# Great Bull or Bulls--t



## dogcom (May 23, 2009)

Since the March lows do you think we have entered the next bull market. I think other then gold we are just sucking up money from the sidelines and such to send the market higher. I don't think earnings are good enough to keep a good bull market going.

We will see new lows in the future lower then they were in March which will give us another great buying opportunity.


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## resource investor (Aug 9, 2009)

I think everybody spends too much time worrying if this is a bull market or not. If you buy a dividend paying company that is growing in a sector with favourable fundamentals, how can you go wrong? Even if you overpay for the stock, the company may grow into the over-valuation.

That is why I like growth not value. With value, if you overpay, you are dead man walking. Just my two cents.


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## Rickson9 (Apr 9, 2009)

"Market commentators and investment managers who glibly refer to growth and value styles as contrasting approaches to investment are displaying their ignorance, not their sophistication."
- Warren Buffett, 2000 Letter to Shareholders


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## resource investor (Aug 9, 2009)

In Your Face Rickson...

"We think diversification, as practiced generally, makes very little sense for anyone who knows what they're doing. Diversification serves as protection against ignorance.” - Warren Buffett

Uh, Warren Buffett is so 1980's.


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## resource investor (Aug 9, 2009)

Buffett's Berkshire Hathaway in the last 3 years has returned 0%. Enough said.


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## mogul777 (Jun 2, 2009)

resource investor said:


> Buffett's Berkshire Hathaway in the last 3 years has returned 0%. Enough said.


Uh, one the above quotes say pretty much the same thing. Two 0% is much better than the over 20% loss for the S&P 500 over those same three years. 

Ironically I'm not a huge Buffett fan either.


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## msimms (Apr 17, 2009)

resource investor said:


> I think everybody spends too much time worrying if this is a bull market or not. If you buy a dividend paying company that is growing in a sector with favourable fundamentals, how can you go wrong? Even if you overpay for the stock, the company may grow into the over-valuation.
> 
> That is why I like growth not value. With value, if you overpay, you are dead man walking. Just my two cents.


I think any growth stock selling cheap has a lot of value in it.  And there are still cheap growth stocks out there.


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## dogcom (May 23, 2009)

I am not really a value investor either but I think in a market like this you have to be careful and get a good price when you buy. If we were in a long bull market like 1982-2000 then you can just buy and hold and not worry so much about over-valuation. I believe however that we are in a market more like the 1970's where you would get big market declines and great market rallies that rewarded those who waited and paid a low price.

If I were to buy something right now I would consider buying FTS-T or maybe SC-T after I had looked into it some more.


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## Oldroe (Sep 18, 2009)

I laugh ever time I heard that 0% in the last 3 years. It's just talking head crap on TV to get people scared.


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## Rickson9 (Apr 9, 2009)

resource investor said:


> Buffett's Berkshire Hathaway in the last 3 years has returned 0%. Enough said.


3 years. LOL!

Oh noes! The DOW has returned 0% of the last decade! Avoid stocks! Invest in a good mattress!


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## mogul777 (Jun 2, 2009)

resource investor said:


> I think everybody spends too much time worrying if this is a bull market or not. If you buy a dividend paying company that is growing in a sector with favourable fundamentals, how can you go wrong? Even if you overpay for the stock, the company may grow into the over-valuation.
> 
> That is why I like growth not value. With value, if you overpay, you are dead man walking. Just my two cents.


BTW, this *** speak would, in a best case scenario, allow for a zero percent return. I wonder if Buffett has any job openings... you should check into that.


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## Oldroe (Sep 18, 2009)

When you start out dollar cost avg. is great. Doesn't really matter were the markets are you will avg. yourself into to a nice position. 

If I continued to buy threw this peak my Div. yield would go down and my avg. cost would go up. 

So patience is key.


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## canadianbanks (Jun 5, 2009)

dogcom said:


> We will see new lows in the future lower then they were in March which will give us another great buying opportunity.


It might not be lower, but in my opinion it will be really close anyway.


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## osc (Oct 17, 2009)

I don't know why you guys are talking about stocks being too expensive right now. Every time in the past, previous highs have been easily surpassed. We are about 40-50% from the highs. What makes you think we are now facing a major shift? 
Even if, despite all signs that the economy is rebounding, a major correction (20-30% down) is in cards, that doesn't mean anyone who enters now will lose money in the medium term (5-10 years), considering we are at 40-50% from the highs. 
I think the best approach right now, is to periodically buy stocks (or stock indexes). I will be doing that as long as S&P500 is below 1200.


