Morgan Stanley stock... sell and buy what?

[Descartes]

nm, I can take this to a PM

 

[sandmanwake]

Ah, forgot all about Israel. Speaking of which: http://www.threeworldwars.com/world-war-3/ww3.htm

 

[JS80]

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: DaveSimmons
> 2) What are good, stable, long-term growth companies to invest in?

If you aren't actively trading, Vanguard's index-based mutual funds like VFINX, VEURX, VEIEX. Buy, hold a few decades, profit!

In this case I agree with you although there are so many better performing funds out there with equal risk. TREMX, although higher risk of course, has performed admirably the past few years for me. I've had a greater return with TREMX over the past 13 months or so than VNIFX typically has over a 5+ year period. Buying and holding works only if you consider holding during a bull market; allowing your equity to drawdown in a bear market and then simply waiting for it to recover is irresponsible, imo.

In the new economy, simply investing in indexes will not yield you the 8-10% it used to historically. If you MUST invest in an index and you have 40 years put it in a fund that mirrors the Russell 2000 index.

I know you think I'm giving you a hard time, but I'm trying to be sincere here.

You talk a lot in certainties. This is very dangerous to a trader or active investor (to suggest an investor who actually reviews their portfolio rather than buys-and-holds) as there are no certainties offered. People have been talking about "the new economy" for decades, and it's never new. On what are you basing this new economy, and what are you using to determine that the index won't annualize to 8-10%?

No, your skepticism is VERY GOOD. It prevents shvt like the tech bubble of 2000. However, I still stand by my statement that if there is a bombing campaign of nuclear facilities by the US and/or Israel, most of the commodities tracked in DBC (particularly OIL) will spike up AND stocks will spike downwards. The question is what percentage change there is of this happening.

However, the statement that the broad market index will not return 8-10% is very much debatable. With all the hedge fund and speculative money out there equity prices are trading at a premium. I believe it'll be much harder now for equities to grow unless there is a new technological breakthrough, such as the internet and biotech that helped the stock market grow in the 90s, equity returns will lag historical returns.

 

[Deleted member 4644]

Wow.. thread got big fast. I actually like the commodities idea. JS80, could you teach me more about it? Basically, I am afraid of investing in pure speculative prices.

Are these different than the "futures" that are speculation as far as I understand? I don't know much about this area of investing.

I am ok with losing some money... this is not the money I need to live and I am still young. But obviously I don't want to take stupid risks.

Edit: For example, I might but 30% of this money in a savings acct, 30% back into blue chip type stocks, and the rest into more risk.

 

[DaveSimmons]

> I believe it'll be much harder now for equities to grow unless there is a new technological breakthrough, such as the internet and biotech

That's why putting some of your money into worldwide index funds is important. If you hold both US and foreign index funds the odds of obtaining good growth over time go up a bit.

I happen to be a Vanguard fan so I say VFINX, VEURX, VEIEX (and VPACX I suppose) but there are certainly other good index fund choices for the investor who doesn't want to spend time trading and watching the markets.


(Before Descartes jumps on me I accepted JS80's claim as an example of the general sentiment that the US overall market may grow slowly over the next few years, lowering the performance of index funds like VFINX)

 

[Descartes]

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: DaveSimmons
> 2) What are good, stable, long-term growth companies to invest in?

If you aren't actively trading, Vanguard's index-based mutual funds like VFINX, VEURX, VEIEX. Buy, hold a few decades, profit!

In this case I agree with you although there are so many better performing funds out there with equal risk. TREMX, although higher risk of course, has performed admirably the past few years for me. I've had a greater return with TREMX over the past 13 months or so than VNIFX typically has over a 5+ year period. Buying and holding works only if you consider holding during a bull market; allowing your equity to drawdown in a bear market and then simply waiting for it to recover is irresponsible, imo.

In the new economy, simply investing in indexes will not yield you the 8-10% it used to historically. If you MUST invest in an index and you have 40 years put it in a fund that mirrors the Russell 2000 index.

I know you think I'm giving you a hard time, but I'm trying to be sincere here.

You talk a lot in certainties. This is very dangerous to a trader or active investor (to suggest an investor who actually reviews their portfolio rather than buys-and-holds) as there are no certainties offered. People have been talking about "the new economy" for decades, and it's never new. On what are you basing this new economy, and what are you using to determine that the index won't annualize to 8-10%?

No, your skepticism is VERY GOOD. It prevents shvt like the tech bubble of 2000. However, I still stand by my statement that if there is a bombing campaign of nuclear facilities by the US and/or Israel, most of the commodities tracked in DBC (particularly OIL) will spike up AND stocks will spike downwards. The question is what percentage change there is of this happening.

Not entirely disagreeing with that.

However, the statement that the broad market index will not return 8-10% is very much debatable. With all the hedge fund and speculative money out there equity prices are trading at a premium.

