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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

Not quite. There is the adage of buying on the rumor and selling on the news. From February 4th till today, including the drop, the stock is up around 25%. Maybe people were already expecting a big quarter and so the news wasn't as big a deal. I think people get used to Apple having a quarter that blows away even the most optimistic rumors and thus goes on a nice run. J&J may have matched the upside rumors so there wasn't anymore room to run.

Think of it like the NFL draft being based on potential, so before a player gets on the field their expectations can be really high. Once they get on the field, they can be a decent NFL player, yet still be disappointing because they aren't an All-Pro.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

I spent 8 years in the most cynical, pessimistic, negative hedge fund on the globe and actively rooted for catastrophe and mayhem to enhance my net worth. It's no way to live. I'm a reformed short seller who firmly believes the world will continue to spin, commerce will continue to hum along and innovation will continue to dazzle and amaze us every step of the way. I used to believe that danger lurked behind every upswing and that every new high in the indices meant an imminent ##### to the growing bubble with a pop that would wipe out portfolios faster than tornado taking out a trailer park. I knew - KNEW - that the housing bubble was going to burst and that home values were going to plummet. I had my best professional year in 2007 when most people were getting abused.

So believing that we are headed for protracted troubled times isn't a large leap of faith for me and yet, I just am not ready to take it yet. The recent rise in home values feels almost organic to me in that rates have remained low, buyers are subjected to stringent lending standards and demand is outpacing supply in the most livable areas of this country. Stocks - while ridiculously overvalued in some cases - are really the only place people can park money for return unless you hunt like hell for yield and are savvy enough to buy the right debt - most aren't. Gold and Silver have consolidated, inflation has been relatively tame, unemployment rates are reasonable (for the most part), political uncertainty seems moderate compared to recent gridlock and country is FINALLY looking for common sense methods of raising revenue WITHOUT raising taxes (legalizing weed and gambling in certain states - a pattern that will be mimicked and frankly speaks to new and exciting freedoms in our great nation).

Yeah, I hear you...stock markets go up AND down and while I have no doubt in my mind that a correction is forthcoming, I don't foresee another financial holocaust like 2008, nor even a great pull back like the tech meltdown of 2000. I felt like there were catalysts to point to in the direction of an opaque crystal ball. I don't feel that way today. And maybe that's what worries me the most. Maybe that's why I should be the most afraid...that I don't sense it.

:goodposting:

The amount of pessimism and sky-is-falling outlook is just going to keep this market going.

This.

Everyone is predicting a pullback so it probably keeps on going.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

Buy the rumor, sell the news.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

Not quite. There is the adage of buying on the rumor and selling on the news. From February 4th till today, including the drop, the stock is up around 25%. Maybe people were already expecting a big quarter and so the news wasn't as big a deal. I think people get used to Apple having a quarter that blows away even the most optimistic rumors and thus goes on a nice run. J&J may have matched the upside rumors so there wasn't anymore room to run.

Think of it like the NFL draft being based on potential, so before a player gets on the field their expectations can be really high. Once they get on the field, they can be a decent NFL player, yet still be disappointing because they aren't an All-Pro.

Well said.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

Not quite. There is the adage of buying on the rumor and selling on the news. From February 4th till today, including the drop, the stock is up around 25%. Maybe people were already expecting a big quarter and so the news wasn't as big a deal. I think people get used to Apple having a quarter that blows away even the most optimistic rumors and thus goes on a nice run. J&J may have matched the upside rumors so there wasn't anymore room to run.

Think of it like the NFL draft being based on potential, so before a player gets on the field their expectations can be really high. Once they get on the field, they can be a decent NFL player, yet still be disappointing because they aren't an All-Pro.

I subscribe to this approach:

When bad news reaches the point where it no longer makes stocks go down, you're entering into a bull market.

When good news reaches a point where it no longer makes stocks go up, you're entering into a bear market.

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

I've heard good things about Inverse Index ETFs. With 3x leverage of course.

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

I've heard good things about Inverse Index ETFs. With 3x leverage of course.

looking for serious answers

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

I've heard good things about Inverse Index ETFs. With 3x leverage of course.

looking for serious answers

Serious answer is don't try to time the market. The last guy who tried to do that ended up getting mocked nonstop for the next two years.

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

Energy and consumer staples. Regardless of what happens, people still tend to pay their electric bill, pay their heating bill, buy groceries, and replace their old underwear.

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

Energy and consumer staples. Regardless of what happens, people still tend to pay their electric bill, pay their heating bill, buy groceries, and replace their old underwear.

