The Long Term Investor

I have found the message in this little article to be very true over the years.....and...this little article is by a person that has a massive pool of data on advisor and newsletter performance.

Investors love to boast about their great stock picks, but beware of those who use fancy math to calculate their gains

https://www.marketwatch.com/story/i...lculate-their-gains-11630784143?siteid=yhoof2

(BOLD is my opinion OR what I consider important content)

"Beating the market is so difficult that you’d be excused for giving up.

But unlike what happens when you give up elsewhere in life, in the investment arena it’s actually a shrewd strategy for winning. Overconfidence, on the other hand, is one of investors’ biggest pitfalls.

After more than 40 years of rigorously auditing the performance of investment advisers, I have learned that over the long term, buying and holding an index fund that tracks the S&P 500 SPX, -0.03% or other broad index nearly always comes out ahead of all other attempts to do better, such as market timing or picking particular stocks, ETFs and mutual funds."

My first step in drawing investment lessons from my huge database was to construct a list of investment newsletter portfolios that at any point since 1980 were in the top 10% for performance in a given calendar year. Given how many newsletters my Hulbert Financial Digest has monitored over the years, this list of top decile performers was sizable, containing more than 1,500 portfolios. By construction, the percentiles of their performance rank all fell between 90 and 100, and averaged 95.

What I wanted to measure was how these newsletter portfolios performed in the immediately succeeding year. If performance were a matter of pure skill, then we’d expect that they would have been in the top decile for performance in that second year as well—with an average percentile rank that also was 95.

That’s not what I found, however—not by a long shot. These newsletters’ average percentile rank in that second year was just 51.5. That is statistically similar to the 50.0 it would have been if performance were a matter of pure luck.

I next repeated this analysis for each of the other nine deciles for initial-year performance rank. As you can see from this chart, their expected ranks in the successive years were very close to the 50th percentile, regardless of their performance in the initial year.


The only exception came for newsletters in the bottom 10% for first-year return. The average second-year percentile ranking was 38.8—significantly below what you’d expect if performance were a matter of pure luck. In other words, it’s a decent bet that one year’s worst adviser will have a below-average performance in the subsequent year too.

What these results mean: While investment advisory performance is not a matter of pure randomness, the deviations from randomness primarily occur among the worst performers—not the best. Unfortunately that doesn’t help us to beat the market.

By the way, don’t think that you can wriggle out from these conclusions by arguing that other kinds of advisers are better than newsletter editors. At least in regards to the persistence (or lack thereof) between past and future performance, newsletter editors are no different than managers of mutual funds, ETFs, hedge funds and private-equity funds.

Beware of arrogance
While I believe the data are conclusive, I’m not holding my breath that it will persuade many of you to throw in the towel and go with an index fund. That’s because the typical investor all too often believes that the poor odds of beating the market apply to everyone else but not to him individually.

It reminds me of the famous study in which almost all of us indicate we’re better-than-average drivers.

This arrogance has obviously dangerous consequences on our roads and highways. But it’s dangerous in the investment arena as well because it leads investors into incurring greater and greater risks.

That creates a downward spiral: When the arrogant investor starts losing to the market, which inevitably happens sooner or later, he pursues an even riskier strategy to make up for his prior loss. That in turn invariably leads him to suffer even greater losses. And the cycle repeats.

The temptation of arrogance is particularly evident when it comes to social media. Psychologists have found that younger investors are far more inclined to pursue risky strategies when they are being watched than when operating alone. This helps to explain the bravado that so frequently is exhibited on investment-focused social media platforms.

Buying and holding an index fund is boring. Adherents are rarely drawn to social media in the first place, and even if they are, they rarely post that they are continuing to hold the same investment they’ve had for years.

Beware of this trick, too
A similar dynamic leads those who frequent social media to brag about their spectacular winners while ignoring their losers. One frequent way they do it is to annualize their returns from a short-term trade and then boast about that figure. Imagine a stock that goes from $10 to $11 in a week’s time. In itself, that doesn’t seem particularly remarkable. On an annualized basis, however, that is equivalent to a gain of more than 14,000%.

Readers of these social media boasts initially must believe they are the only ones with a mixture of both winning and losing trades. Only later do they discover the unspoken rules of social media platforms: it’s bad form to ask fellow investors about their losers, just like it’s poor etiquette after a round of golf to ask the boastful golfer whether he actually beat par.

Humility is a virtue in the investment area. We would do well to remember Socrates’ famous line: “I am the wisest man alive, for I know one thing, and that is that I know nothing.”

It’s amazing when you think about it: What other pursuit in life is there in which you can come close to winning every race by simply sitting on your hands and doing nothing?

I’m not saying it’s impossible to beat the market. What I am saying is that it’s very difficult and rare. And it’s even rarer for an adviser who beats the market in one period to do so in the successive period as well.

I am not the first person to point this out. But what I can contribute to the debate is my extensive performance database that contains real-world returns back to 1980. It compellingly shows how impossibly low your odds are of winning when trying to beat the market."

MY COMMENT

I think anyone that has been investing for a long time KNOWS that the information in the article is true and accurate.....at least they should. It is nice that we seem to have a lot of HUMBLE and honest posters on this broad. There is NO REASON to lie to yourself when it comes to investing results....especially on social media.

This is one reason that I adopted a policy over 25 years ago of posting in real time the investing moves that I make.......as well as my PORTFOLIO MODEL.

This is why I have advised one of kids to just invest all their stock market money in a SP500 Index. It is also why the trust that I am going to set up for my granddaughter when she hits age ten is going to as strongly as legally possibly direct the trustee to keep all funds 100% invested in the SP500.

Beating the markets is NOT impossible.....I know because I have done so over my lifetime....with an annualized return total between 14-15%. I dont even keep data anymore since about 2010 or so when I just quit keeping hindsight information and data....but....considering the fact that I went to cash during the majority of the 2008/2009 economic collapse and got back in January of 2009 and have held through the historic bull market since....I know that my return is now as high or higher than ever. BUT.....the ACTUAL study above of advisor results since 1980....over 41 years is IRREFUTABLE information. It is ABSOLUTE TRUTH...for those that wish to actually SEE. There will be some like myself that are extreme outliers.....due to a big dose of LUCK and happening to invest in particular companies at just the right time and ride their WAVE for years....but that does not mean it is very often repeatable. At least on here....you can watch and see if it is. AND....you can compare your results......whether you post them or not......to mine, the averages, and the others that post real results on here. I think we have a rare group of core posters on here that ARE ACTUALLY honest.