Which equities? Every equity on the market? And what constitutes a premium? There are always equities with high relative strength in a sector that trade at a premium, but for every equity at a premium there are likely a dozen more at a value. Are they a good value? That's a whole other debate.

Also, what do hedge funds (not all hedge funds are speculating funds, btw) couples it to equities being traded at a premium?

I believe it'll be much harder now for equities to grow unless there is a new technological breakthrough, such as the internet and biotech that helped the stock market grow in the 90s, equity returns will lag historical returns.

Ok, now we're talking crazy. In *any* market there is almost always a bull market. Oil, natural gas, health care, insurance, financial institutions, etc. are just a few of the bull markets that have occurred in the past few years.

'05 was an enormous year... enormous, and '06 looks to be even better. You seem to be correlating sectors and just calling everything "equities." Even with the 90s tech boom there were still independent bull and bear markets that occurred.

Serious question. Where are you getting your information? All of these thoughts just seem to come out of nowhere.

 

[JS80]

Originally posted by: LordSegan
Wow.. thread got big fast. I actually like the commodities idea. JS80, could you teach me more about it? Basically, I am afraid of investing in pure speculative prices.

Are these different than the "futures" that are speculation as far as I understand? I don't know much about this area of investing.

I am ok with losing some money... this is not the money I need to live and I am still young. But obviously I don't want to take stupid risks.

Edit: For example, I might but 30% of this money in a savings acct, 30% back into blue chip type stocks, and the rest into more risk.

With futures you're not actually buying the commodity itself; you're buying a contract to purchase X units of the commidity. In other words your paying dollars for pieces of paper. Futures have strict requirements (usually $10k minimum with min. liquid assets and income) because they are usually leveraged. For example you enter to buy a contract let's say for $100k worth of oil, but you would only need to deposit $10k to enter the contract; you're leveraged 10x. So if oil went up by 10% you make 100% on your money but if it goes down 10% you would get sold out and lose 100%. Vice versa for short positions. Reserve requirements differ for different futures.

With GLD and DBC, they are professionally managed to track the commodities they track. For example GLD is trading at 56.72 which means Gold futures should be trading at 567.20 per oz. There is less risk with these ETFs because you are not leveraged like you would be in a futures account (which you can have a lot greater loss than your initial investment), and you are not likely to lose 100% of your investment barring some act of God (but then an act of God would probably be favorable to long commodity prices).

Always do your own due diligence before you decide to enter an investment.

 

[JS80]

There is a lot of money in the market right now and by equities are trading at a premium I mean that PE ratios are still historically high. I don't believe this will be changing anytime soon.

Look at the S&P 500 5 year return. The return is approximately 0.58% annualized. Look at a 13 year chart. As you can see the growth from 1995 to 2001 was primarily from the tech boom because of the technological advances made during that time. Stocks are now approaching 2000 highs because earnings have finally materialized. I predict we will trade sideways until either global terrorism is no longer a threat and/or there is a new technological breakthrough (maybe nanotechnology or legitimate mass market alternative to oil fuel that is uber-cheap).


*When I say "stocks" I mean the broad market.

**Hedge funds tend to be highly speculative and use leverage in their investment strategy to maximize returns.

 

[iversonyin]

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: DaveSimmons
> 2) What are good, stable, long-term growth companies to invest in?

If you aren't actively trading, Vanguard's index-based mutual funds like VFINX, VEURX, VEIEX. Buy, hold a few decades, profit!

In this case I agree with you although there are so many better performing funds out there with equal risk. TREMX, although higher risk of course, has performed admirably the past few years for me. I've had a greater return with TREMX over the past 13 months or so than VNIFX typically has over a 5+ year period. Buying and holding works only if you consider holding during a bull market; allowing your equity to drawdown in a bear market and then simply waiting for it to recover is irresponsible, imo.

In the new economy, simply investing in indexes will not yield you the 8-10% it used to historically. If you MUST invest in an index and you have 40 years put it in a fund that mirrors the Russell 2000 index.

I know you think I'm giving you a hard time, but I'm trying to be sincere here.

You talk a lot in certainties. This is very dangerous to a trader or active investor (to suggest an investor who actually reviews their portfolio rather than buys-and-holds) as there are no certainties offered. People have been talking about "the new economy" for decades, and it's never new. On what are you basing this new economy, and what are you using to determine that the index won't annualize to 8-10%?

No, your skepticism is VERY GOOD. It prevents shvt like the tech bubble of 2000. However, I still stand by my statement that if there is a bombing campaign of nuclear facilities by the US and/or Israel, most of the commodities tracked in DBC (particularly OIL) will spike up AND stocks will spike downwards. The question is what percentage change there is of this happening.

Not entirely disagreeing with that.

