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What The USA Would Look Like After A Euro Collapse

Discussion in 'The Economy' started by Tropo, 5th Oct, 2011.

  1. Tropo

    Tropo Well-Known Member

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  2. wdongli

    wdongli Well-Known Member

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    Could it be stronger?

    Theoretically risks mean a lot of things:

    1. Tings become worse and much worse than people's expectation.
    2. Human only could take hara-riki after completely becoming hopeless for survival
    3. It is not easy to decide to be survival when everyone else is hopeless
    4. Human have to find opportunities if he could be survival
    5. Human can deal with the huge challenges if he wants to be survival and he would give up to hit his head against the wall but tries to find turning around.

    EU defaults or collapses? A new rout of stampede would be there. A lot would take hara-kiri. A lot would lose the capability to cry. A lot would jump up to find how to be survival.

    It is dangerous and hopeful when all of the human beings have been put into the corners and beaten by anything. It would stir the primary instinct to survive extremely. Human is not only good to run in stampede but some could choose not to run: fight to die or win!

    Anyone who takes the hara-kiri with whatever the reasons are extremists. Life is full of options. Market is full of chances and risks. Could you learn from the crashes? Could you give up? Could it be a best class to teach you how to revive your market business without the risks in the hell? Happiness and miserableness are relative matters to human.

    If you don't die and would like to be wiser, you have the chances!
     
  3. wdongli

    wdongli Well-Known Member

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    Could it be stronger?

    Theoretically risks mean a lot of things:

    1. Tings become worse and much worse than people's expectation.
    2. Human only could take hara-riki after completely becoming hopeless for survival
    3. It is not easy to decide to be survival when everyone else is hopeless
    4. Human have to find opportunities if he could be survival
    5. Human can deal with the huge challenges if he wants to be survival and he would give up to hit his head against the wall but tries to find turning around.

    EU defaults or collapses? A new rout of stampede would be there. A lot would take hara-kiri. A lot would lose the capability to cry. A lot would jump up to find how to be survival.

    It is dangerous and hopeful when all of the human beings have been put into the corners and beaten by anything. It would stir the primary instinct to survive extremely. Human is not only good to run in stampede but some could choose not to run: fight to die or win!

    Anyone who takes the hara-kiri with whatever the reasons are extremists. Life is full of options. Market is full of chances and risks. Could you learn from the crashes? Could you give up? Could it be a best class to teach you how to revive your market business without the risks in the hell? Happiness and miserableness are relative matters to human.

    If you don't die and would like to be wiser, you have the chances! Hope next time we have some huge cash reserve when all of the market just could not find the hopes.
     
  4. wdongli

    wdongli Well-Known Member

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    Shares rise but sentiment remain 'terrible'

    Is it confusing to see share rise but sentiment remain 'terrible?' Not at all but understandable. After all of the people, who long in the market are hurt without matter traders or not traders, all of us think about the similar matter, that is what if the market crashes further, except the die-hard value investors such as Warren Buffett.

    These die-hard value investors like the crashes much more than the bullish peak market which is loved by most of warriors(I didn't want but was synchronized instinctively with them in April). They just bought in after the big crash in August 2 when XAO tried to lead the world into the GFCII. These value investors or value type of traders don't worry about the crash since they should have enough cash reserve. If the market crashes again they could by much lower and they should have enough cash reserves for the darkest time.

    So what if DOW crashes after EU crashes to the ground? These value type of investors or traders could buy one or two months later after the GFCII crash. Who care about what EU, DOW, and XAO crash if you just buy at the rock bottom. If the market gone, everything would be gone in the market and finance. If it is there and you could stand up in the rock bottom, you go ahead most of the market. You are true early birds for your worms when others could not get anything.

    Somebodies said value investors never timing the market. That is right but they timing everything for buying with different criterion. They want to see the market is full of the bloods and bonds left by the warriors. They know they could not buy exactly at the lowest points of the bottom but they just want to be roughly right for the rock bottom.

