I disagree. 9.1% unemployment on paper does not mean that’s what it’s like in real life. If you consider the amount of people that are under-employed (working less than they’d like) or at jobs they don’t want but have to take anyways, the rates probably around 15%. The unemployment rate for young professionals (which many think is the most important and will have huge implications in the future) is around 15-20%. In some places in Europe it’s almost as high as 40%. You can’t spin those number to look good.
WillyR is a PM at a small boutique. You think he has time for this now?
I don’t think it’s trolling if you have to say you’re trolling. 
I think you’re doing it wrong. Plus the fact that you even felt the need to clarify points out that deep inside you really do care and seek our approval.
Well now you’re just throwing a tantrum.
Wait, this guy running his mouth works at a call center?!? You forgot to tell everyone you’re Winning!
its funny how you remember willy r and myself. i have no idea who anybody here is except for Chad.
I’m not sure what the complaint is here. Is the OP saying: 1) You don’t think the economy is bad, because you’re not one of the 9.1% that’s unemployed, the 15% that’s underemployed, or the next 15% who’s worried that they may join the unemployed very soon. 2) An unemployment rate that is nearly 2x the “normal” rate of unemployment is “big deal, ‘whooptie doo’,” particularly when there doesn’t seem to be much indication that it will go back to “normal” any time soon, and perhaps never (to the extent that the “new normal” hypothesis is true)? 3) You don’t believe that people are actually hurting or unable to get a job, despite the fact that there appear to be around 5 unemployed persons for each listed vacancy (and those are only the official unemployed). 4) You don’t wan’t to have to cut back your own spending for fear of looking flashy in an environment where others are hurting (you don’t have to, by the way, you just have to be man enough to say you don’t care and face the consequences). In fact, you can ahead and talk about the number of jobs you create by spending (this part may even be true). 5) The fact that exceedingly unhealthy and fattening food is substantially cheaper than healthy food proves that people at the bottom of society are really just fine? Yes, the fact that some people in dire straits have an iPhone 3G is a little puzzling, although it’s also true that the 3G came out before the crash. For the young, maybe their parents gave them a phone. Given how connectivity is essential to functioning in an efficient way in modern society, and given that a number of these phones are cheap knockoffs running on prepaid cards (I was surprised at just how good the Chinese knockoffs are until a neighbor showed me his - you have to look really closely to see the differences), I think that owning a phone like that doesn’t - by itself - prove that one’s actually wealthy enough to pay both rent and food at the same time.
As for launching businesses, etc… “In this economy” is like saying “In this weather…” or maybe “In this climate…” depending on your timeframe. You’re going out without a jacket, in THIS weather? That doesn’t mean that the weather will always require a jacket, but today it does. Many successful businesses were launched in recessionary times: Apple is a major example. But remember that many new businesses fail. We mostly see the survivors, so we’re not getting the full picture. Most new businesses die within 3 years. Is this number higher or lower during a recession?? I dont’ have the data, but it’s not an unreasonable question for people to ask. On the other hand, many businesses are launched out of necessity. And it’s not necessarily crazy to do so. Nor is it necessarily crazy to invest when the market is down… but people don’t often understand that when public perception of economic risks is an accurate representation of true economic risks, then the stock market delivers (on average) its required returns. So the market can go up, even if the economy is going down. If the investing public is more optimistic than reality, it delivers less. When they are more pessimistic, it delivers more. And what they often forget is that you can get the required (positive) return even if earnings is going into the crapper, as long as that’s what people are expecting, because that’s what it means to have stuff “priced in,” or “fairly valued.” The flip side of being “fairly valued” is that “the investment delivers an expected return in line with its risks.” How you identify those risks is a different for different people, and it also determines what they mean by “fairly valued.” But that “expected return,” “required return,” or “hurdle rate” that you use in your valuations is basically your determination of what an investment should deliver if it is fairly valued. A lot of people don’t realize it… they just plug some number into their discounting formula and declare it “a good value.” (Tangible book value is a different story, but not if the company is growing slower than its cost of capital, and there’s no indication of a corporate raider coming in). That’s why valuation is so tricky. You can look at the price and say “how much should that be returning,” and compare it with the economic prospects of the company. Or you can take the economic prospects of the company, discount it back, and look at the price and ask if it is too high or too low. The uncertainty will come either in the price, or the return, because you need more information to nail down both at the same time… and then there’s the additional problems of trying to figure out how much the growth component is worth. Value investing can be really useful at these junctures for companies like Pepsi, because people may panic over the high beta stocks going down, and sell Pepsi along with it. In a panic, people don’t have time to be nuanced. So it’s a good time for value investors with a long enough horizon, although those seeds are unlikely to yield results for a while.
Bchad, What I’m saying is I don’t live my life in constant fear. The news sells advertisement which coincidently is nothing but loom and doom to keep viewers glued. “Up next, find out how you can avoid the next financial crash after a word from our sponsors.” Sure there are people hurting. There are people hurting in good times too. I simply refuse to follow the herd and the mentality that this time is different and the economy really is about to dismantle. Perhaps I’m an ignorant optimist, but I chose to live a life where I see the bright side of things. It kills me when I conceive a grand idea only to have naysayers comment, “In this economy??” My heart goes out to those less fortunate. I simply don’t think our country can hold a candle in hardship compared to 90% of the other countries out there.