However, the statement that the broad market index will not return 8-10% is very much debatable. With all the hedge fund and speculative money out there equity prices are trading at a premium.

Which equities? Every equity on the market? And what constitutes a premium? There are always equities with high relative strength in a sector that trade at a premium, but for every equity at a premium there are likely a dozen more at a value. Are they a good value? That's a whole other debate.

Also, what do hedge funds (not all hedge funds are speculating funds, btw) couples it to equities being traded at a premium?

I believe it'll be much harder now for equities to grow unless there is a new technological breakthrough, such as the internet and biotech that helped the stock market grow in the 90s, equity returns will lag historical returns.

Ok, now we're talking crazy. In *any* market there is almost always a bull market. Oil, natural gas, health care, insurance, financial institutions, etc. are just a few of the bull markets that have occurred in the past few years.

'05 was an enormous year... enormous, and '06 looks to be even better. You seem to be correlating sectors and just calling everything "equities." Even with the 90s tech boom there were still independent bull and bear markets that occurred.

Serious question. Where are you getting your information? All of these thoughts just seem to come out of nowhere.

He's looking at the board equity market in general (ei: S&P and Dow). The S&P and Dow did not have a great year (single digit return).

Only if you are invested in financial and energy you would get 20-40% return. So overall, it wasn't a great year for the stock market.

Heading to 06, the market would likely to trade sideway like JS80 said. Even tho economic growth is sustainable in short term, oil price is unlikely to return to its low. That will be cutting into corporate profit also consumer spending.

We would need to bring our boys back from Iraq for this market to rally. Too many underlying problems.

 

[JS80]

Originally posted by: iversonyin

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: JS80

Originally posted by: Descartes

Originally posted by: DaveSimmons
> 2) What are good, stable, long-term growth companies to invest in?

If you aren't actively trading, Vanguard's index-based mutual funds like VFINX, VEURX, VEIEX. Buy, hold a few decades, profit!

In this case I agree with you although there are so many better performing funds out there with equal risk. TREMX, although higher risk of course, has performed admirably the past few years for me. I've had a greater return with TREMX over the past 13 months or so than VNIFX typically has over a 5+ year period. Buying and holding works only if you consider holding during a bull market; allowing your equity to drawdown in a bear market and then simply waiting for it to recover is irresponsible, imo.

In the new economy, simply investing in indexes will not yield you the 8-10% it used to historically. If you MUST invest in an index and you have 40 years put it in a fund that mirrors the Russell 2000 index.

I know you think I'm giving you a hard time, but I'm trying to be sincere here.

You talk a lot in certainties. This is very dangerous to a trader or active investor (to suggest an investor who actually reviews their portfolio rather than buys-and-holds) as there are no certainties offered. People have been talking about "the new economy" for decades, and it's never new. On what are you basing this new economy, and what are you using to determine that the index won't annualize to 8-10%?

No, your skepticism is VERY GOOD. It prevents shvt like the tech bubble of 2000. However, I still stand by my statement that if there is a bombing campaign of nuclear facilities by the US and/or Israel, most of the commodities tracked in DBC (particularly OIL) will spike up AND stocks will spike downwards. The question is what percentage change there is of this happening.

Not entirely disagreeing with that.

However, the statement that the broad market index will not return 8-10% is very much debatable. With all the hedge fund and speculative money out there equity prices are trading at a premium.

Which equities? Every equity on the market? And what constitutes a premium? There are always equities with high relative strength in a sector that trade at a premium, but for every equity at a premium there are likely a dozen more at a value. Are they a good value? That's a whole other debate.

Also, what do hedge funds (not all hedge funds are speculating funds, btw) couples it to equities being traded at a premium?

I believe it'll be much harder now for equities to grow unless there is a new technological breakthrough, such as the internet and biotech that helped the stock market grow in the 90s, equity returns will lag historical returns.

Ok, now we're talking crazy. In *any* market there is almost always a bull market. Oil, natural gas, health care, insurance, financial institutions, etc. are just a few of the bull markets that have occurred in the past few years.

'05 was an enormous year... enormous, and '06 looks to be even better. You seem to be correlating sectors and just calling everything "equities." Even with the 90s tech boom there were still independent bull and bear markets that occurred.

Serious question. Where are you getting your information? All of these thoughts just seem to come out of nowhere.

He's looking at the board equity market in general (ei: S&P and Dow). The S&P and Dow did not have a great year (single digit return).

Only if you are invested in financial and energy you would get 20-40% return. So overall, it wasn't a great year for the stock market.

Heading to 06, the market would likely to trade sideway like JS80 said. Even tho economic growth is sustainable in short term, oil price is unlikely to return to its low. That will be cutting into corporate profit also consumer spending.

We would need to bring our boys back from Iraq for this market to rally. Too many underlying problems.

This guy knows exactly what i'm talking about