I DO KNOW......if you are going to beat the averages.....It requires long term investing.....and a rational goal. It will never happen by chasing returns....market timing....trading...or other short term investor behavior. This is why for all these years my investing yearly goal remains the same and probably seems very MODEST....achieve an average annual total return of 10% or more for the long term. For me it has also involved following ALL the behaviors and strategies that......the academic research.....shows WORK and give an edge in terms of..........THE BIG KAHUNA.......PROBABILITY. Like....being fully invested all the time......all in all at once......no market timing.....PLUS....plenty of LUCK. I discovered the Dalbar research company and their investor analysis a LONG TIME AGO and recognized it as TRUTH.

SO.......I continue to be fully invested for the long term as usual.

 

As a shareholder of Apple...I have to say this was one of the MOST IDIOTIC moves I have seen in a long time.....a TOTAL disrespect for the privacy of your customers......and.....the ACTUAL owner of the product. Thank goodness someone finally WOKE UP.

Apple Delays Child Safety Photo Scanning After Backlash

https://www.newsmax.com/finance/companies/apple-iphone-photos-child-safety/2021/09/03/id/1034933/

(BOLD is my opinion OR what I consider important content)

"Apple announced Friday it is delaying the rollout of its new anti-child pornography tools, after criticism that the feature would undermine user privacy.

The Silicon Valley giant said last month that iPhones and iPads would soon start detecting images containing child sexual abuse and reporting them as they are uploaded to its online storage in the United States.

However, digital rights organizations quickly noted that the tweaks to Apple's operating systems create a potential "backdoor" into gadgets that could be exploited by governments or other groups.

The announcement comes as Apple faces intensifying scrutiny from regulators over what critics say is abuse of its dominance.

The company announced a rare and long-demanded concession Wednesday to how its online app marketplace works.

Apple cited feedback from customers, advocacy groups, researchers and others in its choice to "take additional time over the coming months to collect input and make improvements before releasing these critically important child safety features."

New technology allows the software powering Apple mobile devices to match abusive photos on a user's phone against a database of known images of child abuse and then flag them when they are uploaded to the company's online iCloud storage.

Apple said previously that at the start of the system's rollout, a minimum of 30 machine-recognized images would be required for it to flag an account and trigger a verification process.

Critics of the policy welcomed the delay.

"It's encouraging that the backlash has forced Apple to delay this reckless and dangerous surveillance plan," said Evan Greer, director of digital advocacy group Fight for the Future. "They should shelve it permanently."

Though Apple cited feedback from advocacy groups in its decision, not all welcomed the pause.

"This is incredibly disappointing," tweeted Andy Burrows, head of child safety online at the National Society for the Prevention of Cruelty to Children.

"Apple had adopted a proportionate approach that sought to balance user safety and privacy, and should have stood their ground," he added.

The new image-monitoring feature would represent a major shift for Apple, which has until recently resisted efforts to weaken its encryption that prevents third parties from seeing private messages.

The company said it would have limited access to the violating images which would be flagged to the National Center for Missing and Exploited Children, a nonprofit organization, and has resisted government effort to weaken iPhone encryption.

FBI officials have warned that so-called "end to end encryption," where only the user and recipient can read messages, can protect criminals, terrorists and pornographers even when authorities have a legal warrant for an investigation.

The tech giant has unveiled major changes in recent days to its online app marketplace after years of criticism, as it tries to stave off a deeper, swelling effort to regulate Big Tech.

A concession announced Wednesday will spare apps that provide newspapers, books, music or video from having to use the App Store payment system and thus avoid paying a 30 percent commission.

Experts see the changes from Apple as proof that Big Tech companies have succumbed to pressure and decided to give an inch to try to avoid a collision with government rules that they would not control."

MY COMMENT

EVEN THOUGH I am a share holder....these companies ARE out of control. When I buy your product I AM NOT giving you permission to SNOOP through my personal data and photos.......yes.....I know they already do it hundreds of ways.

THIS is insanity....no matter how good the reason sounds on paper.

 

All I will say....is.....as a country, as a culture, as a society, as individuals.....we are going to learn some very hard lessons over the next 20-50 years that are going to be IRREVERSIBLE.

Gen Z turns to TikTok, Instagram for personal finance advice despite misleading investment tips

https://finance.yahoo.com/news/gen-z-turns-tiktok-instagram-110202642.html

(BOLD is my opinion OR what I consider important content)

"Young Americans – including Generation Z and millennials – have turned to social media platforms like TikTok, Instagram, Facebook and Twitter for investing advice to get trade ideas and swap tips in a virtual trading floor.

But their newfound power on their smartphones comes with risks.

Financial regulators worry that this year’s viral trading craze of meme stocks and cryptocurrencies have fueled unrealistic expectations for first-time investors, who face the possibility of losing money due to the spread of misinformation and fraudsters, according to brokerage watchdog Financial Industry Regulatory Authority.

“Investing is fundamentally complex. You can’t boil it down in a single tweet. You can’t distill it to just a few words or images,” says Gerri Walsh, president of the FINRA Foundation.

“There is a great deal of information that is good on social media platforms, but there is also a great deal of information that is bad, whether it’s people who don’t know what they're talking about, or malicious intent, which is frightening for regulators,” Walsh added.

Gen Z turns to TikTok, Instagram for financial advice and takes it
To be sure, social media and the internet have become important tools for investors to research stocks and find guidance on investing strategies.

Young investors also can more easily access the stock market and other investments than previous generations with the rise of online trading platforms like Robinhood, which have helped shape their investment behaviors.

Young Americans, who have been hit by the second recession in their lifetimes and prime earning years, are flush with stimulus money and savings in the pandemic. There’s a fear of missing out (FOMO) to cash in big on everything from GameStop to cryptocurrencies.

Meme stocks like GameStop and AMC are companies whose share price don't match their underlying business fundamentals like profitability from producing and selling goods and services.

Earlier this year, small-time investors on Reddit took on a few hedge funds in the GameStop “short squeeze” frenzy. That spurred millions of others to join in, as their effort to drive up the price of a stock perceived as undervalued soon shifted to a campaign to “Stick it to Wall Street.” They used the “squeeze” to rally the share price and make profits for themselves while forcing the hedge funds who had bet it would fall to buy it to prevent greater losses.

Investor knowledge in the U.S., however, is low among all investors and many are confused about the various fees they pay for investing, according to FINRA.

Few young and new investors rely on financial professionals for their investing decisions, according to a 2020 study from the FINRA Investor Education Foundation and the NORC research organization at the University of Chicago. White investors (44%) were much more likely to use a financial professional than either Black (28%) or Latino (23%) investors.

Those under 30 were nearly three times more likely to use social media as a source of information for their investing decisions and new investors were twice as likely than more experienced investors, according to the study. Using social media for investing decisions was much more popular for Black investors (21%) than for white (8%) or Latino (4%) investors.

Young investors have sought help from social media to assist with their meme-inspired investing ideas and for personal finance advice on everything from budgeting, taxes, credit card debt and home buying.

