# Can anyone explain the stock market ?



## nitehawk55 (Sep 19, 2007)

In simple terms.....

When you lose $$ where does it go ? My one LIRA was valued at 30K and has now dropped $6K to 24K. 
I lose , but does someone win ? Does the money just vapourize ?


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## Tarl (Feb 4, 2006)

nitehawk55 said:


> In simple terms.....
> 
> When you lose $$ where does it go ? My one LIRA was valued at 30K and has now dropped $6K to 24K.
> I lose , but does someone win ? Does the money just vapourize ?


As far as stocks are concerned, basically it doe vapourize. The stocks value (what someone is willing to pay for them) drops as folks lose faith in the system. Same thing with houses....my house is probibly worth less than a year ago. Nobody has made any money on it but the value has declined.


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## Robert1950 (Jan 21, 2006)

Emotions, hormones and black magic are more likely explanations than anything logical.


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## bagpipe (Sep 19, 2006)

Buy high, sell low. Thats been my golden strategy up till now !


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## greco (Jul 15, 2007)

This is my humble understanding.

I think that you need to go back to the beginning of any given stock and look at the value of a share at the IPO (Initial Public Offering), the number of shares offered, factor in "splits", additional stock offered by the company at a later date, dividends, the values of the currencies that were used to buy the stocks (and their fluctuations), etc. 

Both human greed and fear (psychology) drives the markets. 

In simple terms, people will always want to buy while others are prepared to sell (any given stock)......it is a market.
The value of a share goes up and down based on "confidence"/ hope that the company will grow and prosper and have more people wanting to buy shares of that company. The reverse is also true. 

The value of a share can go up or down dramatically based on numbers of shares bought versus numbers of shares sold based on total number of shares available for that given company. There is a supply and demand concept in play here. The money is always in the system going between buyers and sellers at differing values per share.

I'm not doing a good job ....does this help?

Dave


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## greco (Jul 15, 2007)

bagpipe said:


> Buy high, sell low. Thats been my golden strategy up till now !


You have been in very good (not happy) company recently!:wave:

Dave


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## violation (Aug 20, 2006)

My mindset is buy low, sell high and I don't officially lose until I sell (or you know, the corporation dies).

Stock market is fun... being an impatient teen, it took me awhile to realize that you don't look at it as a short-term-profit kind of situation like Forex trading, which is equally fun but there's a lot more risk and activity. 

This may be a terrible thing to say but the US economy crash was/is kind of a positive for me. Number one, all my cheques are in USD (therefore I get more Canadian dollars... the magic of foreign exchange!) and number two, market prices are low! 

I think they call what I do 'value investing'... I call it attempting to meet the goal of retiring before I hit 25 years old, lol!


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## nitehawk55 (Sep 19, 2007)

violation said:


> I call it attempting to meet the goal of retiring before I hit 25 years old, lol!


Well good luck to you . I feel sorry for anyone just getting ready to retire and seeing their savings vanish . I'm hopeful mine will recover but honestly I'm having 2nd thoughts on the market and am going to look at different ways to save safely ( my mattress )


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## violation (Aug 20, 2006)

Yeah I guess it would depend on your age, how soon from now you're going to retire and your overall financial situation. 

I'm no expert but basically the way I've been taught to invest is that any money you may need within the next year should be kept in cash (savings account). Then anything you may need within the next two to five years should be invested in something moderately safe like bonds and anything you won't need for five to ten could go in the stock market.


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## Guest (Nov 8, 2008)

nitehawk55 said:


> In simple terms.....
> 
> When you lose $$ where does it go ? My one LIRA was valued at 30K and has now dropped $6K to 24K.
> I lose , but does someone win ? Does the money just vapourize ?


Yes, but it not me. There's a great John Galbraith book I recommend any time these sorts of questions come up: Money: Whence It Came, Where It Went. It goes through the history of currency all the way up to the gold-backed paper currency of not-too-long-ago and then into the stock market and then on to non-reserve methods for backing currency. It's fascinating and well worth the time to read it.

In a nutshell: the money represented by your investments never existed. You had the potential to turn your investments into to cash, but you opted not to do so and some of the potential was lost. It's a little more complicated than that, but that's the gist of it.


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## allthumbs56 (Jul 24, 2006)

iaresee said:


> You had the potential to turn your investments into to cash, but you opted not to do so and some of the potential was lost. It's a little more complicated than that, but that's the gist of it.


More lost potential - the story of my life :frown:


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## greco (Jul 15, 2007)

iaresee said:


> In a nutshell: the money represented by your investments never existed. You had the potential to turn your investments into to cash, but you opted not to do so and some of the potential was lost. It's a little more complicated than that, but that's the gist of it.


I don't *totally* agree with this statement, but that is beside the point....it becomes somewhat 6 of 1 and a half dozen of another.

It might be easier to think of it in terms the vaporization of your potential...not the money

Dave


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## Starbuck (Jun 15, 2007)

nitehawk55 said:


> Well good luck to you . I feel sorry for anyone just getting ready to retire and seeing their savings vanish . I'm hopeful mine will recover but honestly I'm having 2nd thoughts on the market and am going to look at different ways to save safely ( my mattress )


I can't tell you how tired I am of hearing "don't worry it'll come back!!" My father in Law is in the biz.


