What Goes Up Most Also Come Down

[Sir Gala Clad]

Nazi Schwazi says Dr Wernher Von Braun What Goes Up Must Also come Down: (Tom Lehrer "Wernher Von Braun" Music Video)

What was true for the development of the German V2 rocket holds true for the stock market.
Be the investment be in Stocks, Gold, Platinum or Silver.

 

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[Sir Gala Clad]

The Battle for Investment Survival by Gerald Loeb stub - extracts to follow

 

[Sir Gala Clad]

Extracted in full for context from Logic 101 Thread as paragraph in Italics about stocks was off target of that

FL: I pretty much agree with what your reply as that is the way that it has been with welfare for decades.
We all seem to agree that the economy is difficult, but I question difficult for whom.

For sure it is difficult for small businesses, start ups, artisans, highly skilled workers, basically anyone who would make America a better place to live as there is a massive redistribution of wealth from what used to be the middle class to the privileged , the government, and to international corporations. Simply put "We now take from the Needy and give to the Greedy and Inept".

The stock market is no longer for the investor; It is currently run for the benefit of hedge funds and dark pools. Investors have had their life saving destroyed as a result of rule changes and the removal of protective acts that were put in place as a result of the great depression. However Plenty of money is still made on Wall Street; at least enough for one hedge fund manager to construct a multimillion dollar home for his chickens. Hopefully, he will be generous enough to toss a few eggs to the poor.

It is worse for once proud home owners who have become homeless as their homes have been foreclosed on. Many can no longer work because of illness, others are not able to earn sufficient income as their jobs have been marginalized. It is the worst for elders who will not live long enough for a second chance. Then there are the families of veterans who have died in action and disabled veterans who can no longer work as a result of injuries.

Current loan modification programs are rift with fraud, where you not only lose your home, but also your identity which is stolen. Instead of helping, Government programs have magnified the problem as banks have dumped delinquent mortgages on seedy loan companies, and are subsidized by the Government on losses taken. Selling a home at fair market value is impossible when the bank short sales are subsidized and they don't have to disclose.

Large banks shuffle you from employee to employee to cause delay and prohibit the use of the internet as it is self documenting. I would like to know why a bank, supported by tarp money is allowed to loan millions of dollars on a home loan to a Billionaire at less than 3% interest while all the poor get is the run around. Oh I almost forgot , I did get calls with the wonderful news that I would qualify for a short sale! As this is a family forum, I will leave it to your imagination what my reply was other than that I referred to them as carpet baggers and had no intention of helping them hold the bag open.

It certainly has not been bad for law enforcement as they profit by confiscation. Look around and you will see beautiful undercover cars/boats/yachts and all sorts of luxuries.

I have seen local, county, and state economies benefit by the shift from a dirty manufacturing based economy to a clean prison based one. The fallout from the current war on drugs, is that there are more criminals than can be accommodated , and labor is almost free. Further if the vacancy rate increases, Heaven forbid, it only takes a slight change in the law to increase both occupancies and confiscations.

Since agencies have been allowed to work together following the 911 attack, the checks and bounds of Federalism have been eliminated. This creates a police state leaving the post 911 government free to do what it wants. Sadly, It no longer matters what is right or wrong, what matters is that it is expedient and can be gotten away with. I base this statement on recent experience which has denied me my inalienable rights: life, liberty and the pursuit of happiness - guaranteed by the constitution of the United States. Oh by the way my second amendment rights were not violated as they did not take my fire arms which were registered. I suspect, they were not able to find them.

It is true that people often end up where they are as a result of bad choices made. It is also true that you can make good choice(s) and still end up in a bad situation as you are only free to choose, you cannot control the outcome especially when rules and requirements are changed after the decision.



The above information is provided for your perusal. It is important that you understand where the true dangers lie. I understand that few are patriots as I once was, and that some may be so overwhelmed that they no longe care, others may have chosen the easy road and avoid involvement. This is your choice, and I respect that. If there is sufficient interest, I will post details as my purpose is to inform so that your are aware, before the system is beyond repair and there is blood in the streets.

I will leave you with the below quote by Thomas Jefferson to ponder:

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered". - Thomas Jefferson

 

[Sir Gala Clad]

Reply by
Native Floridian to above Extract from Logic 101 Thread:


Sir Gala Clad,

You said a lot there! Some i agree with, some i don't. I love the TJ quote. That man knew what he was talking about!!!

There is truth in what you are saying about the mortgage debacle and the ability of regular folks to get the help they need.

