"Those folks would like to see [QE] rolled back as quickly as possible, since it may be contributing to an overinflated stock market and other economic distortions."
Later in the article:
"Commercial banks have about $1.6 trillion in accounts at the Fed, which is paying them an interest rate of about 0.25%. That’s obviously very low, but in normal times, the Fed pays no interest on deposits. For banks, the ability to earn $2.5 million per year for every $1 billion on deposit at the Fed, with no real risk, has persuaded them to leave most of that money there."
But, but, but... I thought Fed policy was inflating the stock market?! And now you're telling me Fed policy is causing trillions of dollars to sit idle.
Is it just me or does nobody seem know what the f they're talking about when it comes to Fed policy?
And now we're seeing the proof. The dreaded taper was finally announced and the markets took off like a rocket.
Meanwhile, the bears are in shock: "But, but, but... the Fed was only thing holding up the market. This wasn't supposed to happen!"
How much longer until you admit that you were reaallly wrong about the market. Your latest greatest hope was that tapering would tank the market. It didn't. What's your next excuse for missing the rally going to be?
"I'm not wrong. The whole world is wrong! Just you wait and see."
The problem is, win goat, that you've been playing this waiting game for a very, very long time. And so far reality has stubbornly refused to confirm your predictions of economic collapse. At what point do you admit that you weren't early - you were just wrong?
Earth to win goat. It was a simple question. At what point do you stop pushing your predictions further and further into the future, and admit that you were just plain wrong?
No, don't bother trying to correct them. Let him keep living in his magical world with unicorns and rainbows and dividends that double after stock splits.
CSX ringing in the holiday cheer. Shorts got a lump of coal in their stockings.
I don't know when it will happen but once it does you should take out a HELOC and invest your children's college fund in it. According to many people on this board a split will double the dividend and the stock price is virtually guaranteed to go up. Get in on the ground floor! If you're interested I have some shares I bought at a much lower price that I'd be willing to sell to you.
Obviously I was being facetious, but back in 2009 someone on another board actually took a HELOC to buy Berkshire shares. If I recall correctly the B shares were around $66 at the time. In hindsight, every one of us wishes we'd have gone all in, but very few had the stomach to actually do it.
Funny that I'm from your "Great Entitlement" generation and SnowScat always sounded like Boomer to me. I expect nothing from a government shifting into austerity or from the #$%$ economy we're entering into, by the way. Nor do I expect serious public discourse about this. It's much easier for geezers to snark about participation trophies, than it is to admit fault in making a mess of the world.
Great advice for investors. I really enjoy Morgan Housel's articles. He's the only columnist worth reading at the Motley Fool, to be honest.
I'll try, but it'll be hard because I didn't receive all of the presents I was entitled to. ;)
Buffett owned shares of railroads as far back as 2003, I believe. He was forced to sell his other RR shares after Berkshire bought BNSF. I don't know if he paying attention to the FTA's, but what's clear in hindsight is that he paid an absurdly low price for a great business in a great industry.
That's a pretty dopey post, win goat. Buffett is famously one of the leading advocates for a more progressive tax system, but let's talk about derivatives. Berkshire owns LEAPs and major stock indexes, and high yielding CDS's purchased during the height of the financial crisis in exchange for guaranteeing corporate debt. First, these are both HIGHLY profitable positions, so your claim that he's "lost lots of money" is completely wrong. Second, why exactly would it be a problem if he had lost money? Contrary to populist belief, there's nothing inherently wrong or complex about derivatives. If Berkshire can absorb the losses in the unlikely event that they blow up, what's the problem?
More downside than upside potential? I guess it depends on your timeframe. You can only lose 100% in the stock market, and with enough time you can make many multiples to the upside. Stocks are volatile in the short term, but there has NEVER been a rolling 20 year period of losses in the US stock market in spite of the two 50% drops we've seen in the last 15 years. If you want to hide your money in "safe" bonds and CDs that are GUARANTEED to lose money after accounting for inflation, be my guest. I hope you like the taste of cat food, because when you run out of money in retirement that's all you'll be eating.
Hate to break it to you, but there's no such thing as spidey senses. Phypan was the last guy on this board to bail over a gut feeling and he missed the 10-15% rally from summer until now. I think he actually avoided 3-4% of downside, but couldn't bring himself to buy back in when CSX ripped higher than the price he sold it for. Unless you need the money soon, don't try to outguess the market. Even if you happen to time the exit right, your chances of timing the re-entry correctly as well are practically nil.