Stocks for the Next Great Depression

The parallels between the current economic fiasco and the Great Depression just keep getting stronger.

Both disasters originated with excessive leverage. In the 1930s, it was overleveraged speculators buying stocks. This time, it was overleveraged speculators buying too much house with too little cash, enabled by overleveraged financial institutions that blindly assumed housing prices would only go up, up, up.

On top of that, poorly crafted government reactions exacerbated both situations. During the Depression, the protectionist Smoot-Hawley tariff triggered global retaliation and contributed to a worldwide recession. More recently, poorly executed bank seizures and excessive subsidizing of failure have distorted the market's ability to correct its excesses. Add a dash of protectionism from the "Buy American" provisions in the recent stimulus act -- and the potential for retaliation -- and you've got quite a foundation for Great Depression II.

But what does that mean for you and your portfolio?

Can you invest through this mess?
Given those parallels, the Great Depression and its aftermath offer us some salient reminders as we slog through today's doldrums:

  • The country as a whole survived the Depression.
  • As important as debt is to the overall economy, too much debt can be deadly.
  • The soundest and strongest companies of the era survived, and later thrived.

In other words, take a deep breath. Despite all the gloom and doom (and it's real gloom and doom), this doesn't likely spell the end of life as we know it.

But until the country's debt woes are brought under control, this situation is likely to continue.  Right now, the credit markets are still pretty well frozen to all but the strongest borrowers, even prominent banks are still on the rocks, and the overall economy doesn't exactly look healthy.

All of that doesn't mean you should stay out of the market. In fact, it means that you should be invested in companies that are strong enough to survive -- and that will thrive when the recovery comes.

What to look for
A key characteristic of that strength is being able to stay out of the debt crisis that's ham-stringing companies in industries as diverse as finance, automakers, and home builders.

With financing as tight as it is today, even profitable companies can be undone by debts if they can't pay them off or refinance them when they come due. Thus, companies that have limited or avoided debt are far better positioned to ride out these trying times.

But what counts as "limited"? Here are two definitions worth considering:

  • Below half a year's revenue. This helps ensure that the debt is manageable relative to the overall size of the business.
  • Below the company's tangible equity. With sufficient tangible equity, a company can offer collateral for secured loans that may be more palatable to squeamish debt investors than typical senior unsecured bonds -- and that's crucial if the credit market is still frozen when the debt matures.

Show me the money!
Just keeping debt at manageable levels isn't enough -- you also want operational strength. That means finding companies that are profitable today and have substantial free cash flows when compared to their reported earnings.

Put together a strong balance sheet with decent earnings supported by cash flows, and you have the makings of a company with a strong chance of surviving today and thriving tomorrow. Here are just a few that fit these criteria and are worth a closer look:

Company

Debt to Revenue Ratio

Debt to Tangible Book Value Ratio

Trailing Free Cash Flow*

Trailing Earnings*

Cisco Systems (Nasdaq: CSCO  )

0.17

0.31

$8,015

$7,492

Archer Daniels Midland (NYSE: ADM  )

0.11

0.63

$4,043

$2,524

Accenture (NYSE: ACN  )

0.00

0.00

$2,059

$1,790

Applied Materials (Nasdaq: AMAT  )

0.03

0.04

$669

$565

Jacobs Engineering (NYSE: JEC  )

0.00

0.03

$443

$439

Advance Auto Parts (NYSE: AAP  )

0.12

0.61

$263

$238

Maxim Integrated Products (Nasdaq: MXIM  )

0.00

0.00

$179

$156

*In millions.

In severe economic contractions like these, traditional measures of value like price-to-earnings ratio are much less important. Certainly, earnings still count. But if a company doesn't have the assets to support its financial structure or the cash flow to back up its earnings claims, then all the earnings in the world are meaningless.

What happens next?
Even President Obama admitted that, when it comes to the economy, "things are going to get worse before they get better." And that means preparing for the worst. If this mess truly does turn into the next Great Depression, owning shares of solid companies will position you well to ride out the storm.

And if we recover sooner than folks expect, then those strong companies will likely be among the best positioned to take advantage of weaknesses the crisis has exposed in their competitors. Whatever happens next, now is the time to focus on strengths and invest in companies with the wherewithal to persevere today and thrive tomorrow.

At Motley Fool Inside Value, our focus has always been on finding companies with solid financials and true long-term staying power. As these tough times continue, we're using that focus to pick up shares of some of the world's most resilient companies at bargain-basement prices. If you're ready to prepare your portfolio for what's left of this mess -- and the recovery that will eventually follow it -- join us today. You can start your own 30-day free trial by clicking here.

At the time of publication, Fool contributor and Inside Value team member Chuck Saletta owned shares of Maxim Integrated Products. Accenture is a Motley Fool Inside Value selection. The Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On March 03, 2009, at 5:40 PM, BostonCharlie wrote:

    I've been waiting to see when you and other analysts would stark talking more confidently about the possibility that we are on the cusp of another Great Depression. All the indicators and emotions seem to point that way, though the prospect is truly terrifying. Being invested through this makes sense and your recommendations are sound starting points. What concerns me is that the entire financial markets system seems so corrupt and unpredictable.

    Will capitalism as we know it survive? Is the capital markets system broken at its core? What are the prospects that at some point the markets will go into such a tailspin that we won'b be able to sell our holdings at any price --for weeks or months? Not long ago, I would have said these concerns were outlandish, but I think the stakes are now very high and reach far beyond questions about what stocks to buy, sell or hold.

    Please tell me I am wrong and the long Boston winter has addled my brain.

  • Report this Comment On March 03, 2009, at 5:59 PM, rdlegacy wrote:

    I have followed your advice from Stock Advisor as well as Hiden Gems, and purchased selected stocks. However, that decision has cost me 13% of my inevestment. I was very hopefull that your picks would have been better than mine. I agree with Boston Charlie, I am inclined to just pull all out. I keep hearing depression and the dow target of 3,000 to 5000! it is extremely scarey. How can you sit there and recommend that people invest?

  • Report this Comment On March 03, 2009, at 5:59 PM, titanicdwn wrote:

    I disagree. This next time around will be completely different. Included in the next set of events will be the shattering of the fifty state nation into smaller itty-bitty countries. Poverty and chaos will find new deffinitions in the American experience only vaguely hinted at in movies like 'CYBORG'. You have never known sorrow until you experience what's coming.

  • Report this Comment On March 03, 2009, at 6:07 PM, teejk wrote:

    depression is a pretty strong term. apart from banks and housing related stocks (pretty broad category on the last one I guess), I think there is now very limited downside. People still need to eat, take their meds and drive to work (if they still have a job).

