I'm Still Bullish...

…on the longer term prospects for the U.S. and global economy. If I had more money I would be buying.

Ouch. Probably should keep that to yourself for awhile.

you remind me of my firm’s chief investment strategist. Every week on the Monday morning call he spews optimism. He keeps on trying to catch the turn and getting burned. And tell me Gouman, why are you bullish?

give us some picks then, papa

Gouman Wrote: ------------------------------------------------------- > …on the longer term prospects for the U.S. and > global economy. If I had more money I would be > buying. “If i had more oney i would be buying”…but you dont cuz you were bullish and you were whipped out.

Gouman Wrote: ------------------------------------------------------- > …on the longer term prospects for the U.S. and > global economy. If I had more money I would be > buying. “If i had more oney i would be buying”…but you dont cuz you were bullish and you were whipped out.

Gouman Wrote: ------------------------------------------------------- > …on the longer term prospects for the U.S. and > global economy. If I had more money I would be > buying. “If i had more money i would be buying”…but you dont cuz you were bullish and you were whipped out.

always the same, when it is bleakest it is time to buy. for those that think this is the end and the US is done, you are wrong. I am not going to try to time the bottom, but I am still bullish on the US in the long run. dollar-cost-averaging.

Gouman = Bill Miller

Bill Miller “If I only had some money left, I would buy something”?!

Bill Miller? I think his portfolio is more watered down than Miller Lite.

iM bullish on financials, and anything with lots of debt that is due soon

As far as I can tell, looking at economic fundamentals the U.S. Economy was worse off in the last two recessions, the world didn’t end then and it won’t now. The failures so far have been isolated to financials. Businesses fundamentals in other sectors have not changed. Aside from the “end of the world thesis” that the media, left wing liberals and some financial pundits are pushing, I don’t see much of a case against then LONGER term prospect for U.S. companies. Sure there will be forecasts suggesting slower growth from non-financials because they now have more limited access to capital, so there will likely be a justified depression of their valuations. Of course financials are looking terrible. Nevertheless, I think a simple way to look at it would be to buy the financials that you believe will be left standing. They have been shat on so bad, it’s hard to see how in five years they will not be big winners if you got in now. Schwab, BOA, JPM, Goldman, Wells Fargo, UBOC I’d probably buy’em all individually if I had time to do the diligence to justify my initial thesis. For now I’m just looking at ishares DJ Financials. I’m just apprehensive of deviating from my current allocation to my Blackrock fund. I am coming into some cash soon from a settlement that is basically free money. This will surely be going into the Ishares fund mentioned above. Moving along, before this whole thing started it was widely recognized that domestic concerns were flush with cash. That’s good news, which means the best of them will still be able to invest and prepare themselves accordingly for the eventual turnaround. For example you have Microsoft, HP sitting on damn near 20 billion a piece, making investments in future products, their not going anywhere. The treasury has the chance to make a fortune on this bailout, even if it is in inflated dollars, the potential to make a fortune is there. Not to mention it will surely help restore market confidence. I’m not ecstatic about the bailout in principle but see it as necessary now that the market crybabies are expecting it. With respect to recent losses, I don’t care about these short losses. I’m a long-term investor whose horizon is 35+ years in the future. This debacle will be ancient history in 10. Specifically referring to the 750+ decline today, big deal, so the market is super volatile. If you haven’t figured out anything can happen in this market, don’t follow it. Trading this market is asinine, but buying for the long term makes perfect sense. Buy low sell high, duh. Well equities seem to be pretty low. Am I trying to time the bottom, hell no. I just see opportunity to buy low in general. If I had chips I’d be buying some ishares index that tracked the S&P. If I had time and money, I’d be looking at individual names in both global equities and investing in some of these newer opportunity funds that are still buying MBS. Some guys from my old firm are where I interned as a trading assistant on a CDO desk are sifting through the turds and buying up the “good” stuff at 15, 25, 50 cents on the dollar. I’m too poor to invest with them, but they 30 year MBS veterans and know what the hell their doing and they are going to get even richer when the housing market stabilizes. In conclusion, the reason I’m not buying has nothing to do with being wiped out. It has to do with my salary being to skimp to allow investing any more and maintaining my lifestyle. FYI I’m 100% in Blackrock Global Allocation Fund, which is down 16% for the year. I’m there because I like Bob Doll. Based on his performance and his commentary, I think he knows what he’s doing. Like myself he seems to be focused on the long term, and has an uncanny ability to stay focused on it, so our interests are aligned.

