Investing 102

[GregWeld]

I figure some of you are interested or perhaps IN Bitcoin or similar....

Here's my take.... the higher this thing goes -- the more hackers are going to want to figure out a way to steal it.

Another story this morning about another hack attack... and most of you are unfamiliar with the Mt Gox theft and subsequent closure a couple years back...

This mornings article.

I don't care if you're in to it -- not my money - not my job to say yeah or nay... just a "buyer beware". To me - it reminds me of the tulip bulb.... LOL


https://www.bloomberg.com/gadfly/art...n-trader-s-day

[GregWeld]

Here's what $1,000 invested in 2007 ---- a lousy 10 years ago ---- would be worth today.



LOL ---- Oh yeah..... dream on! Woulda, shoulda, coulda comes to mind.




https://lateral-g.net/forums/attachme...1&d=1511969691

[Vegas69]

I have a new book that lays out all the stock market crashes. I just finished the 2008 segment. This 30 year old kid had his horse blinders on and should've been investing MORE. Of course the real estate market sucked and I had too many shiny new parts to buy for an old beater. The Dow got down to 7 or 8k just 10 years ago. WOW

What led to that crash:

In 1981, Option Arms were approved by the government. That meant a homeowner could pay less than the minimum and add to the mortgage balance EVERY MONTH vs. paying it down.

In the early 90's, lending became much more flexible with little to NO down payments which led to ever increasing subprime loans. This was to help BROKE people buy houses. How could that go wrong?

About this time, banks figured out a way to keep less assets on the shelf buying insurance against losses letting them lend more. GREED AIG was the biggest insurer.

Next, banks started assembling caches of mortgages and selling them to big investment companies like Lehman and Bear Sterns and creating stock funds. Most of them subprime with a high likelihood of default. Nobody thought houses would go down in value.

Pension funds had stayed away from risky investments until banks found a way to rate these caches of mortgages favorably. Then the pensions bought these toxic assets.

Lastly, Greenspan kept the interest rates low for way to long as he didn't see much inflation in the market. He missed the HUGE INFLATION in the housing market.

[GregWeld]

Originally Posted by Vegas69

I have a new book that lays out all the stock market crashes. I just finished the 2008 segment. This 30 year old kid had his horse blinders on and should've been investing MORE. Of course the real estate market sucked and I had too many shiny new parts to buy for an old beater. The Dow got down to 7 or 8k just 10 years ago. WOW

What led to that crash:

In 1981, Option Arms were approved by the government. That meant a homeowner could pay less than the minimum and add to the mortgage balance EVERY MONTH vs. paying it down.

In the early 90's, lending became much more flexible with little to NO down payments which led to ever increasing subprime loans. This was to help BROKE people buy houses. How could that go wrong?

About this time, banks figured out a way to keep less assets on the shelf buying insurance against losses letting them lend more. GREED AIG was the biggest insurer.

Next, banks started assembling caches of mortgages and selling them to big investment companies like Lehman and Bear Sterns and creating stock funds. Most of them subprime with a high likelihood of default. Nobody thought houses would go down in value.

Pension funds had stayed away from risky investments until banks found a way to rate these caches of mortgages favorably. Then the pensions bought these toxic assets.

Lastly, Greenspan kept the interest rates low for way to long as he didn't see much inflation in the market. He missed the HUGE INFLATION in the housing market.

I made a small fortune buying apartments in Scottsdale right after the Savings and Loan crash.... you could buy them for 50 cents on the dollar. It was instant equity.

For the people that lost money on the house flipping craziness -- there's a ton of people that have made a killing buying those losses and holding them. One side was a fad driven by cheap money and non-existent credit scores -- the other side is brilliance.

Personally -- I think the FED has completely missed the inflation rate once again. I hope it doesn't end badly. I was in business in the late 70's and early 80's when interest rates rose to 15 and 18%.... and you couldn't print a price list fast enough to keep ahead. It was ugly.

I used to make huge money almost daily flipping Microsoft - Cisco - Intel - Dell.... and the only thing that saved my bacon (day trading 3 million dollars) was that I decided to pay all cash for a new house (2 million) and then gut and remodel it (600K). Right when we were in the midst of the remodel -- the DOT.COM bust happened --- and I'd stopped flipping stocks because I was too busy with the house remodel. My favorite saying --- Better lucky, than smart.


Check the PRICE and TAX history section for that house! Lucky me!


https://www.zillow.com/homes/for_sal...59_rect/17_zm/


Having been an investor thru most of what you describe in the crash scenarios is what led me to believe in the dividend stocks. I've lived thru or been involved in many of those episodes you describe in the book. Making CASH is KING.... and when others are wringing their hands or frozen out --- it's the cash that allows you to take advantage of their mistakes.

[Vegas69]

Originally Posted by GregWeld

I made a small fortune buying apartments in Scottsdale right after the Savings and Loan crash.... you could buy them for 50 cents on the dollar. It was instant equity.

For the people that lost money on the house flipping craziness -- there's a ton of people that have made a killing buying those losses and holding them. One side was a fad driven by cheap money and non-existent credit scores -- the other side is brilliance.

Personally -- I think the FED has completely missed the inflation rate once again. I hope it doesn't end badly. I was in business in the late 70's and early 80's when interest rates rose to 15 and 18%.... and you couldn't print a price list fast enough to keep ahead. It was ugly.

