DJIA Predictions

[fdjake]

I can't even venture a guess as to how low this market will go.  I really don't care.  What I like to do is WAIT......

Let's take home builders as an example.  IMO these stocks aren't even close to where they will eventually end up.  NOT one of the major builders has done bankrupt........ YET.  One of them WILL go under, when that happens watch what the market does to this sector.  IT'LL GET KILLED.
People will wash their hands of ANYTHING home building related.  At that exact moment open your wallet!!!  Make no mistake, this wash out is going to take awhile to run it's coarse.  PATIENCE however, will be GREATLY rewarded.

I've noticed a few guy's here like Vader and Jbaldwin seem to think I'm too negative.  That's OK, they have every right to voice their opinions and in a lot of ways it's good to be reminded to lighten it up a little.  But the thing I find funny about their observations is in reality I'm VERY optimistic about the coming opportunities we will ALL have as a result of this cycle. 

It's all about recognizing these patterns.  I find that most people actually do the complete opposite of what they should do in these situations.   The economy stinks...So they sell their stock in Ford, GM, Toll Brothers, Centex, ect. at the EXACT time they should be at LEAST preparing to BUY these very companies.   I bring up the negatives...no doubt about it.  But I think most here would agree, I have laid out my strategy for investing through this in great detail.  PILES and  PILES of money will be made because of this correction in the next 5 to 10 years.  The people who see this for what it REALLY is (a great BLOW OUT SALE) will make enouigh money to literally change their lives.

Maybe it's just me, but THAT is very good news!!  The warnings will keep coming from me.  I won't take offense to any comments made by Vader, jbaldwin or anyione else.  But on the other hand, if I see ANYTHING I think the users of this forum can benefit from good or bad, it's going up on these boards!!
I'll try not to ARGUE with people who don't agree with my opinions.  I'll be the first to admit I NEVER get it all right.  But I do have over 20+ years experience investing and I really enjoy seeing other people "GET IT."  What does that mean you ask???

Getting it........means you finally see the reality of a situation.

RookieNYC just posted something on this subject that IMMEDIATELY changed my opinion of him. (not that it was bad to begin with)  but he recently mentioned that while in college he asked his business professor how many companies he had started and ran.  The professors answer was NONE.  He stated that a that VERY MOMENT his opinion of College went down the toilet. 

THAT'S GETTING IT!!!!!  He knew right then that what he was going to get there was just an overview.  HE would have to do the REAL learning in the REAL world......  And he obviously has

[oldmandate]

Monday January 21st overseas markets down sharply.

Hold on tight...tomorrow is going to be bumpy day...

[jdproperties]

I understand the markets are closed in the US today. Here in Canada the TSX dropped like a ton of bricks today. I suspect tomorrows trading in the US is going to be a very ugly day for some. I think Buffet and other like minded value investors are going to be smiling for some time to come.

[rookieNYC]

I think Buffet and other like minded value investors are going to be smiling for some time to come.

30 days from tomorrow I guarantee to read about what stocks Warren Buffet bought..He is definitely going to do some buying...

Be fearful when others are greedy and greedy when others are fearful....Warren Buffet...

You can bet the fear is in the streets...Futures are currently down %4-%5 right now...Tomorrow's open will be interesting...Unless Bernake lowers interest rates before the open...I wouldn't be surprised and if does it will be the trade of the year...I will be long as much as I can buy for the day...But I honestly dont think Bernake lowers tomorrow...It's too close to the fed meeting at the end January...It will look like he is throwing a life raft to the market again...He has to lower .75 or more to do anything...Would be interesting if he does it pre-market tomorrow...The rally would be insane...Short covering squeeze like no other...

[allagash]

Ethanol plants need the corn to produce their biodiesel.

Low cost bulk freight carriers like BNI bring transport of products such as this at a ratio of 1 ton of freight moved 423 miles for every gallon of fuel consumed.

Bernake's further lowering of Fed fund rate will excacerbate the already gloomy longer term inflation outlook.

A low cost provider such as this will benefit as suppliers move more and more to rail.

My prediction is Buffett will accumulate more of this rail line.

-Mike

[fdjake]

WARNING:  NEGATIVE POST ALERT!!!............V A D E R............DO NOT READ !
(Sorry man, could not resist)

Look at what's happening here. 

The very thing the experts said WOULD NOT happen.... IS HAPPENING!

