<font color=red>Golden Doghouse</font>
"the irony about the stock market (as I see it) comes from the nearsighted attention paid to earnings, and the inadequate attention paid to building wealth thru capital investments in equipment and current skills for production
right now we have earnings produced from CRAP accounting standards, from widespread layoffs, from hidden losses and debt on double-booked balance sheets, from off-loaded risk on derivative contracts (also off balance sheet)
so as earnings rise, consumers have less purchase power from both rising unemployment and rising debt levels, and fewer prospects in the future for new hires... I guess all that nintendo skill, hackysack skill, break dancing skill, rap music singing skill, and graffiti skill is not so useful after all... ooops, a lost generation !!!
so as "reported" earnings rise, companies are reducing in size, even as they are investing more and more in share buybacks instead of profitable future lines of business... besides, corporations long gave up on America, having moved operations to Asia and other centers more friendly to labor costs and tax overhead
hardly a word spoken in the press/media about two big topics:
1) the world is flooded with mfg capacity, which will take about 10-15 years to work off
2) debt levels in the USA invite disaster, which have worsened since March2000, not improved
reminds me of a line stated in mockery of the Wall Street crowd and their illogical conventional wisdom
"a stock should keep rising as it proceeds toward its goal of zero employees"
that was a New Economy counter maxim
some realities that have not changed:
- capex is still extinct
- debts are still rising for consumers and corporations
- layoffs are continuing (400,000 more announced today)
- pensions are still grossly underfunded
- derivative gearing is about to break
and the worst investor reality is of course
- ignore all extraordinary expenses
- put the best deceptive face on earnings
- run over the cliff, as long as you have someone at your side"
AND:
"DENIAL SYSTEMS AND INVESTORS, a workbook
Slider has a way with words, so clear and focused
I like to focus on two sectors for forward direction
BANKS and SEMIS
both are in wretched wretched shape
end of story
surprised to hear Slider call the big Teutonic banks "insolvent"
I thought they were in deep sneakers, but not dead
maybe they are deader than we know, or I know
I dont know much, mostly skills learned from Jackass 101, 102, 103, 201, 202, 203, 505 and 507 (gradschool)
the most remarkable two single investor facts I have been shocked by are the lack of capability to learn and change from viewing
- proforma earnings, which exclude anything big & bad (see IBM today), or which include anything big & good (see Citi two days ago)
- brokerage house recommendations (see any of 100 recently)
doesnt anyone learn???
I suspect not
my personal background has roots in dealing with drug addiction
so far, clean & sober since 1987
but during the rehab work, plenty of education on psychology and emotional development
or should I say "pscyhological damage from stunted and traumatized emotional lack of development"?
I see denial systems at work in the stock market now, and in the debt management now
BIG DENIAL
so many people use the word "denial" and think they know its full and dreadful meaning
they dont, since they refer only to the basic face value of denial
I refer to an entire DENIAL NETWORKED SYSTEM, which has many examples, starting at the top cranial levels and working down the base plain levels... notice the gradual decrease in mental process, and increase in animal response as it proceeds... common folks have a grip at the bottom levels, but often fail to grasp the higher levels as being integral components to a denial system
(this is from rehabbed memory in 1987, a stimulating month)
intellectualization:
- we invest despite the losses and poor economic conditions because LTBH works, because American capitalism reigns supreme, because our financial system has been set up for the little man to share in the corporate growth miracles
rationalizations:
- we invest despite the losses and poor economic conditions because it is man's place to invest for a future, because we dont want "our money to just sit there" [TV ad], because the stock market always comes back, because Fed stimulus always works
comparisons:
- we invest despite the losses and poor economic conditions because, while our losses are sizeable, they are much less than those banana republic Brazilian Bovespa, Mexican Bolsa, the little yellow Korean Kospi, Japanese Nikkei, or our eurobrother German DAX, and God-forgive the German Nueur Exchange that shut down entirely
minimization:
- my retail account is doing ok... if you want to see bad, check Charly's account which is down 85%... those tech/telecom/dotcom guys got what they deserved... I am in bluechips, not in & out trading, saving for the future
(reality: down 40% in two years, down every month lately, starting to rejigger some longterm financial planning)
avoidance:
- I dont look at my retail account anymore, dont bother anymore, it makes me depressed... I am hoping all will be fine years from now
(often called OSTRICH EFFECT)
basic lies:
- my retail account is doing ok, maybe down a bit, havent checked lately
(reality: down 60% in two years, down 5% per month recently, checked every 3 days, now affecting social life and eating patterns)
an entire denial network system, reinforced by others (friends, colleagues, family)
this is the work of addiction, a byproduct of our Great American Casino
you can make a parallel system for debt addiction
these addictive approaches to investing and indebting have roots in thrill seeking and immediate gratification, often intended to alter emotional state of mind, which often mask a very shallow inner life satisfaction, intense loneliness, lack of meaningful social interaction, and real emptiness
recall that this investing community is dominated by the ME GENERATION, the HIPPIES, the drugged out college gang, who insisted on PLEASURE NOW, no savings, borrow and live for today
DEAD STOCKS AND MOUNTING DEBTS FIT PERFECTLY WITH THIS GENERATION
sad, tragic, desperate, and lethal" |
