Where to Invest 2010
If you are looking for a “where to invest 2010″ list of investment ideas, strategies, and predictions, you are not getting what you were looking for here; however, this post may be exactly what you really needed — a discovery…
Let’s make this interesting, informational, observational, conversational, and introspective: I will pose several questions related to the annual onslaught of “where to invest” articles, generated every December by every media type that exists, to provoke thought and elicit responses from readers (you). Please feel free to share your own “where to invest 2010″ ideas if you wish, but also consider aiding those who have been conditioned for so long by conventional thought that a New Year means a new investment strategy.
“The average man doesn’t wish to be told that it
is a bull or a bear market. What he desires is to be told specifically which
particular stock to buy or sell. He wants to get something for nothing. He does
not wish to work. He doesn’t even wish to have to think.” ~ Jesse Livermore
Perhaps this can serve as useful source of unconventional thought (the right kind, if you ask me) that aids those who found this post and unexpectedly found an intervention!
Please read the questions and proceed to the comments:
- How might recent market conditions color the decisions of those conventional media sources supplying the “where to invest” ideas?
- What if the market were at the same position now as it was in early March of this year (2009)? Wouldn’t the extreme sentiment of the time predict more turmoil ahead? Note: The broader market indexes, as most of you know, have advanced more than 65%, as of the writing of this post, since March 9, 2009, which was not something many “predicted” at the time.
- Similarly, won’t the huge run up in prices influence the “where to invest” articles coming out now?
- What correlation, if any, does the calendar year have with market and economic conditions? Is it simply a behavioral ritual similar to New Year’s Resolutions?
- Does the annual “where to invest” ritual have at least some value for those who would otherwise never look at their investments or would most people be better off not looking at (and hence not tinkering with) their investments anyway?
- How do you feel about the annual re-balancing (returning investment allocations back to the original percentages — in effect buying the “losers” and selling the “winners”) strategy? Is re-balancing even a good idea to begin with?
- Can a trader gain any kind of advantage or insight by observing and perhaps taking action (i.e. momentum trade or contrarian play) based upon the most common themes found in the “where to invest” articles? For example, if all of the “where to invest” articles say to “buy gold,” what might a prudent trader do?
- Have you ever made money by following a “where to invest” article’s suggestions?
I think these questions should get the wheels turning for you. In the comments, I’ll share the one best place to invest in 2010, especially in the wake of The Great Recession…
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Kent Thune is blog author of The Financial Philosopher
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December 17th, 2009 at 5:06 pm
The average man . . . does not wish to work . . . doesn’t even wish to have to think . . .
exactly- so where’s the stock tip? Or do you expect me to read everything you wrote to find it.
Next time just say buy_________and fill in the blank.
Thanks dude.
December 17th, 2009 at 5:06 pm
The greatest investment in 2010, especially in the wake of The Great Recession and any and all other times, is in yourself…
What else might you expect from someone who writes in a blog called “The Financial Philosopher?”
Self-knowledge and self-awareness (emotional intelligence) might be the greatest attributes an investor, or anyone for that matter, can possess…
“I study myself more than any other subject. That is my metaphysics that is my physics.” ~ Michel de Montaigne
December 17th, 2009 at 5:27 pm
We totally loaded up on “Forever” Stamps. We also bought a ton of Lindt chocolates since they were 40% off at the local Kroger — just in case cocoa and dairy go nuts next year. Unfortunately *someone* got into the stash so I’m sure we’re way behind on that investment since 12/01/09. Last year we invested a great deal in single malt and someone got into that cupboard and the investment turned out to be a total loss.
December 17th, 2009 at 5:35 pm
“Last year we invested a great deal in single malt and someone got into that cupboard and the investment turned out to be a total loss.”
Implicit in this lament is the idea that you did not get one drop, which would make it a definitive dead loss event.
Changing your statement for current macroeconomic circumstances…
“Last year we (the tax payers) invested a great deal in (AIG) and someone got into that cupboard and the investment turned out to be a total loss.”
So I guess you aren’t the only one.
December 17th, 2009 at 5:44 pm
that single malt story actually choked me up-
I’m weeping
December 17th, 2009 at 5:51 pm
One of the narratives will be the value of proved reserves. CVX and like will probably get pushed- margins being increased for gold trading- where will they be lowered?
