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1929 will look like a walk in the park compared to 2008?

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A person trading in 1929 would have to have been 21 years-of-age and would now be 99 years old. So it's fairly safe to say that few traders of those times remember it at first hand today.

If you'r concerned about markets then you could trade as I do, even though my reasons are due to heavy losses in 1987-89.

I at present have 27% in US Bonds and 28% mainly in high risk stocks in the mining sector and the rest in cash. No outstanding loans, no mortgage and a private income sufficient to live on.

Investing isn't at times how much you have invested or where you have it invested. It's more, what will happen if it's all worth nothing tomorrow.
 
Re: 1929 will look like a walk in the park compared to 2008 ?

wavepicker said:
Hello explod, the signs are there that some severe might emerging here for world markets. BUT is Gold and Silver a safehaven?? I am not sure about this. Let's look back into time and see how Silver performed in the last Great Depression following the Crash of 29.(POG was fixed back then)

Silver still followed commodities and paper assets down during the deflation to a final low in Dec 1932.

The fact that people "rushed into Gold" in the early 1930's has been a mainstay of the gold advocates' argument. They rarely tell you the whole story though. One main reason people bought Gold then is that the U.S. governement had fixed the price, at $20.67/ounce. While everything else collapsed, Gold was soaring in relative value, and it's value gains were guaranteed. Who wouldn't buy it? If the government had fixed the price of any other substance, people would have invested in that instead. Today, gold like silver during the Great Depression, is free to trade at market price, which means that it can go down during a dollar deflation. There is no guaratee that it will do this, only a good case to be made that history indicates otherwise.

Look at some charts explod. Stock charts have been bullish, so have commodities, property, precious metals, currencies trades against the USD. It's "All The Same Market"

If the Stock market tanks it this year, so will commodities, so will precious metals and the USD will reverse. In most cases when we have had falls in the stockmarket in the in the past 2 years this has been the case.

Not saying that Gold is ready to reverse just yet, but don't be surprised to see it falter in 2008 if the Stock market does too.

Cheers
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The following details, coutesy the Privateer Newsletter is one of the reasons why I am long gold and gold stocks, and the charts confirm:-


And the Fed fixed gold as it was a threat to paper currencies, still is, always will be, and will be again soon.
 

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noirua said:
A person trading in 1929 would have to have been 21 years-of-age and would now be 99 years old. So it's fairly safe to say that few traders of those times remember it at first hand today.

If you'r concerned about markets then you could trade as I do, even though my reasons are due to heavy losses in 1987-89.

I at present have 27% in US Bonds and 28% mainly in high risk stocks in the mining sector and the rest in cash. No outstanding loans, no mortgage and a private income sufficient to live on.

Investing isn't at times how much you have invested or where you have it invested. It's more, what will happen if it's all worth nothing tomorrow.
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"If there is one bit of conventional wisdom that we hear repeatedly with respect to investing for a deflationary depression, it is that long-term bonds are the best possible investment. This assertion is wrong. Any bond issued by a borrower who cannot pay goes to zero in a depression. In the Great Depression, bonds of many companies, municipalities and foreign governments were crushed. They became wallpaper as their issuers went bankrupt and defaulted... ...Understand that in a crash, no one knows its depth, and almost everyone becomes afraid. That makes investors sell bonds of any issuers that they fear could default. Even when people trust the bonds that they own, they are sometimes forced to sell them to raise cash to live on. For this reason, even the safest bonds can go down, at least temporarily, as AAA bonds did in 1931 and 1932"... Prechter Jr. 2002
 
for more points of view on this whole drama, get a copy of this weeks AFR, issued saturday (the xmas special) - lots of things to mull over.
 
Re: 1929 will look like a walk in the park compared to 2008 ?

Uncle Festivus said:
I don't recall having said that on this thread about gold, or advised buying gold or that I am missing opportunities by being hold up in a cave somewhere???


No, it's entirely possible, that's why we are discussing it I guess. We should still count that possibility, remote as it may be. Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year, so dig a bit deeper and all is not as it would appear.
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Uncle I am quite aware of the problems that the XAO is in and have stated the lack of momentum in the Aussie market outside a couple of strong Big Caps on my blog all year as well as from time to time on the XAO thread. But my point is there is always problems to be dealing with and the upside and down side are always over stated. But it has payed to be a bit optimistic with a dash of caution.

