[Cold Iron]

source: http://www.fido.gov....ns?openDocument

I'd be interested in seeing UK figures if you are so surprised. I've never had any reason to believe the Aussie securities exchange does any worse than any other. I believe it's the 9th biggest in the world.

Any risk calculation must include your ability to mitigate.

[frookenhauer]

Urb, Insider dealing? Great question...moving swiftly on. What I'd like to talk about is how easy it is to- Okay fine. Its dirty and it spoils the level playing field somewhat. It does exist, but not to the extent that people would like to believe. Corporations are intensely secretive and anyone who has reached a key position will likely have learned to keep their gob shut and this minimises information that goes out to their buddies and networks until a general release is issued. Also the penalties for getting caught are rather severe, ask Martha Stewart. For the average investor its simply best to just assume it does not even exist, the chances of anyone ever really being affected by it as an investor are pretty much slim to none because positive and negative information reaches the market anyway and the herd moves as it will.

Stifling innovation to generate cashflow? I think you're blaming the wrong culprit here. Its the businesses themselves that are 'stifling' innovation and they have very good reason to do so, because they have yet to recoup the profit from the last set of innovations (which cost a lot in terms of R&D). But this has to be balanced by the level of competition, whether its keeping up with the jones's or wearing the hat. The influence the stock market has on this process is negligible.

CI, for some strange reasn i thought you meant they had only gained 6.5% in value over 5 years, UK funds are doing pretty much the same as the Australian funds With regards to funds, the funds from which to get the most out of is the Asia market. With Chinas slowdown in growth from 12% to 8%, (compared to the negative figures in the west) and similar stats for that region thanks to all that lovely cheap labour (its a separate argument) I reckon it might be an idea to have a look over there. Have a look here and here. Why settle for a few percentage points when you can go for the big numbers. For those that are wondering, that big dip in the middle is the result of the worst financial disaster of the blah blah blah, and the resilience of the market can be seen by the rapid climb back to where things were before the fall. I look at funds on pretty much a daily basis and the one thing that is clear to me is that the funds which were doing well before the crisis are the ones that are doing well now, in most cases. You can have a good look here. The interactive investor is where I first started trading and its got lots and lots of useful info. And for those who want to dip their toes without even getting 'em wet have a go at this . Its a UK stock market sim program with live data and a whopping great £100k to play with.

CI what's this about risk calculations and mitigating risks?

[Cold Iron]

I don't know why I'm bothering comparing apples with oranges. The risk is entirely different but there's nothing much that isn't entirely different from stock investment to small business investment.

Over the long term the market corrections will level out and you will make back your losses, I'm with you on that - unless of course your company goes bankrupt and you end up with nothing. This causes rot in the system however because failed companies get propped up for the sake of not exposing people to the real associated risks.

I don't know. The whole things rests on the energy market and is inherently unstable for as long as we rely on fossil fuels. I cede this one - just cos I don't like it, don't mean it's all that bad.

[frookenhauer]

So I win? Are you going to give investing in the stock market some thought? I hope so, cos you will make money if you play the game.

I'm a little uncertain with regards to what you mean by the propped up companies, its a bit vague. Care to elaborate?

And lastly, now that we are...pretty much at the end of the year and seemingly geared up for a great Christmas run up, and more than 50% of us still have jobs (I'm guessing, I've chnged jobs 3 times, however) Are you still worried that the world will still have a financial coronary?

[Grand Goombah Graeld]

Yes. The end is nigh!

The sky is falling, the sky is falling!! Run for your lives!

[frookenhauer]

Hey GGG, nice name. So whats your reasoning behind the prediction?

[Grand Goombah Graeld]

Don't ask me. I got it from chicken little. Thanks.

[Nicodimas]

The market is still ugly.. Remember the 140 P/E ratio will come back to earth in the 30's after this melt up is over. The market folds to 1/4 the value or the dollar will..

Watch the signs carefully to know when to get out.

DXY

[Cold Iron]

Frookenhauer, on 20 November 2009 - 07:57 PM, said:

So I win? Are you going to give investing in the stock market some thought? I hope so, cos you will make money if you play the game.

