New Stock Market Terms
CEO – Chief Embezzlement Officer
CFO - Corporate Fraud Officer
BULL MARKET – A random market movement causing an investor to mistake himself for a financial genius
BEAR MARKET – a 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no kool-aid
VALUE INVESTING – The art of buying low and selling lower.
P/E RATIO – The percentage of investors wetting their pants as the market keeps crashing.
BROKER – What my financial planner has made me.
STANDARD & POOR – Your life in a nutshell.
STOCK ANALYST – Idiot who just downgraded your stock.
STOCK SPLIT – When your ex-wife and her lawyer split your assets equally between themselves.
MARKET CORRECTION – The day after you buy stocks.
CASH FLOW – The movement your money makes as it disappears down the toilet.
YAHOO – What you yell after selling it to some poor sucker for $240 per share.
WINDOWS – What you jump out of when you're the sucker who bought Yahoo at $240 per share.
INSTITUTIONAL INVESTOR – Past year investor who's now locked up in a nuthouse.
PROFIT – an archaic word no longer in use.
LIQUIDITY - When you look at your investments and wet your pants.
# # # # #
If you had purchased $1000 of shares in Delta Airlines
one year ago, you will have $49.00 today.
If you had purchased $1000 of shares in AIG
one year ago, you will have $33.00 today.
If you had purchased $1000 of shares in Lehman Brothers
one year ago, you will have $0.00 today.
But---- if you had purchased $1000 worth of beer
one year ago, drank all the beer,
then turned in the aluminum cans for recycling refund,
you will have received $214.00.
Based on the above, the best current investment plan
is to drink heavily & recycle.
It's called the 401-Keg.
Saturday, March 28, 2009
Saturday, March 14, 2009
The Financial Crisis & Bailout Explained in Drinking Terms
Heidi is the proprietor of a bar in Berlin. In order to increase sales, she decides to allow her loyal customers - most of whom are unemployed alcoholics - to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around and as a result increasing numbers of customers flood into Heidi's bar.
Taking advantage of her customers' freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the most-consumed beverages. Her sales volume increases massively.
A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi's borrowing limit.
He sees no reason for undue concern since he has the debts of the alcoholics as collateral.
At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed. Nevertheless, as their prices continuously climb, the securities become top-selling items.
One day, although the prices are still climbing, a risk manager (subsequently of course fired due his negativity) of the bank decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi's bar.
However they cannot pay back the debts.
Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKBOND drop in price by 95%. PUKEBOND performs better, stabilizing in price after dropping by 80%.
The suppliers of Heidi's bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.
The funds required for this purpose are obtained by a tax levied on the non-drinkers.
Finally an explanation I understand ......
That story almost makes me want to take up drinking again!
Word gets around and as a result increasing numbers of customers flood into Heidi's bar.
Taking advantage of her customers' freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the most-consumed beverages. Her sales volume increases massively.
A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi's borrowing limit.
He sees no reason for undue concern since he has the debts of the alcoholics as collateral.
At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed. Nevertheless, as their prices continuously climb, the securities become top-selling items.
One day, although the prices are still climbing, a risk manager (subsequently of course fired due his negativity) of the bank decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi's bar.
However they cannot pay back the debts.
Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKBOND drop in price by 95%. PUKEBOND performs better, stabilizing in price after dropping by 80%.
The suppliers of Heidi's bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.
The funds required for this purpose are obtained by a tax levied on the non-drinkers.
Finally an explanation I understand ......
That story almost makes me want to take up drinking again!
Saturday, February 21, 2009
Torture?
And I though President Obama was going to outlaw torture when he took office. But ever since he arrived in the Whitehouse it has been nothing but bad news and the market does not like his stimulus plan or the banking rescue plan. The new fear is the nationalization of the banking system. It has brought the market straight down and as 2009 starts off it looks like the “lost decade” as we are now at the lowest levels in the new millennium.
But short term, I think the bad news is behind us and we can expect at least a “dead cat bounce” off the latest low of 755 for the S&P 500. I expect at least a 10%-20% rally that could last at least a couple of weeks.
Friday, January 23, 2009
Friends Don’t Let Friends Buy Financial Stocks
Hart thumping, jaw dropping and ear popping. That had to be your reaction if you have had any financials in your portfolio in the last year.
Look at the chart below, the average financial stock has lost over 90% of its value in the last couple of years. When will the pain end?
Look at the chart below, the average financial stock has lost over 90% of its value in the last couple of years. When will the pain end?
Thursday, January 1, 2009
2009 Predictions
Here are a couple predictions for 2009, good riddance to 2008 which saw a dismal economy and a negative 38.5 % downward move in the S&P 500.
1. Stock market up at least 25%. The market will rally at least 25% in 2009 but may not finish the year up that much as the bear will continue to hit the market well into 2010.
2. Madoff takes a bullet. Former hedge fund manager Bernard Madoff, whom stole 50 billion dollars in a fraud scheme won’t live to tell about it. Not sure if it will come from a disgruntled investor he stole millions from or the Russian mafia he was rumored to launder money for but there is a bullet out there somewhere with his name on it.
3. Housing market bottoms. The government finally is focusing on the right things to bring a bottom to the market – interest rates. If the government can get long term rates down to a target of 4.5% and keep it there, then housing can finally bottom.
4. Almost all public builders go bankrupt. Most of the big public building companies will dry up and blow away in 2009. That means the DR Horton’s, Centex, Pulte Homes and the like. This will actually be a plus for the economy as it will dry up the supply of new homes on the market- and that is needed to make #3 come true.
5. Huskies win a game. 2009 will be a break through year for the Dwags as they actually win a game.
1. Stock market up at least 25%. The market will rally at least 25% in 2009 but may not finish the year up that much as the bear will continue to hit the market well into 2010.
2. Madoff takes a bullet. Former hedge fund manager Bernard Madoff, whom stole 50 billion dollars in a fraud scheme won’t live to tell about it. Not sure if it will come from a disgruntled investor he stole millions from or the Russian mafia he was rumored to launder money for but there is a bullet out there somewhere with his name on it.
3. Housing market bottoms. The government finally is focusing on the right things to bring a bottom to the market – interest rates. If the government can get long term rates down to a target of 4.5% and keep it there, then housing can finally bottom.
4. Almost all public builders go bankrupt. Most of the big public building companies will dry up and blow away in 2009. That means the DR Horton’s, Centex, Pulte Homes and the like. This will actually be a plus for the economy as it will dry up the supply of new homes on the market- and that is needed to make #3 come true.
5. Huskies win a game. 2009 will be a break through year for the Dwags as they actually win a game.
Sunday, December 14, 2008
Blast-Off
You can not afford to be out of the stock market – not even for one single day. The market is going to start a rally very soon and I expect it to carry the DOW to over 11,000. Hop on board and enjoy the ride.
Saturday, November 29, 2008
Plump Juicy and Tasty
Tasty was the market this week as it went up for 5 days in a row- something it has not done in all of 2008. I hope this is the beginning of the mother of all bear market rallies. The market has gone down so far and so fast in the preceding 11 months it is due for a major rally. Historically, December has had the largest returns and I expect that to continue in 08.
I have added a couple more buys to the list and now the boat is fully loaded so no more passengers can get on unless a couple get off. So for now we will see where the market takes us.
Ticker........ Buy Date...........Price
UVT .................11/14...................$15.50
QLD ..................11/14 ..................$29.00
UUPIX ..............11/14 .................$7.40
AMD …………….11/28.. ………..$3.28
UYG ………………11/28………… $6.16
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