Vanguard's energy fund lost about half its value during the financial crisis. If you saw that crisis coming and followed your advice, you would have fared about the same as auto-pilots like me who just robotically invest in the S&P 500.

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Ok, pros.

You pull out to cash and wait this out, or invest in what?

Interest rates are going to go up or the stock market keeps going up. Period.

So you can't do bond funds. Even corporate bonds are dicey.

Gold? There's a glut of supply now.

What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

Energy and consumer staples. Regardless of what happens, people still tend to pay their electric bill, pay their heating bill, buy groceries, and replace their old underwear.

Vanguard's energy fund lost about half its value during the financial crisis. If you saw that crisis coming and followed your advice, you would have fared about the same as auto-pilots like me who just robotically invest in the S&P 500.

I'm not expecting a crisis. Crashes #### up everything. Market correcctions typically don't #### over energy and consumer staple stocks.

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What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

how many times have you seen a broad market selloff with a spiking interest rate environment?

I haven't. I'm not some pro. I just invest in low fee index funds with prescribed asset allocation percentages for my age and risk tolerance.

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What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

how many times have you seen a broad market selloff with a spiking interest rate environment?

I haven't. I'm not some pro. I just invest in low fee index funds with prescribed asset allocation percentages for my age and risk tolerance.

Then just keep doing that.

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What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

how many times have you seen a broad market selloff with a spiking interest rate environment?

I haven't. I'm not some pro. I just invest in low fee index funds with prescribed asset allocation percentages for my age and risk tolerance.

Don't change. Low-fee index funds until you retire. Done.

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What sectors and indexes are traditionally safe in a spiking interest rate environment with a broad market selloff? Energy? Big Banks?

how many times have you seen a broad market selloff with a spiking interest rate environment?

I haven't. I'm not some pro. I just invest in low fee index funds with prescribed asset allocation percentages for my age and risk tolerance.

Then just keep doing that.

:goodposting:

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Commodities

I'm almost reluctant to say this out loud, but I do think a case could be made for uranium. Talk about a sector that has been abused and left for dead...I own some mining stocks that I just can't bring myself to sell, but don't have the balls to buy more of, despite the fact that from a historic standpoint, these things are dirt dirt cheap. That said, the punishment the spot price has absorbed since Fukushima has put great strain on the balance sheets and operations of these producers.

Other commodity ideas? We own about 10 physical minor metals, but unless you are buying a large amount of these, have a broker that can buy them and have a facility in place for storage, they just aren't good ideas for the casual investor. We really like bismuth, but outside of buying 5N Plus, I don't really know a good way for the average joe to play it. And really, I don't see a major spike coming in this metal, just an uptick in demand without the corresponding uptick in supply. :shrug:

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Over the next four months several factors (including but not limited to Europe and the political mudslinging) are going to result in significant stock market losses IMHO. It may not happen, but I think the likelihood is much stronger than an increase. The Dow is at 12,997 right now. :blackdot:

Anybody miss this guy?

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Over the next four months several factors (including but not limited to Europe and the political mudslinging) are going to result in significant stock market losses IMHO. It may not happen, but I think the likelihood is much stronger than an increase. The Dow is at 12,997 right now. :blackdot:

Anybody miss this guy?

Every time I come into this thread I go to the first page, read that and chuckle, although I kinda feel bad for almost anyone who was on the short side of this market in the last two years. The Dow is only up about 4,150 points in that span :lmao:

ETA: 8,000th post :thumbup:

Edited by fantasycurse42
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What's your take on China's risk, GM? That's my biggest concern as the trigger for the next major correction.

Real estate over there is a huge risk. Property trusts that have been recklessly borrowing & building are starting to default, and large sums are due by 2015. If a few these trusts can't make payment and default, then I can see that as the start of the avalanche.

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Cocoa is up about 38% over the past year and there's a projected deficit over the next 10 years with Asia consuming more and more cocoa products (the big cocoa dogs have recently built factories and are growing in Asia....especially Indonesia). Just sayin. Currently at 3,066/mt.

Who doesn't like chocolate?

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Commodities

I'm almost reluctant to say this out loud, but I do think a case could be made for uranium. Talk about a sector that has been abused and left for dead...I own some mining stocks that I just can't bring myself to sell, but don't have the balls to buy more of, despite the fact that from a historic standpoint, these things are dirt dirt cheap. That said, the punishment the spot price has absorbed since Fukushima has put great strain on the balance sheets and operations of these producers.