Jan 2010 rule change regarding proved reserves- it’s important boys and girls. Look it up and try to understand how Monte Carlo is going to push you into a casino without you even knowing.
Take a look at Americas Petrogas, DYODD and like potash plays (exclude US and Canadian ones until things are sorted out) and look into items which will be affected by changes in China’s discrete import duties. Short garlic. Long toothpaste.
December 17th, 2009 at 5:53 pm
The first step to turning all the talk into action is the development of an open job productivity certification prototype to translate the current closed compliance job certification process, controlled by capital, through its agent, government. So long as capital controls who can work and who cannot, capital can only liquidate.
That will realign variable credit back into productive investment. Once they are aligned, Paul Volcker can set aggregate interest rates to compensate for aggregate opportunity costs. Until then, Bernanke is as good as anyone, but time and resources are quickly running out.
The upcoming “stimulus” will be the last of it. Current governments are obviously illegitimate. Politicians can jump in front of a parade, but cannot start one. This is not Paul Volcker’s first rodeo, but he needs something to work with.
The efficient automation equipment must be replaced and independent energy developed to catch the economy, and the safety net will now be removed geometrically.
December 17th, 2009 at 6:01 pm
kevin-
ok- whatever you said- was that english?
here is my trading advice- when you see someone like Tom Brokaw announce on NBC- “how high can it go”-
sell immediately (that was during the Nasdaq bubble)
and when you see common laborers trying to get in on the action or even worse -give advice- it’s a lock the market is oversold-
sell immediately (that was the height of the housing bubble)
December 17th, 2009 at 6:17 pm
The whole periodic rebalancing idea I always found idiotic. Why should traders dump their losers and let their winners run, but Joe Average should do the opposite? I agree you shouldn’t put all your money into a single investment, but investment decisions should not be based on some static quotas and fixed dates.
December 17th, 2009 at 6:23 pm
I honestly didn’t realize that people “invested” anymore. I thought that was dead.
December 17th, 2009 at 6:34 pm
So they peed $700B into a $2T hole, and now the hole is staring back.
“That all ya got, Timmy? You got nuthin’..”
Credit and M3 are still declining. Deflation coming at us like the back side of the hurricane.
Get some nails and board up the house, this Nor’ Easter ain’t done yet.
Cash and high quality bonds are king – until the next orgy of printing begins.
The D-Train™ is coming round the bend….. All Aboard !!
December 17th, 2009 at 6:39 pm
Well I’m trying to make a new business out of supporting Free Software. I have to learn a bunch of new software tools, so that is really investing in myself.. The rest of the economy scares the daylights out of me, whenever I stop to think about it. Hard to see this ending well.. The legislative process is broken, booth sides to blame, but really the past leadership should be shot. Maybe that would inject some realism to the current batch?
December 17th, 2009 at 6:40 pm
@kevin…
good notions, thank you.
December 17th, 2009 at 6:44 pm
Guess proved reserves issues are verboten.
December 17th, 2009 at 6:55 pm
97% of recommendations of what you read are from folks who manage money, they are essentially paid to have an opinion and make coin either way, when it is you’re own skin in the game you better be the smartest man in the room
in 2010 prices will go up and they will go down, of that i’m pretty certain, although, not 100%
December 17th, 2009 at 7:34 pm
So having established that “the average man, does not wish to work or think”, how exactly do you propose we invest ourselves? You are not suggesting that I work and/or think, are you?!?
;)
December 17th, 2009 at 8:21 pm
If Bernanke is seriously uninterested in actively working to reduce the unemployment rate, and if the DC villagers and TV business pundits are serious about granting him the title of Chair of the One-Man Committee to Save the World, my conclusion would be to invest with the assumption that the current economic growth will peter out rather than continue to build into a new growth cycle.
Two of the major sources of growth – the Federal stimulus and the rebound from the late-2008/early-2009 panic – will be out of the picture. Meanwhile, the state and local governments which have barely managed their budgets with a combination of spending cuts and accounting gimmicks will soon have to pay for the gimmicks in an environment where revenues are, at best, stabilized at a low level.