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## greco (Jul 15, 2007)

Can you ask him "When.....How soon?" :food-smiley-004:

Thanks

Dave


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## Guest (Nov 10, 2008)

greco said:


> I don't *totally* agree with this statement, but that is beside the point....it becomes somewhat 6 of 1 and a half dozen of another.


For the sake of being pedantic: what don't you agree with?



> It might be easier to think of it in terms the vaporization of your potential...not the money


Yes, it's easy to speak of stock as money but really it has potential to become money, and you trade it as if it might be money, but really: it is not actually money. It is _potential_ money.


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## greco (Jul 15, 2007)

iaresee said:


> Yes, it's easy to speak of stock as money but really it has potential to become money, and you trade it as if it might be money, but really: it is not actually money. It is _potential_ money.


This statement further clarifies the issue. 

Sorry...no disrespect intended.

Cheers

Dave


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## devnulljp (Mar 18, 2008)

greco said:


> Can you ask him "When.....How soon?" :food-smiley-004:
> 
> Thanks
> 
> Dave


How much and which stocks in particular...and I'd like next week's lottery numbers too please 

My first thought to a flippant answer to the thread title after the last few weeks, "Can anyone explain the stock market ?" is "apparently no".

OT, anyone seen the movie pi?


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## greco (Jul 15, 2007)

devnulljp said:


> "Can anyone explain the stock market ?" is *"apparently no".*


Good one !!:food-smiley-004:

Dave


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## nitehawk55 (Sep 19, 2007)

Starbuck said:


> I can't tell you how tired I am of hearing "don't worry it'll come back!!" My father in Law is in the biz.


Only to see it maybe grow again and then take a dive . It just seems to me that any gains you have made can go down the johnny flusher way faster then they grew . 
OH yeah.....I get sick of the " it's a long term investment " .....Right , the long term investment won't be there when my retirement time comes , it'll be in a down cycle .


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## mhammer (Nov 30, 2007)

And this, ladies and gents, is why I think the social institution of retirement is unsustainable.

Huh?

Over the last 50 years, people have come to expect, slowly but surely, that they could enter the workforce full-time at 23 or so, buy a home around 28 or so, have their own kids around 32 or so, and retire from the workforce around 62-ish, where they will live out their days travelling during retirement and maintaining what has become an increasingly more extravagant standard of living over the last few decades, until the age of 82-ish, despite spending fewer years in the workforce than their parents and grandparents, and putting off major life-stage expenditures (home, kids, etc.) later in their in their career.

How do they expect to pay for those last 20-25 years? Simple, investments. If they can sock their money away and parlay it at a steady 12-18% ROI (or better) then they can live off that, as a topping up of their meagre pension. Certainly teachers know that. Teachers pension funds are HUGE powers on the stock market. Teachers own the majority of BCE.

Sounds great, but just exactly what IS that money made off the stock market? Are those people contributing to gross domestic product? No. Are they making that money as a result of *actual* production or simply profits from selling stuff when it looks like it *might* be profitable? And how can a social institution survive if it depends fundamentally on a lot of people making a lot of money off the "promise" of making money for others?

The other thing I find weird is how many jobs end up going south or east for the purpose of increasing shareholder value (i.e., we cut operating costs by outsourcing so your stocks are worth more because we look like we're gonna make a profit this year...for the first time in 7 years), yet all those folks whose jobs were cut now turn to the TV cameras and say "I don't know how I'm going to retire." Quite possible that YOU won't be able to retire, simply because somebody else's pension fund (and need to bump up the ROI from 13 to 15%) said you can't.

Quite simply, the perceived need for an ever-higher standard of living, and longer more luxurious retirement, created on the basis of a shorter working life and money made from illusion rather than actual productivity, will not be able to stand on its own two legs for much longer.

That's not to say that investment and stocks are inherently "evil". Rather, unlike the old days when my parents bought reliable stocks that would yield 7% at a steady rate that you could simply collect dividends from regularly, and planned to live a modest life for another decade after age 65 (which neither of them made it to), the expected ROI required to sustain retirement under the current circumstances demands that money be more "nervous", and flit about in search of the ever-higher ROI that will let you afford a cottage, trips, two cars, etc. (despite having fewer children then previous generations). In other words, the current culture, and the form that retirement takes, makes investment money more central in the lives of more people, and more unstable in its search for greater profitability, and THAT's the problem. I can't see us keeping it up more than another 15 years, if that.

One need only look at the events of the past 2 months to realize that all these millions of retirees in the US and Canada and Great Britain and other places crapped their pants when they suddenly realized that they were "worth" a fraction of what they thought. It is simply unsustainable to have entire generations and a national economy that is "worth something" only on paper.


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## greco (Jul 15, 2007)

mhammer...Very well written , IMHO:bow:

Many of us have become used to a very luxurious standard of life/lifestyle.
This is, as you wrote, likely to change.

Cheers

Dave


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## Guest (Nov 10, 2008)

greco said:


> This statement further clarifies the issue.


Ahh cool. I'm not a money guy, I'm an EE, but I've tried over the years to absorb the money guy information so I can make informed decisions. It's very easy to get it a little bit wrong with big consequences. 



> Sorry...no disrespect intended.