Other commodity ideas? We own about 10 physical minor metals, but unless you are buying a large amount of these, have a broker that can buy them and have a facility in place for storage, they just aren't good ideas for the casual investor. We really like bismuth, but outside of buying 5N Plus, I don't really know a good way for the average joe to play it. And really, I don't see a major spike coming in this metal, just an uptick in demand without the corresponding uptick in supply. :shrug:

Depends on the moment in time. I know people who have made a killing off tame hay but coffee, heating oil, ethanol and cotton can all provide good buy and hold and call opportunities. Swaps are too volatile, those are generally for the big boys. A lot of it can be seasonal/cyclical but commodities by and large have some predictable arcs. Metals are less predictable although aluminum alloy is a favorite. Uranium huh? Seems like long-term, the problem might be extraction methodology. I had read the miners are becomming overrun with regulation, even in the third world. Seawater extraction is pretty interesting though, especially if the market returns.

Edited by George Jefferson Airplane
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What's your take on China's risk, GM? That's my biggest concern as the trigger for the next major correction.

Real estate over there is a huge risk. Property trusts that have been recklessly borrowing & building are starting to default, and large sums are due by 2015. If a few these trusts can't make payment and default, then I can see that as the start of the avalanche.

Funny you should ask that. Back in November (I think) the Portland Alternative Investment Association hosted an education event where John Fichthorn was the guest speaker. Topic of the event was "China's Banking System: Out of the Shadows" and man...it scared the hell out of me! What's even scarier is that I missed half of it because a rookie board member didn't buy enough beer and we ran out before the presentation even began. So I had to wrangle up some more, missing a lot of his presentation. Despite that, what I saw was alarming.

When I finally sat down midway through his presentation, he was showing us a video of a giant city in China that was essentially vacant. It was very eerie. He was driving around the entire city filming it and there was literally nobody on the streets. Giant, brand new buildings and infrastructure were everywhere, yet nothing was moving, nothing was happening. While it was startling to see this video during daylight hours, it REALLY had an impact when he filmed at night. The giant buildings were dark. Not just the office buildings, but the residential buildings. Maybe one or two rooms lit among thousands of dark windows.

And this isn't limited to just one city in China. His contention was there were several of these massive cities sitting vacant, with no real catalyst for an influx of people and commerce. The banks are lending money to build, the builders are building, and nobody is moving in to pay the bills to pay off the loans. Now granted, Fichthorn is very bearish, but he's also incredibly brilliant and has done his homework for sure. He thinks it's only a matter of time before the dominoes fall, so to your point, I am very well aware of it and agree, it definitely bears watching (no pun intended). Because if China's banking system falls, look the hell out.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

:yes:

I bought some JNJ back in 07 when it looked just incredible as the best of the lot during the downturn. Until '12 it did absolutely nothing. Almost sold it, but laziness pays off as it has skyrocketed in the last couple years. No real reason for it to stay flat for 5 years and no real reason for the amount of increase lately. But, on the whole, it's about the right CAGR.

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Cocoa is up about 38% over the past year and there's a projected deficit over the next 10 years with Asia consuming more and more cocoa products (the big cocoa dogs have recently built factories and are growing in Asia....especially Indonesia). Just sayin. Currently at 3,066/mt.

Who doesn't like chocolate?

For the novice, how would one go about buying cocoa? Futures? Is there an ETF?

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Commodities

I'm almost reluctant to say this out loud, but I do think a case could be made for uranium. Talk about a sector that has been abused and left for dead...I own some mining stocks that I just can't bring myself to sell, but don't have the balls to buy more of, despite the fact that from a historic standpoint, these things are dirt dirt cheap. That said, the punishment the spot price has absorbed since Fukushima has put great strain on the balance sheets and operations of these producers.

Other commodity ideas? We own about 10 physical minor metals, but unless you are buying a large amount of these, have a broker that can buy them and have a facility in place for storage, they just aren't good ideas for the casual investor. We really like bismuth, but outside of buying 5N Plus, I don't really know a good way for the average joe to play it. And really, I don't see a major spike coming in this metal, just an uptick in demand without the corresponding uptick in supply. :shrug:

Depends on the moment in time. I know people who have made a killing off tame hay but coffee, heating oil, ethanol and cotton can all provide good buy and hold and call opportunities. Swaps are too volatile, those are generally for the big boys. A lot of it can be seasonal/cyclical but commodities by and large have some predictable arcs. Metals are less predictable although aluminum alloy is a favorite. Uranium huh? Seems like long-term, the problem might be extraction methodology. I had read the miners are becomming overrun with regulation, even in the third world. Seawater extraction is pretty interesting though, especially if the market returns.

