Any stock tips out there?

[Smitty]

QUOTE (thomasbeyer2000 @ Jan 1 2009, 11:47 AM) this is brilliant insight .. much , likely way too much, money is tied up in mutual funds and stocks where you buy stocks from someone else .. not creating any new value really !Perhaps if taxes were as follows it would eliminate that:invess for a day or less: tax is 100% of gain
invest for a week or less: tax is 75% of gain
invest for a month or less: tax is 50% of gain
invest for a year or less: tax is 25% of gain
any gain over a year: tax free

Garth and Thomas (sorry Ed! Got this thread mixed up with another one - my apologies):

Lets not assume the moral high ground. Some aspects of investing/trading are zero sum - mathematically speaking for the reasons you stated.
But not lets create the impression that long term "investors" are morally superior or contribute more because of some concept of goods and services created for society.

On the surface, what both of you have said seems to make sense . Society should value creative entrepreneuralship and risk of start up of innovative companies. But many start ups are risky and lose money for there investors. Where was the value in that?

Or, stated differently, you`ve both committed - to my thinking - an egregious error by what you`ve generalized. The short term traders and zero sum guys are not parasitic - am I getting the wrong impression here(?) - neither are they useless. The short term guys - and since I`ll raise a lot of hackles, I won`t call them "investors", I`ll use the word speculators - provide very valuable service to society:

1) They take the other side of your "investments"
and/or
2) They provide much needed liquidity in the global markets. Every "investment" needs both buyer and seller.

But the egregious error is really committed in the assumption of what the investor does when wealth is created?


My friends that`s where I`ll reserve judgement. A few hypothetical - yes, very hypothetical examples.

1) Warren Buffet - long term "investor" creates wealth "buy" companies and never sell them. In some cases, he`ll provide guidance and maybe turn some companies around. Creative wealth
2) REIN member Jim Bob, buys properties, never sells, them, fixes them up, provides a decent place for people to live, in the meantime creates wealth for himself and his investors. Maybe he does so well he buys some land and develops a project, providing more housing.

These 2 guys are the guys Garth would applaud. But what if Warren B was using his wealth to fund terrorism. What if Jim Bob was slum Landlord. Would it matter if they were the much lauded "long term investors?" Oh, and by the way, don`t think those don`t happen. We do have slum landlords - hopefully none of them are REIN members! - and yeah, there are shady groups that have long term investments and create wealth.

Judge by what they do and whether its illegal; its ludacris - my opinion - to judge someone on the basis of timeframe or the "appearance" of zero sum. TRUE zero sum culturally, and sociologically speaking, truly and really doesn`t exist. I am surprised to hear Thomas advocate a position that punishes so heavily someone who chooses to excel in short time frames. Its kinda like saying, "we`re gonna give a better gold medal and praise more highly the marathon runner, than the winner of the 100m sprint."

And what about Mary-Jo, who day trades in futures and currencies, both zero sum games, and really contributes "nothing" to society? But she was inspired reading "Three Cups of Tea", and she uses her excess "short term, speculative profits" to build schools for poor people in Pakistan. But she contributes nothing, because her method of personal wealth creation is zero-sum? And Thomas, you would punish her, because, she plays and excels at a high pressure game in short time frame? Does that even make sense???
Really, this is black and white. If, logically, that you defend and rationalize that short-term investing sotkc markets or house flipping - and more than a few, more `famous` REIN members have achieved serious wealth doing this, if is so offensive or morally inferior, shouldn`t we just go ahead and make it illegal?

I rest my case too. Good discussion, as always. I appreciate the insights of people - totally irrelevant if, though, I disgaree with them - are smart and thoughtful.

Smitty
P.S. I can read between the lines. Frankly, I agree a lot with what Garth says; growth, new companies, new industries, new technologies, start-ups, - the creation of new services and goods - are all laudable, necessary, should be encouraged, even incentivized. But it doesn`t logically follow the rest. Having said that, I could also agree with too many shenanigans and sub-prime mess were due to the lack of regulations regarding the zero sum types of investments. You wouldn`t have to twist my arm to see that point of view

Happy Investing to all in 2009.

 

[EdRenkema]

QUOTE (Smitty @ Jan 2 2009, 12:34 AM) Ed and Thomas:


Happy Investing to all in 2009.


I haven`t actually contributed to this thread but have followed it closely in order to educate myself to a post neanderthal level of investing. You make good points Smitty.
Here is the real point in my view: anyone not educated or experienced in equities should not be playing with more than they can afford to lose. Some previous points made are more on the level of ethical investing and how am I as an investor contributing more to society by adding value rather than just $ for myself. That is where a business or RE is most value added since the investor has control over the asset. A business or RE is not a zero sum game since it adds value to the surrounding economy simply by being in existence and creating a product for the consumer and the spin off revenue. The idea of creating personal wealth and using it for charitable works elsewhere in the world while being a commendable goal is sort of a Robin Hood concept.
Greg Mortenson is perhaps one of the greatest philanthropists by creating a movement achieving education for those consistently deprived of it and giving women previously relegated to a secondary role the opportunity to contribute to society in a meaningful way.
Don`t forget that Greg was/is supported by many business people creating value added goods or services and wealthy as a result.

 

[YehoramShenhar]

Hi,

My 2 cents -
I`ve been doing a lot of reading, trying to make sense of the events that we saw during 2008. One measure I started using is to listen to people who accurately called this crisis the early years of this decade.

Here are 2 useful links:

• http://www.jugglingdynamite.com/http://www.crestmontresearch.com/

Both those are by authors that I recommend you read. They both identify the current long term cycle in stocks as bearish, and predict below average returns for paper assets (stocks, bonds) for the coming years.

Good luck!
Yehoram.

 

[Thomas Beyer]

a very conservative strategy in flat, slightly rising or slightly declining markets, yet volatile, like 2009: buy conservative stocks and write a CALL 10% or so in the money one year out for a 10%+ ROI.



Of the Dow Jones 30 stocks, in 2008 only TWO were higher than at the end of 2007: Wal*Mart and McDonalds ... as both benefit from a recession that will started in late 2007 all the way through 2008 and that will continue in 2009 ..



Let's use Wal*Mart as an example as it won't go anywhere and in a recession they have more customers .. but hey, they too might drop 10% .. who knows ..



More here: http://myreinspace.com/public_forums/General_Discussion/61-8913-What_else_do_you_buy__besides_Apartment_Buildings.html