I'm a little uncertain with regards to what you mean by the propped up companies, its a bit vague. Care to elaborate?

And lastly, now that we are...pretty much at the end of the year and seemingly geared up for a great Christmas run up, and more than 50% of us still have jobs (I'm guessing, I've chnged jobs 3 times, however) Are you still worried that the world will still have a financial coronary?

Yes you win, no I won't be investing any time soon, I have a personal loan that is at 13% and you can't give me risk free returns bigger than that.

Bail outs are bad for the society, rotten companies should not be propped up, the risk of insolvency needs to be real.

Am I still worried? No not really. But I do feel like the numbers haven't added up - we've felt a lot less impact from this than we should have - which will surely must result in a much more drawn out recovery.

[Grand Goombah Graeld]

Those bail-outs made me sick. Rewarded bad behavior in some cases, took people's confidence in the free market system away in others and brough in much more direct government control in all.
My company went through a bankruptcy last year. We were bought out of bankruptcy by a goup of investment firms, lost all our top management (bad management), a lot of our corporate and field staff and are now poised to turn a profit for the first time next year.
The old company failed, but it didn't mean everyone lost their jobs, rather, the best (in most cases) retained their jobs, often with greatly increased responsibility (I now do the jobs of 2.5 people), the new company is leaner and less like ly to fail.
If that had been allowed to happen across the spectrum, in many cases the failing companies wouldn't have disappeared entirely. They'd have been bought and given a new lease on life, some headed in the right direction, others not. You wouldn't have seen the debacle where investors lost all their investments in auto companies while the unions got investment fund shares, etc. That crap right there was in direct contravention of existing bankrupcy law & the government forced it to happen.

[frookenhauer]

Those bail outs which you guys are deriding are the sole reason we are doing so well right now. If more fiannce houses were allowed to collapse we would be in a massively dire situation because those financial companies 'are' the economy. Everything is tied to them, be it industrial, pharmaceutical, whatever. It is a commonly held belief that letting Lehman brothers go to the wall was a terrible mistake and if we'd a propped em up at the time less money would need to have been spent later, but every one failed to get past Fulds' arrogance and just wanted to see mud on his face. What you guys are saying is regurgitated tabloid material, which we all know should be confined to the toilet and used primarily for wiping excrement, I am of the opinion that they should make the actual paper more absorbent so we can get the full value from it.

Who was going to buy those companies? Who had the money to buy THE biggest companies in the market, the government and us that's who. No one else had the capital or the inclination to take on so much risk.

Make no mistake, the bailout was a brilliant piece of work and something we should be proud of.

[Grand Goombah Graeld]

I'm sorry, but that all sounds like so much alarmist crap to me. I'm sure with many of the companies in question it wouldn't have been a question of a single "buyer", rather it would have been groups of buying entities. Yes, some may not have re-emerged. But with those financials, guess what? We're not talking about entities that actually PRODUCE anything. They still haven't been loaning much of anything, even to very credit-worthy small businesses who DO produce things, and who are the ones actually providing jobs for regular people. As for the government buying, sorry. That just doesn't hold water. The government's money doesn't BELONG to the government. It belongs to us. The people. The government doesn't produce anything but red tape and policy. The people paying taxes to the government produce things. Not the financial institutions, the actual INDUSTRIES. If it had been put to a vote, last year when baby Bush was still in office, I'm confident the people would have voted to NOT fund the bailouts. Considering it was our money that was used, we should've had more say in it. It's way past time for government to get less say, vote on EVERY penny they spend transparently, completely do away with earmarks, reform campaign finance so our gov't. officials aren't beholden to big money anymore, actually write and read every peice of legislation they vote on, in language every person can understand, in a fashion that will allow every concerned citizen to actually read it themselves so they know exactly what their reps are voting on. These guys are supposed to represent the PEOPLE to the government, not the government to the people. That's not happening. As far as there being a catastrophe without the bail-outs, it's no less conjecture than when I say there wouldn't have been. What's not conjecture, though, is that they said unemployment wouldn't go above 8% w/o the stimulus. Guess they were wrong on that peice of conjecture, eh?