In fact, about 56% of Gen Zers (born between 1997 and 2012) and millennials (born between 1981 and the mid-1990s) say they intentionally seek out information or advice about personal finance online or through social media.

The majority of Gen Z seek this information on Instagram (57%) and TikTok (52%), according to a recent study conducted by Qualtrics on behalf of Credit Karma.

Millennials mainly seek out this kind of information and advice on Facebook (53%) and Instagram (39%), the study found.

Although technology and social media can be a powerful tool for young Americans who have taken steps to inform themselves on their finances, it’s important for consumers to do their research and verify the information they find online before taking action, according to Colleen McCreary, chief people officer at Credit Karma.

She said this is especially true when it comes to more risky advice like investing in the stock market or cryptocurrencies.

“Most of the time, you don’t know who these people are and they don’t know you. You may be taking advice that doesn’t necessarily apply to your financial situation,” says McCreary. “I’d strongly encourage people to use this as an entry point to get more clarity on their personal finances and then decide to talk to an expert.”

Young generations most confused about investing and filing taxes
Lofty values and the wealth generated in the pandemic have drawn young Americans to investing, even though they have been hit by two “once-in-a-lifetime” recessions early in their prime earning years and may feel that they have not saved enough for their nest eggs.

Therefore, the ability to become rich quick seems close at hand.

But the drive to get in on the action comes with big risks: low levels of financial knowledge leave most Americans at risk of losing more money than they can spare when markets turn volatile or crash.

“In many situations, you hear people boast about how much money they’ve made trading, but you never hear about people who lost money. People tend not to brag as much about things that don’t go in their favor,” says McCreary. “There are a lot of stories recently where I don’t know how much of it is skill versus luck.”

Younger generations are most confused about investing (24%), filing their taxes (21%) and credit score factors (18%), according to the study.

And, that study shows when it comes to the parts of their financial lives that feel too daunting to even address, Gen Z and millennials list 401(k) vs Roth IRA options (27%), stock market investments (25%) and crypto currency and digital assets investments as the most daunting.

Gen Z has received home buying advice (26%) and advice on opening a credit card or bank account (22%), while millennials have received advice on how to invest in the stock market (29%) and advice on credit card rewards and points (28%), the study showed.

And 22% of millennials also have received advice on investing in bitcoin/cryptocurrencies, which are essentially digital coins created and exchanged over a decentralized computer network where transactions are secured and verified through coding.

Among cryptocurrency owners, the top sources of information are Facebook (46%), Twitter (41%), friends and family (37%), Reddit, and Instagram (35%), according to a Harris Poll, whose data of more than 2,000 adults was given exclusively to USA TODAY.

That poll found Reddit (68%) was regarded as the most credible social media platform, followed by Twitter (63%), Facebook (62%) and Instagram (59%).

Bitcoin, the world’s most popular digital coin, has been highly volatile.

In late 2017, the digital token rose to nearly $20,000 before crashing to almost $3,000 the following year. It had a dizzying rise earlier this year when it doubled in value to above $64,000, but then it briefly tumbled below $30,000 this summer as regulators continued calls for tighter controls on cryptocurrencies.

The stock market, meanwhile, has surged more than 100% since March 2020, when the COVID-19 pandemic dealt a huge blow to the economy.

“The stock market has been on a tear, but how long will the good times last? You have to ask yourself whether you are preparing yourself for shocks or risks if things don’t sustain over the long term,” McCreary added.

More than a third of Gen Z, millennials say they would take financial advice at face value without fact checking
While social media can provide many benefits for investors, it also presents opportunities for fraudsters.

Earlier this year, FINRA and the Securities and Exchange Commission issued warnings about the risks that come with social-media-influenced investing.

Through social media, fraudsters can spread false or misleading information about a stock to large numbers of people with minimum effort and at a relatively low cost, according to the SEC.

They also can conceal their true identities by acting anonymously or even impersonating credible sources of market information.

Some social media influencers are using their platforms to artificially inflate or depress the prices of stocks, according to Mark Gorzycki, an investor behavior expert and co-founder of OVTLYR, a behavioral analytics tool for retail investors.

“The most clear cut, surefire way to protect yourself from a malicious actor is to understand their motivation,” says Gorzycki “Why are they giving you information to follow? If the answer is because they want to have a big following on their YouTube channel, that’s wrong.”

Roughly 75% of Gen Z and millennial respondents who intentionally seek financial advice online or through social media say they follow specific social media influencers who create content relating to personal finance, the study showed.

And 45% of those who have sought out this information say they actually have taken financial advice from someone they didn’t know online and 69% of those who took advice said the advice they received made a positive impact on their lives.

In a troubling sign, many young Americans aren’t fact-checking disinformation on social media, according to Credit Karma.

Among all Gen Z and millennial respondents in the Credit Karma report, including those who have and haven’t taken advice from someone they didn’t know online, 37% say they would take such financial advice at face value without feeling the need to fact check the information.

Additionally, the report found nearly half of all respondents said they’re likely to share financial advice or information found online with a friend or family member.

Of those who have taken advice from someone they didn’t know online and intentionally sought advice, 25% received tips on investing in the stock market and 19% got advice on investing in bitcoin/cryptocurrencies, according to Credit Karma.

Personal finance influencers see the pros & cons of TikTok
Deacon Hayes, a 38-year-old personal finance TikToker, is an influencer who takes a measured approach with investment advice when it comes to meme stocks and cryptocurrencies.

Hayes, who has more than 15,000 followers on TikTok, previously worked as a financial planner at Ronald Blue and Company, an investment management firm that assists high net worth individuals.

He and his wife, Kim, who reside in Scottsdale, Arizona, paid off $52,000 in consumer debt in an 18-month span in 2009 and 2010 following the aftermath of the global financial crisis. The payoffs included car and student loans to credit card debt.

After that experience, he decided that he wanted to work with average Americans to help give them personal finance and investment advice.

Hayes founded Well Kept Wallet, a personal finance site aimed at helping visitors save and grow their money with financial tips.

He’s found that TikTok is a popular way to share his advice, which he’s noticed has helped boost interest in investing, saving and retirement topics among young adults. However, he’s also noticed that at times he has seen incomplete information on risky investments on the platform for things like meme stocks.

In July, TikTok barred the promotion of financial services including cryptocurrencies, unless users disclose it through a branded content option in the app.

Hayes had a mixed reaction to the decision, but still thought it was needed, he says.

“TikTok as a platform has a responsibility to make sure people have accurate information,” says Hayes. “It’s important that people aren't being taken advantage of. You do have to have checks and balances on those platforms."

Hayes, who says he doesn’t sell products on the platform, added: "What’s in it for them? Are they trying to sell you a product, or a course to ‘get rich’?”

