OT: 2008 Elections

[JRod]

Looks like McCain and Clinton are building some momentum.

GOP establishment may rally behind McCain while Democratic party establishment is behind Clinton, who won in Nevada despite Obama getting a big union endorsement out there.

As long as it isn't Romney-Clinton. That could make the Bush-Kerry race from four years ago look like a battle of superlative statesmen.

If it's McCain-Clinton, then my vote goes to McCain with ease. If it's Romney-Obama, my vote goes to Obama with ease.

If it's Romney-Clinton, then I consider a move to Canada. Talk about two Teflon flip-floppers who have almost nothing to offer this nation but a 25-pound sack of horsesh*t and more of the same.

Take care,
PK

Romney-Clinton would be the worst outcome possible. And it would kill any momentum Obama has brought to the race.

I think the only R to stand a chance of beating any democrat is McCain.

[jondiehl]

Jim Cramer is predicting a 2000-point drop in the Dow when the mortgage insurers, which have $450 billion exposure, default.

Mort Zuckerman said worst recession since the Depression, lasting over a year with real estate and credit markets in deep trouble.

Good. I hope the Dow drops that much, it will be a good dollar cost averaging opportunity. Honestly, unless you have a short term time horizon, a recession is a great time to be buying equities. The only people that it hurts are those that are looking to retire soon and live off of their equity assets. For those people, they should have been balancing things out with a large bond position anyway.

Every bull markets ends with the start of a bear market. The stock market is cyclical. Contraction follows expansion and vice versa. Hopefully people won't get foolish and try and time the market and figure out when to bail out and when to get back in. Those that invest with a herd mentality like that end up making only ~4%/yr even though the buy and hold crowd get the market average over an extended amount of time (10-11%).

[wco81]

There might be more consequences than a buying opportunity in the stock market.

Zuckerman also said 7-7.5% unemployment, which is about 50% higher than where we are now.

For many, dollar cost averaging won't be much of a consolation.

Typically the Fed cuts rates and markets tend to go up in presidential election years.

But this year, the Fed is being forced to do so, despite the highest inflation in a long time.

Edit: BTW, I think someone cited a study that historically, bear markets have not led to greater returns 5 years later. It did after the '87 Black Monday for instance, but that was more the exception than the rule.

=============================

R.O.I.
By BRETT ARENDS



Be Careful Buying
January 17, 2008

Wall Street, as measured by the broad Standard & Poor's 500-stock index, has now fallen about 12% from its peak -- the record level reached just last October.

Many investors assume a stock market "correction" of 10% or more is automatically a great buying opportunity. But that's really a view we've inherited from the big bull market of the 1980s and 1990s.

To get a longer perspective, I looked at all 10% stock-market corrections going back to 1950. I found 20, including the current one. (Yes, they are surprisingly common.)

The big lesson? They don't always pay off as well as you'd hope. In fact, Wall Street on average rose less in the five years following such a correction than it did at other times.

The average five-year price rise following the 19 corrections from 1950 to 2000 was 37%. But the average five-year price rise throughout the entire period was 52%. So much for being rewarded for taking a risk.

And there was wide variation. Let's compare two periods when stocks had fallen 10% from their peak. Those who jumped into the market in April 1973 were still down 16% by April 1978. Those who bought in June 1950, on the other hand, more than doubled their money over the next five years.

This all ignores the effect of dividends, which will smooth the results somewhat. (Usually the lower the stock market, the higher the dividend yield). It also ignores the effect of inflation.

But many investors simply assume that the stock market tends to rally sharply in the years following a selloff. It frequently doesn't.

The reason is that some declines proved brief, lasting a few months at most. (Does anyone remember the slump of October 1955?) Others, though, proved to be a harbinger of big, grizzly bear markets -- like those that began in 1972 and in 2000. On both occasions, the stock market went on to fall by nearly a half before bottoming out.

None of this should scare you away from the market. Long-term investors should probably take advantage of the stock market selloff right now to add to their holdings. But they should think twice before rushing to invest.

Unless you possess a crystal ball, the best way to beat a stock-market downturn is with a three-step plan.

Buy.

But buy small.

And buy often.

[jondiehl]

This all ignores the effect of dividends, which will smooth the results somewhat. (Usually the lower the stock market, the higher the dividend yield). It also ignores the effect of inflation.

Dividends are a large part of overall return, so ignoring them pretty much throws out alot of those stats. At least the writer acknowledges this.

Buying small and often = dollar cost averaging, so it looks like we're on the same page. I'm still going to be pumping my 401k and IRA's full each and every month and make sure I rebalance every quarter too. Bring on the recession!

[Naples39]

Jim Cramer is predicting a 2000-point drop in the Dow when the mortgage insurers, which have $450 billion exposure, default.

Mort Zuckerman said worst recession since the Depression, lasting over a year with real estate and credit markets in deep trouble.

