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Posted by phil scott on August 23, 2008, 11:26 am
> On Fri, 22 Aug 2008 08:10:10 -0700, phil scott wrote:
> >> On Thu, 21 Aug 2008 14:06:47 -0700, phil scott wrote:
> >> > a rosier view might be stocks rising at 15% and inflation at 15% for
> >> > a net wasted investment,
> >> > subtracting brokerage fees etc. and lost opportunity costs of having
> >> > the money tied up the investor still looses.
>
> >> the expense ratio on vanguard's sp500 fund (vfinx) is .15%, and given
> >> your breakeven scenario described above there is no opportunity cost
> >> unless you have an alternative investment that can generate a return
> >> higher than 15% (and i'd hate to see the risk profile on that
> >> investment), anything less would be an inferior investment to the stoc=
k
> >> market. =A0the bottom line is that you will get hammered more by
> >> inflation from lower yielding investments than you will by staying in
> >> the stock market which always compensates for inflation (by going
> >> higher) in the long term.
>
> > correct in theory ... and.. on paper, but not always in reality. =A0 Fo=
r
> > example in 1929, many stocks simply
> > vanished from the face of the earth... a 100% loss. =A0 =A0 The 'averag=
e'
> > did those investors no good.
>
> > Even diversified investment can have similar issues, evidenced by what
> > happened in Japan, Argentina and Russia... what comes back is not alway=
s
> > what bit the dust.. but another, entitity, laundered from the losses an=
d
> > not carrying any prior baggage or investors.
>
> > but yes, some real smart guys and a few lucky ones can buy right at the
> > bottom and come out the top in good shape... most dont... in comodities
> > and futures markets its about 1% comes out on top. =A0 99% loose thier
> > ass. =A0 what comes out the top usually are people with insider pull an=
d
> > information... not players.... but those who run the companies and shor=
t
> > sell or buy long because by proxie (hidden)...because only they know
> > what they themselves will do or say next.
>
> yes i agree with that, unfortunately it's reality. that's why i only
> recommend investing in the stock market via the sp500. =A0the strategy is=
:
> if you can't beat 'em join 'em. =A0may not know the specifics of where &
> when the rich guys are going to make money but rest assured they *will*
> make money and that will be reflected in the performance of the sp500
> over the long term. =A0
>
> my investment strategy is actually a bit more involved in that i track
> where the market is in relation to the long-term (80 year) trendline and
> use the difference to adjust (inversely) the proportion of stock holdings
> (vs. money market).- Hide quoted text -
>
> - Show quoted text -
all stock markets lag reality.. that is the insiders are in and then
out with their profit before it shows in the market... the public
comes in late, most loose. Long term players in the past earned 10 or
15% minus the inflation rate for a net profit..not so bad.
today, the inflation rate is above 15%... the market is falling. The
losses are massive. The market would have to rise by an amount
equal to the real inflation rate in order to break even assuming no
brokerage fees or capitol gains taxes. Margin strategies hold vast
potential for profit but carry massive risk, or worse than just
risk... insiders know the bad news or good news, or what they will put
out in a press release ...weeks before you do. They do their
selling then...and not traceably... a guy in somalia can do it for
them under a shell name.
thats whats going on.
There is only enough legitimacy in the market to attract more people
to fleece... imo.
**
My advice, buy something you can control the destiny of personally...
unfortunately much of that is in a bubble going south... which leaves
possibly some of the more reliable type comodities... people will
always have to eat etc... big fat ass hog butts or something.
Phil scott
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