No worries. I didn't see your comment as anything other than I might have a chance to learn something, further my understanding of money markets. :food-smiley-004:

Warmest regards,
- Ian


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## Guest (Nov 10, 2008)

mhammer said:


> Over the last 50 years, people have come to expect, slowly but surely, that they could enter the workforce full-time at 23 or so, buy a home around 28 or so, have their own kids around 32 or so, and retire from the workforce around 62-ish, where they will live out their days travelling during retirement and maintaining what has become an increasingly more extravagant standard of living over the last few decades, until the age of 82-ish, despite spending fewer years in the workforce than their parents and grandparents, and putting off major life-stage expenditures (home, kids, etc.) later in their in their career.


As a Gen X'er I have to say: that delusion you speak of starts and ends with the Baby Boomers. There is no such wide-spread expectation in my peer group or the one below me -- at least not in my random samplings. :smile: 

Even in university, in the hey days of the tech boom, me and my fellow engineers fully expected to be constantly working, if not right up to our very demise, then pretty darn near close to it. We just talked more about how to go from grueling work to less intensive stuff as time marches on. Not about how to retire rich with nary a care in the world.



> Quite simply, the perceived need for an ever-higher standard of living, and longer more luxurious retirement, created on the basis of a shorter working life and money made from illusion rather than actual productivity, will not be able to stand on its own two legs for much longer.


I couldn't agree more.



> One need only look at the events of the past 2 months to realize that all these millions of retirees in the US and Canada and Great Britain and other places crapped their pants when they suddenly realized that they were "worth" a fraction of what they thought. It is simply unsustainable to have entire generations and a national economy that is "worth something" only on paper.


For some _it's the second time around_ this game in the last 8 years! I know many people who had to come "out of retirement" after the tech bubble collapsed. All of them in my parent's age group (the 50-60 year old set). Who had their on-paper worth go from millions to mere tens of thousands in a matter of months and have never recovered. And yet, and yet: we go again in such a short period of time.

There's a great economist's blog I've been reading: http://globaleconomicanalysis.blogspot.com/ -- he's got a killer pessimism that's nice and good eye on what's going on.


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## greco (Jul 15, 2007)

Ian..I have been buying and selling stocks, etc (through a broker) for many years now. 

There certainly is a wealth of information (excuse the poor choice of pun...given the recent markets) about investing out there. 

I admire your determination to learn more about this stuff...it gets complicated. I work in the medical field, so investing, markets, etc is something I have taken upon my self to learn also.

I am also trying to learn electronics, to have as a hobby for my retirement at age 95 (Freedom 95). Maybe we can trade ideas, since you are an EE.

Also......I'm hijacking this post...SORRY to the OP!!

Dave


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## Lester B. Flat (Feb 21, 2006)

I saw the stock market described like this recently:

"The Dow is a dead banana republic dictator in full military uniform, propped up in the castle window with a mechanical lever attached to his arm, waving to the Wall Street Crowd". :wave:


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## GuitarsCanada (Dec 30, 2005)

All I know is most of mine are currently worthless. Thats what I know.


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## mhammer (Nov 30, 2007)

iaresee said:


> As a Gen X'er I have to say: that delusion you speak of starts and ends with the Baby Boomers. There is no such wide-spread expectation in my peer group or the one below me -- at least not in my random samplings. :smile:


I'm a Boomer who didn't finish university until I was a peer of Gen X-ers, so I have some insights into both mentalities. I have not planned on any sort of retirement, have not bought RRSPs or anything like that. My only concession to the possibility of retirement is that we bought a house so that somewhere in my late 60's (assuming I live that long) we would not have to pay rent, if it came to the possibility that I could not work.

On the plus side, I can say with some confidence that NOT planning to retire is actually kind of liberating. I can say whatever the hell I want to senor management because I'm not at all worried about my "career". I.E., I'm not worried about assuring that I get promotions X and Y in Z number of years so that my "best 5" will bump my pension up. I'm not worried about moving my money around, and am basically untouched by the recent economic downturn because none of my assets (other than pension contributions taken from me by my employer) sit in investments.

At the same time, I'm lucky because what I do is "knowledge work", and unless I start to dement or become otherwise too ill to think for more than the 20 minutes at a time that it takes to figure out what management needs to do, I can keep working for a long long time. Not everyone is so lucky as to have ended up on a career path that permits this.


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## nitehawk55 (Sep 19, 2007)

Good points guys , I'm glad it's bringing out a few opinions on what the markets are . 

I'm much like you mhammer , I've lived my life while I've been young and enjoyed it best I could . I too have been careless at planning for retirement and have the same sort of idea on having a house paid for ( I hope ) when I do retire and hopefully having enough to get by , I've never seen myself as living a wealthy lifestyle , that just isn't me or the wife . 

My feeling is this.....I've seen too many save all they could through their lives for retirement only to die before or be in poor health so they did not enjoy it . I know the wife and I will get by in our senior years somehow , it may not be anything fancy and I've never had those kind of expectations . I guess I'd rather be in a rocking chair regretting some things I've done then regretting things I never did . :food-smiley-004:


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## rhh7 (Mar 14, 2008)

*Hope to work until I die...*



mhammer said:


> And this, ladies and gents, is why I think the social institution of retirement is unsustainable.
> 
> Huh?
> 
> Very well written!...I totally agree with you.


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## mhammer (Nov 30, 2007)

nitehawk55 said:


> I've seen too many save all they could through their lives for retirement only to die before or be in poor health so they did not enjoy it .


All too true that fate can work in disappointing ways and that the best laid plans may be all for nothing. But we also forget how much people enjoy the structure and camaraderie that work provides. As a result, some people who have the savings and other assets to be able to retire will defer it until health forces them out of the workplace. Small wonder that so many retire and then die before the supposed freedom of retirement is fully realized.

