Who do I listen to?

[phlemboy]

Hey guys,

      I've been watching various financial channels. Each has its own set of "experts". Which channels are worth watching? Which experts are worth listening to? Are there any solid forms of media that just give the truth instead of their own spin? Thanx.

[MichaelQuarles]

Good afternoon,

I dont listen to any of them... I make my own news.... Think about what they get paid to do.... Talk Smack about this or that... And if youre trusting their info be be right on and not just a bunch of fear selling think again...

Michael

[fdjake]

Michael's right!!

I've made a lot of money over the years buying stocks the "experts" wouldn't go anywhere near.

Think about some recent examples.....

Merck in 2004-05......This stock was $23 /SHARE!!!!  they pay a 4% annual dividend and they have about $16 BILLION  in cash.  The stock just recently pulled back from $50/share.  In 2004 the "experts" were ALL SELLING this cash cow. 
We've got an UNHEALTHY, OVER WEIGHT, AGING,  Baby Boom population in this country that is just NOW entering their DRUG maintainace years.  You didn't have to be a genius to see that selling these people DRUGS that they HAVE to take EVERYDAY might be a pretty good business to be in!!!

Goodyear Tire.....2003....traded at $4/share   Now trades at $26.

Another stock the "experts" wouldn't go near.  If you did a little research on Goodyear at the time, you would have learned that QUIETLY they were shutting down U.S. tire plants and building, or BUYING, NEW plants in very low wage paying countries.  At some point those low cost producers were going to start showing up in the bottom line.  Cripes the stock was STILL $10/share when Goodyear announced a LANDMARK contract with the UAW which has now become Industry standard.  Goodyear made a ONETIME cash payment to the UAW and they now NO LONGER have to pay for retirees health care costs!!!!  That is HUGE.   Did anyone hear the talking heads mention this on TV?????

Do your own research and keep your eye open for BARGAINS.

Think these Home Builders are going to stay in the toilet forever?
They won't, and neither will a couple of American car companies that are quietly improving their quality and cutting their size to become profitable!!  This recession is going to hurt both these segments, but just watch....When it looks REALLY BAD.......START BUYING!!!  Then you can sell to all the "EXPERTS" when their bosses decide it's OK to buy the stock at 3 times what you paid for it!!!

I'm not trying to brag here but this stuff happens OVER and OVER.  You don't have to be a genius to see it and make money from it.

[realnew]

Who do you listen to? Yourself! Listen to your gut. Those instincts are there for a reason.

One of my fav. sayings is: cramer doesn't follow stocks, stocks follow cramer.

(Oh, FD, By the way, Cramer was on TV telling everyone that he's going to buy heavy in real estate in about 18 months. )

I posted in one of the other threads that I was not investing because of fear.
I don't know that is quite it.  My gut is telling me we're in for some major pain.

The REI stuff we saw last year.... Then it started with the banks raising credit card interest rates on GOOD customers. Recently, I read that one of the solid investors here... who pays regularly, has good credit etc... just got his loans called from 30 yrs to 15! WTH?  And let's not forget that the gov't is spending $43 million (we don't have) to advertise so they can tell everyone to file his/her taxes so they can get a rebate check... Yes, the government is paying people to shop.

Banks are desperate. openly, blatanly desperate. That's a bad thing. between the news, and the banks, smells like great depression part 2 to me. Throw in a little international failures... a scandal here or there... some nukes... Ok, i'm exaggerating... but. you get the idea... and I'm suddenly feeling very OK with not jumping into REI right now.

I'm going to buy another mattress.

[fdjake]

Cramer is a MORON!!!!!

If you followed his advice a year ago last January you would own the following companies.  This was his BIG,  END OF THE YEAR, I want you to buy just 2 companies for 2007 show.........His two picks??????????

Goldman...........Jim's BUY in????  $245/share   "Do me a favor, just BUY, BUY ,BUY GOLDMAN"   Goldman is now $179/share

Toyota......"BEST IN BREED"   Jim's buy in???  $140/share    Now at $106!!!!


Jims quote on Goodyear tire in 2006........(Goodyear at $10/share)  You'd have to look REALLY hard to find a worse tire company than Goodyear"  (AS soon as I heard this I KNEW I had a winner!!)
8 months later?????               Goodyear Tire...................$28/share

Thanks JIM.........can't wait to see what GREAT advice Ole JIMBO has coming up in the LIGHTNING ROUND!!!!!

[realnew]

Oh, I wasn't endorsing him. I'm commenting how the cramer sheep follow him.  I suspect there's money to be made shorting anything he recommends because the next morning, his followers are buying blindly and driving up the stock price for short term runs.

[tworent]

I invest for the very long term and listen to everyone then I decide; I buy one or two ever now and then for the gambler in me last year it was Converted Organics Inc (coin) a company I will win big or lose it all and be upset with my choice either way
bob

[phlemboy]

I think my situation in regard to educating myself on the economy and such is that I don't know the areas to focus on to educate myself. That's mainly because there's so much out there to sift through. I just want to know where to focus my efforts. I don't feel I'm educated enough on the economy and how it works to have a "gut" feeling. I suppose I could just flip a coin.

[Tien]

Don't believe anything anyone tells you until you verify it yourself.


Hard to follow that mantra all the time but it works well.




By the way Fdjake, does this mean we should be buying these investment banks in 1-2 years when the prices hit dirt cheap levels?