    Why do I need the spade? We need diversification between the bonds and stocks. The labor and spade if work are just like bonds, even some could give high yielding but some not, which is a trustful cash strings in the ruins and you could have cash and time to wait.

    Sun would be up from dark, darker, darkest, less dark, dark, dim light, and bight rising Sun. In GFCI, I had a spade in hands even I had less capital in hands and then I didn't feel pressure and I dared to put all of my cash into the market between Nov 2008 - March 2009 and I could wait for half more, one more, or two more years for the running under the rising Sun. You need to timing the rock bottom roughly right. You need to forget the time for the rising Sun.

    When we joke with hara-riki, it implies that we really have lost the confidence for the market. Is it darkest time? Is it less dark? Is it time to buy since it is in the rock bottom? No people now dare to say so. We all wonder it could be much darker, which actually and usually say it is not too far from the darkest time. In Nov 2008, who dared to say it was at the rock bottom after Buffett declared the Pearl Harbor in the market on October 2008 but market crashed more? But it was at the rock bottom just 2 or 3 weeks later.

    Since April I learned a lot. The market once in dark time from the brightest time, it could be darker, much darker, darkest, less dark, much less dark, and bight could be seen by everyone. Bang everything up and the we get V or other type of recovery.
     
  5. wdongli

    wdongli Well-Known Member

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    Foolish taken away...

    It was stupid to cheer on the top of house which would start crash. I was one on the top even I was taken from much lower place by the market and I have to admit my stupidity.

    But it is stupid to cry for the ground and the sky to sink since the houses have been crashed so much. All know the crash and most of us believe ground and sky would be down.

    Foolish would be taken away always. Foolish would always put the money on the table too early or too late. The problem is we could not know if it is the lowest point.

    If you have got enough chips on the table, you should hold your position. If you have enough cash such as $200,000 or more in hands, you could wait for EU, DOW, and China to crash with the event such as Greece is broken. Don't buy just at the news out but wait all of the market could not sell any more.

    It could not guarantee your total cost is lowest but should not be much higher than that. You would get a roughly right cost and when all of warriors, new or old, come back, you could service them better to sell your shares to them.
     
  6. wdongli

    wdongli Well-Known Member

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    Yielding, capital gain, and job if something extremely wrong

    it doesn't matter how clever, intelligent, and wise, we could be wrong. There is no exceptional in the market even we take the market playing as business. What if something is extremely wrong? You have to survive and better to revive rather than take hara-riki.

    Survival means you could get chances. Revival means you could get a good or excellent scenario after you fine-tune yourselves intelligently and not bad lucky enough. All of us need to be fair to anyone including ourselves. If you make the mistake which make something is extremely wrong, you have to admit it, reduce the damage, and correct it. If you do all you could do and the extremely wrong caused by something out of anyone's control or bad lucky, you don't need to blame yourselves even all of us tend to value people based on the consequences.

    We don't want bad result and we don't want to lose the money. We don't want to lose all of the hopes. So we have to figure out what are the necessary conditions to be survival when something is extremely wrong. It is never a good time to guess but think openly, objectively, and rationally.

    There are two conditions to be survival rather than take hara-kiri in the market:
    1. Have the cash-equivalent investment for enough income which meant the investment has to yield enough cash flow in the situation when something is extremely wrong.
    2. Have the investment which could generate high capital return which means the capital base and the return have to be good enough so that it could have high risks if thing goes normal.

    Most of us don't have enough cash-equivalent investment. Most of us even don't have enough investment for normal capital gain. We may want to be "no loss" for our portfolio but we have to know we are hungry for money since we never try to build enough financial base or we fail to do so. A lot of mistakes come from the fact we don't have enough cash or capital.

    After long time hungry for money, it is fact we fail to make the money. This fact could result in different reactions and responses depending on whom we are. We could be very fearful in extremely good or bad times. When time is good we are fearful if we don't buy more we could lose the chances to make the money. When time is bad we are fearful if we don't sell!

