I'm still buying antique jewelry.

Seriously, I am.

Marc,

Your question is a good one, what do you do?

I do not pay much attention to the world market as I look long term. Real estate, my own ventures and money market funds for current cash needs.

I cannot predict currency fluctuations so I don't worry about it and average out my exchanges when traveling.

I buy silk and wool from a number of countries and interestingly half the time I pay in dollars.

Last edited by The_Shooman (2008-02-01 07:54:02)

Good thread...... who knows?

Good article in NYTimes Sunday. Contrary to common wisdom, bear market didn't start in 2008. Their chart showed that most equity mutual funds performed very poorly over the last 10 years.

Having lived through the grinding secular bear market in the '70s and early '00s it is tempting to guess that this one will be over in a couple of years, as those were. Ergo, hold tight, and buy on dips before the market takes off again.

Maybe. Another school of thought is that the US, and maybe world financial system, has been destroyed for as long as the eye can see. At the moment, capital, investors, and consumers are all "on strike". The only ones in the market today are speculators, based on the extreme volatility, and sharp daily swings. These people are buy and hold investors, but "hold" is  a matter of days, or hours.

To further complicate the problem, there is the reality that the government in the US may have to nationalize large parts of the financial world to put off further destruction. If so, you have to look at AMTRAK. A monopoly railroad, that was nationalized 40 years ago, that has continued to operate, only because it has been heavily subsidized by taxpayer money. It has never been self sustaining.

Huge infusions of federal funds, as necessary as they may be, results in ginning up the printing presses, and rampant inflation, within a couple of years. At one time it was felt that common stocks were protection against inflation. When we had runaway inflation in the '70, money poured out of the stock market into Treasuries yielding over 10%.

Again, who knows. If any of these guesses are correct, there are still ways to make money. Avoid the equity market, completely. Shift into gold, and gold mining stocks. It's easy to short the market through Pro Shares, without leverage, if that has any appeal.

With money funds paying less that 100 basis points, TIPS look very attractive. Any time they yield over 2%, you get Treasuries, with the inflation protection thrown in for free. They are almost as liquid as cash, and will rise in value, if inflation occurs.

To end on a cheerful note, if there is an international blow up in the Mideast, Russia, or Europe, the gold, TIPS, and short positions will increase greatly in value. It is likely that events like this will further damage the world equity markets.

Finally, the Smoot Hawley bill signed by Hoover helped throw the world into a depression. Today, the isolationism, and "Buy American", can destroy opportunity for trade, world wide. CAT said Friday, that a trade war with China will shut them out of the opportunity to participate in the construction expansion in China, that they have been counting on.

This may all be nonsense. However, it is a time to think, and decide for yourself. Most of the "experts" on places like CNBC seem to be peddling a brand of Panglosian naviete that seems to have only a speculative connection to reality.

Last edited by Matt (2009-02-02 05:18:04)

Gold closed at $910 an oz Friday. Could easily swing a great deal, based on inflationary expectations, and international events. Never a sure thing.

I agree with you on Cramer. Barron's had a cover article on his picks, about 6 months ago. The S&P outperformed his picks during the period measured.

Booya my ass! The guy perpetuates a gambling instinct that is a sure way to lose money. Look at the broad tape, showing after hours trading while he is on the air. You will see that people pile into his recommendations, driving the price up, based, on his hype.

This appeals to the same people that take busses from here to Atlantic City to gamble, on day trips. CNBC used to have a guy by the name of Dan Dorfman on each day. It turned out that the guy was getting paid to recommend junk stock. He was taken quite seriously by the other talking heads. He was an out and out crook. Cramer surely isn't a crook, but is selling advertising space for CNBC, to rope in the hopelessly gullible.

Pro Shares are not for everyone indeed. The Euro markets opened down, today.

Just for fun, see what happens to QID (Ultra Short QQQ);DXD (Ultra Short Dow), and SZK(Ultra Short Consumer Goods). They may all go down today, however, you aren't borrowing money, and you can cash your gains or losses at anytime the market is open. Certainly not for everyone, indeed.

Interesting.  I hadn't noticed the date on the first post, and assumed it was a new thread. 

Anyway, through all the past year, I have continued to make steady investments in U.S. and overseas markets, but I also increased cash as well.  I don't foresee myself doing anything differently, even though my portfolio (including IRA and 401k) has lost close to 40% of its value from the peak..

To me though, those are only hypothetical losses since I am not prescient enough to either buy the absolute lows nor sell at the absolute highs..

I was half thinking of taking Grayson's advice and investing in some bespoke clothing, which in another thread, he claimed may become the next bubble.  That way, I'll get in early..

Q: How Are You Investing Your Money These Days?

A: I'm Not. Haven't Got Any.