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Author Topic: What Goes Down, Must Come Up  (Read 959 times)
winginit
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« on: October 13, 2010, 11:30:12 AM »

Assuming the economy is at a bottom right now or has just passed the bottom (a big assumption I know but I'm going with it!), what are the best investments? In other words, what is at the bottom right now? What are the lagging economic indicators, e.g. markets that tend to go down significantly after the recession starts and go up significantly after the recession ends. A well-known lagging indicator is the commercial real estate market. But commercial real estate (and residential for that matter) were overbuilt and I don't think the demand has come back yet. Still, used heavy construction equipment is interesting in that it was dirt cheap for a while there, maybe still is.  Lesser known lagging indicators are the water market and anything driven by state and local government spending.

Commodities took a break with the recession, but as China comes back, demand will go back up. Copper and Iron Ore are improving dramatically right now...so what about the mining companies, eg Rio Tinto and BHP Billiton? And if they come back, will that be enough to prop the Aussie dollar back up? Nickel sucks, why is that?

China's auto sales forecasts are very high, but I don't know that American investors can benefit directly from that? More from the raw materials used to build those autos, and possibly petroleum industry.

The stock market in general appears to be a good place to be right now. Probably some fits and starts on the horizon. PE ratios were much too high in the past, no way could earnings keep up with that (unless interest rates stay extremely low), but investor exuberance may return nonetheless. I'm pretty conservative, but I've noticed that American investment psychology (in general, not on this blog) seems to be skewed to the positive over the long run. The way to take advantage of that is to be on the leading edge.
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Mason
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« Reply #1 on: October 13, 2010, 12:40:39 PM »

Top investors are bailing out of the stock market and investing in gold.  I can't afford gold so have been investing in lead.
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AllenF
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« Reply #2 on: October 13, 2010, 01:44:04 PM »

Look at that, lead prices are up.   Mason may be onto something.


I don't know where to put money or make money, except for land maybe.
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tecumseh
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« Reply #3 on: October 15, 2010, 07:53:28 AM »

winginit writes:
Assuming the economy is at a bottom right now or has just passed the bottom (a big assumption I know but I'm going with it!), what are the best investments?

tecumseh:
the stock market index(s) suggest the bottom was two years ago.  if you are in a growing community then depressed (price) real estate might be the way to go.  in a declining community real estate is rarely the way to go.

investing in yourself (in education or creating some business) is an often times over looked place to put your money. <this can produce a stream of income that outperforms any other option.

at the other end of the spectrum... invest in a bee keeping firm and discover how quickly you can declare bankruptcy.
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I am 'the panther that passes in the night'... tecumseh.
kathyp
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« Reply #4 on: October 15, 2010, 10:00:27 AM »

stock market is not a good indicator of economic health.  however, this would be a good time to be in a well managed fund if you have spare cash.  IF things turn around, there's a lot of money sitting out there waiting to be invested. education is great, but not a degree right now.  the price of education is inflated and you will not get a return on your investment for many years....if ever, if things don't improve.  there's a reason kids are moving back in with their parents after college

technical skills are always in demand and i'd rather be a paid car mechanic than an unpaid MBA.

starting a business is a great idea if you can do it without going into debt or risking what you have.  right now, people are not spending so if you are not offering something that you know folks can't live without, a new business should be a hobby and not a career.

you know my prediction.  we have at least one more rough year, maybe worse than the last couple, before we are out of this....and that depends a lot on how things go with the next elections.
pay close attention to your local stuff.  doesn't do any good to get the fed squared away and have your state bend you over.
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.....The greatest changes occur in their country without their cooperation. They are not even aware of precisely what has taken place. They suspect it; they have heard of the event by chance. More than that, they are unconcerned with the fortunes of their village, the safety of their streets, the fate of their church and its vestry. They think that such things have nothing to do with them, that they belong to a powerful stranger called “the government.” They enjoy these goods as tenants, without a sense of ownership, and never give a thought to how they might be improved.....

 Alexis de Tocqueville
Mason
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« Reply #5 on: October 15, 2010, 11:44:53 AM »

What goes up must come down but what goes down often does not come up. 

Some are predicting a double dip recession.  I think our best investment may be getting some lawyers out of Washington and replacing them with statesmen.
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AllenF
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« Reply #6 on: October 15, 2010, 08:23:28 PM »

All I know is my pumpkin futures have been going up in value all month.  $$  I think I will sale them all the first of November.   grin
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