  • Report this Comment On March 03, 2009, at 7:02 PM, theplater wrote:

    "I have followed your advice from Stock Advisor as well as Hiden Gems, and purchased selected stocks. However, that decision has cost me 13% of my inevestment. I was very hopefull that your picks would have been better than mine. I agree with Boston Charlie, I am inclined to just pull all out. I keep hearing depression and the dow target of 3,000 to 5000! it is extremely scarey. How can you sit there and recommend that people invest?"

    In times like this you shouldn't be investing and expecting your shares to rise over the next year, you should be lookingat the next 5 years or maybe even 10. In a climate like this looking for an investment return over the next year is pot luck and the odds are against you.

    If you can afford to stay in for that length of time stay in but if not cut your losses and take what you need as money you need in the short term shouldn't be in stocks.

  • Report this Comment On March 03, 2009, at 7:07 PM, ReillyDiefenbach wrote:

    "Will capitalism as we know it survive? "

    Well, I certainly hope not. This horrible situation has rudely jarred a great many people from their slumber. With the exception of the right wingers so well represented on this board, most of the country is mad as hell about the theft of billions upon billions of our dollars by unscrupulous Wall Street bankers and slimy hedge fund managers.

    As for investing in stocks? No thanks, I'm just fine with my three percent in the money market for the moment.

  • Report this Comment On March 03, 2009, at 7:10 PM, AtlasAynRand wrote:

    The only difference between the Great Drepression and the Depression we are entering, is that in the Great Depression capitalism was still the American way, and the corruptness of Wall Street to Main Street had not exploded to proportions unprecedented.

    Yes...it is time to get out of the market, unless you are a fool and still read Pollyanna.

  • Report this Comment On March 03, 2009, at 7:47 PM, marilynstake wrote:

    I agree with the Fool. I'll bet on the fact that companies will still need to provide the basics. I pulled out 9 months ago and am back in at bargain prices for the long haul. I'll back companies provide necessities and the technology to deliver it. At these prices my grandkids will love me!

  • Report this Comment On March 03, 2009, at 7:51 PM, whypher wrote:

    Your comparison of the Great Depression to the New Depression is only half right at best. What you FAIL to mention is the mortgage backed derivatives these banks and investment firms broke up into tiny pieces to, once thought, avoid this type of failure. They sold them to banks around the world. This world wide depression is due to these derivatives that were leveraged with only 20% down. The problem with unraveling them is one mortgage could be split between several derivatives. Any discussion about the economy and 'why' needs to include in the discussion these derivatives. Failure to mention them is only telling half of the story at best. While you hammer away at the homeowner your statement, "overleveraged financial institutions " is glassing over the true problem of this disaster. Capitism works only when the rules are followed. This obviously was only true with a minority on wall street.

  • Report this Comment On March 03, 2009, at 7:56 PM, titanicdwn wrote:

    I see major flaws in marilynstake's comment. First, those companies will only provide the basics if they are making money on the basics. Second, People all over the world have very desparate needs. That does not mean they are buying anything. Never assume need will translate into profit. It might instead translate into doing without like the rest of the world. That includes food and shelter as well.

  • Report this Comment On March 03, 2009, at 8:23 PM, chuckjr wrote:

    I get a big kick out of people who always associate capitalism with crime. Crime exists in all forms of government and all forms of life. To blame the existing situation on capitalism is ridiculous. You may blame it on crime, yes. You may blame it on greed yes. But, why are there always those who think crime and greed are only capitalistic characteristics. Likewise, I think it's ridiculous to think that "government" should have seen it coming and protected us. Come on!!! If you took a variable rate mortgage and didn't know the consequences or bought a house that cost more than you know you could afford don't expect the government to to take the blame.

    -Chuck

  • Report this Comment On March 03, 2009, at 8:28 PM, titanicdwn wrote:

    truthisntstupid makes a good point, but is also missing a bigger one. I would take my money while IT IS STILL worth something and load up on what I already know I will not get later. Why invest my money now? My money will be gone, plus other things I could have bought instead.

  • Report this Comment On March 03, 2009, at 8:30 PM, chuckjr wrote:

    RD,

    You're in a market that is expected to drop 50%-75% and you're upset that you have dropped 13% because of MF picks? You are indeed a very lucky person!!!

    -Chuck

  • Report this Comment On March 03, 2009, at 8:35 PM, theplater wrote:

    titanicdwn:

    Whilst I'd agree it would be good to pull your money out now it is incredibly hard to predict the bottom of a economic bust, some of the best investors in the world get burned by it and then theres transaction costs on top.

    Good companies with good products, sound balance sheets and a market dominance will always return good profits in the long run and I think at this price over 5 years buying now would be a good move if your not 100% sure you can predict the bottom. (Assuming this isn't some financial apocalypse signaling the end of the financial world, but then as someone said earlier money would be useless).

  • Report this Comment On March 03, 2009, at 8:37 PM, chuckjr wrote:

    To all concerned,

    I just realized this post was written by Chuck Saletta. The last two comments by me I signed as -Chuck. I am not the same Chuck as Chuck Saletta. Sorry if you thought I might be that intelligent.

    -Chuck

  • Report this Comment On March 03, 2009, at 8:46 PM, TMFBigFrog wrote:

    Hi chuckjr,

    I myself often sign off my posts with a "-Chuck". So when I saw your posts and saw the "-Chuck" signature at the end, I did a double-take. Thanks for clearing the air on that, because I was starting to wonder what was going on, myself.

    And as for this statement: "Sorry if you thought I might be that intelligent." Don't sell yourself short. I doubt I'm any more intelligent than you. I just have the benefit of both a financial editor and a copy editor who carefully correct and clean up every piece I submit for publication. They have the very difficult job of making what I write into something that you'll be willing to read.

    Best regards,

    -Chuck (Saletta)

  • Report this Comment On March 03, 2009, at 8:49 PM, JeffersonBrazil wrote:

    I am Jefferson Souza of Brazil. I want to say to everybody that they observe as ours big country is traveling through to such crisis created by the incompetence and Greed of theirs financial-market. Our goverment have a great fiscal equilibrium, companies grow like never, we are the biggest producers of comdities of the world and we have a huge lack of infra-estrutra expecting investments with super returns. We are still a poor country, but here we do not invent money with miraculous operations, here we work hard very much and every day. To the contrary one than is said by the 1º world, we conserve yes our natural patrimony, despite of since our discovery we will be plundered by the world capital. We are a receptive people and despite of prejudices they will exist, but this palestinian way and Arabs can be friends by example. Results of a harmonious one multiracial people. Invest in Brazil and doubts itself lost money. However they cared for with politicians, here they are equal in everyone the majority want to earn money. But it has still a lot gentye grave wanting to doing a better world!

    souza-jefferson@uol.com.br

  • Report this Comment On March 03, 2009, at 8:50 PM, chuckjr wrote:

    Dear Chuck (S),

    Now you're the one selling short (pun). From now on I'll sign off as:

    -ChuckJr

  • Report this Comment On March 03, 2009, at 8:54 PM, xetn wrote:

    All of the comments about mortgage backed securities and greedy bankers etc is all true but misses the point. In the case of the mortgage backed securities, no one was forced to purchase them. It was greed that encouraged the buyers to purchase, just as it was greed that motivated most people that purchased houses during the last 5 years thinking that house prices would just keep going up and then taking out equity loans to purchase cars, etc. The is no excuse for stupidity in any quarter. But none of this stupidity would have occurred with out the Fed creating massive amounts of money out of thin air and ACORN forcing banks to make sub-prime loans to people that were unable to pay.