[Nicodimas]

Quote

Make no mistake, the bailout was a brilliant piece of work and something we should be proud of.

The "Bailouts" were probably the worst thing that happened in our country in a long time as it showed the depth of American Greed. I kind of looked at it as the dying of our great country as it showed just how depthful the ponzi sceme goes. It the end the good thing is the long term side effects of spending ourselves into oblivion will be shown to the world at large when this all crashes. Just remember Tax receipts(way way down) and unemployment is still rising. The bailout was supposed to have this at what again. It's worst case scenario was 8.8 right? Nothing was solved with the 12 trillion, but more debt. Eventually the interest payment alone is going to be unaffordable as taxes aren't even going to cover it.

Buffets trade spoke volumes about where the market is going.

Sorry the goverment/computers purchasing the market don't negate the fact that volume purchased are at all time lows. I am ready for the second bailout/QE 2.0. in the next couple of months, that will show just how much confidence they have in the market. I await there explanation next time at why unemployment keeps rising into the next year.

[Grand Goombah Graeld]

Nic, wasn't that explanantion already given as something along the lines of "we inherited a worse economy than we thought at first..."?

[Nicodimas]

In other news, The FDIC ran out of money..
Nothing to see here folks! So as of right now Trillions is being backstopped by nothing.

http://money.cnn.com..._list/index.htm

[Urb]

Second bailout?

I thought they had already started phasing out the bailouts...
Or maybe that was just over here.

[Cold Iron]

Frookenhauer, on 24 November 2009 - 04:07 PM, said:

Those bail outs which you guys are deriding are the sole reason we are doing so well right now. If more fiannce houses were allowed to collapse we would be in a massively dire situation because those financial companies 'are' the economy. Everything is tied to them, be it industrial, pharmaceutical, whatever. It is a commonly held belief that letting Lehman brothers go to the wall was a terrible mistake and if we'd a propped em up at the time less money would need to have been spent later, but every one failed to get past Fulds' arrogance and just wanted to see mud on his face. What you guys are saying is regurgitated tabloid material, which we all know should be confined to the toilet and used primarily for wiping excrement, I am of the opinion that they should make the actual paper more absorbent so we can get the full value from it.

Who was going to buy those companies? Who had the money to buy THE biggest companies in the market, the government and us that's who. No one else had the capital or the inclination to take on so much risk.

Make no mistake, the bailout was a brilliant piece of work and something we should be proud of.

Maybe we shouldn't be doing so well right now, we just had the biggest crash since the great depression, where are the consequences? The media report a lot of shit, but there is also truth being reported, most intelligent people are pretty skilled at filtering.

[frookenhauer]

No internet at home and no time at work. I do so want to reply and will get back to you guys soon, sorry. Just think of the word crisis and mix it up with the word lots. gotta go.

[Grand Goombah Graeld]

My home internet will be gone after tomorrow for a couple days as we move to another home. Don't feel bad.

[Shinrei]

Caesar, convinced there is a plot afoot takes Brutus aside and says to him that he wants to put a nest-egg aside in case the shit really hits the fan. Brutus agrees and takes the enormous deposit of funds from Caesar, but instead of taking it to the bank, he stashes it away for himself. With a twist of a grin, he makes tribute a single penny to Caesar, depositing it in the bank at 1% interest. The rest, as they say, is history.

How much is that penny worth today, having been untouched in that account all of this time?













That penny is now worth all the wealth in the world....




The point of the analogy is, obviously, this is an impossibility. Markets are meant to crash - they cannot avoid it. In fact, they MUST. Inflated money must lose value. Why? Because money is ultimately a symbol of things that actually have value. Money represents something, or at least it should. The bailouts and liquid money creation represent limited(inflated) or zero value, and if we think that we've somehow evolved beyond this economically, we have not learned the lesson of history and basic economic principle.

This is in part why I have so quickly recovered my losses of 2008. I was invested in companies that were valuable. After being depressed by the overall market plunge, they have bounced right back to where they were and are continuing to make money.