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## mogul777 (Jun 2, 2009)

osc said:


> I don't know why you guys are talking about stocks being too expensive right now. Every time in the past, previous highs have been easily surpassed. We are about 40-50% from the highs. What makes you think we are now facing a major shift?
> Even if, despite all signs that the economy is rebounding, a major correction (20-30% down) is in cards, that doesn't mean anyone who enters now will lose money in the medium term (5-10 years), considering we are at 40-50% from the highs.
> I think the best approach right now, is to periodically buy stocks (or stock indexes). I will be doing that as long as S&P500 is below 1200.


Quit hanging out with Resource Investor, lol. 

If you overpay by 20-30% you need to make 40-60% extra to get back to point A... it'd be much easier starting from even than from minus thirty. 

The rest I agree with. Average in since no one knows what the markets will do with perfect accuracy. But remember the idea that one can overpay now and have it be "okay" a few years from now, is pure idiocy. Overpaying is never a good idea. And yes stocks right now are _not_ cheap.


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## osc (Oct 17, 2009)

mogul777 said:


> Quit hanging out with Resource Investor, lol.
> 
> If you overpay by 20-30% you need to make 40-60% extra to get back to point A... it'd be much easier starting from even than from minus thirty.


The thing is not that I want to overpay. The thing is that I don't want to miss it. People were screaming at 900 that S&P is too high and it will go back to 600, they were screaming at 1000, now they scream at 1100. What if it will not go down right now? What if you'll get the correction when you get to 1400? By cost averaging (buying monthly) when the relative values (relative to the recent bull run) are low enough you will not miss the potential bull run and you will not miss the correction when it will come. Your average cost will be low enough.


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## mogul777 (Jun 2, 2009)

osc said:


> The thing is not that I want to overpay. The thing is that I don't want to miss it. People were screaming at 900 that S&P is too high and it will go back to 600, they were screaming at 1000, now they scream at 1100. What if it will not go down right now? What if you'll get the correction when you get to 1400? By cost averaging (buying monthly) when the relative values (relative to the recent bull run) are low enough you will not miss the potential bull run and you will not miss the correction when it will come. Your average cost will be low enough.


Chasing vs overpaying, that's basically the same thing. So if you get a correction from 1400 to 1100, you'd be looking at a gain of zero. Hate to miss out on that would you? 

News flash, the easy money has already been made. It's now time to get back to basics and buy solid companies at good values. Notice I said at good values. No one (with lots of brain cells) ever said it was necessary to be in the market all the time. 

BTW, I don't think now is a time one needs to sell, this is simply a reply to some "I wanna stay in the poorhouse" thinking.


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## scomac (Aug 22, 2009)

osc said:


> The thing is not that I want to overpay. The thing is that I don't want to miss it.


What you will earn on any given investment is determined by what you pay, period. There is no growth without value. It is a widely held misconception that price is secondary to purchasing a good company with good prospects in an industry with good fundamentals. This is a recipe for mediocrity because it downplays the importance of value and overemphasizes the importance of predicting the future. Price today is much more certain than what the future will bring. As solid evidence, look no further than the track record of the financial analysts community. Their accuracy is deplorable even one or two quarters out!

Do not concern yourself with missing this opportunity, there will be plenty more. Opportunities arise everyday. You just need to be in a position to recognize and act on an opportunity when it presents itself.


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## leslie (May 25, 2009)

Agreed. As a foot note...

I deplore the common 'valuation' produced today based on estimates of FUTURE earnings estimates. 
* The estimate of future earnings is only a guess.
* The estimated future earnings is always 'without all the bad stuff', not Net Income
* Shills always overestimate future earnings but claim accuracy by changing their estimate AFTER the quarter-end, just before the earnings release.
* If they don't get a decent resulting P/E using the next year-end's earnings, they use the earnings 2 year-ends away, or even three.
* This ignores the time-value-of-money and the appropriate discount rate of about 10% for holding equity risk. They say pay NOW for value 2 yrs away.


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## osc (Oct 17, 2009)

mogul777 said:


> Chasing vs overpaying, that's basically the same thing. So if you get a correction from 1400 to 1100, you'd be looking at a gain of zero. Hate to miss out on that would you?


I'm not chasing anything, I started buying stocks when S&P was 750 and I will keep doing the same until S&P gets over 1200. Then I'll switch to buying bonds. I will start selling stocks when S&P gets over 1600.


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## osc (Oct 17, 2009)

So are you guys short, or in bonds or in cash? Saying that the market is overvalued now is fine, but what are your actions?