    As far as capitalism is concerned, I hope we can end the current system and return to a free capitalist system without the burden of over 175000 pages of government regulation on businesses.

    Of course, if I was a banker, and had the FDIC and the Fed (lender of last resort) behind me, I have no incentive to care about the potential of loan losses or any other loses. I can take any risk I wish knowing that the government will bail me out. And, of course, that is what is happening.

    We now have a national mind-set that government can save us all from ourselves, make mortgage payments for the people who should never have had a mortgage in the first place, and keep giving money to the banks that should just go bankrupt, except they make big contributions to the very politicians that have voted for the bailouts.

  • Report this Comment On March 03, 2009, at 9:00 PM, chuckjr wrote:

    JeffersonofBrazil,

    Thank you for commenting here. It is refreshing to hear from others in other countries. It helps me to get a better perspective on our world. Brazil has so much to offer the world, as you say, and I hope you don't always look at it as being plundered. You have much to gain also by offering your resources to the world. I'm sorry if you have lost money because of the world wide financial crisis, as I have. I know how it feels. I hope we can work this out together as you have stated in your closing sentence of "wanting to doing a better world!" Please stay with us and contribute more to this post.

    -ChuckJr

  • Report this Comment On March 03, 2009, at 9:16 PM, chuckjr wrote:

    xetn,

    I agree with your comments except for the buyer/government bailout one. I really don't think home buyers were thinking, at that time, of the government bailing them out. I think they were thinking, "hey mister bank, if you're gonna give me the money to buy this house I'm here to take it." I don't think the government ever came into their decision. Now, the banker was most likely aware of the government safety net so the decision to take the risk lies with them. The bank saw a way, offered by the government, to profit from a risk and took it. Am I way off base here?

    -ChuckJr

  • Report this Comment On March 03, 2009, at 10:21 PM, afleetfeet wrote:

    I chuckle when I read the messages of the gloom and doom and worries about the end of capitalism. Have any of you ever read a history of the Great Depression? People were just as gloomy and asking the same questions about capitalism then. The nation and capitalism made it through in fine order then, and both will fare just as well this time around. It is unfortunate we have had to learn the same lessons all over again, however.

  • Report this Comment On March 03, 2009, at 10:23 PM, afleetfeet wrote:

    xetn --

    <<ACORN forcing banks to make sub-prime loans to people that were unable to pay.>>

    Everyone knows this is baloney. You seriously undermine your case by repeating it.

  • Report this Comment On March 03, 2009, at 11:39 PM, FatboyMan05 wrote:

    I wanted to sell my house back in the summer of 2006. would have had 75K cash in hand. Wife (now EX) convinced me not to. wound up selling at a loss but thats the way it goes.

    Have a work 401 (Great West Sucks) and a 457 - started my IRA last summer buying individual stocks (mostly small caps) . I'm down 40% overall and I am looking for extra cash to keep buying.... everything is on sale but I have to do my DD and I look for 5 years from know to be something that makes me smile.

    considering everything I see DOW 6000 no doubt and realestate sliding for months to come....

    John

  • Report this Comment On March 04, 2009, at 1:14 AM, TheHague wrote:

    I think I will just get a gun and end it! You all are the most depressing individuals I have ever listened too! Every one wants to be the "Prophet"! The all knowing and omnisient diety that predicted the death of life as we know it! Unbelieveable! Get a life! If it falls apart, I am not saying it is, we will need all the positiveness we can muster to survive! I know I will seek out a different place to spend my time than with this group!

    See ya!

  • Report this Comment On March 04, 2009, at 4:31 AM, max12345 wrote:

    At about the end of 2007 or maybe at the beginning of 2008 (I can't remember quite when) I sensed that we were on the verge of something big and extremely nasty. It seemed to me that the U.S. could NOT just keep going into debt to China and that the trade balance and the current account were completely unsustainable and a big correction was way overdue.

    Not to mention the other trillions that we (that is Dick Cheney and his Neocon friends) already had squandered on Iraq. (though for Halliburton et. al it was in fact a windfall of profits) And if they really couldn't resist pursuing "freedom and democracy" wouldn't it have been much better to just continue doing what was already being done together with the Brits which was to maintain a low level aerial bombing of Saddam (so called "containment") and continue to insist on more UN inspections? Sooner or later Saddam would have died anyway -with or without a little CIA help- and Iraq would not have been completely trashed and driven into the hands of Iranian Shiah sympathizers not to mention that a lot fewer idealistic and courageous young Americans and innocent Iraqis would have lost their lives. (and the U.S. debt would not have increased by trillions)

    I also thought that housing prices all over the place had gone up way too much and were due for some very significant (and sustained) correction sooner or later and probably much sooner rather than later.

    I didn't know (how could I?) by just how much Wall Street had gambled and lost and cheated people in the U.S. and throughout the world (by selling them derivatives, and derivatives of derivatives, all with bogus AAA ratings) but my sixth sense and all sorts of other "non-verbal"signals told me that the "best and the brightest" of Wall Street were a bunch of young, lying, self-enamored and self-delusional turkeys living in ideological bubbles who absolutely could NOT be "trusted. (or could be trusted about as far as one could throw them) (along with their "highly clever" and ethical senior bosses of course)

    Based on this "highly pessimistic" (i.e. highly realistic) analysis and views (and I was told that I was unduly pessimistic and extremely negative to the point of being a nut case by about 99% of my friends) what I wanted to do was to liquidate my portfolio entirely and redeploy it as follows:

    25% in oil company stocks...(because the world is running out of the stuff).....(but not in U.S. oil companies); 25% in cash (meaning greenbacks and NOT money market funds); 25% in gold (physical gold and NOT gold stocks) and 25% in the stocks of commodity producers in Australia and Canada with solid balance sheets and a history of dividends. That to me seemed to respect both the upcoming realities and also the "principle of diversification"...(which itself can be highly dubious in certain circumstances)

    I really thought we were on the verge of a second Great Depression. And I also thought that in the medium term paper currencies themselves were in for a big correction relative to "real values" (i.e. gold and other minerals in the ground) (what is commonly called inflation in "normal" economic parlance)

    But my "amazing pessimism" was not limited to the above.

    I also thought that "3% economic growth forever" (the current capitalist and also socialist, communist, fascist, social democratic and every other ecoomic and political ideology of this planet's basic economic model) simply could not last forever on a planet with finite resources. At some point we would run out of not only oil but also water, air and just a few other unimportant things like that.