That's always the trick, finding the Bull in-between all the Bulls**t.

My response about the gold and battening down the hatches wasn't meant to say that you were pushing that tactic. Was more about being in the market when there is opportunities rather than not being in it and waiting for the end of the world.

Anyway.
Happy Festivus & Serenity now.
 
Re: 1929 will look like a walk in the park compared to 2008 ?

Uncle Festivus said:
Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year
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Sounds like the Nasdaq 8 years ago.

Increasing reliance on a shrinking number of players to keep the overall market going up tends to indicate trouble ahead.

Same with most non-financial things as well - eg the number of countries with delining oil output exceeds those with rising output - a likely indication that top in oil production is near. Same with a lot of other things too.:2twocents
 
The article has an element of truth, but it is assuming that there will be a great policy error by the central banks, which most likely wouldn't happen *touch wood*. Credit has been increased significantly in the past few years to take advantage of the low rates, spendings have increased also, and quite some money were borrowed for trading/investment as well. This growth has included some people who were never capable of repaying the debts, and shouldn't have taken out the loans in the first place. What we need now is to keep the interest rates at a relatively high level (compared to the past few years), slow down growth, flush out those who shouldn't have borrowed in the first place, and let the system catches up with the spendings and growth that occured in the past few years. After which, there would be a good foundation for future growth.
 
I should also add that, despite what is happening in the economy, there is still a lot of money around in the system, looking for a home. There are many institutions and high net-worth individuals, and, currently, the smart money is in cash (in terms of long-term investing anyway). They are waiting like vultures, ready to snap up any bargains that come along.
 
Interesting and very Valid point in this article, didnt quite know which thread to add it too, might be worth one of its own even!

Why companies need owners

Today's CEOs are accountable to no one, says shareholder activist Bob Monks.

Monks writes: "History will look back on the 1990s and early 2000s as a time when the principal officers of public American corporations transferred from shareholders to themselves approximately $1 trillion - or 10 percent of the market value of public exchanges. This must be the largest peacetime movement of wealth ever recorded, and it was accomplished through stealth that amounted to theft and in a spirit of regulatory permissiveness that certainly rises near to the level of criminal neglect."
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http://money.cnn.com/2007/12/27/magazines/fortune/gunther_ownership.fortune/index.htm
 
Awesomandy said:
The article has an element of truth, but it is assuming that there will be a great policy error by the central banks, which most likely wouldn't happen *touch wood*. Credit has been increased significantly in the past few years to take advantage of the low rates, spendings have increased also, and quite some money were borrowed for trading/investment as well. This growth has included some people who were never capable of repaying the debts, and shouldn't have taken out the loans in the first place. What we need now is to keep the interest rates at a relatively high level (compared to the past few years), slow down growth, flush out those who shouldn't have borrowed in the first place, and let the system catches up with the spendings and growth that occured in the past few years. After which, there would be a good foundation for future growth.
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The Central Banks are private entities that were created for and exist to support the banking system. In creating cheap money they have created the problems and by creating more money out off thin air they are creating more problems. Not for the banks of course, because the creation of money for lending gives them fees as it moves between the differeent parties as well as interest returns.

So policy error, think about it, it is on purpose to suck money in for those who own the multinational banks. A lot of spin and advice comes from so called experts and advisors who are employed by the banks. I notice they are of late warning about the sub-prime problems, they always issue the warnings after everyone knows about it. The sheeple, who only listen when the banks speak think. "gee.. thier smart"

By expecting the worst you can be prepared to protect yourself and profit from it as well.

Gold is my store of cash.
 
I had an interesting discussion with an analyst once , I asked for the NPV
( net present value ) on a project well underway . He was stumped so I gave him a week , he was still stumped and had discounted quite alot with the stocks share price in his report , which I sent back reappraised for the stock , they laughed at me , way too soon though , the stock tumbled after the brokerage report . To date it has been my best swoop and it was Orica .
 
ithatheekret said:
I had an interesting discussion with an analyst once , I asked for the NPV
( net present value ) on a project well underway . He was stumped so I gave him a week , he was still stumped and had discounted quite alot with the stocks share price in his report , which I sent back reappraised for the stock , they laughed at me , way too soon though , the stock tumbled after the brokerage report . To date it has been my best swoop and it was Orica .
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That story is amazing. My Father, dead now since 1969 always used to speak the priases of ICI from which Orica grew. Dad I think worked for Pivot at Fooscray just after he was demobbed from the Air Force in 1945.

