Comments on: It’s a Great Time to Be an Investor ! http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 21:38:31 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: david foster http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-96220 david foster Mon, 14 Jul 2008 15:44:36 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-96220 BobC..railroads...I'm a RR investor, having bought mostly in the early 2000s and sold about half the positions in the last year or so. I think freight rail has a great future; however, there are some issues to be concerned about: 1)Shippers are angry about rates, and may have the political pull to get some form of re-regulation imposed. (Picture the CEOs of Dupont and ADM singing old Granger songs about the inequity of the railroads.) 2)The are indeed a lot of capacity constraints emerging, and it's become very difficult to build anything at all in this country. OTOH, some capacity improvements on existing lines will be achievable via better train control systems. 3)It's no longer an undiscovered industry, so probably less room for profit than there once was. BobC..railroads…I’m a RR investor, having bought mostly in the early 2000s and sold about half the positions in the last year or so. I think freight rail has a great future; however, there are some issues to be concerned about:
1)Shippers are angry about rates, and may have the political pull to get some form of re-regulation imposed. (Picture the CEOs of Dupont and ADM singing old Granger songs about the inequity of the railroads.)
2)The are indeed a lot of capacity constraints emerging, and it’s become very difficult to build anything at all in this country. OTOH, some capacity improvements on existing lines will be achievable via better train control systems.
3)It’s no longer an undiscovered industry, so probably less room for profit than there once was.

]]> By: bendover0 http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95252 bendover0 Mon, 14 Jul 2008 04:20:23 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95252 uly 13 (Bloomberg) -- Treasury Secretary Henry Paulson sought authority from Congress to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, aiming to stem the collapse of confidence in the largest sources of U.S. mortgage financing. FUTURES UP HUUUUUUUUUUUGE!! Fascinating: will the market rally or crash more? <a href="http://tinyurl.com/696jes" rel="nofollow">http://barrons.com/markets/US?story.index.htm</a> uly 13 (Bloomberg) — Treasury Secretary Henry Paulson sought authority from Congress to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, aiming to stem the collapse of confidence in the largest sources of U.S. mortgage financing.
FUTURES UP HUUUUUUUUUUUGE!!

Fascinating: will the market rally or crash more?

http://barrons.com/markets/US?story.index.htm

]]> By: Frank http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95251 Frank Mon, 14 Jul 2008 00:02:35 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95251 Apparently Mr. Saut never worked much for a living. People who do manual labor arn't stupid or slaves, if a person bust's their ass for thirty five years paying taxes to the theiving government,they deserve better than having their s.s. stolen as well. Do you want us to all live on the generosity of our masters? My union will remove you from the job if your not doing it,realizing we negotiate as a whole to try and better each others lives. Back when the country was 40% union and growing,there were one parent working families, less drugs, and even a few honest bankers Apparently Mr. Saut never worked much for a living. People who do manual labor arn’t stupid or slaves, if a person bust’s their ass for thirty five years paying taxes to the theiving government,they deserve better than having their s.s. stolen as well. Do you want us to all live on the generosity of our masters? My union will remove you from the job if your not doing it,realizing we negotiate as a whole to try and better each others lives. Back when the country was 40% union and growing,there were one parent working families, less drugs, and even a few honest bankers

]]> By: Bruce http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95250 Bruce Sun, 13 Jul 2008 23:39:13 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95250 One other thing occurs to me, and maybe it doesn't make much difference...but back in the time of Arthur Burns/ Paul Volcker our inflation and fear of the future seemed to me to be an internal U.S. problem, our policies caused the inflation (with some outside help) and our policies stopped it. This time we are more like a third world nation, i.e. petroleum and commodities caused a major portion of the problem, and this wasn't necessarily internally generated...now we seem to be responding to this present crisis in a manner very unVolckerianlike and this is, at least to me, very concerning....it seems beyond the power of the strongest country in the world to resolve this problem... I have more of an idea how Russia and Thailand and Argentina felt...and I very much would choose another path here than what BB has chosen...(and our other economic leaders...) Bruce in Tennessee One other thing occurs to me, and maybe it doesn’t make much difference…but back in the time of Arthur Burns/ Paul Volcker our inflation and fear of the future seemed to me to be an internal U.S. problem, our policies caused the inflation (with some outside help) and our policies stopped it.

This time we are more like a third world nation, i.e. petroleum and commodities caused a major portion of the problem, and this wasn’t necessarily internally generated…now we seem to be responding to this present crisis in a manner very unVolckerianlike and this is, at least to me, very concerning….it seems beyond the power of the strongest country in the world to resolve this problem…

I have more of an idea how Russia and Thailand and Argentina felt…and I very much would choose another path here than what BB has chosen…(and our other economic leaders…)

Bruce in Tennessee

]]> By: catman http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95249 catman Sun, 13 Jul 2008 22:37:59 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95249 I have a trading system that I've tested almost every day for the last 50 years. My brain. I have a trading system that I’ve tested almost every day for the last 50 years. My brain.