    Which made me think -though only vaguely at that point in time- that it probably would not be possible for the world to later (after the coming Great Depression number two) to simply "grow out of the problem" as it has done "historically" before, because certain worldwide (planetary) fundamental conditions and circumstances had changed forever.

    (Circumstances and Contexts and Conditions -the magic three C's- that shape the other magic three P's of what is Plausible, Possible or Probable- DO change and our happy (and finite) world never had 6.5 billion people on it ever before (pushing towards 10-12) nor did it ever consume as many resources per capita as it does today) So how long can the basic game plan we are following really last?

    And although in some ways history DOES repeat itself (as many who are much wiser than I continually tell us all) (they must all have a direct line to the Almighty) in other ways it doesn't.

    (particularly when it objectively cannot)

    And just to give another example regarding the preceding outrageous view ....if we now were to have a full scale nuclear World War using 20,000 H bombs History would NOT repeat itself with everything soon settling back again to what it was before, (as has been the case with most wars) and the world would instead take 20,000 years to recover from the radioactivity. (Carl Sagan's 20,000 year nuclear winter, for those who may remember who he was) (the guy who wrote Cosmos)

    Which means that one should always try to keep one's eyes on assorted fundamental REALITIES and not on assorted ephemeral IDEOLOGIES (of various kinds)

    So based on this additional and even greater "pessimism" I thought that sooner or later we would be in for not just a Great Depression but an even greater GREAT CORRECTION. (to a world economic development model and a demographic growth model that was more in line with the finite resources of the planet)

    And I also thought that fixing the GREAT CORRECTION will be infinitely more difficult than fixing the GREAT DEPRESSION number two.

    And more simply I certainly also thought that if a Great Depression did occur it could never be fixed by going back to the status quo ex-ante, which was riven with irresponsibility and imbalances. (i.e. just try to get China to start to consume -"stimulate domestic demand"- internally rather than exporting most of what it makes to the United States and then buying treasury bills with all of the (paper) dollars)

    This also meaning that the U.S. "consumer" (although I prefer to think in terms of "citizens" rather than "consumers") (since isn't that after all what we actually all are, or at least should be, first and foremost?) would have to start saving slowly once again over time and begin to consume again at historically more normal levels (in line with one's means) rather than buying all of that Chinese junk, taking out home equity lines on the backs of inflated house prices bought with baloney mortgages and loading up all those 18% p.a. credit cards.

    And incidentally it now seems like the government's "solution" is to try to go back to the very behaviors and attitudes and practices that caused the problem in the first place... which is why it all simply won't work. If Americans are smart (and we are after all not quite THAT dumb) we will say "thanks but no thanks" to all of the "kind offers" of all that newly happily "flowing credit" and to indebting ourselves to the hilt even more than before.

    So given everything I have now said above you may think that by now I should be "sitting pretty" with all of my extremely wise new investments I thought of above... right?

    Not quite.

    I was psychologically so hammered by my friends and colleagues for my "irrational pessimism"...(which in their view is the opposite of irrational exhuberance and just as nutty) but not only by them but also my wonderful super-professional financial advisor at one of the "best brokerages" in the whole country who kept telling me that "now is definitely not the time to sell" and that moreover "history shows" that one should ALWAYS stay invested, and that "eventually" stock markets outperform all other asset classes and that one should "never try to guess a bottom or a high"....and that markets typically rebound suddenly and if one is not "in" then one will miss out...and etc. etc.

    (which is akin to telling somebody sitting on a beach seeing the 20 meter Tsunami wave coming in and wanting to run like hell up the hill .. to just sit there and put on a bit more sunscreen because afterwards everything will be honky dorey again ....and all the washed away buildings will be standing once again)...

    In other words all of the standard ideological fare that we have all heard 100 million times.

    Not to mention all of the other baloney that I read right here on Motley Fools which has changed its underlying fundamental story line at least two or three times as "the situation has evolved". That is, assorted "fools" -and maybe they really do deserve that term for real rather than just tongue in cheek- are finally now calling the Depression that has been in the making by its proper term.

    Before the story line was quite different....i.e. "invest now before it may be too late"...."buy and hold for value investment" and etc. etc.

    As a result of all of this wonderful advice and badgering from my friends, my financial advisor, Motley Fools and also a few other real fools out there (Zacks, Seeking Alpha, most of the talking heads on CNBC and Bloomberg and etc etc.) I waited much longer than I should have to do what I had thought (in my heart of hearts and in my mind of minds) I ought to do way earlier (based on simple common sense and observation of empirical realities instead of as based on deep and profound theories of markets, finance and economics) and therefore I lost about 25% of my life savings completely needlessly.

    Though one could argue that if I knew better but was stupid enough to listen to others, then I deserved to get an even bigger haircut.

    Of course I do think I am also very lucky since I indeed could have done MUCH worse, just as many other unfortunate others certainly have done.

    And of course it is also true that I may well recover (and some) that needlessly lost amount of 25% of my lifetime savings in about 10, 15, or 20 years.

    The trick will be to try to recover just as much as possible and then some.....(hopefully).. and then get out entirely (and buy only land and other tangible assets that will not be nationalized) before "the great world devaluation of all currencies" occurs, followed by the GREAT CORRECTION (to something other than 3% economic growth forever)

    I did however learn one very useful lesson from all of this. (though I knew it already and didn't have to pay quite the price I ended up paying for it) which is to Keep my Eyes on the Realities and not on the assorted Ideologies and theories of the moment, or of the historical period one happens to live in or even on the assorted "convictions" of well-meaning "expert" others who typically do not do that and mostly haven't got a clue about how to even begin to do it.

    But doing "all of that" is of course "much easier said than done" and one very fortunate thing (just to prove my persistent pessimism) is that sooner or later we will all croak...(another fundamental reality).....whether rich, poor or in between and whether extremely wise or extremely foolish.

  • Report this Comment On March 04, 2009, at 6:00 AM, titanicdwn wrote:

    Why is it at the end of this year everyone will be saying, "How could we have known it would get this bad?"??? I am reminded of Greek mythology. There was a prophetess cursed by Apollo that although her prophesy were always right (I am not claiming that about myself) she would never be believed. She told Troy not to bring that giant wooden into the city, but burn it instead. It had enemy solders inside and would destroy the city. I am saying that while there will be ups and downs, IT'S GOING DOWN!!! The end of the USA IS NOT THE END OF THE WORLD. It's just the end of the USA. The world already has eyes on our replacement.

