Politics… it’s been fascinating watching the politics on this, and they may be opaque, but they are hugely covered. These is one of those cases where China is buying the assets of a continent. I did a foot-loose-retiree trip south in late ’09. In Buenos Aires you probably can’t go anywhere in the city and not see some form of PetroBras sign at least every 5 minutes; Soccer teams, bus stops, empanada stands, t-shirts on kids. And that’s in Argentina. In Brazil, it’s total.

This one correctly illustrates typical strategies employed by so-called high-frequency traders.

If I recall correctly, they’ve been a bit capital-constrained. Partnerships with China would help that.

But I avoid because they are politically opaque.

I actually was trading through some of the banks (BAC, WFC, WB) at various points during the slide. I’m potentially prone to “value trap” just like any other value investor, and I didn’t immediately recognize how serious the problems were.

Happily bailed on WB as soon as it became apparent that the CEO was lying through his teeth about the financial health. Got burned a bit on the shady BAC/Merrill deal, but profited nicely on WFC. Overall a wash — but could easily have been much worse.

Am sticking to more transparent businesses for now, thankyouverymuch!!!

(Tongue firmly in cheek…)

Since May 10, the S&P500 is up 15.7%. It did fall first — so Felix did okay as long as he jumped back in before mid-September. Still not sure it makes sense to try timing the market like that.

Consider a “counter-cyclic” philosophy? When the market projections are rosy, be content with high-dividend slow-growth stocks. Eventually the market will turn, and those will hold up better than their riskier peers. Then you are perfectly positioned to pick up some bargains.

Volatility is a long-term investor’s best friend.

Our top four holdings right now (in order from least risky to greatest return) are PG, JNJ, ABT, and IBM. Pharma is facing a tough decade, however the wiser companies are using the present cash flow to invest in other businesses. I expect they will maintain their strong dividends while achieving slow growth. IBM is one of several very similar “mature tech” companies, providing essential services on a scale that smaller businesses can’t touch. Their growth prospects are likely limited at this point, but their margins and cash flow are strong.

Dividends, stable earnings, and P/E below 15 limit the downside risk in an economic downturn. All stand to benefit from global growth. I hesitate to place big bets on any single issue, but have a dozen holdings of this nature that form the core of my portfolio.

Greed never rests. I’m evidently older, my urchins are through grad school, we held on to the mortgage docs for historical purposes, and the annuity is somewhat inflation adjusted. I owe on a library fine, but on consumer debt we’re part of the vile class exploiting the poor; forget miles, my credit cards pay me money.

But, my lessons in life lead me to the conclusion that there is a dearth of competence in many of our leaders and leading institutions. Sadly, my time in government exposed me to some of our state and national leaders. Not encouraging. In those circumstances I think you have to stay in growth mode. The urgency drops, and you can be selective, but you have to stay in the game.

Ideally I would love to be getting part of that return from bonds, but with yields in the toilet that isn’t an option right now. So I have been funneling new money into mortgage repayment and carrying 80%+ of investment assets in companies that I am certain will be worth more in 2020 than they are today (while paying a 3% dividend yield throughout). Can’t think of any better strategy to meet my goals.

Not sure where I would look for growth right now. y2kurtus has a good strategy, but you have to implement it very carefully.

Check; but what now? Very, very few bargains around, and the ones I got in 08-09 are at [or past] the fully valued stage. Lovely companies, solid management, usually at least some moat, all slowly regressing towards the mean. At the same time, I will never see those companies at those prices again.

Still, for the time being, though my money be dumb, it seems like there’s a whole lot of smart institutional money that would like to take its place.

TFF and DWJ are both right when they say that “smart retail” can beat the market like a drum over time.

If you ask me the truely dumb “retail order flow” comes not from people who are logging into e-trade to sell their 100 shares of JNJ, KO, & IBM at the worst possible moment… but from the people who are calling their brokers assitant to dump their XYZ Agressive Growth funds in the middle of a market panic. That’s why I will always prefer individually held stocks to funds.

The people who listened to Cramer say “GET OUT OF THE MARKET IF YOU NEED THE MONEY IN THE NEXT 5 YEARS” on 10/6/2008 and never returned (or who are just returning now.) – There’s your dumb money. Timing wise Cramer was right… from October 6th 2008 to the March 2009 low the market dropped a little over 30%. To the extent you avoided that bloodbath good for you. Yet from 10/8/08-today the market is UP almost 30%… so I hope the people who GOT OUT remembered to GET BACK IN.

I’d bet that most people who regularly read Felix’s blog could beat the market over their investing lives so long as they can promise never to bail out when the market is dropping like a rock. There are a hundred great investing quotes out there but my favorate is “the best time to buy is when there is blood flowing in the street and some of it’s yours.”

If so, I think it’s wise to realize the constraints that the big money have placed on them that retail investors do not and take advantage of that IE not having to worry about redemptions or fixed periods of re-allocation.