Red flags to watch on social media
Investment fraud criminals use a wide array of sophisticated and highly effective tactics to target and influence prospective victims. Learning to recognize specific tactics can help Americans avoid being a victim, says Walsh of the FINRA Foundation.

To avoid becoming drawn into a scam, look for the warning signs of investment fraud. Be suspicious of anyone who guarantees that an investment will perform a certain way because all investments carry some degree of risk, financial experts say.

Many investment scams involve unlicensed individuals selling unregistered securities —ranging from stocks, bonds, notes, hedge funds, oil or gas deals, or fictitious instruments, such as prime bank investments, according to FINRA.

Any investment that consistently goes up month after month — or that provides remarkably steady returns regardless of market conditions — should raise suspicions, especially during turbulent times, Walsh says.

“When you’re dealing with somebody who is giving investment advice but isn't licensed, all of the investor protections that surround a registered professional, whether they’re a broker or advisor, don’t exist,” says Walsh.

So be sure to deal with licensed professionals.

“Even when it comes to a well-intended person who is giving advice, if it ends up turning sour for you, none of those investor protections that a regulated person would be subject to would apply to that person,” Walsh added.

To be a professional trader, for instance, requires exams and a FINRA license to execute orders for a Wall Street securities or brokerage firm. An average person, however, isn't required to do that if they're day trading for themselves.

“The perfect storm is brewing. Young retail traders have seen success with things like meme stocks,” says Gorzycki. “They’ve had some early wins. But when you mix early success with inexperience, you get over confidence real fast. You can’t go into the market thinking you’re bulletproof. Be sure to get education on how markets function.”"

MY COMMENT

NO further comment.....on this story.

Consider any issue that is measurable.....like college entry test scores...how have they done over the past 40 years? Education? ANY other measure of a society or country?

I am......NOW....... more than ever totally focused on one thing.....MY IMMEDIATE FAMILY....one or two generations down the road......and their future. SO....that is what I am doing in terms of investing and planing. BUT than again that has ALWAYS been the primary reason for investing....to provide a better future for your family.....and if you are lucky....a couple of generations.

 

TOMORROW is FREEDOM DAY......when American business....especially small business.....will be FREE of the interference of FREE MONEY from the government hindering their ability to find workers.

'Largest cutoff' of jobless benefits looms next week for millions of Americans

https://finance.yahoo.com/news/largest-cutoff-of-jobless-benefits-looms-next-week-133530270.html

(BOLD is my opinion OR what I consider important content)

"Unemployment benefits have kept the Applebys afloat after Brianne — a bus aide – and her husband — a school bus driver — lost their jobs last year. That life line ends on Labor Day when the pandemic-era unemployment programs officially end — with no extension in sight.

Both had been reluctant to take in-person jobs this year because Brianne has asthma, making her more vulnerable to complications if she gets the coronavirus. But as the expiration looms, they may have no choice, even as cases in their hometown of Rochester, N.Y., rise.

“Going back out in this world just to go get groceries is scary,” Appleby, who is vaccinated, told Yahoo Money. “I'm disappointed that our government has consistently determined that our lives mean significantly less than the running of the economy.”

The Applebys are two of at least 7.5 million jobless workers who will be left with no benefits when the unemployment programs end, according to an analysis by the Century Foundation. The actual number may be as high as 9.1 million, according to Andrew Stettner, an unemployment insurance expert and senior fellow at The Century Foundation.

“The largest cutoff of benefits that we've ever seen,” he told Yahoo Money, noting that spending will shrink by $5 billion each week with the expiration. “Historically there’s never been an ending of benefits so abruptly.”

Approximately 4.2 million workers will lose the Pandemic Unemployment Assistance — benefits for workers who usually don’t qualify for regular unemployment insurance. Another 3.3 million workers on the Pandemic Emergency Unemployment Compensation (PEUC) that extends the duration of unemployment benefits will also lose benefits. The additional $300 of weekly benefits, paid for by the federal government, will also run out this weekend.

Already 4 million unemployed workers lost some or all of their benefits in June and July after 26 states opted out of federal programs early.

The pandemic unemployment benefits have been extended three times during the pandemic — the last time in March — and have delivered a total of more than $800 billion to families. But there’s no appetite now in Congress to grant another extension.

“There was an idea that by September, things would be relatively back to normal, that people would feel comfortable going to work themselves and employers would be very eager to hire them,” Stettner said. “The Delta variant complicates the whole situation.”

While job openings reached a record high of over 10 million in June, employers may not be rushing to fill some of those postings due to the uncertainty caused by the rise of the Delta variant, according to Stettner. The Labor Department reported on Friday that leisure and hospitality — which added 2.1 million jobs from February to July — was flat in August.

That could make it harder for those losing benefits to find a job immediately. Only 1 in 8 workers who lost some or all of their jobless benefits in the 19 states that ended the programs prematurely in June found a new job by August 6, according to research by a team of economists who analyzed banking data of more than 18,000 low-income workers.

“We're both trying to find work,” Appleby said. “It's just been a lot of the same low-income jobs where you have to put a lot of physical energy behind it. I'm disabled so these kinds of jobs are actually super difficult for me.”

While the jobs recovery has accelerated in the summer months, the number of people still relying on temporary unemployment programs is historically high compared with previous recoveries from recessions.

For instance, 1.3 million workers were on Emergency Unemployment Compensation before it expired in December 2013 following the Great Recession. Similarly, 830,000 workers were on the Temporary Extended Unemployment Compensation when it was phased out in December 2003 after the dot-com bust.

Other relief programs are also ending.

“Everything is ending. The eviction moratorium is over. Some of the payments for health insurance are ending,” Stettner said. “A lot of things are coming to an end at a similar time.”

Appleby worries about how she and her husband will cover their $900 rent after their benefits end. She managed to pay some debt during the pandemic, but the benefits weren’t enough for her to build up savings.

“We don't have this overflowing bank of money,” Appleby said. “What I have in the bank is rather small, it's just enough to make sure that like if I need to go to the hospital or our cats get sick I can cover the bills.”"

MY COMMENT

LETS SEE:

The actual number might be as high as 9.1 MILLION people NOT working while the rest of the country somehow manages to go to work every day.

The largest cur-off of benefits we have ever seen.....DUH.....this is the largest number of people getting benefits from the government without having to qualify in history.

There has NEVER been such an ABRUPT cut off of benefits......except for the fact that this.....abrupt cutoff.....has been extended three times and has been known and talked about for months and months now. EVERYONE knew it was coming.

And...all the millions losing these benefits......well....either did not qualify for regular unemployment....or....have gotten way extended benefits for over a year and a half now. Of yes....they also lose the EXTRA $300 from the government that has allowed some of them to make more on unemployment than when working.

Plus....EVERYTHING....is ending....yes....you are now going to have to actually pay your rent and your mortgage.

