On Oct 4, 11:31*pm, cporro <cpo...[at]gmail.com> wrote:

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Your original question was where to invest given the economic crisis.
I am suggesting that long term bonds aren't safe because of the danger
of inflation.

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Productivity can only be improved through investment in new
technologies.

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The bad debt is exaggerated. Only those that are out of work or bought
at highly inflated prices are having problems.

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You have the option of starting your own business or becoming a
landlord.

--
Ron

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10T! yikes. and i've been hearing there is some miltiary spending
that's going on right now that basically not being covered in mass
media.

yeah, from my understanding medical care expense is outpacing
income...as is education...housing (at least it was). to me this all
points to fewer people who can afford to be educated, buy homes, or
get health care. if you believe those same people are the "engine" of
this economy we are in serious trouble.

that's why i'm investing in soup.

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- quote -

the way i see it: inflation is a result of the dollar being devalued.
the dollar being devalued is a result of "creating" too much money via
lending. you know, when a bank makes a loan it also opens a new line
of credit for someone else... essentially creating money based on
someones promise to repay. so the idea that inflation wiping out debt
is kinda like using debt to wipe out debt. this may look good on paper
but isn't sustainable. i think there is some neocon explanation for
how this works out...anyone? something like we can permanently change
the productivity rate.

again, i'm no expert, but what i'm being told just doesn't add up. and
now i'm beginning to wonder if the subprime thing really is the root
trigger event for all that is happening. has anyone looked at the
number of foreclosures and done some simple math? how much bad debt is
it and how does it compare to these huge banks?

this line of thinking has me investgating non-traditional investing.
then again, maybe i'm crazy. we'll see.

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On Oct 3, 9:55*am, "rick++" <rick...[at]hotmail.com> wrote:

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Bubbles are identified by declining prices, but that doesn't mean the
decline in price is warranted. What is the opposite of a bubble?

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Drugs have a limited patent life and when that expires the price of a
patented medicine declines.

--
Ron

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"cporro" <cporro[at]gmail.com> wrote
- quote -

Historically over periods of 15-25 years, yes, stocks have
been a good bet.

Regarding the U.S. being a fading power, I think one needs
to remember that it is an easy matter to invest globally
these days, either via U.S. based companies with a strong
international presence or funds of same or funds of foreign
companies.

I think perusing _Stocks for the Long Run_ by Jeremy Siegel
can help give a person confidence through periods like this.
As you seem to be aware, it is important to stay
invested--and keep reinvesting dividends--during periods
like this.

Your premise seems to be that stocks remain in a bubble. In
my opinion, they are no longer a bubble. Lately, as part of
a history lesson and hopefully not as an exercise in
numerology, I have been looking at the Japanese stock index
the Nikkei 225. It reached a peak of around 40,000 in late
1989 and has mostly decreased for almost 19 years. Today is
at about 10,900. I think one must remember that, at its
peak, the average P/E for the Nikkei 225 constituents was
around 70, and the average dividend yield was around 0.5%.
Today I estimate the Nikkei's P/E is around 15 and the yield
is around 1.9%, numbers far more sane and in fact similar to
today's S&P 500. The S&P 500 high P/E occurred about 2001,
at 54.

The crash of our S&P 500 and that of the Nikkei do not seem
similar. Granted the S&P 500 may continue as a flat market
for many years, but because the S&P appears more
appropriately priced, I do not foresee a decline of some 75%
happening and holding. Panic may drive it down further, but
if so, I would not say the panic is rationally based, and I
do not expect the S&P 500 to wander for years well below its
current value.

Reinvest dividends. Watch the compounding effect on your
portfolio as the economy recovers. Note Siegel's
observations on the same: Dividends will increase;
reinvesting dividends buys stocks at bargain prices; when
stock prices rise to normal P/Es, your portfolio will be in
fat city. Be braced for a bumpy ride but remember you are
betting on the economy as a whole for the long run, and all
should be fine.

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On Oct 3, 2:37*am, cporro <cpo...[at]gmail.com> wrote:

- quote -

The current debt will be reduced by inflation which won't be good for
bond holders.

--
Ron

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If in stocks or bonds, where the price is in line
with profits or cash flow. Sometimes prices get
way ahead of these.

Most of the bubbles I'm aware of have been deflating.
One people dont talk about much is medicine.
Its inflating rapidly and consuming a large fraction
of the economy. Thats a danger sign to me.

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On Oct 3, 12:37*am, cporro <cpo...[at]gmail.com> wrote:

- quote -

The debt is already 10T.
http://www.treasurydirect.gov/NP/BPD...application=np

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imho these bubbles weren't hard to see. i was listening to npr and
hearing reports of the housing bubble years before the sub prime
"crisis". not to mention if you looked at the way prices were
increasing it was pretty obvious this could not be sustained.

same thing goes for the dot.com. i was here in san francisco in 2000.
just looking around you could tell this thing wasn't sustainable. at
the same time business people were saying it can't go one like this.

when the bubble bursts is another matter. that is hard to figure.

the thing that worries me about the current crisis is we are creating
more money (as debt) and at some point maybe someone will realize we
aren't good for it. we have a 3 trillion war, a 700 billion bailout i
think will pass, a GDP of 13.8T, and debt of 9T? i'm no expert but
this does not look good to me. if you distribute the current debt
among the taxpayers its about 80k. yikes? how do we do it?

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ideally the money would be invested for 15-25 years. that makes a lot
of assumptions. their is no current need for it.

the thing that worries me... i feel this country has been going down
the wrong path for some time. is this the culminating event in the
country's inevitable decline? realistically we can't remain a global
superpower forever. will this decline be gentle with a good standard
of living or a harsh event for 10-20 years. i don't know. worse i have
no plan B. i think most everyones plan A is based on good growth in
american stocks, bonds, housing...historically this has been a great
bet.

i am the type of investor that believes in making sound (used to be
called conservative) choices and holds them for long periods of time.
my idea is not to panic and dump my current investments but have a
backup plan.

i've heard that real estate is the typical place for most people to
invest when there is lost confidence in the stock market. but my fear
is the devaluation of the dollar. so would my house, valued in
dollars, be safe?

foreign markets would seem safer...unless they own lots of american
debt.

gold seems like a good idea. has anyone watched the you tube video
"money as debt" ? however, when you start adjusting the price of gold
you'll see (or at least it looks to me) it ain't that cheap.
apparently some other people are worried. this would make me slow to
jump into gold.

good book recs are welcome.

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On Oct 1, 3:18*am, cporro <cpo...[at]gmail.com> wrote:
- quote -

That's a hard call to make.

- quote -

The commodity ETFs are a good alternative, but most follow the whims
of the market. Look at DBA, DBC, GLD, SLV, UNG, USO.

--
Ron

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I am sure there are other sites but Fidelity Investments has a range
of alternatives from dividend paying stocks to cds.

http://personal.fidelity.com/product...tml.cvsr?bar=c

Frank

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On Oct 1, 1:18*am, cporro <cpo...[at]gmail.com> wrote:
- quote -


Depending on what kind of financial crisis. Gold is traditionally a
"safe heaven" for crisis times. Besides stocks and real estates,
there is always cash.

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"cporro" <cporro[at]gmail.com> wrote
- quote -

How long can you leave the money invested?

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"cporro" <cporro[at]gmail.com> wrote
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How long can you leave the money invested?

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is there a place to put money that isn't a bubble?

hypothetically, lets say we are on the verge of some financial crisis,
where else can a person put money besides stocks and real estate? off
the cuff we have about 63% in home equity at current prices, 37% in
stocks and bonds at current prices.

i have no ideas. anyone want to comment?

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