]]> By: me http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95248 me Sun, 13 Jul 2008 22:00:18 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95248 The completely unnecessary jab at union labor pretty much killed whatever point Saut was trying to make. Tacky. The completely unnecessary jab at union labor pretty much killed whatever point Saut was trying to make. Tacky.

]]> By: Steve http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95247 Steve Sun, 13 Jul 2008 20:11:13 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95247 It's a terrific time to stress test a trading system. How about that for a silver lining ;>) Since Jan 1, I've been running a "live test" of my trading system. Prior to the October market top, the CAGR was over 25%, Maximum drawdown less than 10%. The system has done a pretty good job of adapting during the market down-trend. The purpose of the live test is to demonstrate that an amateur investor can use professional methods to achieve extraordinary results. allstarstockmodel.blogspot.com All those hedge funds that were charging alpha fees for beta performance are now being undressed. It’s a terrific time to stress test a trading system. How about that for a silver lining ;>)

Since Jan 1, I’ve been running a “live test” of my trading system. Prior to the October market top, the CAGR was over 25%, Maximum drawdown less than 10%. The system has done a pretty good job of adapting during the market down-trend.

The purpose of the live test is to demonstrate that an amateur investor can use professional methods to achieve extraordinary results.

allstarstockmodel.blogspot.com

All those hedge funds that were charging alpha fees for beta performance are now being undressed.

]]> By: wmac http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95246 wmac Sun, 13 Jul 2008 19:26:14 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95246 "Garbage collectors (at least, in non-union towns) know they have to turn up in the morning and..." I can't believe anybody would pay any attention whatsoever to a person who would write a line like that. What an ignorant cheap assed shot at those of us lucky enough to have Union representation. Yeah, I sit around home all day watching soaps and they mail me my check. ...rant over... “Garbage collectors (at least, in non-union towns) know they have to turn up in the morning and…”

I can’t believe anybody would pay any attention whatsoever to a person who would write a line like that. What an ignorant cheap assed shot at those of us lucky enough to have Union representation. Yeah, I sit around home all day watching soaps and they mail me my check.

…rant over…

]]> By: Bodz http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95245 Bodz Sun, 13 Jul 2008 19:11:58 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95245 "It's a great time to buy or sell a home!" Actually, the NAR was half right. It turns out that 2006 was a great time to sell your home. Perhaps today's title should have been "Why it's an exciting time to be an investor" If you are invested in bonds or CD's and have now started to dollar cost average into the stock market like me, it is fun. “It’s a great time to buy or sell a home!”

Actually, the NAR was half right. It turns out that 2006 was a great time to sell your home.
Perhaps today’s title should have been “Why it’s an exciting time to be an investor”
If you are invested in bonds or CD’s and have now started to dollar cost average into the stock market like me, it is fun.

]]> By: BG http://www.ritholtz.com/blog/2008/07/its-a-great-time-to-be-an-investor/comment-page-1/#comment-95244 BG Sun, 13 Jul 2008 18:02:26 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/07/its-a-great-time-to-be-an-investor/#comment-95244 While the masses don't think like this, investors should be happier at the margin when prices are down and understand that it is a worse investment environment when stocks go up. The cheaper the merchandise, the better, if you are a buyer/saver. The problem is people need to differentiate between extremely leveraged financials and companies with unconservative balance sheets in undeniably hard times. Buying and holding indexes in a secular bear market is crazy. The point here is that investors who know what they are doing and buy cheap companies with no leverage and sustainable competitive advantages are still going to do well if you measure performance in years and not minutes. Sure P/Es could go from 14 to 8, but if you're buying the companies trading at under 10x now that can grow earnings at decent compounded rates from here, you're going to be alright. I think that is what Saut is talking about in his piece - now is not the time to lose your nerve but to find great long-term opportunities. While the masses don’t think like this, investors should be happier at the margin when prices are down and understand that it is a worse investment environment when stocks go up. The cheaper the merchandise, the better, if you are a buyer/saver. The problem is people need to differentiate between extremely leveraged financials and companies with unconservative balance sheets in undeniably hard times. Buying and holding indexes in a secular bear market is crazy.

The point here is that investors who know what they are doing and buy cheap companies with no leverage and sustainable competitive advantages are still going to do well if you measure performance in years and not minutes. Sure P/Es could go from 14 to 8, but if you’re buying the companies trading at under 10x now that can grow earnings at decent compounded rates from here, you’re going to be alright. I think that is what Saut is talking about in his piece – now is not the time to lose your nerve but to find great long-term opportunities.

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