The economy of the planet has been on an unprecidented tear for the last 5 years or more.  THINK ABOUT IT!!! There's a 2 year waiting list for new FERRARI'S!  MEGA YACHT builders same thing, then add in a GLOBAL housing BOOM!  It sounds GREAT!  But............

These things end only one way. (and it ain't good)

China is near historic highs, India near historic highs, Germany, England, The U.S is only 1800 points off our all time high, and our economy is starting to show cracks.  Regardless of what "the experts" say,  this isn't going to be a 3 month recession.  Cripes people,  these are the same guy's who told us the Housing Bubble didn't exsist (remember that!) , the Sub Prime mess was contained (MY PERSONAL FAVORITE!) , and this Credit Crunch WOULD NOT spread to other parts of the world!! 

WELL GUESS WHAT?????

THEY WERE WRONG......ON ALL OF IT!!! 

 

[allagash]

Does anybody have a tourniquet?

http://money.cnn.com/2008/01/21/news/international/europe_econcrisis.ap/index.htm?postversion=2008012116

-Mike

[jdproperties]

Comments on richdad.com 2008 predictions about gold and REI

[jdproperties]

Does anyone know why a person should buy gold/silver stocks versus gold bars to hold in a safety deposit box.

What about the taxable capital gains treatment:

someone selling gold stocks would =tax on 50% of the gain? Correct?

What if the person collected gold coins/bars  as a hobby, when they sell would they also have to pay a capital gains tax

[Dave T]

someone selling gold stocks would =tax on 50% of the gain? Correct?

What if the person collected gold coins/bars  as a hobby, when they sell would they also have to pay a capital gains tax

As a general rule, everything you own and use for personal purposes, pleasure, or investment is a capital asset.  For example, stocks, your primary residence, your household furniture, your car, coin or stamp collection, jewelry, gold, silver, or any other metal are all capital assets.

An exception to the general rule applies when any of these items are held for sale by a dealer, then, they are not capital assets but rather are inventory (merchandize).   

Profit on the sale of a capital asset gets capital gains tax treatment.   Last time I checked, 100% of your gain is taxable.  I am not aware of a 50% of gain rule for federal individual income taxes.  Maybe this is a state rule that applies to your state individual income tax return. 

The maximum long term capital gains tax rate is determined by the asset type.  The maximum long term capital gain rate is 28% for collectibles (your gold and silver bar collection).  Stocks and bonds held in your investment portfolio enjoy a 15% maximum capital gains tax rate. 

So, if you are looking for a tax reason to prefer holding stocks rather than bullion, the difference in the capital gains tax rate may be sufficient.  I would add that stocks are much more liquid than bullion.  It is a lot easier and a lot faster to sell shares of stock.  Stocks can be held in your brokerage account without charge.  Bullion held in a secure vault might incur storage and insurance charges.

[jdproperties]

15% Holy smokes are you kidding me. If I was a US resident and sold a security (stock) for a gain only 15% of it would be taxed???

Here in Canada it's 50% capital gains tax on that same stock

I think I am going to be sick...

[d_sbrown]

Yea, but look at the great health care that tax money is buying you.

[rookieNYC]

NEM tracks gold well but no dividend...Check GGN...I think it pays a %7 dividend and pays out monthly...Advice is be careful with buying any commodity stock..They can kick the bejesus outta you quickly...Commodities are volatile and when they pullback it can be %20..I personally would NOT buy gold here,I think it's very toppy but it may go higher...I'm just not a buyer at these levels...Be careful

[jdproperties]

if you have a chance check out what Robert Kiyosaki has to say about gold and silver. I'd love to hear other points of view of gold & silver upon hearing Roberts take on what's going on with the worlds economy. richdad.com 2008 predictions

[tatertot]

Gold and silver are good when there is inflation.

I wouldn't be buying now, but I think a lot of people are, because they can see the inflation coming.

What you do in inflationary times is you buy gold and silver coins and then you barter them for your purchases. That way there is no capital gains tax because the transaction is off the grid.

The last miserable bad inflation, there was even a little subcult trading gemstones.

I'm not recomending gemstones, because they are very difficult to sell and turn back into cash. But the stones were sealed into tamper-proof packets with an estimated value and evaluation of the quality of the stones.  Then there was bartering, using the stones to pay for services.