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## dogcom (May 23, 2009)

Most of my money is in cash right now while I wait for opportunities to come along. I believe in a market like this that capital preservation is the first priority, so you need to pick your spots and overpaying could be very dangerous.

I find the best time to invest and get good gains is during bear markets because you can buy low and sell high. It is much more difficult to buy low and sell high when you are in a later bull market where things keep going up because money is just going there like we are seeing in this rally up until last week.


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## osc (Oct 17, 2009)

dogcom said:


> I find the best time to invest and get good gains is during bear markets because you can buy low and sell high. It is much more difficult to buy low and sell high when you are in a later bull market where things keep going up because money is just going there like we are seeing in this rally up until last week.


So, you think we are in a "later bull market"? If so, this was a very short bull run by historic standards, only 7 months. The previous bull run lasted from 2002 to 2007.


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## Rickson9 (Apr 9, 2009)

osc said:


> So are you guys short, or in bonds or in cash? Saying that the market is overvalued now is fine, but what are your actions?


Still holding stock that we've bought at various times over the last 12 years. Last significant purchase was during Q1-Q2 2009.

Still holding investment RE that we bought 10 years ago. Last significant purchase was our home approximately 5 years ago.

Income from various sources pile up until the next asset decline, then it is deployed. 

We rarely go deliberately into cash (ie. sell an asset to hold cash because we 'feel' that the market is overvalued). 

Always studing the income statement and balance sheet of stocks and the income statements of commercial property. Stocks I can do myself, but for RE I'm always talking to a lot of RE agents.

I don't care if the market is a bull or bear. I do not make investment decisions based on that. All I care about is if I can find a reasonably priced asset.


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## tojo (Apr 20, 2009)

dogcom said:


> I believe in a market like this that capital preservation is the first priority, so you need to pick your spots and overpaying could be very dangerous.


I believe this is the key ... as the nest-egg grows, my appetite for risk is diminishing. My last few purchases have been preferreds, utilities, telecoms and convertible debentures. Although not completely bullet-proof, the portfolio has held up well against the recent dip, and hopefully into any possible correction. Cash is low, as idle money returns very little - I believe in making my money work, but conservatively.


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## mogul777 (Jun 2, 2009)

osc said:


> I'm not chasing anything, I started buying stocks when S&P was 750 and I will keep doing the same until S&P gets over 1200. Then I'll switch to buying bonds. I will start selling stocks when S&P gets over 1600.


Good for you. Now the challenge will be sticking to your plan.


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## scomac (Aug 22, 2009)

osc said:


> So are you guys short, or in bonds or in cash? Saying that the market is overvalued now is fine, but what are your actions?


I am staying the course and taking the appropriate action when the situation warrants it. I don't short. I don't engage in deliberate market timing. That makes me mostly long. Bonds are held to maturity. I tend to trade stocks more frequently, buying when they are undervalued and selling when they are fully/overvalued.


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## Oldroe (Sep 18, 2009)

I'm long with most. I've got bank stock from 15 years ago. After the crash I got every cent possible into bank stock Power Corp/Financial that I will keep. At the same time I bought Suncor, Petro Canada and Onex just to make money, beat up, good company's good financial.

By early summer I have no new money so I sold some. Now have about 25% cash and bought a new truck.

My strategies is buy solid companys take profits and move money into growth stocks with good div. for income.


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## moneymusing (Apr 3, 2009)

So the US releases GDP numbers today that indicated growth of 3.4% and people say that is all well and good but the unemployment numbers are still high therefore still the end of the world as we know it. Isn't there something covered in intro economics about coincident indicators and lagging indicators? 
GDP - coincident indicator
Unemployment - lagging indicator

So I'm not entirely sure why people are so up in arms about unemployment numbers in relation to the economy. It's true that people are still unemployed but with the prospects of broad based economic growth slowly emerging the unemployment figures will follow, not lead, as they always have.


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## dogcom (May 23, 2009)

Tojo and Scomac sound like they are playing it right by looking for returns but keeping a solid base of value and income under what they own. Even if we don't get the bear market that I believe will return I think that money will still leave the overvalued hot plays and into other stocks and sectors that haven't run ahead of themselves. Like I said earlier FTS-T is one I looking at because of its solid dividend and it doesn't look like it is to far ahead of itself and wouldn't drop like a rock if we got hit with another big selloff.


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## Oldroe (Sep 18, 2009)

I started drips on fts,rei, trp will probably move them to discount broker after this tax season. Just to much aggravation. At this time I'm not putting any new money in anything.

Patience doesn't matter when it happens I'm ready.


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