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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: STEVE who wrote (57500)	9/28/2008 10:33:09 AM
From: Rande Is	3 Recommendations Respond to of 57584

....Steve, to answer your question.....[excuse my usual ranting manner...] Let's first look at the greed in America, because that is what I have always used to read the markets for so long. Greed is what drives companies like Lehman, Bear and Merrill to self-destruct. Had they been just a bit more prudent and employed just a few months worth of integrity based decisions...,(rather than lying, cheating and stealing to try and work your way out of getting caught lying, cheating and stealing), I think they would still be in business today. Make no mistake about greed. It is the enemy of capitalism. At first, it always looks as though quick easy money can be had by peeling it from places where it isn't directly affecting the bottom line. Then it can be increased upon by nickle and dim'ing customers and tricking them in ways they don't notice, can't imagine or can even do anything about. Wrap it up in preferred stock dividends, while paying no dividends on the common stock, then place a nice big bow on the top, representing the golden parachute severance package for the CEO and cronies...and you have the makings of legal? racketeering....legal? extortion...legal? fraud....and legal? theft (in that order). Are you listening FBI? Multiply that recipe times the number of corporations and institutions in America, then add to it the amount of similar greed based transactions that occur in all levels and all agencies of government every day and you have it...as clear as can be... Capitalism run amok! I've warned about it here for the better part of the 10 years we will have been on this HOME thread (in another 2 months). We have all pointed out areas where it has derailed otherwise good companies. We have discussed the pressures companies are under from the major investment banks.....like the ones we have seen failing recently...and the two (I can't believe my eyes!) being bailed out by hard-working taxpayers....to the tune of the better part of a trillion dollars...with little to no accountability. Government forcing the victims to bail out the crooks, in order to sustain the corruption. What's next? Convenience stores being forced to pay into social security for however many robbers have taken loot from them over the years? It makes about the same sense, don't you think? So where does that leave my opinion on the markets? Yes, I believe we are teetering on the abyss. We have been for many many years, but always found ways of keeping from falling in. Now, we've run out of rope...our hands are slipping and our muscles are failing. It will take a MASSIVE effort to reverse the current economic condition. I don't think the plan they are rushing to pass will do it. It is simply not honest! I believe it will require honesty on the part of every player in Washington...on Wall Street...and throughout corporate America to determine the proper road to recovery...if it is not already too late. Either we return to a time when enough is enough...and capitalism works....or else we find another economic system for this country. Plain and simple. As I have said for a number of years here, I've not found companies in America that had decent enough balance sheets and dividend payout history to warrant a long term investment. There are no more blue chips. And since the "lids came onto the market", (referring to Wall Street's super computers that automatically play against the internet investor private stock trading rooms...and even individuals...thus keeping any small float stock from ever again shooting to the moon), trading this market is harder than has ever been. The cards are "legally" stacked against the player. And I seriously think you can get better odds at video poker in Vegas. Having said that....I do believe there are bargains right now. The ETFs of well-diversified foreign mutual funds in emerging economies, such as China, Russia, Brazil, India and so forth are moving toward ultra-lows share prices (which does not necessarily reflect the companies they hold). They drop with the American markets, despite any earnings they may have. You have to study the history of their dividend payouts...NOT their stock price. You are not playing these to get the price up. You are playing these long term, to get all your investment back in dividend payouts. These ETF's are managed, often by American or British companies that manage mutual funds...but again, only shareholders (you) may profit from the dividend payouts....(at least until they learn the ways of America)...>smirk< When you select one with a strong history of dividends, invested in growing segments of world economies...and well-diversified!!!, so that no one or two segments can pull the entire fund down...there is a great deal of safety in the play. The fund MUST pay out the dividends to shareholders of record. There is no company to skim off the profits or siphon them into CEO salaries and bonuses. it is a mutual fund! ALL the dividends MUST be paid out to the shareholders. Did I say that yet?? Search for companies with a high ratio of dividends to stock prices, with strong steady dividend history. Do your D.D. Find the ones where the stock price has recently taken a major beating....but the dividend history remains strong. Just because the markets in America and elsewhere are dropping, does not mean that many of the companies represented in the emerging and growing country's ETFs are not still doing well. They very well "may" have dividends ranging in the 50% of stock price or even higher. It is a gamble. No doubt. So I would look at a basket...and dollar cost average in. Then my time horizon would be a ways out...like 5 years or even longer. By then, hopefully, all the shares are riding free and the original investment has been moved off into something else. I have watched this work over the past several years....when it was VERY hard to catch the bottoms. Now these same ETFs are selling considerably lower than at any time in their history...or at least in this millenium, if they've been around that long. Your investment may not completely coincide with your personal geo-political views. But then I doubt you were in agreement with Microsoft when you owned that one. So you will have to come to a decision on how you personally feel about profiting on the backs of countries growing wildly...but with differing political, ethnic or religious beliefs from your own. I can't help you there. Hopefully, that has given you some ideas on how to profit somewhat from the ugliness I fear is inevitable....provided you are shrewd and find the true bottom. (good luck with that) I know that I would NOT be holding ultra high PE ratio stocks at a time like this....any more than I would be holding over inflated real estate...or bottles of 50+ year old French wine. Value is key when times get tough!! I'd say I am near-term realistic....and long-term astounded. The writing is already on the wall. The powers that control the many strings that represent Wall Street and Washington these days have their plan. I wasn't invited to the meeting. So all I can do is guess what they have in mind. If I were to venture a wild guess...or a dream as Daniel put it..... I'd have to go by the book....and imagine that...one day in the conceivable future.....anywhere from 1 to 20 years off?.....we Americans...brazened by the economic collapse and now robbed of most of our freedoms, rights and privacies...(because each of us owe the FED more money than our homes are worth).....could be offered a global currency....probably cashless...as a solution to the devastating global economic crises that has kids dying of hunger in every nation of the world. A handsome man that represented the face of all the world's ethnicities would get on a world stage and have the answers....all of them...(perhaps scripted many years earlier!) He would introduce the solution while smiling.... charming the world into accepting it. After the world could take no more pain, he would explain that everyone had instant credit and only had to receive a symbol of accepting...perhaps a microchip under the skin, representing the numbers of your single personal one world bank account. Those who don't accept the symbol, will not be able to participate in the global economy...and so will have no means to buy or sell. All of this would set the stage for world occurrences like no one has ever seen...or even imagined possible....and I wish I was making this stuff up...but I'm just getting it out of one of the oldest historical books we have...that happens to discuss future times as well as those of the past. Hence, my new attitude of.... living in the moment...embracing everyone...declaring my happiness daily...getting things done that I've wanted to do...stepping out of the endless maze that is the rat race....grabbing the gusto when I see it...never forgetting how short life truly is....and never taking geo-politics personally...or think that there is much or anything that I can do about it anyway. Always being thankful...and quick to forgive...(yes, even you that cut me off the other day after 2 hours in line for gasoline)....always blessing others....always teaching others....and trying to give back as much or more than I take. Hope that helps....best wishes.... Rande Is