The problem with uranium isn't one of extraction; it's an overhang of supply. There's simply too much material going into a spot market with diminishing demand.

This article is pretty good...ignore the part asking you to subscribe to get "THE BEST STOCKS IN THE SECTOR".

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Cocoa is up about 38% over the past year and there's a projected deficit over the next 10 years with Asia consuming more and more cocoa products (the big cocoa dogs have recently built factories and are growing in Asia....especially Indonesia). Just sayin. Currently at 3,066/mt.

Who doesn't like chocolate?

For the novice, how would one go about buying cocoa? Futures? Is there an ETF?

For a novice, I would go the ETF route. Check out NIB and CHOC.

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So the whole world is going to look like Zimbabwe in about 6 months or so? $70 loafs of bread? $40 ball cream?

The stock market goes up, the stock market goes down.

It is unpredictable when things happen, as evidenced by this thread, over and over again, but we are certainly due for a down cycle eventually. When and how long I will leave to the guys with the crystal balls.

Perfect example is JNJ. Released quarterly earnings released today, crushed analyst consensus for earnings and EPS and announced first stock buyback in a long time. One of the analysts even remarked on the earnings call "...best quarter he's seen from the company in a long time." Bloomberg even on-site basically circle-cranking with CEO/CFO live interviews on air today.

Stock was also highlighted as Bloomberg's biggest loser at the closing bell on the Dow today, dropping 2.1%.

Markets = irrational.

:yes:

I bought some JNJ back in 07 when it looked just incredible as the best of the lot during the downturn. Until '12 it did absolutely nothing. Almost sold it, but laziness pays off as it has skyrocketed in the last couple years. No real reason for it to stay flat for 5 years and no real reason for the amount of increase lately. But, on the whole, it's about the right CAGR.

HOOOORAY FOR LAZINESS!!!!!

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Cocoa is up about 38% over the past year and there's a projected deficit over the next 10 years with Asia consuming more and more cocoa products (the big cocoa dogs have recently built factories and are growing in Asia....especially Indonesia). Just sayin. Currently at 3,066/mt.

Who doesn't like chocolate?

For the novice, how would one go about buying cocoa? Futures? Is there an ETF?

For a novice, I would go the ETF route. Check out NIB and CHOC.

Hmmmm. Too rich for my blood.

:roarin:

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How did this board ban lhucks? Everyone else manages to find another alias and keep on doing what they do.

Somehow they really seem to have gotten rid of the guy.

he never had an alias that I'm aware of.

Is it possible to unban him and give him posting privelages just in this thread?

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How did this board ban lhucks? Everyone else manages to find another alias and keep on doing what they do.

Somehow they really seem to have gotten rid of the guy.

he never had an alias that I'm aware of.

Lhucks was JoeT all along. He told me that at one of the Mellyholes. Also told me he was gay.

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Funny you should ask that. Back in November (I think) the Portland Alternative Investment Association hosted an education event where John Fichthorn was the guest speaker. Topic of the event was "China's Banking System: Out of the Shadows" and man...it scared the hell out of me! What's even scarier is that I missed half of it because a rookie board member didn't buy enough beer and we ran out before the presentation even began. So I had to wrangle up some more, missing a lot of his presentation. Despite that, what I saw was alarming.

When I finally sat down midway through his presentation, he was showing us a video of a giant city in China that was essentially vacant. It was very eerie. He was driving around the entire city filming it and there was literally nobody on the streets. Giant, brand new buildings and infrastructure were everywhere, yet nothing was moving, nothing was happening. While it was startling to see this video during daylight hours, it REALLY had an impact when he filmed at night. The giant buildings were dark. Not just the office buildings, but the residential buildings. Maybe one or two rooms lit among thousands of dark windows.

And this isn't limited to just one city in China. His contention was there were several of these massive cities sitting vacant, with no real catalyst for an influx of people and commerce. The banks are lending money to build, the builders are building, and nobody is moving in to pay the bills to pay off the loans. Now granted, Fichthorn is very bearish, but he's also incredibly brilliant and has done his homework for sure. He thinks it's only a matter of time before the dominoes fall, so to your point, I am very well aware of it and agree, it definitely bears watching (no pun intended). Because if China's banking system falls, look the hell out.

