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  • demerson09 demerson09 Feb 18, 2014 12:52 PM Flag

    A message on economic cycles affecting your investments


    Not everyone took economics in college. No problem. Let me give it to you in third grade level language, the language of choice when investing.

    There is an almost predictable occurrence in our huge economy where it goes up, then down, then back up in waves about every 7-8 years. The secret to being way down in the cycle, and looking for that bear market to turn bullish, is jobs. If, during the next cycle, you young guys get discouraged, wondering if the market will ever go up again,just look for the jobs report for any indication of a turn in market conditions. It's the number one catalyst, and not always crystal clear.

    OK, so jobs losses have stabilized, maybe even given a hint of a turn. Now what?
    Go for it. Diversify, but start throwing your money back in the hat. Consider getting more and putting off that new car you really didn't need, and start putting it back in the market. This is the time when almost all stocks make money. Most people foolishly think they are smart now because they are ahead of the game for the next few years, but the truth is, the only smart ones are the ones who make money in a bear market. Why?

    In these bull runs, you can throw a dart in a dart board of SP500 stocks and make money. Everyone is doing it.
    Some just do better then others. Just look at the last few economic cycles. Then overlay your favorite stocks. 9 out of ten will move with the market. Even this stock was at $11 plus back in 2011, but falling down, then picking back up even though they have not made a dime. It's the market that gives this stock a climb from $3 to $9 for a base, and now rising based on upcoming metrics going forward. It's been dead money for three years in spite of folks making money in the interim, but going up based on broader market conditions. Things are different now, and a strong base of $10 plus look solid. Remember your economic cycle and don't be afraid to sell going into the next bear market. We should be good through most of 2015.

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    • This has plagiarism written all over it dude! You haven't had an original thought in your entire life!

    • Your post is short of the most salient facts and analysis. I feel you are too parochial in characterizing the US economy in a global world. Especially from the perspective of jobs and what this means to our economy.

      I've recently realized that growing global aggregate demand can make up for sluggish domestic US aggregate demand. Our companies will continue to do extremely well as middles classes rise in other societies. Mobile devices and work stations will continue to sell. Ironically, in spite of this prosperity, 14% of Americans in low wage jobs are in danger of being socioeconomically there won't be the traditional negative impact of sluggish domestic demand compelling action here.

      Additionally, emerging North American domestic energy & 3D printing is reinvigorating a US industrial base that already produces 22% of global manufacturing GDP. Our corporations dominate every supply chain on the planet. We're more than ready to ride the next waves of macroeconomic industrial development.

      And there are such waves. Social, mobile, 3D printing, big data, alternate energy, cloud computing, nanotechnology, blue gold water development, and even statistical optimization science are powering economies. Last but not least, we've been in a secular bear since 1999, only recently pulling above those highs. We're on the cusp of a secular bull.

      Mind you, given high debt to GDP ratios, we're also in an era of low interest rates. Growth may be tempered, but expect higher PEs. Nevertheless, we will grow and, as always, there will be alpha to be found.

      Speaking of alpha, connect the dots with GTAT in the context of what I just stated. All the best.

    • Can I pay you to stop giving your "advice". Can you just start a blog to share all your "wisdom" ? Nobody values you BS here. What is next ? Tell us you just donated a kidney to help save the life of a displaced entitlement breeder. It doesn't help that you usually are not talking about GTAT.

      Sentiment: Strong Buy