BUT....dont worry.....the FREE MONEY for simply having children......which people somehow managed to pay for before the pandemic..........will STILL continue till the end of the year.

 

HERE is what we will see this week in a short market week. I see NOTHING new this week so the markets should be free to run up if they choose to do so.

Pandemic-era unemployment benefits expire, producer price index: What to know this week

https://finance.yahoo.com/news/fede...e-index-what-to-know-this-week-180740256.html

(BOLD is my opinion OR what I consider important content)

"During this holiday-shortened week, traders will be keeping an eye on new inflation data at the producer level, as well as the early impacts on the labor market from the expiration of a crucial source of unemployment insurance during the pandemic.

Under Congress' Coronavirus Aid, Relief, and Economic Security (CARES) Act, millions of Americans were offered additional unemployment support during the pandemic with augmented federal unemployment benefits. These programs expire nationally on Monday, cutting enhanced unemployment benefits for some 7.5 million jobless workers, according to data from the Century Foundation.

The federal programs included Pandemic Unemployment Assistance (PUA), which provided longer-term unemployment relief for those that exhausted regular state unemployment benefits. It also included Pandemic Emergency Unemployment Compensation, or benefits for gig workers and contractors who did not qualify for regular state programs. Other crisis-era federal benefits included enhanced $300 per-week payments on top of regular state jobless benefits.

Over the summer, about half of U.S. states ended these federal unemployment benefits early, a move many of these states' lawmakers suggested would incentivize workers to rejoin the labor market.

And to be sure, weekly jobless claims data has reflected a general downtrend in the total number of individuals claiming unemployment benefits across all programs over the summer. As of the week ended Aug. 14 — or the latest date for which data is available — that number stood at 12.2 million, which was down from more than 18 million at the beginning of 2021.

In last Friday's August jobs report, the number of workers unemployed for 27 weeks or more declined by 246,000, which is "potentially an impact of expiring extended UI benefits in some states," Joel Kan, MBA associate vice president of economic and industry forecasting, said in an email.

Others, however, have contested whether the expiration of enhanced benefits and the drop in those claiming benefits has actually translated into commensurate employment gains.

"Our earlier research failed to find large effects of ending the programs in jobless claims data and alt-data indicators such as OpenTable dining and Google searches for 'jobs' as a measure of job search effort," JPMorgan economists Peter McCrory and Daniel Silver wrote in a note published Aug. 25.

"July employment growth does not seem to have been impacted by the changes to the unemployment insurance programs," they added. "There is essentially zero correlation between state-level employment growth in July and the time between the end of expanded UI benefits and the survey reference week. We similarly find no differences in earnings growth or labor force participation among those states that had ended benefits early. We will continue to closely monitor the state-level data as it may simply take some time for an effect to materialize in the aggregate data."

Producer Price Index
In an otherwise relatively light week for economic data and earnings reports, investors will be keeping an eye on the Labor Department's Producer Price Index (PPI) out on Friday. This print will give an updated look at the state of inflation in the U.S. at the producer level, and suggest whether ongoing supply chain constraints and materials shortages have continued to push prices higher.

The headline PPI is expected to slow to just a 0.6% monthly rise for August after a 1.0% jump from July, according to Bloomberg data. Last month's print had come in ahead of consensus estimates, suggesting more inflationary pressures at the producer level and higher costs for companies to have to try and pass off.

Excluding food and energy prices, core producer prices are expected to increase at a 0.5% monthly rate in August, also slowing from July's 1.0% climb.

But over last year, the broadest measure of producer price changes will likely leap by 8.2%, accelerating from July's 7.8% annual gain. That would mark the fastest year-over-year jump on record for the PPI. Many economists have noted that the sharp jumps in inflation reflect, in part, a jump off last year's pandemic-depressed levels. That would suggest price increases should slow in the coming months as the economy laps last year's virus-impacted data.

"Price metrics continue to be impacted by pandemic-related effects including strong demand and supply constraints," Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note about the July producer price index. "The reopening impact should diminish over coming months but there is less certainty about supply dislocations, which could be exacerbated due to spread of the Delta variant."

The sustainability of inflationary pressures, however, carries heavy implications for the path forward for monetary policy. Though the PPI is just one measure of price increases in the economy, the Federal Reserve's preferred gauge of inflation, or core personal consumption expenditures, has also recently overshot the central bank's target of 2%. Still, many monetary policymakers including Fed Chair Jerome Powell have reiterated that they believe this inflation will prove transitory, and ultimately moderate as the economic recovery matures."

"Economic calendar

• Monday: No notable reports scheduled for release
  
  
• Tuesday: No notable reports scheduled for release
  
  
• Wednesday: MBA Mortgage Applications, week ended September 3 (-2.4% during prior week); JOLTS Job Openings, July (10.000 million expected, 10.073 million in June); Consumer Credit, July ($28.300 billion in July, $37.690 billion in June); Federal Reserve's Beige Book
  
  
• Thursday: Initial jobless claims, week ended September 4 (343,000 expected, 340,000 during prior week); Continuing claims, week ended August 28 (2.748 million during prior week)
  
  
• Friday: Producer Price Index, month-over-month, August (0.6% expected, 1.0% in July); Producer Price Index excluding food and energy, month-over-month, August (0.5% expected, 1.0% in July); Producer Price Index, year-over-year, August (8.3% expected. 7.8% in July) Producer Price Index excluding food and energy prices, year-over-year, August (6.6% expected, 6.2% in July); Wholesale Inventories, month-over-month, July final (0.6% expected, 0.6% in prior print)"

"Earnings calendar

• Monday: No notable reports scheduled for release
  
  
• Tuesday: Coupa Software (COUP)after market close
  
  
• Wednesday: LuluLemon (LULU), RH (RH) after market close
  
  
• Thursday: Zscaler (ZS) after market close
  
  
• Friday: Kroger (KR) after market close"

MY COMMENT

A free week for the markets.....kind of like SPRING BREAK for the markets.........or a chance to end up in one of those "Markets Go Wild" infomercial videos......where we see the markets FLASHING everyone...or...drunkenly staggering down the street after an all nigher partying....or a group of markets behind the dumpster in the alley smoking weed from a big bong.

ABSOLUTELY nothing going on this week.....so the markets are FREE to run wild as they wish. UP....DOWN....SIDEWAYS....who knows. My guess......another UP week for the markets.

 

AND....if all the above was not enough.....here is the next shoe to drop.

A shock is headed for the housing market

https://finance.yahoo.com/news/shock-headed-housing-market-140000215.html

(BOLD is my opinion OR what I consider important content)

"At the height of the pandemic, more than 7.2 million homeowners were in the mortgage forbearance program, which allows some borrowers to pause their payments. The economy has since posted one of the fastest recoveries in history. Now, just 1.7 million borrowers are enrolled in the forbearance program.