Just saw today a second Chinese builder is nearing default. News like this is scaring domestic Chinese away from the housing market, which already dropped 10% this year. As you said, a lot of builders are sitting on excess inventory in remote locations that they cannot sell. Those builders are facing note payments and are having difficulty moving units despite providing larger and larger discounts.

This could be the trigger for a market collapse: builder discounting unsold inventory + fear will cause a larger correction in China's housing market. In a major correction, the market will freeze and builders will race each other to the bottom trying to dump unsold inventory as they struggle to make payment on their notes. Most of them will likely fail, and default.

In the early stages of the US housing collapse, we couldn't see the small lenders struggle and fail since debt is re-packaged and sold a dozen times over, and large money institutions were able to hide and manipulate numbers. In China, we actually have more visibility since we can see these small builders fail before the big builders and banks start to falter.

China faces what would be the second default in the nation’s onshore bond market after a builder said it may fail to make a payment next week, the latest sign of stress in the world’s biggest corporate debtload. Huatong Road & Bridge Group Co., based in the northern province of Shanxi, said it may miss a 400 million yuan ($64.5 million) note payment due July 23.

Shanghai Chaori Solar Energy Science & Technology Co. (002506) marked China’s first onshore corporate bond default in March when it missed a coupon payment. Huatong Road would be the first to fail to pay both interest and principal, and would also be the first default in the interbank note market, the nation’s biggest bond bourse. Chinese firms have the most debt globally after increasing borrowings to $14.2 trillion as of Dec. 31, surpassing the U.S.’s $13.1 trillion, Standard & Poor’s said in a June 15 report.
Edited by Acme CEO
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I saw an episode of Vice about the ghost cities in China, was really weird to see. They had a city that was a replica of somewhere (think it was Paris??) that is pretty much only used as a tourist attraction and for wedding pictures. Basically everyone in this thread can likely explain it/understand it better than I can, but the way it was explained was that all of the unneeded real estate is meant to inflate their GDP numbers.

If China takes a huge hit, what would be the expected effect on a typical lazy 401K with S&P500/Vanguard International fund holdings?

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I saw an episode of Vice about the ghost cities in China, was really weird to see. They had a city that was a replica of somewhere (think it was Paris??) that is pretty much only used as a tourist attraction and for wedding pictures. Basically everyone in this thread can likely explain it/understand it better than I can, but the way it was explained was that all of the unneeded real estate is meant to inflate their GDP numbers.

If China takes a huge hit, what would be the expected effect on a typical lazy 401K with S&P500/Vanguard International fund holdings?

It wouldn't have to be an international fund in order to take a hit. Most US Fortune 500 companies are international companies and would take a hit.

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I saw an episode of Vice about the ghost cities in China, was really weird to see. They had a city that was a replica of somewhere (think it was Paris??) that is pretty much only used as a tourist attraction and for wedding pictures. Basically everyone in this thread can likely explain it/understand it better than I can, but the way it was explained was that all of the unneeded real estate is meant to inflate their GDP numbers.

If China takes a huge hit, what would be the expected effect on a typical lazy 401K with S&P500/Vanguard International fund holdings?

It wouldn't have to be an international fund in order to take a hit. Most US Fortune 500 companies are international companies and would take a hit.

Thanks, that's what I figured...I am still a long way from tapping into any of it anyways, just have a terrible habit of checking it regularly. Started paying attention in the last couple years so I have gotten too used to everything always going up.

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One expert is from the Prudent Bear Fund. First, his fund has a 5.5% load and a 1.75% expense ratio, both of which are high. Second, according to Morningstar over the past 5 years, $10K in the S&P has grown to almost $25K, while $10K in his fund would now be worth about $4K.

This is akin to Goldman Sachs' calls on oil going to $250 a barrel years ago when they were huge in the commodities business, i.e. made money off of that prediction by getting more people into oil, etc.

This guy wants the market to go down because he needs a 60% correction to get back to even.

Honestly, I think we could easily see a dip soon, but I really don't think it will be that bad at all. I could see the returns slow down and stagnate for a bit, but a 60% correction puts us back at 1997 levels (ignoring the crash in 2009, from which we have recovered). To give you some perspective, the S&P 500 earnings back in 1997 were $58 per share and in 2014 they are around $102 per share.

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One expert is from the Prudent Bear Fund. First, his fund has a 5.5% load and a 1.75% expense ratio, both of which are high. Second, according to Morningstar over the past 5 years, $10K in the S&P has grown to almost $25K, while $10K in his fund would now be worth about $4K.

And the other, Doolittle, has been calling for a significant pullback for probably a year now. (at least).

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