Lol, you can’t time a bottom… It’s easy for guys to keep on saying “I’m still bullish”…next week “I’m still bullish”…“I’m still bullish.” Yes it has to turn around eventually but don’t catch a falling knife.

Fair answer Gouman. Oh crap I take that back. I didn’t read the bailout argument. >Schwab, BOA, JPM, Goldman, Wells Fargo, UBOC I’d stay away from WFC and GS. I’m not kidding. I think substantial equity dilution is coming for these two.

That’s a nice piece. a) If your investment horizon is 35 years, your choices are either invest in equity or invest in firearms. There just aren’t 35 year periods in countries that remain functional where equities don’t perform pretty well . b) The Treasury making a fortune on this bailout is BS and would lead me more down the firearms route. If we are trying to ease our tax burden by using the Treasury as a giant hedge fund, I want to move (or be Treasury Secretary). Nothing could be worse for economic liberty than an approach like that. c) The longer term for individual companies is made up of shorter terms. Nobody can’t go bankrupt in this environment. d) Equities only seem low because of where they have been. Some equities, especially of financial companies, seem very high to me. Amidst all this talk of gov’t bailout we still have $2B of equity left in FNM? Huh? Edit: grammar

TPain - I believe he’s saying he ain’t trying to time a bottom. BTW - best signal that will get you out of a deep bear market is when the 20 week moving average crosses 1% below the 50 week moving average. When the 20 week crosses 1% above the 50 week moving average you go long. This is for Long-term investors. Look at the history of this signal and you will see what I mean. Of course it can be proven wrong, but it hasn’t yet.

Look, if you think the bailout is losing bet then you’re basically agreeing the U.S. housing market is never coming back either. The fate of both are tied to each other. If the treasury is buying this shat at such deep discounts to par and their current values (firms would have to sell at losses to eligible to sell to the Treasury), I don’t see how they don’t make out like bandits. Morals and principles aside, just looking at the potential value of the portfolio the Treasury is buying for 700 billion. I read somewhere on realclearmarkets.com that the potential portfolio value is something like 2 trillion dollars on the low end. I also read opposing views that argue to get the market stabilized there must be a series of massive injections of money to the economy, creating inflation that will hamper returns. Like I said, I’m not ecstatic about the bailout, but I am willing to live with it to see markets stabilize. Always the opportunist, I can see how if managed properly the Treasury stands to come out of the bailout on top, but it’s risky. I wonder if the advantages of being so closely associated with people who make the rules of the game outweighs governments historically ability to fumble the ball. So the real question is can Paulson pull it off, maybe, but maybe not. But one thing I believe is certain, the housing market will come back and whoever is the holding the MBS bag when it does is going to see what might be the biggest capital gain ever and walk away from this debacle like Joe Kennedy did from the depression. Mark my words, one of the big stories coming out the credit crisis, whenever it’s over, is going to be the nerves of steel of the people who had the stones to buy MBS in midst of the storm, how they used their talents to buy up solid issues that survived, and how they are all billionaires. On a side note does anybody know where I can get reliable mortgage and delinquency and foreclosure data for free?

Best yet, the treasury won’t have to pay capital gains on any appreciation… OR on the income… I think that some kind of action is necessary, but one doesn’t want to use this crisis to to hand additional unchecked power over to the executive branch. It really does feel like the build-up to Iraq (give us unchecked powers or else Iraq will nuke us), except that the consequence of doing nothing is somewhat more likely here.

Everyone on TV is saying this isnt the bottom and we are going lower…sound familiar. It was the same people that said we were going to 15000 on the dow when it was at 14000. It doesn’t pay to sell down here, because the move off the bottom is usually so powerful that you give up a lot of upside if you capitulate. If the bailout doesnt pass and government does nothing - Dow 8000 is realistic. But even if this doesn’t get passed, something will be done, probably similar to recap they are doing to the European banks.