  • Report this Comment On March 04, 2009, at 9:36 AM, tlenyc wrote:

    just read an article in wsj about the merril lynch bonuses. Besides being jealous! I just don't understand how this could have happened. billions of money going to already wealthy bankers and traders. Kraus, montag, sobotka, these guys should tarred and feathered, seriously, how can not disdain wall street after seeing this money going out to a small group of people at merril , not the secretaries and support staff, after all the multi-billions this firm has lost. It is a travesty that these super wealthy don't have to give back some of the crazy bonuses from year's past, but now we see them earning more money than hollywood celeb's and star athletes, who yes are probably overpaid also but at least have something unique to offer. This is public tax-payers money, how could the government allowed this, putting aside the lack of ethics of john thain and ken lewis who ran the bank. And orcel, montag still have there jobs. Where is the government hearing with these guys in front of the senate , justifying their bonuses. I'm all for capitalism and rewarding hard work and genius , but what we see here is rewarding the same people who got us into this mess and are causing so much misery. Anyone agree with me!? where are the street protests in front of merril and b of a, anybody in, email me at tlenyc@gmail.com

  • Report this Comment On March 04, 2009, at 10:51 AM, TimothyVR wrote:

    I'm somewhat confused.

    There are many people here saying that capitalism is dead and the world we know has essentially come to an end. Most are saying they will never invest in stocks.

    Why would you post on a site that is about investing?

  • Report this Comment On March 04, 2009, at 10:56 AM, Windsurfing1 wrote:

    Let’s face it: It will not be the end of the world, neither the end of the United States of America. It will not be the end of capitalism; an unjust and not perfect system, but still proven so much better than socialism, communism, feudalism and any other ism’s, since those are substantially more unjust and mostly end in a disaster. Therefore, capitalism is simply good, point finished. Trust me, I was born in Eastern Europe and you do not want to experience what my parents had to, before they escaped… friendly enough to take me along. The only thing I am worried about is a little thing that came along or was born within the great depression: History calls it World War #2. And it originated not from a third world country and it did not originate from an area full of hate and agony on the rest of the world. It originated from a country once rich and prosperous. Do not take me wrong, all I want to say that I only hope that none of the politicians of any country turn completely nuts and support hate among their population. Anyway, until I do not signs of a massive war coming up, be assured: Markets will start moving up and wealth will be restored, just simply thanks to all the people who want to live a better life and will drive things further and further, as it has always been. Just my personal advise from the old days I used to be an investment advisor: Avoid the timing bias. Do not invest all your money at one moment. I for example took out my retirement money end of 2007 (OK, lucky I agree) and decided to invest it over the time frame of 3 years, buying worth of 1/6 of it every six months. True, my first two slots are for now a loss and my wife makes me a scene each time she sees the bank accounts, but I am convinced on average the six investments will be worth substantially more in twenty five years when I retire. And by the way, I do buy some of the stocks from the Stock Advisor plus some companies I just think will rock for ever and ever. Btw, before you get the impression, I personally did not get financially hurt…. I am employed at one of those “fantastically” managed financial institutions that are laying off thousands of people every month…. And there my personal backup: I heard Costa Rica is beautiful, not expensive, safe and secure. So if they sack me, which probably will happen, I will check it out down there, trying to continue financing my kids…Btw, do not forget, that 99% of people working for Wall Street and even facilitating the setup of Hedge Funds did never earn millions. At least none of the guys on this floor ever did earn more than average Joe… and we are in Hedge Funds, but maybe at the wrong side of the business, not bonus driven. Anyway, good luck and trust me over time all will work out just fine. Do not overreact and do not blame the people of your neighboring country for things they are not to be blamed for ;-)

  • Report this Comment On March 04, 2009, at 11:06 AM, DietOfWorms7 wrote:

    What I have learned through all of this is that what seems like a bargain today will seem expensive tomorrow. I thought that I would become a real estate investor, and bought a rental property last August. It now is probably worth half of what I paid for it. Then I thought I would invest in stocks at "bargain" prices and now see them breaking through their 52 week lows. This is not the time to invest in stocks. We can no longer trust Wall Street, our financial institutions, and especially not the government. Keynesian economics has failed us. We are the largest debtor nation in the world and highly overleveraged. Position yourself for the collapse, keep as much cash as you can and invest when the dark clouds have passed away.

  • Report this Comment On March 04, 2009, at 11:27 AM, chuckjr wrote:

    Max12345,

    I found your comments engaging, but you took an awful lot of words to say, "neener, neener...". :)

    -ChuckJr

    P.S. With practice one will learn to listen to and heed that little voice.

  • Report this Comment On March 04, 2009, at 1:05 PM, titanicdwn wrote:

    You will change your tune after Iran tests its first atom bomb. Now, I wonder how world markets will react to that. I am all for investing. But you and I have far different definitions and my head is not in the clouds. You will get my point after those clouds turn into mushrooms. WW II was also unnecessary as Pearl Harbor maintained that holiday, devil-may-care attitude on July 1, 1941. Yes, many experts will moan and groan how we never could have known. Financial experts will nod in uniform agreement it was beyond their knowledge how markets would slack while all their money was packed. The investor invested with a smile as long as a mile and maintained a most positive attitude all the while. Was Noah a pessimist, realist, religious fanatic, or prophet? He invested in boat! How stupid is that?

  • Report this Comment On March 04, 2009, at 1:20 PM, Windsurfing1 wrote:

    titanicdwn: Are boats cheap to buy now days?

  • Report this Comment On March 04, 2009, at 1:34 PM, steveherb wrote:

    All comments combined. What audience do these articles target. If your looking for investors. Why just forward these optimistic articles to the ones who stole all the money.

  • Report this Comment On March 04, 2009, at 8:04 PM, gladlylearn wrote:

    Everybody calm down. As Walt Kelly once said, "We have met the enemy, and he is us." We know what happened. It has happened before: Remember the Savings and Loan crisis? A few hundred billion to bail out the banks from bad real estate loans. Historians can count backwards to others. Dumb. Familiar, Sigh.

    I bought a new 4BR-2BA house for $22,500 in 1968 in San Jose. Exactly one year later, the same developer opened a new development 5 miles away. The exact same house sold for %45,000. Being young and ignorant I did not invest in real estate. Over the years, houses have gone up significantly, year-by-year. Everyone said this cannot last; it makes no sense. They still went up. If you heeded the dire warnings and got out of the market, you lost out. If you were out long enough, you could not afford to get back in.

    A stopped clock is right twice a day, so the doom predictors were right 40 years later, the rise finally stopped, and the bubble broke. Were we really surprised? Only if we had no sense of history.

    If this is not familiar enough, just think of real estate as the Cabbage Patch doll frenzy of a few decades ago. There was a great speculative frenzy for these odd dolls. Then it popped. People who had paid hundreds of dollars for a $20 doll suddenly had a doll worth less than $20. Where did the money go? Poof! Just like having a fire of dollar bills. It ceased to exist.

    So, the party is over, and we have to clean up. Was there greed, ignorance and stupidity on Wall Street? When was there not? Did They conspire to steal from us and destroy us? Not really. They went broke, too. Old saying: Never attribute evil intent to something that can be explained by ignorance and stupidity. Did some thieves make out like the bandits they were? Duh. But most of the huge number of people involved were ignorant, and some were stupid, as well.