There's a legend in Ottawa named Hy Bloom. This guy has been in the audio business for decades, nay, generations. As opinionated as a lot of audio guys are, but he has been around the block. He's gotta be in his 80's now. I see him occasionally. He maintains the same office he has had for nearly forever in downtown Ottawa, a mere 100 yards from Barrymore's club. It's cluttered with test equipment, and magazines, and something always seems to be on the bench. Of course, it doesn't really matter when you look in the window, there's nary a customer to be seen. Personally, I think he continues to go to the office because he can smoke cigars there and no one gives him grief about it. One of these days, I have to pop in and buy up some of his sure-to-be-rare parts before he starts forgetting where stuff is or before some family-member dumps it as an estate.


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## lbrown1 (Mar 22, 2007)

one simple rule of thumb with the stock market


stocks rise based on facts

stocks fall based on rumor


it sucks......but it's the way it is and the way it will be for as long as humans buy and sell in the stock market


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## Guest (Nov 11, 2008)

mhammer said:


> I'm a Boomer who didn't finish university until I was a peer of Gen X-ers, so I have some insights into both mentalities. I have not planned on any sort of retirement, have not bought RRSPs or anything like that. My only concession to the possibility of retirement is that we bought a house so that somewhere in my late 60's (assuming I live that long) we would not have to pay rent, if it came to the possibility that I could not work.


The majority of my peers have a similar attitude: pay down the debt fast, so you can do whatever you want and aren't a slave to the salary level. That makes your "work" options much more open in your later years.


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## allthumbs56 (Jul 24, 2006)

All I can say to people who doubt they'll be able to afford retirement is that if we keep losing decent paying jobs at the current rate then you won't be able to work when you're old either.

Walmart only needs so many Greeters.......


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## mhammer (Nov 30, 2007)

allthumbs56 said:


> All I can say to people who doubt they'll be able to afford retirement is that if we keep losing decent paying jobs at the current rate then you won't be able to work when you're old either.
> 
> Walmart only needs so many Greeters.......


Good point.

I guess the question that governments (provincial and federal) have to ask themselves is whether they are better off importing and growing the sorts of skill sets needed to support the economy such as it is, or re-engineering the economy to make good use of the skill sets that Canadians of all working ages have.

On the one hand, there has been a steady push towards what many call a "knowledge economy". That makes sense for the reason that knowledge is cheap to ship and can go anywhere and be used by anyone, and people in knowledge-based jobs can remain in them over a longer period of their lives.

At the same time, how does any nation compete against other nations in marketing their knowledge when knowledge CAN be shipped around the world so easily and cheaply. An economist I heard interviewed about a decade back described programmers as the car mechanic of the 21st century. His analogy referred to the way in which auto mechanics were these highly-paid exotic technologists at the dawn of the automobile era when few people knew much about cars, but had become this dime-a-dozen workforce over time. As he put it, "Why should Bil Gates pay American wages to American coders when he can get similar quality coders in Bangalore for Indian wages who can ship the work back and forth over the net?". In other words, there is risk in reverting to a knowledge economy because anyone who acquires the same knowledge can replace you if they undercut you. In contrast, Saudi Arabia and Uzbekistan will never become a major supplier of shakes and shingles to the North American market. There is a certain comfort in being a producer of needed/desired physical goods that DOES incur added shipping costs for your competitors.

I think it also warrants mentioning that encouraging the entire population to pursue the sort of education needed to be competitive as a largely knowledge-based economy would drain us dry in no time flat. Any economy NEEDS people that finish school at 18, start working, and pay taxes. It needs them as much as it needs people who go to university for 5 and 6 years and drain more from the public purse than they contribute to it for that period. So there has to be work for people who are more educated as well as those who are less educated; knowledge-work AND Joe-jobs are both important and needed.

So, allthumb's point about the need to plan so as to be able to find jobs for everybody is a very cogent one. One of the challenges it provides is that you can't stick seniors in physically-demanding jobs, and you can't expect younger people to pursue education that prepares them for knowledge work if you save the thinking jobs for middle-aged and older.

Somebody's got some thinking and planning to do here.


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## greco (Jul 15, 2007)

There are some very good points being made in this thread. Thanks for taking the time to express your thoughts. 

Dave


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## LeftyLang (Mar 4, 2006)

The Stock Market is Manic-Depressive...usually over bought on the upside & over sold on the downside. Short Term the Market runs on Fear & Greed...long term it runs on Companies that make a real profit and are able to reach their street estimates and more.

The hardest thing to do is buy when stocks are depressed and sell when they are flying high....you have to go totally against your emotions.
Also as you get near retirement, you should have a well balanced portfolio of Stocks and Fixed Income to protect against times like this.
JMO


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## nitehawk55 (Sep 19, 2007)

LeftyLang said:


> The Stock Market is Manic-Depressive...usually over bought on the upside & over sold on the downside. Short Term the Market runs on Fear & Greed...long term it runs on Companies that make a real profit and are able to reach their street estimates and more.
> 
> The hardest thing to do is buy when stocks are depressed and sell when they are flying high....you have to go totally against your emotions.
> Also as you get near retirement, you should have a well balanced portfolio of Stocks and Fixed Income to protect against times like this.
> JMO


Do you think changes have to be made in how the stock market operates to ward off these internet traders who just jump in to buy/sell daily for a quick buck VS people like myself who purchase stocks for long term investment to support well to do solid companies ? 
Is the system flawed ?