Also truth to TARP abuse. Still TARP restored trust amongst the bankers and that saved us from total collapse. So a deal with the devil so to speak.

I disagree about your comment regarding the stock market. The market is not rigged in any way. It is their for all to use as a wealth building engine. The loses you speak of were incurred by uninfomed investors, not by the market.

I know you are thinking that the market collapsed in 2008 taking invesotrs saving with it. You are right. It did. it was a very hard time. Yet, here's the thing about losing money. You don't lose until you sell. You absolutely have stocks in your accounts that are worth less money. it's called an unrealized loss. Still, you haven't lost anything until you give up. At that point it becomes a realized loss. That is why the IRS only looks at realized gains and loses for tax purposes.

Since the market collapsed in 2008 it has come back. Had those investors who realized their loses not given up they would be whole again today. Most would be ahead. And, of course some depending on how they were invested might still have some losses.


Also, the collapse created an incredible opportunity for those who chose to take advantage of it. While i lost a ton of dough in my 401k plan, and empl bonus plan, in my personal trading accounts i made a huge proft over the 2010, and 2011 based on taking advantage of the market's way over sold condition.


I'm not a hedge fund. I'm just one guy who knows what he is doing. Do i lose money in the stock market. Yup, every year! But. as long as my gains out strip my loses i come out ahead. Which is where i am most years.

Those who lost money because of 2008, mostly did it to themselves. The market is not rigged.

 

[Sir Gala Clad]

Native Floridian: I agree that TARP saved the Banks from total collaspe and that the devil is in the details.
It may of restored trust within the bankers (the high muckety mucks) but it surely did not restore trust in those who need loans.

The banks still dump delinquent mortgages on seedy loan companies. The banks still shuffle you around from employee to employee causing needless delay for those who will not survive without a loan modification. How do you trust a business that prohibits the use of the internet which is self documenting but will take fax and phone, which are more difficult to trace. It still does not explain why a bank supported by TARP money is allowed to make a multimillion dollar home loan to a Billionaire at less than 3% interest while those who desperately need to modify their loans get the run around.

I so strongly disagree with your statement that the stock market "not rigged (your term)" in any way, that I have reserved an early reply " The battle for Investment Survival by Gerald Loeb" statement which will be filled in later.

I remain firm that the market is definitely manipulated both legally and illegally, it is poorly regulated, there is rampant insider trading, and front running, plus there are conflicts of interest with those who determine the policy of the US.

The losses I speak of were incurred by investors (both informed and uniformed), who were once protected by acts put in after the great depression. If I remember correctly, two of the most important were:
1) The Glass Segal Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and security firms.
2) The removal of the uptick rule on short stock which is responsible for the high volatility of today's market.

Properly timed the market may be a wealth generating engine but it can also be a double edged sword where you lose money. It is less than a zero sum game as to make a profit you have make up the commission, margin interest, and slippage costs. Plus you have to make up the additional cost(s) to trade, manage your portfolio and prepare your taxes.

For clarification Stocks are initially sold (IPO) to obtain capital for businesses. Later capital can be raised of businesses by increasing the number of shares when allowed by the stocks charter called secondary's. Most of the time the stock market just buys and sells already issued (used/owned) stock for liquidity.

In general Wall Street always wins, unless a member takes an active position putting them at risk or there is a default. Commission(s) are made when you buy/short and Commission(s) are made when you sell/close the short position. Money is also made on the margin interest charged. Plus a small fee is deducted which goes to the exchanges.

Congratulations on gains outstripping your loses, anyone who can do that has my respect and envy. I, also know what I am doing, but it is the market who determines who is right (sigh). What you say about unrealized losses is conditionally true, the conditions being that you are not margined and forced to sell (capitulation) and that if you hold your position the stocks which you own recover.

Yes, the collapse in 2008 created an incredible buying opportunity later, unfortunately if you were one of the many who were forced to capitulate (wiped out) you would not have the money to re invest and take advantage of the market's oversold conditions.
I remember 2008 well as in one day I lost times of what I had gained the prior year in a single day (sigh). It was like your so called wealth building engine blew a head casket as volatility over 71 in a single day. This is huge (over 20 is considered high volatility). It was so bad that you were glad, when open short put contracts were put to you at strike suffering a loss as the loss was much larger if you had close them yourself. There was no choice, I received a call from a panicked broker that unless I closed my positions at market open, the brokerage would close them! The big boys were also in this gun to the head position, Aubrey McClendon former President and COO of Chesapeake Energy (CHK), was forced to capitulate and lost heavily on what he had invested in CHK.