    One of the hard lessons of growing up is that there is no They. Just us. The people in Washington are just people, with our human limitations. "They" do not know more than "We: do. Some of them may know more than some of us. That is as good as it gets.

    Another hard lesson is that actions (including non-actions) have consequences, and some of those consequences are unexpected. The people in the government and Wall street took actions, but they did not anticipate these consequences.

    Is Capitalism dead? Not likely. Capitalism is just trade. Your money is worth more to me than my carrots. We trade, and we both have more value than before. It all starts here. Adam Smith just documented it.

    Is Pure Capitalism the answer? No. Capitalism, like many other -isms, is just a mechanism. It has no sense of good or evil. Illegal and immoral activities make lots of money, and this money spends the same as honest money. So, we have laws and enforcement to distinguish between good and bad money, to encourage the one and discourage the other.

    The problem is not the system, it is the people - us. We have no direct memory of things that happened before we were born. If it is far enough back, we arrogantly assume that Things Have Changed, and that the Old is no longer reliable. So we have a depression about every 80 years or so, when people have forgotten that some important things.

    It will be hard - as usual - but we will survive and continue. Probably as before, after the same heartfelt resolutions that were uttered the last time.

    I sincerely hope we do not have a nuclear WWIII. But even if we do, with nukes and all, the earth will not be destroyed. A significant portion of the 5 billion people on it will survive. And things will recover again.

    Be careful in your extrapolations. Extremity of worry does not compensate for inherent lack of knowledge. Shouting louder does not make it true, or useful.

  • Report this Comment On March 05, 2009, at 11:55 AM, chuckjr wrote:

    Gladlylearn,

    Who are you?! You sound like the most sane person on the planet! Thanks for your comments.

    -ChuckJr

  • Report this Comment On March 05, 2009, at 1:14 PM, investingcents wrote:

    Dear Gladlylearn.

    Your post is probably the most level headed, cogent and well written piece I've come across the web in what seems like a very long time now. Bravo and thank you.

  • Report this Comment On March 06, 2009, at 1:31 PM, hunkeringdown wrote:

    gladylearn-

    It's refreshing to read your analysis- it's the most intelligent I've read/heard anywhere since 8/07 & I agree wholeheartedly, thank you

    max12345-

    I too intended to pull everything out of the market 10/07, called my broker, at Merrill, and was thoroughly talked out of it. My husband has berated me ever since for listening to anyone else [I almost tripled my inheritance from 2002-2007 by investing in solid companies producing needed goods with no or little debt.] Of course I'm furious with that broker, and left him! But ultimately the huge losses are a result of my lack of sufficient confidence in my own DD to buck 'the fulltime pro with the business MBA & 40& years in the business"! That doesn't replace the huge losses- I've been selectively selling into rallies and have gone from virtually no cash [almost 100% of the portfolio invested] to now @25%, still selling.

    On another note, everyone we know here in rural Pennsylvania is buying more guns and huge amounts of ammo- partly in anticipation of Obama restrictions, but mostly in case the country divides into those who have and those who take. When Obama campaigned here in NE Pa., he said what his local supporters wanted to hear, from here he went to California, I believe it was San Francisco---where he commented on the NE Pa. people as, and I quote, "clinging to their guns and religion" ! Does he think the people living in the 'flyover' states are stupid? After he won the nomination he seemed to move more centrist, but his DECIDEDLY UNSTIMULUS "stimulus bill" shows his true colors. All it stimulates is more government and more gov't employees, and payoffs to every Congressional Democrat who voted for it, with just a pittance to infrastructure -unless you think $200K for tattoo removal, and others of the 9000 earmarks in it are stimulative! We see the way the US is headed- confiscate from all those who work hard to give to those who don't. I think it was Margaret Thatcher who said that socialism always fails because eventually they run out of people to pay for it.

    With that said, the only equities I can see being investable at this time are those who produce things people HAVE to have = selective energy & materials names, preferably nonUS and certainly not the big US guys, who will be taxed out of existence [& not the big healthcare names, same reason], tobacco [WILL be taxed even more but won't be destroyed because so many states are receiving so much from the tobacco settlement, & has great div], some food/drink names [w minimal debt & solid cash flow], & GLD [though watch it very carefully, TRADE it from @900-1K]]. Ex.: RIG, NOV [big backlogs, proprietary tech.,big oil continues to invest, esp PBR & XOM], NAT [benefits from contango], FCX, RIO, MO, PM, PEP, KO [these last 3 suffer a little from strong dollar vs. euro]; also like MCD & YUM [growing internationally], and QDEL [smallcap, makes quick diag. tests used in ER & Dr's offices to pinpoint diagnosis & so save $, down big], & PWR [builds transmission towers across US, repairs same and lines after disasters, etc.].....full disclosure, I own all above except KO, MCD, YUM, PBR, XOM. I continue to hold GOOG, HSIC, AUY,FUND, RVT,TACWX, - have sold or am selling everything else. I am a fulltime investor >40 hours/week studying dull financial statements,until the crash last fall had great ROI....Most of these are at or close to very good entry points for LT-scale in ! These are the survivors.

  • Report this Comment On March 06, 2009, at 3:04 PM, sailmx wrote:

    I think we need to get the whole world back to basics and start over.

    What they have done is absolute insanity that I learned not to do in college and high school, banks don't really take risk. Have the heads of these banks and rating agencies lost their assets and their jobs? Are they sitting in debtors prison?

    Before I get back into the market I want to see some real reform! I want to be able to be a buy and hold investor without having my investments manipulated by hedge funds, puts and calls, and by over leveraged instruments. I know, no one can run a company with short term thinking! Yet that is the mentality we have driven "C's" to do.

    Why should speculators be able to drive the prices of the world to a frenzy that makes the whole world suffer? Gas, oil, electricity, corn, coffee, sugar, rice, etc. and money should not be subject to highly leveraged speculation.

    Derivatives need to be abolished, what purpose do the provide? I can't believe the information I am reading in Warren Buffet's current letter to stock holders. Even he has lost his head in the name of greed and poor judgement. He still holds 251 derivative deals going way too far out and says he can't loose. If he can't loose why did somebody pay him millions/billions for the deal in the first place. Somebody with more money than brains?

    I see no discourse going on about the changes that need to be made to correct the current situation and what got us there. I think we need these fundamental changes first before the system can get going again. We have proven that more regulation is not the answer - it didn't work in so many ways - and then we have the subject of Madoff and others that have come to light as even more proof.

    With money the KISS principal has to rule! That's how my father - and accountant - and I have succeeded and survived. I don't like the fact that others in the world have messed it up at my expense! It is not only me. Look where charities and endowments have been taken - how are they to get back on track - by riskier financial engineering?