OK, I gotcha. Thanks for clearing that up. It is true that the first job of newspapers is to sell more newspapers… and it’s a PITA that their tactic is to say “Are you about to die from X??? We’ll tell you how to handle this, after these messages.” It’s bad enough when times are good… but when people have real reasons to be insecure, it just makes it worse.
what grand idea did you have? is it the one with the shank cause i think that idea is stupid in this economy. Chad, you investing these days or what? we haven’t spoke since Apollo, hope you didn’t get into that.
like I said, all talk no bite. lets hear what your grand idea is genius since you’re so smart. why would you bring up your grand ideas and not share. ppl on here are waiting patiently for you to reveal your thoughts. i mean, grand idea here right? its Amanda Lang. hot classy Canadian babe. learn about her. that’s my grand idea for the day.
Nice try you Zuckerturd wannabe. My idea is in production, I don’t care for the comments of you. She must be Canadian. Look at how much skin she’s revealing!
What bug crawled up your butt, Frank? Don’t you have a ton of value opportunities to evaluate instead of coming here and trying to crap on everyone like you’re some BSD, without even offering anything useful in return. My grand idea was to go to cash, bonds and gold in late July. And though I’ve missed some of the bounce in the last two weeks, I’ve been able to sleep pretty well the last few months, with plenty of dry powder, and I’m still ahead of the buy and hold crowd. Missing the drop means that I don’t have to catch the bounce to stay ahead, even if it would be nice if I could. I did nibble a bit at EMs in the interim, and I’m not sure whether that was a good idea or not. The high beta did mean that I got some of the latest bounce, but not enough to make all that much of a difference. But basically, we need to wait for Europe to fall apart before one can sensibly take on equity risk. Duration risk doesn’t make much sense, although some US 2-5 year exposure might be ok on the reasonable chance that there will be a flight to quality if things get really bad overseas. I need to do more research on Canadian stuff, but my instinct is that long Canadian banks/short US banks is a sensible trade to look into. Volatility is high, so it might be good to sell some calendar spreads. Just make sure you cut off your extreme tail risk. Covered calls too, although you wouldn’t want to do that on stuff that falls into a value screen (actually, a covered call at fair value would make sense for a value stock).
its in production? lets hear more. sounds interesting in this economy. Amanda Lang is a hot classy babe. look her up.
hi Chad…I’m very bored at the moment and have been in the last few weeks. Yes, we have plenty of ideas to look for and have been active. definitely not a BSD. barely Average Sized Hanging D. on the trade front, I have to disagree with a few things… 1) waiting for Euro - not really a big deal from a long term perspective. Valuations for some stocks are attractive at the moment and it will go up only higher once things are resolved (which they will). I hear ppl saying “waiting for the euro to resolve” all the time, and i find that quite funny. unless you’re buying businesses heavily leveraged to sovereign debt I truly think it matters very little (grain of salt). 2) shorting US banks/long Cdn - i think you have it the other way around if anything though I’m not endorsing selling Cdn banks. US banks are actually quite strong for the most part. fundamentals are gaining steam. not sure why you care about high Beta and volatility. I sleep well at night regardless. we should chat more.
That was where I quit reading.
Being from the other side of the ocean I have to say that there is no chance the Euro will fail. Too much effort has been into it. The real issue in EU at the moment is how to keep banks with bad business models alive and make the people shut up and pay for it. Some formula will be made up, some banks will fail and those who remain will have the chance to go on after this crisis. People will take the pain as banks and the economy will for the same period. Gradually economy will start up again and the cycle will begin. Actually, I believe that the EU is a really good field for long term investments with some careful research. Anyhow … in this economy …
Euro will stay, some countries will likely be ejected from it… Stratfor’s analysis makes sense on this topic, although I feel they ignore Greece’s future (and past) role as a buffer for an emerging Turkey (expanding into Balkans?).
That was where I quit reading.
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so what is your Grand Idea? we’re still waiting. We want to learn how to pick through the rubble like you…go ahead.
Hmm, well to be honest, our family loaded up on commercialized mid-western farmland in south dakota a few years back (about 2,000 acres around 2008/9). It’s been a pretty rockin deal so far. It could be scaled up for a fund, but it’s definitely more of a hands on investment like PE in terms of lining up commercial farmers who pay the rent (CF is strong) and managing soil samples to ensure leases are honored. I mean, it’s not time intensive, but it’s not like a publicly traded equity investment where you click buy and forget you own it. The income and peace of mind is pretty great. Simple math and a look at global demographics makes it a pretty simple long term play. In terms of an idea, not sure if I’d buy in now to that same investment (there’s been a decent amount of appreciation) but given that’s the portfolio, I would be sitting tight, enjoying the CF waiting for this European action to shake out. Greek holders are facing a pretty large potential haircut. Portugal, Spain and Ireland are still struggling majorly to turn their deficits around. After watching Greek go, sovereign financiers will think twice about the future of the sovs they buy and you could easily see one of the above three go if they can’t close the deficit over the next year or two. That could potentially open up major issues within the region.
see, that wasn’t so bad now was it? everybody is so fussed about the whole euro issue. we are long a euro financial so we’ll see what happens.