Pessimism about the real economy has been a sure fire way to lose money in the equity markets for the past 9 months, but pessimism has changed over the past year from “here comes the Greater Depression” to “where’s the sustainable growth?” After another quarter or two of the giddy-with-liquidity market action, pessimism will grudgingly reach the “this will be a weaker-than-average business growth cycle” and it will be time to go short the markets.
The AAII survey of investor sentiment is showing the lowest bearish percentage since May 2008. However, the bearish sentiment in that survey has been above long-term averages since about mid 2005, so the current sentiment numbers are pretty close to long-term averages. Until I start to see a substantial shift to bullishness in that survey, I won’t be bold enough to bet against the markets.
December 18th, 2009 at 12:47 am
NO DOUBT at the end of 2010 you’ll realize again
“I overestimated present pleasures and underestimated future pain”
You won”t be alone ,maybe that will be satisying. {8^))
December 18th, 2009 at 8:15 am
Fade Cramer.
December 18th, 2009 at 8:27 am
@NiNM: Actually, buying forever stamps (especially just prior to a price increase) and sale-priced non-perishable food items are outstanding investments. I assume you were at least half-joking but this is good thinking.
@MRegan: I don’t like Monte Carlo either and I’m an investment adviser and financial planner! Monte Carlo is simply part of an illusion in the form of statistical, but false, sense of security like much of the junk financial planning software spits out. I dropped my planning software and created my own simple yet effective reports.
@kevinearick: Yes, uncertainty is building as the stimulus winds down and most of what remains is hope, which can be powerful; but hope is not a plan. Back to uncertainty…
@leftback: Your dismal scenario could occur but its not highly likely. I’m not a fan of cash currently. I like the idea of purchasing goods I know I will need long term but are at extremely low prices now. I’m looking at technology (hardware) for my business.
@Porsche87: The automatic nature (removing emotion) of re-balancing is healthy but in general I don’t believe in re-balancing either.
@Tbrander: You get high credit for finding and remaining on the underlying theme of the post: Think for (and act as) yourself! Starting a business is not for everyone but I can attest that the rewards, both monetary and non-monetary, are well-worth the risk, which is largely a function of the individual’s actions anyway. Of course, having a good idea, good timing, and good implementation help!
@torrie-amos: You’re right. Most of the recommendations are from people who manage money. They would be foolish to share the best ideas so you end up with generalities. In addition, print media does the interview and gathers the information up to 60 days in advance of the time the reader finally gets the final copy. 60 days makes a difference in this market environment.
@Pete from CA: Thinking often gets in the way!
@ottnott: I tend to agree with your overall sentiment that the last 9-month run-up has been largely a function of “This is not the Great Depression, as everyone thought.” The next move seems more likely a function of “Things are not terrible but they’re not as good as market prices have predicted.” I wouldn’t be surprised to see a flat year in 2010, with modest move higher balanced by a moderate correction in prices.
@R.D. To add to your thought, I like this from Ben Franklin: “All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”
Cheers to Barry and to all… I’ll look forward to sharing more thoughts in 2010…
Kent @ The Financial Philosopher
December 18th, 2009 at 8:31 am
hey- where’s my complimentary return comment- lol
December 18th, 2009 at 10:22 am
I dont try to avoid the holiday decoration that hangs from the tree in the form of year end prognosticating. Obviously a lot of people are talking their book, or their fondest hopes, or out of their ass – but – every once in a while one of the published lets something interesting slip either intentionally or not and you can put in the work and follow the bread crumbs and end up in interesting and profitable places – just make sure it isnt the oven.
December 18th, 2009 at 11:09 am
Kent,
thanks for kudos, i’ve read jesses stuff yearly, issa pivot man with a gann plan
my 2010 is commodities run and destorys profits and thus debt is once again a problem
we are in a world in transition from cheap energy to the next best, how she goes, i don’t know, yet it’s my thesis
United States of American Airlines, you’re flight has arrived, over the next 7 years we should replicate the airline sector from after 9-11, and airlines presently are leanest and meanest ever, still have demand, and still have pricing issues, 40 years of cheap airfares is embedded in average fliers physche’s and that will not change, and good old jet fuel is as volatile as the wind, how much is that blanket in the window