I want to thank you gnome, your many insights have allowed me to extract much more from my time here on ET.
Maybe you better go get a college education -- that you referenced --- from your post I'd question if you have a high school degree. You really can't be as uninformed as your posts suggest. Oil now over $90. No, it won't affect consumers. They'll just quit driving their SUV's. They'll choose to not heat their homes this winter. And as oil goes higher so do transportation costs of products to retailers. That gets passed on to the consumer or the manufacturers of products eat the cost and see margins adversely impacted and reducing earnings. Food prices increasing? I guess they'll quit spending money since many are overweight anyway. Whoops -- that would adversely impact sales & earnings. More and more foreclosures. People who declare bankruptcy can't get credit so how are they going to spend more and more $$? Rising prices isn't inflationary? Get a clue --- it eats away more and more each month from an already squeezed consumer. Wages aren't rising faster than prices. A consumer who can't pull any more $$ out of his house by refinancing because he has so little equity due to prior refinancing and stagnant (or declining) home prices. Where is he to get more $$$ to spend? Not from his paycheck. Massive credit card spending? Sure --- with many consumers with no savings and record debt. 47% of consumers are basically living paycheck to paycheck per a recent article. And you better educate yourself about how many jobs are now being outsourced overseas --- jobs that require(d) a college degree -- start with IT and go from there. What the US is creating more of is menial, low paying jobs at Wal-mart and the like. As consumer spending slows the economy follows suit -- the US consumer makes up 2/3 of the economy.
don't hold your breath waiting for a repsonse. A well thought out logical question is never answered by the guru stock. It's 4100+ posts of the same thing: He knows everything there is to know about the mkt (he managed to learn this sine 2003). No more bear mkts ever ! (he really believes this, I think). The only way to make money is be buy and hold momo stocks (ok).
I've asked similar questions of him in the past and he disappears. I believe he stated he wasn't around back in late 90's and the tanking we saw in early 2000 --- so he obviously doesn't know there's 2 sides to the market. Buy & hold may be fine for long term (retirement) but he has no clue that trading is a totally different game.
We're in a globalist world economy. With globalization the american consumer and middle class isn't as important since companies can derive sales from other sources besides American consumers. In the future American consumers will become increasingly unimportant. Rising food and gas prices may have a small impact on the American consumer but overseas revenue growth more than makes up for that. Also there is no compelling evidence that the American sonumer has been negatively affected by rising food costs and rising oil (as you claim). Keep in mind that over time food prices, gas prices and other expenses Will increase due to inflation as well as increased demand. Thats why I don't recommend retail stocks that depend exclusively on US consumer spending like target or urban outfitters. Tech is great cause its global. We're in a smartist highly educated global tech economy. high growth and high spending. Overseas markets and free trade. I can guarantee that my buy & hold methods beat out 90% of people here.
Finally some substance. Ok, how will US producers compete when oil prices double? Remember that for producers in EUR, and for the Asians too, oil-prices are not substantially higher, since they revenue in more valuable curency. So, although a lower dollar normally stimulates export for the US, it will not now, because the cost of production will double soon. Next, what is your guarantee worth? Can you show us a portfolio statement in which we can see you are actually holding long the stuff you recommend, and thus suffered a loss of 300 YM-points equivalent since last week? Your recommendations aren't worth much, because we all know you are a papertrader. No one would be so dumb as to let losses accumulate that high for real. Ursa..
No doubt. We've been in a bull market so that buy-and-hold has worked in recent years. The fact that your method has been effective to this point doesn't mean that it will be in the future. What happens to you when the big bad bear comes to stay for years? The global economy is a new phenomenon and may have major weaknesses that won't come to our awareness until there's a crash. History repeats itself but the specific reasons for each repetition are always unique to the times. We have no way of knowing with certainty what will cause the next collapse until it happens. The causes of the next collapse may be somewhat understood now but the timing of every collapse always comes as a surprise. In the meantime, of course, you have to stay with a winning method, but let's hope you have a method B at hand to use when the times change ( when we least expect it ).
I've been hearing that argument for the past year and still the market marchers higher and my stocks keep going higher and I keep making more money. True, IF there is a big selloff i'll lose money, but so will everyone else. Also after the subprime scare the markets actually came out ahead. Rimm and AAPL for example moved much higher as well as ETFs like EWX and FXI. So it would take a VERY VERY serious event to cause a selloff large enough to cause me to lose lots of money. But the odds of this REALLY REALLY BIG event are very small. The us and global economy is too robust for anything to affect it easily. Not like in the 80's and 70's. And valuations are inline. There are no bubbles like in 2000. Nor is there excessive inflation like there was in 2000 or in the 70's. Fed lowering rates, growth stable. And there is much more money to be made going long than trying to wait out for the BIG event that may never come. I am very certain that there will be no more bear markets or 87' type crashes due to economic and financial perpetualism so I have almost nothing to worry about.
Couple points of disagreement stock. 1) Traders will not lose money in a down market, they will make money at a much faster rate than in an up market. 2) there is inflation in the system, the fed is making it come thru faster by cutting rates and injecting liquidity. 3) Inflation in 2000? nope. 4) There will be another down cycle, economic cycles have not ended, you are not thinking clearly if you think its different. Have a good weekend.