"The Panic of 2007"

[OldMercsRule]

This is a heavy read fer some of you non financial types.

It also can scare ya, (don't mean to).

Some financial pundits are always bearish, (negative), and are rarely right but jus' like a broken clock when they correctly predict a disaster they become geniuses, (jus' like a broken clock that tells the correct time twice a day). Don't read too much into the gloomy sceneriao here. Jus' take a mental note n' remember what ya learn.

You have read Rubber n' I spar back and forth about "investment philosophies". Before my career as a Registered Rep, I worked in the Lending Business. The insights I learned then taught me to be very skeptical of the types of debt instruments this article talks about. For that reason a guy with only one functional brain cell, (who tries to be very aware of me limitations) decided long ago that if I buy a debt instrument fer me clients or me own account: KEEP IT SIMPLE: STUPID!!!! Real smart fellers n' gals have all the angles figured out on cormplicated carp, (like this article talks about). That said: if ya wanna piece o' debt buy a t-bill t-note or t-bond. Maybe a AAA Muni!!!! REAL SIMPLE fer a simple feller like me. YA then get what ya think ya got. Not fancy at all. A guy with only one brain cell can do jus' fine: thank you Mrs Jones.

Good read, (not gospel but provocative). Don't get toooooo bearish but be cautious!!! BTW, 1907, 1987, 2007....... Hmmmmmmmm 7s eh? Not superstitious but September is when the kiddies go back to school n' people get serious about lots of things includin' their money. Jus' food fer thought. Good Luck to all!!!!!!!! JR


http://www.realclearpolitics.com/articles/2007/08/the_panic_of_2007.html

 

[Haut Medoc]

Re: "The Panic of 2007"

Interesting.....​

 

[JB]

Re: "The Panic of 2007"

Guys (and gals, too) that understand what is happening and know what will happen next are gazillionaires and keep their mouths shut about it.

 

[OldMercsRule]

Re: "The Panic of 2007"

Guys (and gals, too) that understand what is happening and know what will happen next

Only one that I know of who really KNOWS what will happen next: Jesus Christ, (yah the big fella ya can call em' God or the Holly Ghost if ya like). The rest of us (BIG n' small) are jus' along fer the ride. Some know more then others, n' some of those have some money too.

are gazillionaires and keep their mouths shut about it.

Or maybe they talk it up or down, n' act like they really know what they were talkin' about!! Or in the case of a few (George Soros comes ta mind) may force a move or two by a well placed very heavy bet at exactly the right time n' place. Thanks fer the comment: JB

Respectfully, JR

 

[RubberFrog]

Re: "The Panic of 2007"

I think JB was saying that we are full of shiite.

Merky... I have never owned a CDO, nor have I ever recommended one. I am not saying my portfolio is free of real estate. I prefer actual physical real estate (commercial property vs residential).

In addition, leveraging is strictly against my "investment philosophy." The only thing I would recommend borrowing money against is a home (to live in) and maybe a car (to get to work).

As to that article, I think he maybe a little gloomy about the outcome, but I would also say that he is more right than wrong.

With all of that behind me, I am still cautiously bullish. I am not selling (for the most part). I am holding and (in some cases) still buying. There are a lot of good deals out there. As Mauldin pointed out, a lot of folks are selling there good stocks (and some times AAA muni's) for cheap to cover the spread.

If every one knew how to read a set of financial statements, the world would be a better place.

 

[OldMercsRule]

Re: "The Panic of 2007"

Yah Rubber, JB may have been takin' a pot shot, and maybe not.

I jus' wanted to clearly state for the record that NOBODY except the big fella really knows.

Capital markets are a real humbleing experience fer young smart wiz kids fresh outa school who think they got it figured out, or old farts like me that may know a thing or two. The young kids usually don't loose much unless the jus' inherited Daddy's pile. The old farts are more likely to take a large beatin' that may change their retirement years.

It is an equal opportunity portfolio crusher if ANYBODY gets to cocky, that includes George Soros or Warren Buffet, and they know it REAL WELL, (as do you and I: Rubber, [I know I'm readin yer mind]).

It is very important to have an "investment philosophy", and the primary aspect of anyones' VALID investment philosophy, (IP), is recognizing that you the investor don't really know anything about what will make the next big move up or down, and how fast or how far the move will be.

The only reasonable way to deal with the above mentioned uncertianty is diversifacation, with some of yer bets in the areas where ya have the greatest confidence.

Sometimes the knowledgeble ones like Sir John Templeton are right, but many Many times they are wrong. Ya just need to either be more right then wrong if yer bets are all equal or more right then wrong on the big bets, it yer more often wrong then right. Not rocket science here.

Yer appitite fer risk is another critical component of a person's IP. Emotions are not only the wrong way to make decisions in politics, (that is why I pound on FEELIN's soooooooo much here on DC ), but uncontrolled emotions are the quickest way to LOOSE large amounts of money in the capital markets.

We all want to buy low n' sell high. MUCH EASIER SAID THEN DONE. When somethin' ya have yer eye on is low the others who are long that position are scared to death, (FEAR). When somethin' ya coulda woulda shoulda bought last week runs up up n' away and is very high the envy n' worry about a lost opportunity, (that new boat ya really really wanted), can get the better of ya, (GREED).

Sucessfull investors CORNTROL those emotions and make logical decisions, (EVEN LIBERALS CAN BE SUCESSFULL INVESTORS), shockin' I know since their feeeeeeeelin's tend ta govern them in POLITICS, (how could any sucessfull investor vote fer a LIBERAL DEMOCRAT?); happens all the time: Mrs. Jones!!!! Money tends ta make people pay attention if they have at least one functional brain cell!! They jus' don't cornsider politics that important, that's all!!!

Good luck to all, n' be carefull out there!! Respectfully, JR