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## rollingdam (May 11, 2006)

What I find annoying is the reliance on analysts-you see this often -Company X has great sales-makes a profit BUT did not meet with analysts' expectations, so the stock begins to drop...


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## bagpipe (Sep 19, 2006)

rollingdam said:


> What I find annoying is the reliance on analysts-you see this often -Company X has great sales-makes a profit BUT did not meet with analysts' expectations, so the stock begins to drop...


Regarding analysts and their predictions, I couldn't believe this one. Regarding Nortels announcement of "only" 1300 layoffs in their most recent round on Monday, this jackass is disappointed that it wasn't 3000 employess! :

Kris Thompson, an analyst with National Bank Financial, called the latest round of reductions “shallow.”
“We are disappointed with this employee reduction program,” he wrote in a research note. “We had modelled a reduction of 3,000 employees based on an employee productivity analysis we had earlier conducted against Nortel's peer group.”


http://www.reportonbusiness.com/ser...s/?page=rss&id=RTGAM.20081110.wnortelstaff110


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## mhammer (Nov 30, 2007)

Paul said:


> (emphasis added)
> 
> There's part of the problem... a wee bit o bias coming through from the intelligencia. Those who get that higher education do tend to look down on those who don't. What some call "Joe-jobs", others call skilled trades. :smile:
> 
> One harsh reality in skilled trades is that progressive provincial governments have delisted many trades that used to be part of a formal apprentice programme. That makes it tougher to entice or recruit young workers into trades.


Absolutely fair comment, and absolutely my bad. Let me please, then, distinguish unskilled joe-jobs from semi-skilled jobs and skilled tradespeople. Big difference, which Paul was right to make note of.

With that correction, my point still holds; ALL those jobs form part of a well-balanced economy. (sounds like a Special K breakfast, doesn't it?)

For a while now, some economists have emphasized knowledge-work as the economy of the future, pointing out that Canada's education level gives it an edge over other nations, and that we should not content ourselves to remain the proverbial "hewers of wood and drawers of water" (i.e., entirely resource-based). That worked for a while until some very large and populace nations - namely India and China - started cranking own a lot more clever educated people than a puny country like our own ever could. Not as much on a per capita basis, mind you, but when you have the overall population they do, even a teeny fraction of the populace getting educated makes you a threat for a nation of 32 million. Once countries like those can offer up knowledge-workers who can provide services electronically to the entire world, simply having a bunch of Ph.D.s and MBAs in your country doesn't make you all that special anymore.

I'm thinking that being able to provide your own skilled and semi-skilled labour is what is truly needed these days to make you competitive. That, and developing local markets for goods produced efficiently in modest quantities. I.E. globalization is going to start to lose out to localization...which is not the same as protectionist)


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## rollingdam (May 11, 2006)

bagpipe said:


> “We are disappointed with this employee reduction program,” he wrote in a research note. “We had modelled a reduction of 3,000 employees based on an employee productivity analysis we had earlier conducted against Nortel's peer group.”
> 
> 
> What arrogance-this man should be laid off so he can experience first hand the results of his predictions-a lot of good his modelling process will do him then.


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## mhammer (Nov 30, 2007)

There was a time in Ottawa when plenty of folks didn't really know what it was that Nortel actually DID. All they knew was that it had stocks and the stocks went up....for a while. These days, I'm still confident that a lot of folks don't really know what Nortel actually does or makes. What they know about Nortel is that Nortel lays people off for a living. It's their brand.


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## Robert1950 (Jan 21, 2006)

No matter if anyone thinks this sounds socialistic, but, labour is a commodity, just like the material used make telephones and communications systems. If you aren't selling and you are really going in the hole, you have to cut back on production and the the commodities you use. How do you think this guy ends up feeling disappointed in laying off 1300 instead of 3000? Nortel didn't cut back enough on the commodities they used. This is how he sees and so he doesn't have problem with it.


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## mhammer (Nov 30, 2007)

Though this has obviously wandered far afield from its origins, your points are well-taken. Post-secondary education suffers from navel-gazing. In many respects, because being able to obtain a post-secondary teaching position is dependent on totally immersing yourself in a single discipline, the practical connection between education and the entire spectrum of jobs is neglected. Most university instructors will approach their students as if they are training the next generation of profs. To be fair, they are, but they are also teaching a whole whack of other folks whose career aspirations are different, but every bit as legitimate. So, if one is teaching, one should make a point of trying to impart knowledge based on the importance and usefulness of the knowledge itself, and not any specific role.

Case in point. These days, while a developmental psychologist by training, I work in human resource management with a sort of public administration slant. While I can't teach part-time anymore for health reasons (can't do those 70hr work weeks like I could when I was younger), if I were to teach, say, a course on organizational behaviour, I shouldn't teach it as if my class is headed for similar positions as my own. Somewhere in there is going to be someone who, in the context of a 4-employee roofing company, needs to know some of what I'll be covering. Somewhere in there is going to be a shop foreman who will need to understand how to maintain motivation of staff or simply how to hire good people. THEIR role needn't be MY role. It is the knowledge itself that is useful and worth acquiring, and what deserves respect is not some specific role they use it in, but the fact that they seek to be better informed and use what they know wisely.