But soon it’ll be zero.

The Biden-Harris administration has made it clear it has no plans for another extension of the mortgage forbearance program, which is set to lapse on Sept. 30. Borrowers won’t all get removed at once, instead they’ll be phased out over a period of several months. (For details on the mortgage forbearance wind down, go here).

Nonetheless, as Fortune has previously reported, this is a major shake-up headed for the housing market. In a nation of more than 80 million homeowners, 1.7 million might not sound like a lot—until you consider there are just over 600,000 homes for sale right now on realtor.com. In fact, this year housing inventory hit a 40-year low. So, if even a small percentage of these 1.7 million struggling borrowers opt to sell—rather than returning to their monthly payments—it could cause a shock in the housing market.


Back in July, Fortune reached out to researchers at Home.LLC, a startup that provides down payment assistance to homebuyers in return for a share of profits, to forecast how the end of forbearance would impact the market. They found the end of the program is likely to see U.S. inventory—homes for sale—rise by 11% later this year. While that’ll hardly shift the housing market from a seller’s market to a buyer’s market, it would soften the market a bit.

Even before mortgage forbearance ends, the market is already starting to cool. After seeing housing inventory plummet over 50% between April 2020 to April 2021, it’s moving up again. Inventory levels ticked up 8.8% in June, and another 10.4% in July. Over the past year, median home prices are up 17.2%, according to real estate research firm CoreLogic. In the coming 12 months, CoreLogic foresees that slowing down a bit, to just a 3.2% appreciation.

But don’t expect the end of forbearance to sink the market. A housing market crash is very unlikely: In the short term, a wave of demographics and years of under-building will ensure, industry insiders tell Fortune, that demand outmatches supply.

A foreclosure meltdown is also unlikely. The strong housing market means most of these struggling homeowners have positive home equity. So if these homeowners decide to walk away, they can simply sell. That is very different from what happened during the Great Recession: Millions of underwater borrowers, with mortgage balances greater than their home’s value—were forced to sell. But we could still see a lot more inventory in the coming months."

MY COMMENT

In "typical fashion"........we have the SCARY, FEAR MONGERING headline about the massive shock coming to the housing market.....and in the end:

"that’ll hardly shift the housing market from a seller’s market to a buyer’s market, it would soften the market a bit."

OMG....the market "might"......"soften a bit".

AND.....in spite of the scary headline:

"don’t expect the end of forbearance to sink the market".......because......"demand outmatches supply."

Yes...but what about the DREADED foreclosure meltdown:

"A foreclosure meltdown is also unlikely. The strong housing market means most of these struggling homeowners have positive home equity. So if these homeowners decide to walk away, they can simply sell."

But, but, but....what about the scary headline......I mean....come on man:

"we could still see a lot more inventory in the coming months."

Thank you for the gratuitous opinion financial writer....yes we could.....or we might not.

We have now entered MAXIMUM MORONIC INSANITY......yes......the "MMI" phase.....of the recovery and fear mongering. BUT....come on....give them some credit.....it is hard to come up with filler over the Labor Day weekend.

 

I started this little thread nearly 3 years ago.....on October 2, 2018. At that time I introduced myself and my history and background. Since we are in the middle of a 3 day weekend......I am going to repeat those first posts INTRODUCING MYSELF.....so those that are current posters or lurkers that did not bother to go back.......373 PAGES.....in time can see where I come from in terms of my experiences and BIASES. So....here is a repeat of my introduction:

1. "I am new to this board. I am NOT new to internet stock posting, however, having previously posted for over 25 years on another site under the same thread title. Over the years that forum degenerated into just politics, social discussion and general gossip and chat. As a result I made the decision to eliminate my LONG TERM INVESTING thread (the highest viewed investing thread on the board) and begin the search for a new INVESTING discussion home.
   
   I will post more over the next few weeks on my background and investing history. Needless to say, I am a LONG TERM INVESTOR and have been for 50+ years. I have invested through the bear market of the 1970's, the stagflation time of the early 1980's, the Regan boom, held through the "flash crash", through the dot-com era and crash. I have invested up to and through the CMO and derivative mess of 2008 to 2009 and continuously up to the present.
   
   My approach is LONG TERM investing in a concentrated portfolio of, usually, 10-15 individual stocks and three mutual funds. I DO NOT believe in or use Market Timing, Technical Analysis, or Trading. My approach is basic Fundamental Analysis combined with my experience, education, and investing intuition. I focus on the BIG CAP side of the markets and hold my stocks and funds for years until they no longer fit my criteria for anticipated growth.
   
   I have two SEPARATE investing goals:
   
   1. Beat the SP500 annually.
   
   2. Achieve a LONG TERM total return of at least 10%.
   
   I have achieved both goals over the LONG TERM. BUT.....due to my financial situation, I never get greedy. I am content to simply double my money over 7.2 years (rule of 72's). In spite of my age my stock market money is and will continue to be LONG TERM for the remainder of my life since I am not dependent on that money.
   
   I currently manage a number of family accounts as well as a family trust. All of the accounts are set up the same way and in the same investments. Basically on a very MICRO, MICRO level I run a "family office", doing the investing, taxes, estate planing, legal, and other work for extended family.
   
   Here is my "PORTFOLIO MODEL" for all accounts managed:
   
   STOCKS:
   
   Alphabet Inc
   Amazon
   Apple
   Boeing
   Chevron
   Costco
   Home Depot
   Honeywell
   Johnson & Johnson
   Nike
   Nvidia
   3M"

YOU can see that over the past three years my PORTFOLIO MODEL has had a few changes......the SALE of my holdings in BOEING, CHEVRON, J&J, and 3M. My introduction continues:

To continue my "little" introduction to this forum:

As a LONG TERM, fully invested, all the time, investor I do not trade, I hold for the LONG TERM. I do NOT sell unless a holding starts to under-perform my expectations and lose long term growth potential. In an average year I will usually make ZERO trades.

My portfolio (see above) was started many many years ago with half the funds put into the stock side of the portfolio and half the funds put in the mutual fund side of the portfolio. Over the years I allow the investments to run as they wish and I DO NOT re-balance. Currently the stock side is about 60% of the portfolio and the funds about 40%. My personal belief is.....much of the "stuff" you see in the media now about re-balancing and diversification, at least how practiced by the majority of investors, is simply busy work and killing returns for the majority of investors. I believe people using the current thinking are re-balancing and diversifying themselves to death in their investing and killing their returns. The emphasis and doubling up of holdings in the fund and stock side is INTENTIONAL.