    And GW wanted us to have all our SS in the stock market for greater returns - not on your life! What a farce this has become and who is hanging for it? Are the rating agencies still in business?

  • Report this Comment On March 07, 2009, at 3:10 AM, rcvrcat wrote:

    I am impressed with the posts on this board concerning the economic melt down and gloomy prognosis of our world economy. So it is an understatement to say things are bad right now for a whole lot of people.

    However, we need to remember this financial mess with our banking industry and other financial institutions was fueled by greed and selfishness at multiple levels. It won’t heal itself over night and it will take time. I do resent our government stepping in to provide money to pay for peoples bad investment strategies and individuals lack of understanding that the loan they were being advised to take on may not be in their best interest. Even with this resentment, I am willing to make some sacrifices by taking a cut in pay or contribute more in taxes if it can save a persons job. In the end, we are all in this together whether we like it or not.

    The important thing is not to get caught up in all the hype and you need to stay focused on what’s best for your specific situation. Perhaps the best place for you money is in a savings account currently earning 2.5% to 3%. For others selected investments in the market at this time look pretty attractive. People need to take stock in companies they believe will continue to provide valuable goods or services into the future.

    I am fortunate to touch many different industries around the world in my day to day work. Many of the consumer related markets are impacted the most as consumer confidence has shifted to “Limited Spending mode”. Building and Construction related industry were also impacted in the last quarter of 2008 and the first quarter of 2009, but now due to some governments stepping in around the world to provide stimulus this area is seeing some renewed and welcome business. Equipment makers that sell into the Enterprise space, while down are not down and out. They shown signs of new business as productivity enhancements continue to be a focus in the industry. The industrial sector has been impacted, but not as much as the consumer markets. In general, I have seen a plateau effect in business this quarter or the leveling of certain markets vs the free fall of the past 6 months. So while it is bad, I am seeing positive signs in some markets. My point is there are positive signs of hope and those companies on a solid financial footing are beginning to make new investments into the future.

    It is too easy to get caught up in the hype that the world is doomed, you need to look around and question what is being forced feed to us in the news. It is time to seek out your own information, make your own informed decisions on investing, and stop following the general flow because there are some positive signals being sent if you remain vigilant in your search.

    All of us have been hurt by the current economic situation, but I believe there are many good quality people with creative ideas who will pull together in their own grass roots efforts to make a difference.

  • Report this Comment On March 07, 2009, at 10:24 AM, scriblrr wrote:

    Many thoughtful and insightful comments here!

    But, no one seems to mention the oldest "get rich" advice of all -- BUY LOW, SELL HIGH.

    Perhaps that's because "buying low" requires incredible guts! Now, when things are down, how many of us have the stones to plunk down some of our fast-dwindling cash to buy beaten-down stocks? It is easier to hold back in the belief that those stocks will go lower still! And so, we don't buy at all! Later, after the recovery begins, we will excuse our lapse with "shoulda-woulda-coulda" talk, and still won't buy! Only when stocks are 50% higher will we invest --- just in time for the first correction and a haircut!

    I've done it...you've done it...and so, we don't "get rich."

    So, what to do? I am presently loaded-up with junk bonds, which may or may not be right. I prefer debt to equity these days and I was looking for some more high yield bonds this morning. But, when I read Moody's "Bottom Rung" and found companies like Nordstrom's and Comcast listed there...and the news that the default rate may rise from 5% to 16% by year-end, I got extreme cold feet!

    I never thought of investing as a supreme act of faith, but with negatives like the dead economy and rising default rate, BUY LOW seems like an immense act of blind faith!

    I think I'm gonna sit this one out until the merry-go-round stops spinning!

  • Report this Comment On March 07, 2009, at 7:10 PM, theplater wrote:

    "Derivatives need to be abolished"

    No don't bad derivatives!!! BAN ALL LOANS as we can see a small sub-group of loans are stupidly sold to people who cant afford them and are then overvalued, so lets ban all loans and we solve this problem.

    This is no different than the assertion your making there are many types of derivative that were in no way related to this crisis.

    Perhaps the wheat "puts" that farmers sell to guarantee the sale of their wheat should be banned? Thats a derivative product.....

    Perhaps interest rate swaps should be banned as well which allow exporters to export to different countries with a greater certainty of stable exchange rates?

    Or PERHAPS it would be better to make sure derivatives were properly regulated rather than crazily banning financial products because a small subgroup of them caused a recession.

    When you think of derivatives your thinking of heavily leveraged derivatives based on complex financial products which are used heavily for speculation..... these have brought down companies and financial firms.

  • Report this Comment On March 07, 2009, at 10:00 PM, Dupedbycons wrote:

    I dislike most posts because they usually have a habit of becoming platforms for political or intellectual fighting. With that said, here goes.

    I am tired of the market or the market pundits stating that the drops are mostly due to the government inabilities or their ineptitudes. How about this : Wall Street insiders, you created this stinking mess with your holier than thou attitudes and ways, but now you are waiting for someone else to properly prop up this house of card till you deem it safe enough to jump back in. How sweet. In the meantime you are complaining to these plans do not suit or please you. Here's a revelation: If you hadn't done what you did, there wouldn't be any reasons for the government to administer any of their medicine. Take it and shut up, you ought to be happy someone is willing to put any money into this. Most of you wealthy cons are already out anyway, been out since last year even though you are telling us peasants to stay the course, but this scenario isn't playing out fast enough for you as you feel cheated out of many non materializing opportunities. Once arrogant, always arrogant. Oh ya, I know, you are also a victim. Strange how a perpetrator of a crime be also the victim of that same crime? How about this: All of you billionaires and other wealthy capitalists out there, why don't you pool your money together and buy out or infuse funds into AIG, Citi, BAC and the likes. No need for the government then and I am sure you can fix it quickly as you have told us so far. Problem solved.

    Look folks, I do not like the government being in this business any more than you but until big private money jumps back in we have no alternative. As we all know too well government agencies do very poorly at what they are supposed to be experts in, but what other options did they have. Remember the Lehman experiment? These "Too big to fail" banks and other financial institutions had their greedy little fingers in everybody's pies and to have just let these fail would have caused total financial meltdown which I do not think we would have recovered from in the next two decades. The time to have gotten tough with these boys was when they were buying up all their competitors and delving into business areas they shouldn't have been going into. The problem was that too many people were drunk from the smell of massive returns to worry about the morning after and be dammed if you didn't join the party. We will get out of this mess, some far richer and most poorer, and we will go back to business as usual. We can't help ourselves. We never learn, or that has been the norm so far. I just hope that the system is not corrupt to the point of being unrepairable.

  • Report this Comment On March 09, 2009, at 8:56 AM, aetris wrote:

    Hem! Chuck Saletta recommended 7 stocks in the article above - does anyone have an opinion on THEM, as opposed to rants and ravings about the stock market?

