These "Stress Tests" Are Such Horse ****

[KrazyHorse]

Also: Everyone says the "buy and hold" strategy is the smart play, and I see people scoffing at stock picking and speculating, but with the degree of volitility in the market right now, doesn't it make some sense to try a little gambling? For example: American Express, over the last five years, trades around 40/share. Recently areound 18/share and bouncing all over the place. Doesn't it make some sense to buy, see if you can get a nice uptick in the short term, if not, it's more than likely still a decent bet in the mid-long term, even if we find a new bottom (or two) in the meantime? I guess the trick is figuring out when the bottom bouncing ends and the prolonged recovery begins. I guess the long term view is just to see the whole market as a bargain and buy index funds and ride them.

Stock picking and short-term market timing are, in my view, sucker's games.

On a longer term I think that you can spot stuff like risk aversion being high (after a crash) -> low equity prices -> buy now.

This gets down to the efficient markets hypothesis and the capital asset pricing model. The only input to these guys is the degree of risk aversion of the market as a whole.

There are a lot of market participants, and a lot of them have good info, experience and access to large sums of cash. In order to stock pick you have to assume that you're basically smarter than all of these guys (since if even a few of them see the opportunity they will swamp it with their money).

[DanS]

DM: As somebody starting out in investing, I learned some very simple things.

(1) Mind the house's rake. People will charge you to do useless things, like manage your money. They also will charge you a lot in trading commissions, if you let them. It is of absolute importance that you minimize these charges, because even small charges take a huge bite from a small investment.

(2) Be diversified. Hold at least 10 stocks at all times in various industries.

(3) Don't buy at unreasonably high prices. You can't time the market, but at least you can control with certainty the price at which you buy a stock. As long as the price is reasonable, you should be just fine.

#1 and #2 are almost impossible to do at the same time for somebody starting out, so smart people buy index funds or index ETFs (funds that trade like stocks), which are as a rule ultra-diversified and have low charges. There are other compelling advantages to index funds and ETFs, even for people who have lots of money.

Good luck.

[chequita guevara]

Bailout Indignation
How about a test of your injustice barometer?

By Ralph Nader

April 20, 2009 "CommonDreams" -- You might think that the reckless, avaricious, giant corporations, having shrunk the economy, cost millions of jobs and then demanded that taxpayers be dunned for years into the future for multi-trillion dollar bailouts, would show contrition, regret, or self-restraint of their power over Washington.

Forget it. They're baaack! Their greed and power are revving up big time to bring Washington and you the taxpayer, you the parent, you the consumer, you the worker, to your knees. Here is a sample of the appalling dynamics of corporate greed and continuing over-reach each day in your nation's capital.

1. Just when people thought the taxpayer-subsidized corporate student loan racket was ended by the Democrats, Sallie Mae, its cohorts and lobbyists, like Jamie S. Gorelick of FannieMae notoriety, are descending on Congress. The non-partisan Congressional Budget Office concluded that replacing these subsidized loans with direct Department of Education lending will save $94 billion over the next ten years.

It is long overdue to end this gouging, college payola giving, obscenely overcompensated industry, and give students an efficient and reasonable lending system. Still, Sallie Mae, Citigroup, Bank of America and others are swarming over Congress to retain a big piece of the action. "Why do we even need private lenders?" correctly asks Congressman Timothy H. Bishop, a former provost of Southampton College.

2. ABC News reports that banks are hiking already high credit card rates and other bank-related fees: "The Banks have been given billions of dollars of tax money and only lend it out if customers are willing to pay extortion rights," said Tony Cesnik, a Concord, California, resident. Cesnik adds: "The banks need a legal spanking. They are acting like spoiled brats!" Elizabeth Warren, Harvard law professor and chair of the Congressional Oversight Panel agrees: "We're asking taxpayers to pay twice."

3. The big oil and gas companies are saturating the airwaves with ads warning about the Obama Administration's alleged desire to tax them $400 billion. This will cost jobs and reduce the discovery of more oil and gas, they say. Where is this $400 billion figure from? Obama's ambition is not much beyond repealing the tax breaks George W. Bush gave his oily friends for drilling in the Gulf of Mexico when oil was selling at less than $40 per barrel. Some of the oil industry's own spokespersons admitted last year that their argument doesn't hold water any more with such high oil prices and profits since then.

