd pay a 10% penalty on the 50% of the account that is left. There won't be much in the way of capital gains to pay, and I hear those are going up at some point anyway... Is that a stupid idea? At least I'd be assured they don't take the house from me when all heck breaks loose.

>Standard advise is cashing in your 401K should be your last resort... since in theory it compounds up (and down) tax free and the lawyers can not get at it :?
>Standard advise is borrowing from your 401K should be your second to last resort - - since you forgo the compounding up and have to pay it back if you lose your day job, but... I borrowed from mine to build a nice hay shed. I think a "half price" hay shed was one of the best investments I made last year :banana:
> If all hell breaks loose I might let them have the house and live in my canvas wall tent. I just hope lots of elk and deer run close by so the kids won't have far to drag them.
 

1982vett

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Apple seems to "fragile", Steve buys the farm all you will have is a core. Rode that one a couple years ago, finally got out only to see it tripple. :roll:

TY -closed end fund - 25.8% trailing annual divided (acording to yahoo)? Just skimming its last reported holdings, doesn't look all that bad. Lot of decent names in their. Chart looks real bad. It is still in a two year down trend. With their new distribution poilicy the dividend won't be much but might stop the NAV decline if the market turns up.

Distribution History 1980 to 2007:

Year Income Cap gainsTotal
1980 1.14 1.08 2.22
1981 1.15 1.64 2.79
1982 1.08 2.72 3.80
1983 1.09 1.48 2.57
1984 1.13 4.46 5.59
1985 1.04 2.40 3.44
1986 0.97 6.96 7.93
1987 0.89 3.73 4.62
1988 0.81 1.25 2.06
1989 0.84 2.55 3.39
1990 0.86 1.60 2.46
1991 0.78 1.80 2.58
1992 0.78 0.70 1.48
1993 0.80 1.80 2.60
1994 0.79 1.90 2.69
1995 0.73 2.01 2.74
1996 0.66 2.72 3.38
1997 0.60 3.45 4.05
1998 0.52 4.28 4.80
1999 0.48 3.79 4.27
2000 0.33 3.30 3.63
2001 0.28 1.11 1.39
2002 0.26 0 0.26
2003 0.17 0 0.17
2004 0.23 0 0.23
2005 0.24 0 0.24
2006 0.28 0 0.28
2007 2.002 0.442 2.444
2008 0.717 0.197 2.114

Could be a while before dividends kick in again.
 

skyline

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Stocker Steve":2enconmv said:
skyline":2enconmv said:
[I started pondering the idea last night of cashing in my 401k and paying off my house note. What's to lose? I'd pay a 10% penalty on the 50% of the account that is left. There won't be much in the way of capital gains to pay, and I hear those are going up at some point anyway... Is that a stupid idea? At least I'd be assured they don't take the house from me when all heck breaks loose.

>Standard advise is cashing in your 401K should be your last resort... since in theory it compounds up (and down) tax free and the lawyers can not get at it :?
>Standard advise is borrowing from your 401K should be your second to last resort - - since you forgo the compounding up and have to pay it back if you lose your day job, but... I borrowed from mine to build a nice hay shed. I think a "half price" hay shed was one of the best investments I made last year :banana:
> If all be nice breaks loose I might let them have the house and live in my canvas wall tent. I just hope lots of elk and deer run close by so the kids won't have far to drag them.

Steve, that's what I have always heard and believed. I'm just starting to question whether standard advice still applies at this point.
 

HerefordSire

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Word on the street (rumor) is that AIG is getting ready to show a $60B loss soon. May file for bankruptcy protection. At one time very recently, they were the largest insurance company in the world.
 

Stocker Steve

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skyline":sohxezz5 said:
Steve, that's what I have always heard and believed. I'm just starting to question whether standard advice still applies at this point.

I think the whole 401K thing is a mess. Poor folks don't have one, and most folks that do have one are not savy investors able to put the max in, and there is no knowing what the income tax situation will be when you pull it out.

For now rebalance, and just keep replaying the Obama hope speech from last night!
 

RD-Sam

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HerefordSire":1pc9qme0 said:
HerefordSire":1pc9qme0 said:
RD-Sam":1pc9qme0 said:
Hang on to your hat, many say the DOW is headed for 6000. I saw on the news tonight that many Republican state govenors may not take any of the stimulus money, they say the rules are counter productive for the long haul and they would be better off without it. They are talking about a tea party in Chicago! :lol2:

11 year low now! This chart shows your 6000 DOW.

Yesterday's intraday Dow price down almost exactly 50% from all time high. Cooincidence?

It seems like a really long time ago now, but it was less than a year and a half ago that the Dow Jones Industrial Average hit its all time high mark of 14198.10 on October 11, 2007. Those familiar with technical indicators will recall that a 50% retracement is a very significant mark for the direction of the market going forward. A 50% retracement from 0 to 14198 would put the Dow at 7099, and we came very close today with the intraday low at 7105. This support line could prove to be bullish; if the Dow holds these levels then from a technician's perspective it could prove to be a market low. However, beware if the Dow falls below 7100 because once that support is broken it could fall very quickly.

The Dow Jones Industrial Average has not been at current levels since 1997, and the next few days could be key to understanding just how low it will fall. Tread very carefully in this sort of market environment.

http://seekingalpha.com/article/122143- ... sb_popular

What do you make of the Dow today, it took a big dive right at the end? Think it will tank tomorrow?
 
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