Anyway, some 9 years ago when we started investing, our new adviser after about the second visit said that we should have our own input into the portfolio so asked what I thought. I suggested Orica, first because of what Dad had said, second because I thought they had a monopoly on explosives (being and ex-cop, and having been stationed near the plant at Sunshine) and third because I thought it was probably an intelligent contribution to the discussion with Mrs present.

Well I must have been wrong on all counts because he was dead against it. I think Orica was about $4 then. Later after we ditched him l was always going to get on when it dipped, it never did and I have regretted it ever since. Should have listened to my Dad.

Still, not put off we got another adviser which did not last long when he was trying to tie all our money up in off shore wrap accounts (good trailing fees) when our dollar was starting to climb. For the past 6 years have been my own adviser.
 
Hmmm..... I can still recall some supposed 'experts' warning, during late 2002 and early 2003, that the All Ords could easily fall below 2000 and that it was not a good time to be buying. May never see another bull run like that again.
 
Interesting reading here if anyone is well ... Interested :D


The Bubble that Broke the World

How a book written in 1931-32 tells us what's going to happen in 2008-2009. (9-Oct-2007)

Summary: Garet Garrett's 1932 book, "A Bubble that Broke the World," describes the main features of the mass delusion that the world suffered in the 1920s and early 1930s: debauched use of debt, securitization of credit, and huge asset bubbles that people thought would grow forever. In 1932, America was the creditor nation, and Germany was the debtor nation; today, China is the creditor nation, and America is the debtor nation. Otherwise, everything is the same today as then.
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http://www.generationaldynamics.com/cgi-bin/D.PL?d=ww2010.i.garrett071009
 
NORFOLK, Va. ”” Religious broadcaster Pat Robertson predicted Wednesday that 2008 will be a year of violence worldwide and a recession in the United States, followed by a major stock-market crash by 2010
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http://www.foxnews.com/story/0,2933,319728,00.html

Not really noted as an economist but this guy has an audience of Millions, and we all know about markets and sentiment ! :eek:
 
numbercruncher said:
http://www.foxnews.com/story/0,2933,319728,00.html

Not really noted as an economist but this guy has an audience of Millions, and we all know about markets and sentiment ! :eek:
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These type of people make a calculated guess on whats currently making news IMO.

If they get it right or even close, they will be crowing about it to anyone and everyone, people will hang on there every word, if its completely off the mark then you either hear nothing more or like this guy he comes up with an explanation in his quote, "All I can think is that somehow the people of God prayed and God in his mercy spared us."
 
explod said:
That story is amazing. My Father, dead now since 1969 always used to speak the priases of ICI from which Orica grew. Dad I think worked for Pivot at Fooscray just after he was demobbed from the Air Force in 1945.

Anyway, some 9 years ago when we started investing, our new adviser after about the second visit said that we should have our own input into the portfolio so asked what I thought. I suggested Orica, first because of what Dad had said, second because I thought they had a monopoly on explosives (being and ex-cop, and having been stationed near the plant at Sunshine) and third because I thought it was probably an intelligent contribution to the discussion with Mrs present.

Well I must have been wrong on all counts because he was dead against it. I think Orica was about $4 then. Later after we ditched him l was always going to get on when it dipped, it never did and I have regretted it ever since. Should have listened to my Dad.

Still, not put off we got another adviser which did not last long when he was trying to tie all our money up in off shore wrap accounts (good trailing fees) when our dollar was starting to climb. For the past 6 years have been my own adviser.
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Sorry missed that reply Explod .

That is a top example Explod .
For all the money they cost , wait till they try and get you into a Crown land lease project in the UK . Had one chap try to sell this type of investment to my mother , a greenfields project he called it . Three phone calls was all it took to unwind his bull . He was reported . To date I have not heard anything on it . So much for ASIC .
 
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