Comments on: Five Wall Street Whoppers And Why You Need To Know Them

By: VentureShadow

VentureShadow — Sun, 22 Mar 2009 18:33:03 +0000

More perfect hindsight. The role model for this writing seems to be Arthur Conan Doyle; the logic involved is always retrospective. Let’s be fair folks, the predictive value of this newsletter and its cohort is weak, very weak. The writers thump their chests because this is what they think they must to do hawk their publications. The expertise of these writers is primarily in writing, not in economic predictions.

My best judgments have been in NOT going along with recommendations of these writers. The worst ones get replaced, and heard about no more–except for those who are obviously favorites of the boss (and we can tell by what the boss writes in his own newsletter).

After observing stock prices for decades and reading thousands of issues of financial publications I still can not identify what drives changes in stock prices more than briefly. We have seen recently that nearly all investments are reduced to speculations. “Investing” is playing poker with unseen opponents.

By: GEORGE

GEORGE — Sun, 22 Mar 2009 17:31:04 +0000

Very logically presented. It was refreshing an thought provoking. I look forward to your next report

By: Gary Wardell

Gary Wardell — Sat, 21 Mar 2009 00:26:07 +0000

This is at the end of Wopper 5 “Nothing – and I mean nothing – will matter until the banks start lending again.”

Now please look at Wopper 2.

Which one is it? Debt is good? Debt is bad?

By: Dusty

Dusty — Fri, 20 Mar 2009 06:07:06 +0000

Housing is a very real economic asset. A house is not an ATM. It is not “Easy Money.” If you did not experience the Depression of the 1930’s (even vicariously) you do not understand.

The game requires buying a house to be a residence for life. Look at Warren Buffet. If it is necessary for a young person or family, buy a small house that is affordable. When there is considerable equity available in that house AND incomes and careers have improved, trade up to something better. One trade is acceptable, two is permissible but questionable. At three, most people will not live long enough to make the game work unless the object is to trade down for retirement to allow relocation. Most relocation for retirement is following the herd and is actually undesirable.

If the game is followed properly, by most of us ordinary people, the mortgages should be fixed 15 year pay plans. The first house is paid for by age 45; a second house is paid for by or before age 55.

Once the housing all of us must have is paid for, costs are limited to maintenance and taxes. That is usually not more than an equivalent to one or two of those monthly mortgage payments. Or one to three monthly rent payments.

Now the home owner with a paid-off mortgage has an effective (ghost?) income increase equal to the annual amount of mortgage or rent payments that do not have to be paid and also gains an amount added that would be the income taxes on that ‘ghost’ income.

A family in retirement with paid-off mortgage with perhaps $2K a month income (SS?) has that amount for living expenses for most of the year. A retired couple/person with a mortgage/rent payment of about $1K has to get by on half the total of the same SS check or other income. Effective income with the paid-off mortgage is therefore $36K/yr, OR real income of $24K with mortgage/rent is reduced to $12K/yr.

Finally, in really hard times, a person or family who is living in a house with a paid-off mortgage and living in a state with reasonable property rights laws can have a place to live- a safe place to sleep, shelter from the cold winds and the rain- regardless of job loss and other economic travail.

———–Dusty.

By: JFD Hamilton

JFD Hamilton — Fri, 20 Mar 2009 04:26:47 +0000

PLEASE Remove me from your E-mail list, I can stand no more of your egotistical drivel !
Mr. Fitz-Gerald et al: Investment “gurus” (your word choice not mine-an insult to Hindus and Siks everywhere) and their cock eyed thinking caused this meltdown! And you and your kind are still pontificating ! Learn right from wrong !
I can remember a time when those advising on investments were honorable members of society. Just because you CAN do something, it doesn’t necessarily follow that it is the RIGHT thing to do ! You don’t invent $$ you earn them !! This “get rich quick” mentality especially if you are mis-using or mis-appropriating a well intentioned plan; is not smart, it’s immoral !! The final proof that ‘Laissez Fare” must be policed as you kind (unfortunately) just cannot be trusted ! Instead of inciting fear, do something that might possibly fix the problem so that someone else (if that can penetrate your egos) might benefit !
If those lowly Americans who are now paying the bills of your profession’s monumental failures, learn this irresponsiblily from you – Lord help the USA !! You’ll soon be a 3rd World nation with nukes !! Better still, all you “gurus” should all be sent to Iraq to defend the Nation that’s going broke to make you jerkheads rich !!!!!!!!!!!!!!!!!!!!
Soapbox down !

By: Econ101

Econ101 — Thu, 19 Mar 2009 20:05:16 +0000

You shoulod expand and write more about whopper 5 and the references therin contained. Educating America about the crisis of the 1870’s and how it paralelles what is happening today would be a great public service.

By: Wilken Fernández

Wilken Fernández — Thu, 19 Mar 2009 18:00:34 +0000

Whoopper No. 6 – The entire Wall Street with its all Banks and credit system.

PERIOD.

By: JEV

JEV — Thu, 19 Mar 2009 14:40:49 +0000

One missing Wall Street “whopper”: don’t buy gold or silver!

As it turns out, over the past 50 years gold has outperformed the Dow Jones Industrial Average by double. Even when dividends are included, gold still outperforms the Dow.

Why? INFLATION! The stock market can’t protect against substantial inflation. The so-called “experts” blather on about gold when it was $850 back in the 1980s, as if people only buy at tops. Those who bought at $90 still made a killing, even with the bubble popping.