My dad was a machinist, who was an appalling businessman, and ran a small shop of himself, 2 employees, and me - as indentured free labour on weekends to help make ends meet. What he did was honourable and, equally important, *thoughtful* work. (I get a bit of pride from knowing that one of his pickup gigs was machining a control panel for Le Studio at Morin Heights, scene of many huge hits).

I suppose it is only natural that people seek out work that demands less exhaustion and risk of physical injury, less need to hose down at the end of the day before your wife will kiss you, and more opportunities to use your noggin. But that does not make work that DOES require a good hosedown at quitting time less important or worthy of respect.....or less benefitted by learning more, whether that comes in the form of on-the-job, community college, or university education.

As for the point about too much dependence of small-to-medium-sized communities on single employers, I couldn't agree more. I lived briefly in St. John's in the 70's and the demise of single-employer places like Come-by-Chance still smarts.


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## Michelle (Aug 21, 2006)

Stock Market: (My opinion) Like a Ponzi scheme, designed to allow the rich to fleece the average person and scoop up valuable assets for pennies on the dollar. See also 'shell game'.

I won't touch the stock market or ANY investment scheme, ultimately, all are only worth the paper it is printed on, like our fiat $$, absolutely no intrinsic value. Precious metals, tangible commodities, and being debt-free is my way of escaping the emotional rollercoaster known as 'investment'. I don't trust any of these broker guys or banksters.

I don't have huge amounts of wealth accumulated, but I have a life, a family, some not-so-extravagant things that give me enjoyment, a home that I own, and a company pension that *should* see me thru. If not, I am a very handy person and can make $$ applying my talents. I am just not going to work to make others rich. 

The time is near, the retirements/terminations are happening right now and at 28 2/3yrs in, I am a target. (Just not sure if I want to be hit or not). I can only live for today.

Michelle


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## LeftyLang (Mar 4, 2006)

nitehawk55 said:


> Do you think changes have to be made in how the stock market operates to ward off these internet traders who just jump in to buy/sell daily for a quick buck VS people like myself who purchase stocks for long term investment to support well to do solid companies ?
> Is the system flawed ?



More regulation is coming.....
The U.S. Mortgage "Stock Swap" was a fine example of the Kings on Wall Street being greedy & screwing things up for everyone. The banks have to also take responsibilty for lending out mortgages to people that really had no way to afford the homes moving forward....GREED at it's finest
JMO


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## mhammer (Nov 30, 2007)

Paul said:


> The real tragedy is that many of the folks who took out sub-prime mortgages are now broke, _and_ have a destroyed credit rating.


Which is, of course, why is why any realistic solution to the current crisis would involve not only bailing out the lenders, but finding some way to permit those who were suckered in as borrowers to regain the sort of credit rating that permits them to be viable members of the national economy.


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## allthumbs56 (Jul 24, 2006)

mhammer said:


> Which is, of course, why is why any realistic solution to the current crisis would involve not only bailing out the lenders, but finding some way to permit those who were suckered in as borrowers to regain the sort of credit rating that permits them to be viable members of the national economy.


Not to put too hard a point on it but these are people that couldn't qualify for good reason in the first place. They were originally barred from borrowing because of their inability to repay - something that has merely borne itself out.


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## Starbuck (Jun 15, 2007)

allthumbs56 said:


> Not to put too hard a point on it but these are people that couldn't qualify for good reason in the first place. They were originally barred from borrowing because of their inability to repay - something that has merely borne itself out.



Thank you! What the heck ever happened to common sense? What happened was the institutions were betting on folks defaulting. It's a travesty! SO, regular Joe's have to suffer cause the lenders gave out bad mortgages, then they turned around and took out insurance cause they knew these people could not pay and then when it all came tumbling down in steps the Gov't to the rescue. The shot heard round the world folks. Should have been illegal.


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## Guest (Nov 12, 2008)

Starbuck said:


> Thank you! What the heck ever happened to common sense?


If your common sense doctrine says: consumption must always increase in order for my countries economy to thrive -- then this explains who such a lending practices can come not only come in to existence, but be encouraged by a government through legislation and incentives. It's not just nice that people were able to spend well beyond their means, it's a necessary thing that consumption increase in order to sustain the economic models used in the U.S.



> What happened was the institutions were betting on folks defaulting. It's a travesty! SO, regular Joe's have to suffer cause the lenders gave out bad mortgages, then they turned around and took out insurance cause they knew these people could not pay and then when it all came tumbling down in steps the Gov't to the rescue. The shot heard round the world folks. Should have been illegal.


In most other first world economies the sort of shuffling and rebundling of debt that went on in the U.S. is illegal. Out of it all we got some funny comics though: http://www.businesspundit.com/sub-prime/


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## mhammer (Nov 30, 2007)

You gents all make good points. I suppose it is necessary to distinguish between *degrees* of credit. As someone who has, outside of buying a home, never gone into debt by more than maybe a thousand bucks (which was usually paid off quickly), I have little sense of how far losing one's credit rating extends. My point was that, even though the folks who were suckered into pursuing sub-prime mortgages may have been bad credit risks in the first place *as far as home purchase is concerned*, eliminating them from consideration for being able to borrow $1000 or get $1000 credit to buy some furniture ultimately hurts the person whose income depends on having a market for the furniture they make or sell.