[Deal Hunter]

Listening and following are two different things.  I think you should listen to them all and hear what they all have to say.  However, you should "consider the source," as well as practicing discernment.  CNBC is chock full of "experts" and they all have a valid piece of the picture, but they are all also salesmen that profit from the fluctuations of the market.  Still, you can learn a lot from just listening to what they talk about.

To get a perspective from the practioners of the industries themselves, you should also read the Wall Street Journal, specific industry publications and "Nightly Business Report" on PBS.  They have a lot less "experts" and feature officers of companies that are active in the velocity of money that is not moving equities or securities.

Here are some other interesting perspectives on the economy:
http://www.dailyreckoning.com/
http://www.whiskeyandgunpowder.com/

[propertymanager]

I think getting educated on our financial system is a good thing.  I especially recommend becoming educated on the history of financial systems.

Then, I base everything on common sense, which isn't so common any more! 

For example, when there's been an unprecedented runup in home prices and the experts are saying that it will keep going forever, common sense will tell you that we really have a bubble.  Just like the "tulip craze" or the tech bubble, all bubbles end in the same fashion - THEY BURST.

When you have done your homework and understand that almost without exception, every civilization that has printed fiat money has had a resulting collapse, common sense will tell you that the United States is due for a major collapse.

When you understand that the government is recklessly spending increasing amounts of money on entitlements that are being paid by baby boomers who are about to pass their prime spending years and will soon be retiring, common sense will tell you that something's gotta give (more reason for a financial collapse).

When you realize that all the major civilizations (superpowers) of the world have gone through basically the same phases, common sense will tell you that the best days of the United States are surely in the past.

Mike

[allagash]

a) Go to www.bigcharts.com.

b) In the symbol box at the very top…..put in: WMT.

c) Next to the symbol box….change the timeline from 1 year to All Data, (the last choice in that dropdown window).

d) Print out this chart on a piece of paper.

e) Go to www.walmartstores.com.

f) Click on the Investors sub-tab.

g) On the left hand margin you’ll see a hyperlink to Annual Reports.

h) Go to the 1968 Annual Report.

i) Look up the Revenues and Net Income, (after taxes), for 1968.

j) Create an Excel® document for Revenues and Net Income….line by line for 1968 thru 1995.

k) For each year over year period, determine the growth in Sales and Earnings on a percentage basis.

l) You’ll find that, on average, both Sales and Earnings were growing at a clip of 40%.

m) While you’re at it…..read each of Sam Walton’s opening letters to shareholders on each of these Annual Reports.  If you were reading those letters back then, the story was unfolding right in front of you.

n) I believe that adjusted for splits….Walmart’s price back in 1975 was nine cents. At a high price of approximately $70 share in 1999/2000 that’s a 77,700% increase.

o) You could have “found” this story anytime during the 80’s and still done quite well.

p) If you bought in 2000….you’re a looser.  You had to have bought much earlier when the story was there but it wasn’t being hyped.

q) Microsoft…start with ’85.  Home Depot….start with ’81.  ADP….start with ’81.  XTO…start with ’96.

r) Sales and Net Earnings need to be growing.

s) Peter Lynch books…..Learn To Earn and One Up On Wall Street.

Just one way to make money with limited means.

It’s a global market now….Plenty of stories out there….gotta find ‘em.

-Mike
BTW....Angelo Mozillo and his Countrywide....about a 25,000% increase until it's crash and burn.

[phlemboy]

Thanx guys,

 Well I've made a few observations so far. When the US needs money for any reason, they don't reduce wastful spending and increase revenue the way a business would. Instead, they borrow, borrow, borrow. Which is why I find it comical when the govt. starts telling people how to manage their finances. At some point, the countries that lend us money will shut us off. Then what?  
Next, I'm very concerned about entitlement programs like Medicare, medicaid and SS. When you count the babybomers,illegal aliens and anyone else draining these programs; the govt. simply cannot pay the bill. I believe the babyboomers are about 75 million? I realize they won't all be taking SS at the same time, but many will be during the next few yrs. If you have 75 million people taking out $1,000/mo. that's 75 Million/ month!
One other thing, if the babyboomers are REQUIRED to begin withdrawing from their IRA's at age 70, isn't that a lot of money leaving the stock market?

Whew! my head hurts!!

[Dave T]

phlemboy,

Right now, I am reading "Rule #1" by Phil Town.  Seems to have a lot of practical advice for the do-it-yourself investor who invests for the long term.

One other thing, if the babyboomers are REQUIRED to begin withdrawing from their IRA's at age 70, isn't that a lot of money leaving the stock market?

I suppose some of that money will find its way into the economy to support the boomers living costs, though I imagine quite a bit will just get reinvested back into the markets outside of the IRAs.

One of my neighbors is planning to use  the mandatory withdrawal from his retirement account to pay off his mortgage.  He says that after doing this for five years, his home will be free and clear.  He obviously does not need to spend that money, so, I am guessing that he will eventually reinvest it back into the markets.   

There will be plenty of conservative boomers who will use the mandatory withdrawals from their retirement accounts to buy capital preservation vehicles such as bank CDs and US Treasuries, perhaps even tax free municipal bonds.

[phlemboy]

I think the majority of the babyboomers are not prepared financially for their retirement. They may need all they can get just to cover the their living expenses and the increase in medical costs. THE END IS NEAR!!!