Over the years I have held many of the BIG name stocks, stocks like EXXON, GE, Colgate, P&G, General Mills, MSFT, Cisco, etc, etc, etc since my focus investing is......BIG CAP, ICONIC BRAND, WORLD WIDE, AMERICAN, GREAT MANAGEMENT, MARKET DOMINANT, companies. I do NOT do International investing....ever, or developing country investing. I consider my BIG CAP, AMERICAN, companies that dominate around the world with their products and business model to by my International exposure. I NEVER invest in auto companies, drug companies, banks, airlines, insurance, or financial companies.

I am NOT afraid to take a chance once in a while with a BIG single stock investment IF....and only IF...I see a probability (yes probability, not possibility) of a once in a lifetime company. For example, I invested ALL of my liquid cash assets in MSFT in 1990 and held through 2002. Another example of a once in a lifetime company that I have invested in is AMZN. I am EXTREMELY clinical in my investing and decisions about investing. I see "the markets" and "indexes" for what they are....individual businesses. As an "old time" investor, financial reports are my main source of information and I definately know how to read a balance sheet, Income statement, cash flow statement, etc, etc.

I intend to post actual results once in a while as I go along. I also intend to post any trades or changes in my portfolio (above) as they are made. This serves as a historical investing record for me and will serve as somewhat of a verification of what I am saying and posting for others.

Outside of investing my relevant background is......I am a college graduate, grad school in business and law school grad (although I am not licensed and do NOT practice law). I am approximately 70 years old. I founded, owned, and ran a small business in my earlier life. I sold my business and retired at age 49 and have not worked in day job since. Over the past 20 years I have primarily lived off my investing and personal assets. My retirement at age 49 was made possible by my investing during my business years.

I started stock investing as a child in the late 1950's and a teen in the 1960's. My investing education started with my mother who had a portfolio of individual stocks and a few funds during that time span. It was extremely RARE for anyone in those years to own stocks or funds. It was the era of round lot trades and having to go down to to brokers office to watch the ticker if you wanted to get info on a day to day basis. It was the era of the Wall Street journal and later for me the Investors Business Daily newspaper which was more comprehensive than the WSJ. There were no 401K, no IRA. The changes in investing over that time span have been massive.

One constant over that time that has remained the same is human psychology and the ability of humans to screw things up by making them way more complex than they really need to be. Actually for the VAST MAJORITY of people today about all that is needed in terms of investing is to simply put ALL investing funds and retirement money in a simple SP500 INDEX FUND and let if ride LONG TERM. Research tells us that the great majority of professional money managers will rarely beat the SP500 on a consistent basis. Forget all the charts, quant data, Technical voodoo, etc, etc, etc. Just look at your results and if you are not beating the SP500 at least half the time (hardly anyone is if they are honest) than why beat your head against the wall. Just put it in a SP500 Index fund and forget about it, enjoy life.

So.........

I will post results once in a while.
I will post any moves or trades.
I will post relevant articles and information, with discussion.
I will do my usual stream of consciousness "stuff".
I might make a few predictions once in a while for fun.

Much of the "stuff" that I might post is going to be short term oriented. Market events, historic happenings, recent data, short term results, political events that impact investing. But, all this "stuff" in combination impacts LONG TERM INVESTING. It also impacts the ability of people to stay in the markets and get the benefit of long term compounding.

As for right now.....the markets are BOOMING. I believe we are in for a historic year end rally in stocks. I would not be surprised to see a gain of 8-10% minimum between now and the end of the year. For those that lived through the Regan tax cuts and boom years, which extended all the way to the dot com collapse, this is deja-vu all over again. For those too young to remember that time span, hopefully you will learn something about economics, taxes, business, and investing over the next few years.

I have had some times in my investing life that I took a walk on the dark side and did some short term "stuff". In the Dot-com boom era I momentum traded 1000 share lots in a few select stocks.....COST, SBUX, AMGN, and a few others. It was easy to do well in that environment. Most of my trades at that time lasted 1-5 days. I did very well, mostly due to the type of market we were in at that time. Amgen had a lawsuit with one of their competitors at the time and I had 1000 shares outstanding at the time the news hit that they had prevailed. That was a BIG GAIN, couple of day, trade. BUT.....live by the gun, die by the gun......I had my losses like anyone. I lost $40,000 on one trade when a dot-com darling stock failed to pop right after earnings. But all in all it was easy pickings for a while.

Even if I was a trader or short term investor, I would still have my LONG TERM account. As I made money I would filter profits into the LONG TERM core portfolio. What is the use of trading or other market activity if you are not saving or building up assets. I took plenty of risk as a business owner and over the years as an investor. The pay off was having the discipline to transfer those gains into my LONG TERM core portfolio for long term growth at lower risk."

So there you have it for those that did NOT start at the beginning of this thread. THE ABOVE is.......STILL.....where I am coming from when I post and as an investor and........"I continue to be fully invested for the long term as usual".

HAVE a GREAT Labor day with family and friends....EVERYONE. Blow off some steam.....since we HIT IT HARD on Tuesday to start the PUSH to year end.

 

You can see from the above that over the past THREE YEARS I have made.....SIX....changes in my PORTFOLIO MODEL. This is MUCH MORE than normal for me in that sort of time span. I added GOOGLE and PROCTOR & GAMBLE. I sold BOEING, CHEVRON, JOHNSON & JOHNSON, and 3M. I went from a total of 12 individual stocks to 10 individual stocks. those events should be within the pages of this thread.

The sale of BOEING was a no brainer. The company has been a disaster for the past years...what a disappointment. When I bought it they were the dominant airline company in the world with no end in sight....how quickly that changed.

CHEVRON....I had owned numerous times in the past. This time was no different, it simply did not live up to what I wanted or expected. I cant remember for sure...but I believe I did not hold them very long this time before selling and once again swearing to NEVER buy another oil company.

JOHNSON & JOHNSON and 3M were holdovers from my older PORTFOLIO MODEL that I was ACTIVELY moving from....and.... more toward TECH and more dominant Millennial oriented companies. If my memory was right they were just not performing up to what I wanted and in addition JNJ had the baby powder issue with one of their primary products that I considered significant so that gave me the push to finally clear them out after many years. I dont recall that there was any dramatic issue with 3M other than substandard performance compared to the rest of the portfolio.

I added GOOGLE, a definite POSITIVE decision and in line with the MODERNIZATION of my portfolio. I also added PG which I had owned for many decades in the past as a VERY long term holding. I added them because I felt that their management had made the transition to the NEW ERA and the NEW YOUNG CONSUMER much better than most of the other old school conglomerates and I was looking for a non-tech company that was a BROAD BASED CONSUMER CONGLOMERATE to help balance out my tech and other more modern holdings.

At least in hindsight the above is my memory of those trades.

 

RG....yes I did very well with TESLA and a few other shorter trades that are ALL in this thread. I did not list it because I was not trying to re-hash all trades in this thread over the past three years. I was simply explaining the stocks that were in my PORTFOLIO MODEL when this thread started and got sold and those that are in it NOW.