I used to make huge money almost daily flipping Microsoft - Cisco - Intel - Dell.... and the only thing that saved my bacon (day trading 3 million dollars) was that I decided to pay all cash for a new house (2 million) and then gut and remodel it (600K). Right when we were in the midst of the remodel -- the DOT.COM bust happened --- and I'd stopped flipping stocks because I was too busy with the house remodel. My favorite saying --- Better lucky, than smart.


Check the PRICE and TAX history section for that house! Lucky me!


https://www.zillow.com/homes/for_sal...59_rect/17_zm/


Having been an investor thru most of what you describe in the crash scenarios is what led me to believe in the dividend stocks. I've lived thru or been involved in many of those episodes you describe in the book. Making CASH is KING.... and when others are wringing their hands or frozen out --- it's the cash that allows you to take advantage of their mistakes.

I got lucky along the way myself. While it sucked selling real estate in 2008-2012, I did take advantage on the real estate investing side and certainly in the rising market twice in the last decade in my real estate business. The recession forced me to be a much better business man and those skills will serve me for life.

Next time the stock market looks BAD, I"m in.

[SSLance]

Originally Posted by GregWeld

My favorite saying --- Better lucky, than smart.

Our small company had a Defined Benefit Pension Plan for the 3 of us back in the late 90s. We were very aggressive in the early years with the contributions and investments in it and had done VERY well...so well in fact that our actuary that took care of the plan explained to us that if we earned ANY more money in the plan, the Government would take the extra in taxes. So we sold everything and put 100% in treasuries. The Dot com bust happened about 3 months later.

The distribution from that Plan after it's 10 year life was the seed money for my current retirement plan. #Lucky

[Try2paz]

Another big bitcoin hack.

https://www.theguardian.com/technolo...hash-passwords

Whats interesting is seeing the rise in the bot trading for bitcoin.

www.Cryptotrader.org

Essentially you're paying someone a percentage who wrote a script to buy/sell/short/hedge etc.

I've got a few friends heavily into it and I've been tempted a few times but looking over how everything is shaking out seems like more and more risk everyday.

[AU Doc]

I think Bitcoin prices are going to come down. Whether that is soon or after another 10%, 100%, 1000% run is anybody’s guess. Sooner or later governments are going to decide they need a piece of the pie and they’re going to start regulating it (I don’t know how, but I’m sure they’ll figure it out). That will put a damper on things for sure.

Now if you’re an optimist, you might consider that the total value of bitcoin at the moment is only around $200 billion US. That’s what you’d be worth if you owned ALL of the Bitcoins currently available. Companies like Apple and Amazon are worth two, three, four times that. So if you think Bitcoin is intended to be a currency to replace whatever currency your country uses, then its WAY undervalued.

[WILWAXU]

Originally Posted by GregWeld

Here's what $1,000 invested in 2007 ---- a lousy 10 years ago ---- would be worth today.



LOL ---- Oh yeah..... dream on! Woulda, shoulda, coulda comes to mind.




https://lateral-g.net/forums/attachme...1&d=1511969691

Nice, I'm in two of those.. the Ex-Date is tomorrow for one of them

I just looked again.. looks like this does not include dividends.

[GregWeld]

Originally Posted by GregWeld

I figure some of you are interested or perhaps IN Bitcoin or similar....

Here's my take.... the higher this thing goes -- the more hackers are going to want to figure out a way to steal it.

Another story this morning about another hack attack... and most of you are unfamiliar with the Mt Gox theft and subsequent closure a couple years back...

This mornings article.

I don't care if you're in to it -- not my money - not my job to say yeah or nay... just a "buyer beware". To me - it reminds me of the tulip bulb.... LOL


https://www.bloomberg.com/gadfly/art...n-trader-s-day

Was reading some more about BitCoin this morning and found this in a "pro" article about how to buy them etc...... It's like - to me - "are you kidding!?!?!"








If you leave your money on deposit with the exchange, the risk is that the exchange itself will lose your bitcoins due to hacking, mismanagement, or fraud. In 2014, the then-biggest Bitcoin exchange, called Mt. Gox, declared bankruptcy after millions of dollars in bitcoins were stolen by hackers. Other early Bitcoin services simply disappeared from the web, taking customers' bitcoins with them The Bitcoin economy doesn't have anything resembling FDIC insurance, so if your exchange loses your bitcoins or goes bankrupt, you might be out of luck.

On the other hand, exchanges have matured significantly since 2014, and holding bitcoins yourself is risky, too. If your hard drive crashes and you don't have backups, your bitcoins could be lost forever. If you print out your bitcoins and then lose the paper, your bitcoins will be gone forever. If you put the bitcoins in a Web wallet and forget the password, your bitcoins will be lost forever. If someone puts bitcoin-stealing malware on your computer, you could lose your bitcoin regardless of how you store them.

In short, there's no completely safe way to hold on to bitcoins, and technical newbies are at particular risk. Investors in Bitcoin are at much greater risk of losing their investments to accidents or thefts than investors in conventional assets like stocks and bonds.


Here's where I copy and pasted the above info:


https://arstechnica.com/tech-policy/...ginners-guide/