True, a bailout of the lenders (i.e., banks) permits those lenders to partake in the lending risk that all solid economies are predicated on, but if credit ratings for individuals disqualify them from ANY borrowing, that sort of shrinks the viable population for small allowable risks.

BTW, if you can stand the drone of her voice, Margaret Atwood's intriguing lectures as part of the Massey Series on CBC Ideas this week has been all about the concept of debt. VERY interesting, and provides nice linkages between social history, political history, economics, and theology (e.g., the idea of debt as "sin"....or not). You wouldn't think the concept of debt was all that interesting, but she connects it to so many things that ity becomes interesting. You can find podcasts here: http://www.cbc.ca/ideas/massey.html


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## Robert1950 (Jan 21, 2006)

iaresee said:


> In most other first world economies the sort of shuffling and rebundling of debt that went on in the U.S. is illegal. Out of it all we got some funny comics though: http://www.businesspundit.com/sub-prime/


That was funny. :smile:


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## allthumbs56 (Jul 24, 2006)

mhammer said:


> My point was that, even though the folks who were suckered into pursuing sub-prime mortgages may have been bad credit risks in the first place *as far as home purchase is concerned*, eliminating them from consideration for being able to borrow $1000 or get $1000 credit to buy some furniture ultimately hurts the person whose income depends on having a market for the furniture they make or sell.


C'mon _....*People need to take responsibility for their actions*. _

What we have happening in the States, is that through a well-intended - but poorly thought-out Clinton administration plan, people who COULD NOT AFFORD IT were allowed to borrow to buy a house. Now I won't say that the lenders are not at fault - but what they did was what they were encouraged to do: lend to higher-risk folks, and then (like they do) they made a business out of it and also tried to lay off some of the risk. 

I see the same problems with all the credit cards and especially the "Don't pay a cent" crap. If you can't afford to buy it now - what in Gawd's name makes you think that you will be able to afford it a year from now? On a personal note, I will never fully recover financially from my 1st wife, and her ADDICTION to having things without the ability to pay for them It ruined ours as well as her next marriage - not to mention the problems and grief it has caused our children.


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## mhammer (Nov 30, 2007)

allthumbs56 said:


> C'mon _....*People need to take responsibility for their actions*. _


Couldn't agree more. The thing is, that people who expect to sell stuff to customers can't make a living if a huge percentage of their potential customers are prevented from *being* customers by credit ratings that don't distinguish between stupid major purchases, and minor purchases. So whatever solution is reached has to not only provide encouragements for people TO take responsibility for their own actions, but not do so in a manner that deprives merchants of potential customers. Remember that in those devastated neighbourhoods in Cleveland and similar places, there are corner stores, hairdressers, auto shops, and even musical equipment stores that depend on having local customers to stay afloat.

Keep in mind as well that if you live next door to a foreclosed home that has fallen into disrepair after being abandoned, your own property value has tanked and no one will buy your home for the privilege of living next door to something with busted windows, boards over the doors, and pigeons for tenants. And if your home isn't worth very much, you're probably not in great shape to take out a loan and buy one of those American-made cars the auto industry so desperately needs you to buy. And remember, that can happen even if you were one of the sensible people who did NOT buy more than you could afford.

The thing is, there are a LOT of spillover effects from this subprime mortgage thing, and mopping up after it will be very complex and require people to bite the tongues and do some things that rub them the wrong way.


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## Michelle (Aug 21, 2006)

Credit card defaults will be the next tsunami. Since people, (in the US anyway), can't borrow against the equity in their home, (because of deflation), they are maxing their CC's just to live.

Keep your balance $0


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## mhammer (Nov 30, 2007)

Michelle said:


> Credit card defaults will be the next tsunami. Since people, (in the US anyway), can't borrow against the equity in their home, (because of deflation), they are maxing their CC's just to live.
> 
> Keep your balance $0


Thanks for reminding me. I have to go over to the bank at lunch and pay off the few dollars owing on mine.:smile:


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## nitehawk55 (Sep 19, 2007)

OK , so I just finished reading a CNN stock market summery for today.....

Market breadth was positive. On the New York Stock Exchange, winners beat losers by almost three to one on volume of 1.99 billion shares. On the Nasdaq, advancers topped decliners by five to two on volume of 3.05 billion shares .

So in the market there really is "winners and losers " , that being a good or bad thing depending where you are at . Today was an "up" day for the market but is this just some buyers jumping in for a quick profit or is it turning around ? If you read a bunch of other articals on the $700 billion bailout which looks to be a total mess and the likelyhood that the big 3 are going to fail it sure doesn't look good . 

I guess a lot of people are pulling mutual funds and bailing out.....can't say I blame them and wonder if I should be making some changes in my LIRA ?


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## Robert1950 (Jan 21, 2006)

Paul said:


> I disagree. The Credit Card issuers will start reducing limits sooner rather than later.


I only have a CC with a $2000 limit - that is intentional.


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## Lester B. Flat (Feb 21, 2006)

nitehawk55 said:


> OK , so I just finished reading a CNN stock market summery for today.....
> 
> Market breadth was positive. On the New York Stock Exchange, winners beat losers by almost three to one on volume of 1.99 billion shares. On the Nasdaq, advancers topped decliners by five to two on volume of 3.05 billion shares .
> 
> ...