 

YOU are very welcome SPP.....and....WELCOME to the thread. I hope you continue to actively post.

 

YES.....and by the way....great posts Globetrotter.....I hope you continue to post as a regular. Anyone else also.

In 2008 as we got into the March, April, May time period we were deeply into the....."possible"....collapse of the entire USA banking system as a result of the......Mortgage Derivatives.....mess. (There is at least one very good movie on this time period......."Too BIg To Fail" and "The Last Days Of Lehman Brothers"....are a couple). I had been following it for a while and doing more and more reading. I got VERY DEEP into the events and issues of the time in my reading. I cant remember the exact timing now since it was years ago.....but some time in about May 2008 time span.....I became convinced that FOR THE FIRST TIME IN MY LIFE.....there was a distinct....."significant possibility"....of a collapse of the USA banking system....which would of course trigger a WORLD WIDE banking and economic collapse.

I considered the risk so extreme that for the first time in my life I decided to sell EVERYTHING and go totally to cash. I sold everything and put the cash into a US Treasury Money Market Fund.

Of course things did spiral out of control ending with the collapse of Lehman Brothers. Merrill Lynch, Washington Mutual and many other companies.....and government mortgage giants Freddie Mac, Fannie Mae. See:

The Fall of the Market in the Fall of 2008

https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp

"Lehman Brothers Collapses

On Sept. 6, 2008, with the financial markets down nearly 20% from the Oct. 2007 peaks, the government announced its takeover of Fannie Mae and Freddie Mac as a result of losses from heavy exposure to the collapsing subprime mortgage market.6 One week later, on Sept. 14, major investment firm Lehman Brothers succumbed to its own overexposure to the subprime mortgage market and announced the largest bankruptcy filing in U.S. history at that time.7 The next day, markets plummeted and the Dow closed down 499 points at 10,917.8


The collapse of Lehman cascaded, resulting in the net asset value of the Reserve Primary Fund falling below $1 per share on Sept. 16, 2008. Investors then were informed that for every $1 invested, they were entitled to only 97 cents. This loss was due to the holding of commercial paper issued by Lehman and was only the second time in history that a money market fund's share value has "broken the buck."


Panic ensued in the money market fund industry, resulting in massive redemption requests. On the same day, Bank of America (BAC) announced it was buying Merrill Lynch, the nation's largest brokerage company. Additionally, American International Group (AIG), one of the nation's leading financial companies, had its credit downgraded as a result of having underwritten more credit derivative contracts than it could afford to pay off.


Government Starts Bailouts

On Sept. 18, 2008, talk of a government bailout began, sending the Dow up 410 points.9 The next day, Treasury Secretary Henry Paulson proposed that a Troubled Asset Relief Program (TARP) of as much as $1 trillion be made available to buy up toxic debt to ward off a complete financial meltdown.


Also on this day, the Securities and Exchange Commission (SEC) initiated a temporary ban on short-selling the stocks of financial companies, believing this would stabilize the markets.10 The markets surged on the news and investors sent the Dow up 456 points to an intraday high of 11,483, finally closing up 361 at 11,388.11 These highs would prove to be of historical importance as the financial markets were about to undergo three weeks of complete turmoil.


Financial Turmoil Escalates

The Dow would plummet 3,600 points from its Sept. 19, 2008 intraday high of 11,483 to the Oct. 10, 2008 intraday low of 7,882.12 The following is a recap of the major U.S. events that unfolded during this historic three-week period.


Sept. 21, 2008

Goldman Sachs (GS) and Morgan Stanley (MS), the last two of the major investment banks still standing, convert from investment banks to bank holding companies to gain more flexibility for obtaining bailout funding.


Sept. 25, 2008

After a 10-day bank run, the Federal Deposit Insurance Corporation (FDIC) seizes Washington Mutual, then the nation's largest savings and loan, which had been heavily exposed to subprime mortgage debt. Its assets are transferred to JPMorgan Chase (JPM).13


Sept. 28, 2008

The TARP bailout plan stalls in Congress.14


Sept. 29, 2008

The Dow declines 774 points (6.98%), at the time the largest point drop in history.9


Oct. 3, 2008

A reworked $700 billion TARP plan, renamed the Emergency Economic Stabilization Act of 2008, passes a bipartisan vote in Congress.15


Oct. 6, 2008

The Dow closes below 10,000 for the first time since 2004.12


Oct. 22, 2008

President Bush announces that he will host an international conference of financial leaders on Nov. 15, 2008.16


The Bottom Line

While good intentions were likely the catalyst leading to the decision to expand the subprime mortgage market back in 1999, many repercussions resulted which yielded undesirable impacts to the economy in 2008.


When one considers the growth of the subprime mortgage market along with the investment vehicles creatively derived from it, combined with the explosion of consumer debt, it would be hard to argue that the financial turmoil of 2008 and the ensuing Great Recession could have been minimized or perhaps avoided if more financially responsible policies have been implemented sooner."

Anyway....this became the GREAT RECESSION of 2008/2009. By about January of 2009 we were deep into the losses......but about March of 2009 My thinking was that we HAD to be near the bottom. So toward the end of March 2009...I bought back in.....not just a bit....I mean......ALL IN ALL AT ONCE. I believed that we were either at a bottom of within 10% of a bottom....and I was willing to take the risk of a loss of up to 10%. In hindsight it turned out that I was right in my analysis.

When I decided to sell out in 2008....I was thinking that there was a 25% chance of the world economic system COLLAPSING.....not a "probability"......but a never before seen significant chance of the unheard of happening. Most of the world had no idea how close we came to a world wide meltdown.....at least at the time.

After I went back ALL IN in March 2009....I than rode the ensuing HISTORIC BULL MARKET for the next 12 years up to today. It was a very scary time in 2009. I remember on the investing board that I was on.....many people did not get up the nerve to get back into the markets for.......YEARS.

WOULD I DO IT AGAIN......YES.....If I thought that there was a 1 in 4 chance of the entire world economic system collapsing.....I would sell everything. If the collapse had actually happened........it would have been the GREATEST ECONOMIC DISASTER in the history of the world. Everything and everyone would have been wiped out. It would have been like a killer asteroid or nuclear war....we would still be living under the resulting turmoil. As it was the EU....Greece, Italy, France, etc, etc.....teetered on the edge for years after. In fact in my opinion the world has been in a deflationary depression ever since.

 

PROBABLY....half or more of the young guys and investors today dont even know what I am talking about above....and....how extreme the situation was. TomB16 knows...for sure. I am sure oldmanram and some of the other older posters understand. Same thing for those of us that were investors in the era of STAGFLATION in the early 1980's. Most investing today......HAVE NO CLUE.....how bad it really was compared to what they think is BAD today.

 

Yes....those are both excellent....Emmett.