DuckMan, answer lies in competing investments
cash is king now for sure
but cash has a way of being uncomfortable where it rests
gonna go for bonds?
actually, I think bonds will rise substantially in the next 3 months
as it becomes clear that econ recovery is not likely in early Q2
but then afterwards, when the long is back under 4.7%, bonds will suck
then when the recovery is in half-swing then full-swing, bonds will suck bigtime
gonna go for housing and property?
wow, if and when recovery happens, rates rise and values fall
as cost per month attempts to remain stable -- the anchor
how about commercial property?
doubtful here either, since vacancies are troublesome
not to mention the stress and strain in managing
my sister loves jewelry, et toi? how about art?
try turning a buck and seeking liquidity
junk bonds?
might be really profitable very soon
but if you are wrong, you might lose it all
in the past six months I have struggled to find a road back to wealth
for a while I thought property would be good to gradually accumulate
but outside a two-family eventually, that is all I think to be wise
for personal occupation that is, with single women in other half
most roads to wealth involve either stocks or a keen growing business
but I dont have a knack for starting a business
stocks are the answer
Scotty, you are unusual among investors in your admirable patience
most dont come close to possessing your level
I have heard it all with other people
"I am in it for the long haul" ... right, until you are down over 20%
"I am diversified with bonds also" ... right, until you are down over 20%
"I have a strategy that works for my lifestyle" ... right, until you are down over 20%
it comes back to stocks
personally, I believe the next wave will be best with smallcaps and microcaps
even nanocaps, or tinycaps, as I like to call them
but one MUST be right
on valuation issues, a real tough question
95% or more of investors regard price in relative terms
sure, relative to earnings... but earnings when?
I dont trust your quoted PEratios, to be honest
they may be from a respectable source, but by what definition?
trailing 4Q? current FY? next FY? according to whom?
the same effing moron analysts who missed the total disappearance of earnings this year?
with the stimulus in the pipeline, it is only a matter of time before recovery shows its head
we are talking about massive unprecedented fiscal and monetary stimulus here
even despite the imbecile Democrats who have stalled the Congressional package
(they would rather give money to unemployed than to corporations who hire 10x as many after incentives paid off)
I regard them the same way as many others do, relative to past price
while keeping in mind the future levels of sales and growth
if Uniphaz begins to see growth again, then we must view it as 1/4 to 1/10 the price of past
if a small firm begins to turn corner into profitability, then we must view it as better than
that flatline discounted incubated price level stuck for months in the past
if telecom gets out of the shitter, then American Tower must be seen as cheap relative to that low of 6
its stable of towers and cashflow looks potentially monstrous
but it needs the debt to threaten less, with a healthier wireless sector
if Siebel begins to see client health, and growing business again, then we must view it as cheap
it is 1/5 to 1/4 of its old price
heck, the Naz is still 60% off its high
but more realistically, the Naz is at its 1998 levels
valuations are a tricky subject, and they are high by most measures now
so stay away from stocks that have elusive forward earnings and growth
like the bulging titans such as Cisco, Intel, GE, EMC, etc
favor instead the smaller companies whose earnings will truly grow leaps & bounds in the recovery
favor the sectors which are to truly grow in healthy fashion in the recovery (not telecom, fiberoptic)
pick from among several surefire sectors like energy, security, biotech
shy away from the tired tech sectors suffering from overcapacity
that overcapacity will surely weigh it down for another 2-3 years
but not oil/gas exploration and production
not security of computers, buildings, facilities, internet commerce
not defense, not many promising biotech areas
fuelcells are very close to the real deal
fuelcelled busses are in Europe now, with big back orders for Ballard
valuation has me concerned also
that is why I wont touch the largecaps or midcaps
on relative terms some seem inexpensive on earnings consideration though
I believe the largecaps and midcaps will recover in price
but will fail to achieve ANY earnings growth, only earnings recovery (even steven with 1998-99)
this rally is not doomed, only stalled
the big question with me is how much patience will it exhibit
my answer is "more than it would have in the past 18 months"
we are close to some recovery
its sustainability is questionable perhaps
if we in US recover slowly, then we will sustain it... that is my strong opinion
we must endure an imploding Asia led by Japan
they face the brink now, the real brink
1/3 of their banks are dead, and their stocks will see sub-100 yen prices (<$1)
most people will favor stocks as the vehicle
then what remains is timing?
mutual funds will soon face extreme risks to their survival
excellent article in last Business Week
their bloated staff and arrogance and disconnection with their customers is rampant
the growth in mutuals will be seen with smaller, nifty firms with track records
my guess is when the public gets back in big ways in stocks next year, differences will emerge
like using midcaps much more, and smallcaps much more
I just dont see the tech titans garnering more than their NiftyFifty share like before
we are to see emergence of a new class of growing viable companies
sorry to ramble, but my fingers are on a roll
I like the vehicle of stocks still, the only monstrous potential out there
it rewards a keen eye for true growth, if you are diligent and patient
I am halfway there, and working on the other
beware of forecasters of earnings
they dont have an effing clue, only guesses
I giggle at talk of Naz100 having no PEratio since no collective earnings
so what?
I can seek out 5-10 companies which have sales growth now, and earnings will follow
I can find several selling at discounts to their sectors
it becomes then a waiting game
if you discern the upcoming trend, seek value within, and display patience,
you will profit handsomely in the next 18 months
if you are patient to pull the switch on pullbacks, you will profit with some familiar names also
what we really need is for Asia to take its monumental crapp and get it over with
then we might see some real world economic recovery
but we have to give our continent and Europe some time to absord these debt levels
both household and corporate
let me close with a question
if not stocks in the next 2-3 years, what vehicle offers a better return on your invested money?
sincerely, Jim |
