On Thu, 9 Apr 2009 13:54:40 -0500, "Alvin" <acorn[at]muncher.com> wrote:


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My experience is that determination of true value during an
expansion/bull market is just as unlikely to be correct as
determination of true value during a contraction/bear market. Both
are extremes - the truth is probably somewhere in between.


-HW "Skip" Weldon
Columbia, SC

"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote

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Are you sure it wasn't overpriced at 95? Are you sure that the stock is just
now reflecting its true value?
People are funny.

On Apr 8, 4:53 pm, dapperdobbs <George...[at]hotmail.com> wrote:
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Shucks I just googled and saw the March 31 announcement of the 65%
cut. Finance.yahoo has it wrong, unless the cut takes place after the
June dividend. Too lazy--or too much of a mind to just say to hell
with stocks; time to go recreate--to get the details.

Re GD
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I would if I could make more heads-or-tails out of this credit crisis
(!).

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I can say I look forward to the book; it will be fascinating to see
what happens. I might even be disappointed if the DJIA is back up to
10,000 by year's end. Meanwhile, good health.

On Apr 8, 9:17*am, honda.lion...[at]gmail.com wrote:
[snip]
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Hi Elle, Thanks for your considerate reply and kind words. IR
announced a 65% cut in their dividend. That surprised me. Later the
CEO "took responsibility" for mis-estimating the extent of the sales
slow-down (whoop-tee-dee). Ya know, I never considered I had the saavy
to analyze a defense stock!:-) Now I think I'll take a look at it.
Don'tcha just love it when the market cuts a perfectly good company in
half? The high was around 95 and today it's 44. Wow - I didn't know we
had achieved world peace (or solar-powered jets). It may have dropped
with TXT which is not in good shape. TGI might be of informational
interest.

Just comments, and no reflection on your bracing (I'm doing some of
that myself), but we may have a reach towards DJIA 10,000, even if we
turn down after that. I have some difficulty understanding how all
this credit bubble bust and house of cards collapse will turn into
year after year after year of economic listlessness. Inflation? High
taxes? Socialism? It may be, but I hope not.

On 2009-04-08, honda.lioness[at]gmail.com <honda.lioness[at]gmail.com> wrote:
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Oddly enough, I bought some IR in the middle of the winter.

i

dapperdobbs <George...[at]hotmail.com> wrote:
Elle linked
[much snipping for brevity; but all prior comments read]
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Yours is an interesting tie-in to the notion that mutual funds get a
person diversity which help reduce risk. You back it up well though,
in your subsequent paragraphs.

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<Laughed aloud here. But good point. I think you are right.
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I am not selling my IR, though granted its fundamentals are pretty
poor today. (Not sure exactly what you mean re the dividend massacre.
Its next dividend payment in June is the same as the one for the last
few years. Of course a bunch of financials have had dividend cuts and
eliminations.) The only position I have sold was a certain bank for
tax write-off purposes last December. Bought a bit of GD a few weeks
ago. I remain braced for 15 bad years.

On Apr 7, 8:14*pm, honda.lion...[at]gmail.com wrote:
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Thank for posting that link there, Elle. Measuring 'risk'
statistically is a substitute for analysis.

Tracing the roots of the hypothesis leads one at least back to
portfolio managment theory of the 1980's. It was response to the
problems of mutual funds. Individuals became convinced it was beyond
their grasp to analyze securities, and dumped billions into funds.
Portfolio Mgmt texts themselves pointed out the 'theory' was
impossible to test (due to computational problems as the article
points to), and should thus be 'hypothesis'.

The next 'refinement' I know of is hedge funds, where the theory was
leveraged (heavily). LTCM (Long Term Capital Management) has been
written about in a short book "When Genius Failed." When the Fed and
Congress should have worked to ban the practice, banks wanted to get
in on the 'game', or as the article you posted alludes, into the
'gambling'.

We still see it today, with massive amounts of money sloshing around
the world like water carried in a bucket. When the majority of stocks
move up and down together, that's positive correlation of morons
following morons, and in some instances, of following just ONE
security analyst. IM(not so)HO, it's ridiculous. Bundles of sticks or
twigs. Money managers who do not bother to understand what's in the
black box.

The way out of it is a return to analysis of the soundness of
individual securities. Higher earnings will influence a stock to
higher prices. If we as a society get the SEC back to enforce accurate
reporting, and if we can break the mentality of 'big wheel' greed, the
"aura" of "financial experts", and the lack of ethics, maybe we can
return to a society where individuals make their own investment
decisions based on solid facts. It is not hard. I just added shares of
Emerson Electric and have not sold any IR in spite of the dividend
massacre.

The article you spotted adds to my understanding of the pieces.

This is a fascinating, easy-to-read piece on the formula that
persuaded many that risk could, for all practical purposes, be
reduced, published in 2000 in a major journal. Bankers and many on
Wall Street seized on this formula, ignoring its assumptions:
http://www.wired.com/techbiz/it/maga...?currentPage=1