So what are the big oil corporations like Exxon doing with their excess profits that totaled a record $45 billion just for Exxon last year? They're not even drilling on two-thirds of the acreage they have rights to explore. Instead Exxon is spending $35 billion to buy back its stock and hold in cash. When the next oil shock comes, Exxon will demand more tax breaks and other dispensations to fund its drilling. We've seen that game played out before at the gas pump.

4. Now comes Newsweek's Michael Hirsh to report a private meeting recently between six senators and Obama in the White House where the president heard complaints that his proposed regulatory reforms were too weak and were being devised by his appointed officials who were part of the problem in Wall Street. Well, are you surprised that a new powerful lobby created by the likes of Citigroup, JPMorgan, and Goldman Sachs is gearing up to stop adequate regulation of "over the counter" derivatives, to keep these transactions secret, and to continue to permit what Hirsh called the "systemic risk that led to the crash." This brazen move by the incorrigible banks is underway after they received huge bailout money from Washington. Beware they may yet demand and receive another big bundle.

5. With workers losing millions of jobs, the U.S. Chamber of Commerce, the National Association of Manufacturers, and virtually the entire business juggernaut are amassing tens of millions of dollars to stop the union-facilitating "card-check" legislation and any effort to bring the federal minimum wage up to what is was back in 1968, no less, adjusted for inflation. It is now about three dollars short of that modest goal for hard-pressed laborers, many without health insurance.

6. And oh, how these company bosses are fighting to keep their big bonuses going as a reward for tanking many of their own companies. Call it hubris, arrogance, disdain for common decencies of the American people, it all reflects too much corporate power over our lives-a judgment over 75 percent of Americans share.

All this lobbying of Congress and the White House year after year pays off. A study by three Kansas University professors found that a single tax break in 2004 earned drug, manufacturing, and other companies $220 for every dollar they spent in their cash register politicking. Presently, Lockheed Martin is spending millions of our taxpayer dollars to oppose Obama, Defense Secretary Robert Gates, and many other defense experts who want to finally shut down the price-skyrocketing F-22 fighter extravaganza designed for combat in the Soviet Union-era.

So, are you more upset than when you started reading this column? Feel frustrated and powerless? With your friends, ask your Senators and Congressperson during their frequent recesses for a three-hour public accountability session. If you can assemble 300 or more residents, after you rev up your community, you're likely to have your elected representatives come to an auditorium where you live and work. If they think 500 people will show up, it is even more likely. Especially if you are organized and tell them this is just the beginning. Just the beginning!

Without the rumble from the people back home, a majority of the 535 members of Congress will continue to kowtow to about 1500 corporations and you'll pay the price again and again. So, rumble, rumble, rumble!

Ralph Nader is a consumer advocate, lawyer, and author. His most recent book is The Seventeen Traditions.

Copyright Common Dreams

[DanS]

Please, no more in this thread from that asshat Ralph Nader.

[Wezil]

Please, no more in this thread from that asshat Ralph Nader.

Can't argue with that logic.

[DanS]

It's not logic. It's a statement of fact. An indelible truth.

[Wezil]

I'm no fan of Nadar but I don't recall "Let the Good Times Roll" columns from him.

[DanS]

I did those threads when they were warranted. Perhaps if you could discern between the good times and bad (and remember when they were), you would have noticed this.

[Wezil]

It's a question of credibility. Your dissing of Nadar does not persuade me.

Quite frankly, the argument he presents is better than the one you presented.

[DanS]

Good thing I don't care about persuading you.

Edit: I couldn't be bothered to read his article. He doesn't deserve that claim on my time.

[Wezil]

Good thing I don't care about persuading you.

Yes, you made that clear a week ago when you ran away from an argument.

[DanS]

Ran away from an argument? Ha!

[DanS]

Oh wait a second. I remember the thread to which you are referring. It wasn't an argument on my part. You were trying to play a lawyer's game of arguing a small point, when the bigger, much more interesting points was what I wanted to discuss.

[Wezil]

I'll let others form their own opinion.

The thread:

http://www.apolyton.net/forums/showthread.php?t=184359&page=5

[DanS]

You have to page 4 of that thread.