    I find all the idealogy here frustrating - I've heard more claptrap about "greedy capitalists," the Illuminati, and the Trilateral Commission than I ever had time to listen to - but it's worth saying that articles such as this one, that begin by delving into history from a political perspective, just encourage the nuts to get cracking. I guess it's worth knowing that Saletta has what I'd call a NeoCon perspective - personally I don't blame would-be homeowners from pursuing the American dream, I blame greedy mortgage salesmen and careless bankers - but I'd rather have an article that begins with a simple "Even if we're in for another Great Depression, markets will recover" than the irrelevant fulminating about interpretations of historical "government reactions." Save that stuff for the article on "How to Profit From Obama's Stimulus Bill," thanks...

  • Report this Comment On March 09, 2009, at 12:08 PM, Big50Shooter wrote:

    Aetris...

    Isn't Aetris a sub-group of the Bilderbergers...? (LoL... just trying to make a joke of course...).

    I WILL comment on the above picks (or at least a few of then that I've been watching):

    AMAT: this stock interests me as I am encouraged by their thin-film solar technology. With all of the "Man Made" Global warming scare (which I personally believe is 100% BUNK- there's nothing man made about it), and the push toward greener technologies, solar energy is definitely something an investor cannot overlook. I probably won't initiate a position in AMAT right away, but they look good for when the market settles a bit (read: after it has dropped another 1000+ points, which I believe it will in the near future; May-ish?).

    AAP is another company on my radar. As the economy worsens, people will be holding thir cars for longer periods, so autopart stocks should do well. However, I just received an email notice from one of the companies that Advance bought a year or two ago (Murrays) that said that Advance too had recently been bought by the O'Reilly Autoparts chain... Is Advance going to continue doing business/trading under its' own symbol?

    CSCO has been a steady company (besides last year but "join the club" huh?), but it's PE & PEG ratios are a bit high for me to initiate right now... If their PE falls under 8 (which will happen when their stock price falls along with the rest of the market), I might get into that one too...

    Hows that Aetris? Only a slight "jab" on the bad economy in that reply... :-)

    Now, back to Roller-Derby....

  • Report this Comment On March 09, 2009, at 3:25 PM, MikeLCT wrote:

    Nice to hear some rants here (it's ok...it's ok...) Some of you ought to be careful, though before you go tearing the US and Capitalism to boot. As was mentioned, no system can survive lawlessness and dishonesty and apparently that's what It seems we're dealing with here. I would also expect to see our system correct itself and put the law-breakers in jail. I find it hard to believe that proper risk management, maybe even regulatory laws didn't prevent this. What happened? In fact a very small push from some original mortgage failures and our whole system falls like a house of cards? …I smell a fish. Where is the insurance against this risk? Where's the reinsurance? There was no insurance on any of this stuff???

  • Report this Comment On March 09, 2009, at 5:43 PM, topscoreefg wrote:

    Long time reader, first time poster...OK, OK, not funny. I tried.

    My electrons worth of input...

    Buy low, sell high. Things are low. How low they can go...that's trying to figure the bottom isn't it? I thought you weren't supposed to do that. Well, who does what they're supposed to anyway?

    Don't listen to your gut. I didn't. Lost my shorts and my gut. It's been Mr. Toad's Wild Ride. I'm still in. Sold some of my real dogs. And reinvested those monies into companies I felt had greater upside potential and ability to survive really tough times.

    I've added more money in the last 2 weeks. Call me dumb if you want to.

    The world is going to end. Maybe. Maybe not. You can probably make a bet on that in Vegas, but you'd have to pay up front.

    Politically speaking, I consider my self a liberal conservative with a centrist point of view. Doesn't really help does it?

    Have a good day. Know, seriously.

    -efg

  • Report this Comment On March 09, 2009, at 6:13 PM, MikeLCT wrote:

    I guess we've cried it all out.... Now back to business. Did you guys see the Barons article today?

    http://online.barrons.com/article/SB123578882581298993.html?...

    That's what we should be focusing on... Riding the Green Wave: FSLR, STP, JEC, ABB, ETN, AMAT and GE (was up 11% at one point today). What do you Fools think?

  • Report this Comment On March 17, 2009, at 6:28 PM, DanielMack wrote:

    I am a small investor. I don't make a lot of money but I try to put a little away every paycheck to invest. My portfolio is very small but but I am the most optimistic I have been since I' began trying to figure this "investing thing" out. Keeping in mind I am not a expert and could be completely wrong, but it occurs to me that If everyone else is selling I should be buying. When companies start failing I should be looking for the survivors. If am wrong and the economy collapses anyway, at least I took my shot. I've been poor most of my life. I'll survive.

  • Report this Comment On March 18, 2009, at 12:24 AM, FoolishGardner wrote:

    RD,

    You're in a market that is expected to drop 50%-75% and you're upset that you have dropped 13% because of MF picks? You are indeed a very lucky person!!!

    -Chuck

    I was thinking the very same thing.

  • Report this Comment On April 14, 2009, at 1:30 AM, easyrob wrote:

    wow the raging interest in this article dropped off with the rally eh??

    Maxim12345, gladlylearn and others....thanks for taking the time to contribute ratioanal arguements about the macro situation.

    hunkering down and bigshooter 50 thanks for staying on track with comments about picks and poitions.

    I too was concerned in late 2007. I too talked to my broker and others who were way too optimistic(my broker convinced me to buy just a 1% position in SDS as a hedge hehehe, a lot of help that was!)

    I finally ditched the broker and went 75% cash in summer 2008. Better late than than never.

    I have now gone back in some and am 20%oil and gas MLPs, 10% major oil/oilservices, 5%renewable energy, 5% GLD and gold miners, 10% everything else and 50% cash.

    If i had followed the advice here and elswhere right i would be feeling my stomach churn when i thought of my finances, much as i did after my irrational excuberance ended in 2000-2002.Seems that i'm not the sharpest blade in the drawer but not a spoon either.

    I think we may be in for some interesting times and are in a much more fragile position than we would like to be.Using stock market history for 100+ years to base our financial assumptions is probably a mistake as the momentum of forces and feedback loops gathering in our world seem to point towards conditions not seen in the recorded history of humans.........for what it's worth.....

  • Report this Comment On December 08, 2009, at 7:31 AM, gelgin wrote:

    unfortunately i use a system very biased towards small caps which this article leaves to believe incorrect.

    what people forget about the Great One is towards the beginning there was more protectionism than just smoot hawley.

    29-32 run on the dollar. remember silver certificates ? old green-backs (the large dollars)

    if you look at the BIG money charts closing of banks while bad sad also shrunk that. see madoff had a use !

    hoping that this is more like the 70s lots of swings no real progress a traders mkt i suppose we've yet to see run away interest rates how does one prepare for that ?

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Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 843336, ~/Articles/ArticleHandler.aspx, 10/24/2014 6:04:31 AM

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