Good. I hope the Dow drops that much, it will be a good dollar cost averaging opportunity. Honestly, unless you have a short term time horizon, a recession is a great time to be buying equities. The only people that it hurts are those that are looking to retire soon and live off of their equity assets. For those people, they should have been balancing things out with a large bond position anyway.

I don't know, the largest portion of the population, the baby-boomers, are about to retire en masse. If the Dow tanks, anyone with significant stock market holdings, whether they have balanced their portfolios or not with debt, will lose a ton of money which was supposed to carry them through retirement. I just can't possibly see how a massive Dow drop is good for anybody except first-time investors, let alone good for the nation as a whole.

Now that it seems Edwards is fading, I still fear the Clinton-Huckabee end result. Any other combination I could find someone to vote for I think.

[jondiehl]

I don't know, the largest portion of the population, the baby-boomers, are about to retire en masse. If the Dow tanks, anyone with significant stock market holdings, whether they have balanced their portfolios or not with debt, will lose a ton of money which was supposed to carry them through retirement. I just can't possibly see how a massive Dow drop is good for anybody except first-time investors, let alone good for the nation as a whole.

18yrs worth of Boomer's aren't all going to retire in one year. Also, most people don't actually retire at 62 (or even 65). The first baby boomer's turn 62 this year, and I doubt they'll be even touching their retirement assets in the near future. The large majority will still work well into their 60's and many will continue with new career's or part time stuff to keep from being bored.

If those about to retire in 3-5yrs aren't working with a competitent financial advisor, then shame on them if they aren't protected against short term volatility of the equity markets (of course, it's not all their fault with all of the DIY investment advertising getting shoved down their throat).

[Inuyasha]

JFK pulling out (of Vietnam, not MM)

http://www.youtube.com/watch?v=l3Icbzk8mg8

[Leebo33]

I'm still going to be pumping my 401k and IRA's full each and every month and make sure I rebalance every quarter too.

Me too. I can't afford the tax hit of *not* contributing to my 401k up to the max Federal limitations. I can't fathom the market drop that would make me even consider it. I think if it did I would have bigger things to worry about like a revolution, rioting in the streets, or a world war.

[pk500]

I'm still going to be pumping my 401k and IRA's full each and every month and make sure I rebalance every quarter too.

Me too. I can't afford the tax hit of *not* contributing to my 401k up to the max Federal limitations. I can't fathom the market drop that would make me even consider it. I think if it did I would have bigger things to worry about like a revolution, rioting in the streets, or a world war.

Same here. Come hell or high water, my 401K is pumped full every check. You're nuts not to -- it's free f*cking money. Trim the fat elsewhere in the budget to compensate.

Take care,
PK

[wco81]

I don't think anyone is talking about not investing IRA or 401k, although your annual IRA contribution may get more bang for the buck, assuming the market isn't going down.

It's other pain, such as loss of jobs, which are more immediate concerns.

Edit to add:

Also, people are seeing their most valuable asset, their homes, go down in value in most areas of the country.

[Jackdog]

Edit to add:

Also, people are seeing their most valuable asset, their homes, go down in value in most areas of the country.

That's because white people keep moving in.

[jondiehl]

Also, people are seeing their most valuable asset, their homes, go down in value in most areas of the country.

Much like their equity accounts, it's just a paper loss if they're not looking to sell it. The difference is, they don't get a monthly statement showing exactly how much their home has lost value.

I purchased a new home on 3/1/06 and I have no doubt in my mind that it's worth considerably less than what I paid. I have no intent to move anytime in the near future, so I couldn't care less how much it's worth right now if I'd stick a for sale sign in the yard.

[Smurfy]

So sad.

My man Kucinich dropped out.

The Democrats suck. Time and time again they are given opportunities to make a difference and they turn the other way. What have they done with their majority lately?

[FatPitcher]

So sad.

My man Kucinich dropped out.

The Democrats suck. Time and time again they are given opportunities to make a difference and they turn the other way. What have they done with their majority lately?

At least they have the excuse that they don't have the presidency. The Republicans had the presidency and a comfortable margin in both chambers of Congress and they managed to fail miserably at the two most popular planks in their platform: limited government and fiscal responsibility.

That's not to say I'm sad to see the Democrats fail to pass their agenda. Let's see: more taxes, more welfare, leaving Iraq to fix the mess we made there, and plenty of wasteful/irresponsible spending. No thanks. And let's not forget how they did absolutely nothing to fight the "culture of corruption" by getting rid of earmarks. Both parties are still handing out the candy to special interests that support their campaign. Disgusting.

[Jackdog]

So sad.

My man Kucinich dropped out.

The Democrats suck. Time and time again they are given opportunities to make a difference and they turn the other way. What have they done with their majority lately?

At least they have the excuse that they don't have the presidency. The Republicans had the presidency and a comfortable margin in both chambers of Congress and they managed to fail miserably at the two most popular planks in their platform: limited government and fiscal responsibility.