Forget understanding the stock market. It has totally disconnected from the fundamental forces that usually drive it, which are supply and demand and the psychological effects of good and bad news in regard to potential growth. Your watching ruthless, big fish eat naive, little fish right now. The professional medium sized fish are sitting out on the sidelines waiting for the bubble to completely deflate. I expect a further 30-40% loss on the Dow before it's all over. There is still $70 trillion in bad paper out there to be purged from the system.

I also have an LIRA and since I can't cash it out I'm vulnerable and looking to make some changes. The only safe place to hide is precious metals, not so much to make money but to avoid potential total loss. I only have the choice of various managed funds so I can only move into a precious metals fund which I assume is a collection of mining companies. Companies can fail. Not as safe as buying physical gold or silver but when gold starts to approach $800/ounce (some say $2000 is coming) I may move in.

The stock market is usually an indicator of what the economy will be like 6 months later so the full effects of the crash on the economy are still months away. Hang on tight!


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## keithb7 (Dec 28, 2006)

*Investment Options*

I am interested in hearing some ideas where I can place my investments instead of the volatile stock market. I have been purchasing mutual funds for the past 15 or so years. I was feeling pretty good seeing my net worth grow. "on paper" I had enough put away to pay off my mortgage if I wanted to. Today that amount is half of what it was 6 mos ago. I am back to the same amount that I had in about 2001 or so. I am thinking about investing in real estate. Any other ideas? I don't have a lot of faith in continuing to buy mutual funds at the rate I have been for the past 15 years. Maybe I'll start up a GIC or some sort of bond account where I can deposit funds every pay cheque safely. When I have enough saved up for a down payment, I'll purchase some real estate. Hang on to it for 20 years or so. I should see some stability there versus the stock market based investments I currently have.


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## Steadfastly (Nov 14, 2008)

nitehawk55 said:


> In simple terms.....
> 
> When you lose $$ where does it go ? My one LIRA was valued at 30K and has now dropped $6K to 24K.
> I lose , but does someone win ? Does the money just vapourize ?


No, it doesn't vapourize but it seems like it. It just gets devalued, like a car or a house, etc. Your $100.00 is now worth X amount of dollars because markets, financial systems have lost their value and everything, monetary, falls with it.


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## Robert1950 (Jan 21, 2006)

Doubt, Fear, Panic, Greed. Anything else? Let me think,... Nope.


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## Guest (Nov 22, 2008)

keithb7 said:


> I am interested in hearing some ideas where I can place my investments instead of the volatile stock market. I have been purchasing mutual funds for the past 15 or so years. I was feeling pretty good seeing my net worth grow. "on paper" I had enough put away to pay off my mortgage if I wanted to. Today that amount is half of what it was 6 mos ago. I am back to the same amount that I had in about 2001 or so. I am thinking about investing in real estate. Any other ideas? I don't have a lot of faith in continuing to buy mutual funds at the rate I have been for the past 15 years. Maybe I'll start up a GIC or some sort of bond account where I can deposit funds every pay cheque safely. When I have enough saved up for a down payment, I'll purchase some real estate. Hang on to it for 20 years or so. I should see some stability there versus the stock market based investments I currently have.


Pay off debt. That's your highest rate of return right there. Start with high interest debt and move on from there to things like your mortgage, student loans, etc.

If you're debt free you could consider continuing to invest while the market is low. If you're buying regularly (monthy, semi-monthly, etc.) and investing the same amount every month your money is going further now -- and when things swing up (and they do eventually) you'll have more to gain. Of course, this strategy assumes you've got lots of time to wait out the downturn.

Precious metals usually do well during times of economic downturn. Gold. Platinum. Both usually rise as commodities fall.

I'm not an (investment banker/financial advisor/accountant/bean counter/stinking rich man) so caveat lector.


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## Apostrophe (') (Dec 30, 2007)

keithb7 said:


> I am interested in hearing some ideas where I can place my investments instead of the volatile stock market. I have been purchasing mutual funds for the past 15 or so years. I was feeling pretty good seeing my net worth grow. "on paper" I had enough put away to pay off my mortgage if I wanted to. Today that amount is half of what it was 6 mos ago. I am back to the same amount that I had in about 2001 or so. I am thinking about investing in real estate. Any other ideas? I don't have a lot of faith in continuing to buy mutual funds at the rate I have been for the past 15 years. Maybe I'll start up a GIC or some sort of bond account where I can deposit funds every pay cheque safely. When I have enough saved up for a down payment, I'll purchase some real estate. Hang on to it for 20 years or so. I should see some stability there versus the stock market based investments I currently have.


To me it sounds like your investment choices aren't in line with your risk tolerance.

I'd try grabbing a book on asset allocation:

http://www.amazon.ca/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/0071362363/ref=pd_ts_b_16?ie=UTF8&s=books

It's American oriented, but very good, and a very easy read. There's a newer book called The Intelligent Porfolio that I grabbed about a month ago, but I haven't read through it yet.

There's some online info available that's Canadian specific under the Asset Allocator link on the left here: (I'd suggest reading the whole primer, it's great)

http://www.shakesprimer.com/

And most of the banks have planners that should give you some type of indication of your risk tolerance:

http://eadvisortdeseries.tdcanadatrust.com/home.asp (it's only working in IE for me)




Robert1950 said:


> Doubt, Fear, Panic, Greed. Anything else? Let me think,... Nope.


"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." - Warren Buffett

"I'm a greeeeeeddy black duck" - Daffy Duck/Apostrophe

Let's hope I'm not wearing a potato sack this time next year.


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