That's not to say I'm sad to see the Democrats fail to pass their agenda. Let's see: more taxes, more welfare, leaving Iraq to fix the mess we made there, and plenty of wasteful/irresponsible spending. No thanks. And let's not forget how they did absolutely nothing to fight the "culture of corruption" by getting rid of earmarks. Both parties are still handing out the candy to special interests that support their campaign. Disgusting.

Yes it is. Very disgusting.

I find it kinda funny how race is playing a part in the South Carolina Democratic Primary today. Aren't the Democrats supposed to be the "color blind" party? My God,the way the media and the Clintons are acting you would have thought Obama just turned black this week.

[JackB1]

This Clintons vs Obama thing really needs to stop so we can focus on the differences between the candidates. Even perennial Dem. hater - Ann Coulter was on Hannity's show yesterday saying that the Clinton's need to stop lying about Obama. She actually felt bad for him because he has to respond to all the lies. We all saw what happened when Kerry tried the "turn the other cheek" approach. I think this makes both candidates look bad and I think that Edwards has benefited some from this feuding.

If Hilary losses S Carolina and FL (looks like she will), is she in trouble?
I think that if Edwards drops out, Obama wins easy, since most of the Edwards supporters prefer Obama over Hillary.

[Jackdog]

This Clintons vs Obama thing really needs to stop so we can focus on the differences between the candidates. Even perennial Dem. hater - Ann Coulter was on Hannity's show yesterday saying that the Clinton's need to stop lying about Obama. She actually felt bad for him because he has to respond to all the lies. We all saw what happened when Kerry tried the "turn the other cheek" approach. I think this makes both candidates look bad and I think that Edwards has benefited some from this feuding.

If Hilary losses S Carolina and FL (looks like she will), is she in trouble?
I think that if Edwards drops out, Obama wins easy, since most of the Edwards supporters prefer Obama over Hillary.

Good points Jack. I think the Clinton's have enough money to last until "Super Tuesday" even with losses in SC and FLA. I would say that if anyone is thinking of casting a vote her way,they need to talk to some folks in PK's neck of the woods first. I don't think they would give a glowing report.

[Naples39]

Hillary still has a very big lead in the polls in FL (like 18 points). Even if you gave Obama 100% of Edwards share (13%), that still wouldn't be enough to catch Hillary. I think it would take quite a turn of events for her to lose there.

http://www.realclearpolitics.com/epolls ... y-261.html

[wco81]

Obama wins SC by a big margin.

But Obama will have to win white and Hispanic votes in other states.

[JRod]

Obama wins SC by a big margin.

But Obama will have to win white and Hispanic votes in other states.

I wonder if Camp Clinton will paint this victory as a win for Obama because it's has more of a black population. Some in the press tonight said as much that's why he won.

Which if you read in between the lines, whites won't vote for him in "whiter" states or the general. I think it's crap but the press have to create some sort of controversy.

[F308GTB]

I think you really have to look at the big states. South Carolina means nothing in terms of voting power, but it does provide momentum. The demographics of the state are atypical compared to the rest of the US. If you look at the voting there, over 50% of the voters were black and nearly 2 in 3 black voters voted along racial lines. There simply won't be that advantage for Obama in big states like Florida, Texas, New York, and California. I would expect Hilary to take all those states, and that would provide a tremendous advantage in the DNC.

The coming weeks should be interesting.

[Rodster]

Obama wins SC by a big margin.

But Obama will have to win white and Hispanic votes in other states.

I wonder if Camp Clinton will paint this victory as a win for Obama because it's has more of a black population. Some in the press tonight said as much that's why he won.

Which if you read in between the lines, whites won't vote for him in "whiter" states or the general. I think it's crap but the press have to create some sort of 'controversy'.

JRod the word should be entertainment. For the last 30-35 years the press has turned itself into a sideshow. They no longer look for insightful news coverage or how they can better serve the American Public. It has become all about the ratings first, entertainment second and the Amercian Public third.

So when I hear people say the press is trying to be controversial I say they are just trying to stir the pot just to give dumb America more entertainment value in return for their viewer ship.

[wco81]

I guess the margin indicates that Obama did better with the white voters in SC than polls were indicating -- some were showing his white support had fallen from 20 to 10% in recent weeks.

Huge turnout in SC. They were expecting 300k and got 500k.

Apparently, huge turnouts favor Obama, suggesting he's getting younger voters to participate.

Either he's setting himself for a fall because of the unreliability of younger voters or perhaps he's inspiring younger voters to participate.

Certainly the Clintons have been building their machine for a lot longer so they have advantage in most of these states. But it could be that higher-than-expected turnout, especially of unanticipated younger voters are upending their planning.

If the Clintons see that high turnouts favor their opponent, you would think they'd have to grace to back out.

[pk500]

If the Clintons see that high turnouts favor their opponent, you would think they'd have to grace to back out.

WCO:

This is the Clintons we're talking about. Grace never has been in their lexicon.

Take care,
PK

[greggsand]

If the Clintons see that high turnouts favor their opponent, you would think they'd have to grace to back out.

Remember, this isn't only a run for the position of President but Vice President, as well.