    We are never happy to win 100% even 10 baggers. Most of time we could not forget the absolute amount of the profit and losses. We don't want to be greedy and fearful but without enough cash in bad time you could not be fearless and without enough capital you would be not greedy since the profit is great but not enough! Feeling not enough or feeling too much to lose, have terrible power to force us to sell on fire and take part in the grand party before it ends its music.

    In the worst time, we do need high-yield and high-safety of the fixed income investment as the bonds. Cash is the king. If you don't have the cash you could not help but stop to take flight into the safety heaven. But it usually could not generate high yielding at the bottom with extremely low interest rate and increased bond price.

    However if you have got professional training you are the high-yielding bond for yourselves. You have the labor value and your labor value have quite stable yielding, high or low. Most of us instinctively know that but we just never think it with our market playing. Why did Buffett buy the high-yielding investment such as preferred stocks from Bank of American? He got the high-yielding in the bad time without worry the losses.

    We just could not do what Buffett could do! He has huge cash and capital. He could sit there to twist the risk and chances for months and years. However we could think how to get the job to give us enough yielding from our labor value. Most of retail market players do fear to lose the job in worst time. Some just need the job for some trustful yielding when the thing becomes extremely wrong.

    In worst time you should have 70% of your capital in the stock market since the price of the stock is too low and the future yielding or capital return would be much higher with much higher probability. However if you don't have the 30% in cash or the cash is not big enough, you should think about how to get a job to compensate your cash demand. The job could generate some cash flow. It is very important to know it and use if without shame. If you could hold your portfolio at the extremely low price, you could have the chance to get your losses back or perhaps get some big enough capital gain.

    We need to count our cash reserves and know exactly the cash demand for our family. As a market player you could spend $10 per week plus the rental but you could not let your family feel the pressure. You have to prepare the worst become worse with enough cash flow. You have to know what you do now before your family life is affected by the extremely wrong things.

    Don't want to take hara-riki and don't want to get the future capital gain enough? Don't forget and never forget the cash reserve and never make excuses to allow greed heat out head too much if the profit is big enough. Get the basic amount of cash and capital which need the prudence and long term view. Never and ever emotionally cheer and fear with the crowd.

    I have modified my resume for a spade. My rental income is not enough to hold all of my portfolio after the cash reserve is consumed. I don't want to leave any chances to take the hara-kiri. I really don't know how long the bear would stay in XAO. I am really not sure we have stood on the rock bottom. I am really not sure the market would stay in the rock bottom for days or months or years. I do know I need the last defending line to protect my portfolio and my family from any pressure. I made the mistakes I have to take the responsibility and admit the stupidity!

    I don't believe the sky would fall down but I don't know when the sun would rise. I play for the good black swans but I have to be ready for the bad black swans without matter they come from EU, US, China, our home-made one in Australia or even just my bad luck. Do you believe someone die just because a drop of water stays in their throats too long?
     
  7. wdongli

    wdongli Well-Known Member

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    Cash reserve, inflow, yielding and capital gain

    If you could deal with the cash reserve, cash flow, yielding, and capital gain in a conscious way, you don't need to do R/D on hara-kiri.

    1. do you have enough cash reserve, which should be more than you need in 5 months?

    2. do you have cash inflow? Is it enough to hold your position and family in good shape?

    3. If not, could you get the enough yielding from the fixed price investments?

    4. If you don't have enough fixed price investment, you have to use your labor value as a high-safety bond. How much the price for your labor? Could you hold your position for a part time job, full time job, one job only or a few jobs?

    5. all of us need the capital gain since someday we do need or hope we could have enough fixed price investments for choosing what we love and retirement. All need the balance between the bond and stock.
     
  8. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Jesus wdongli, don't you sleep? Here is a positive commentator. He is only one of a handful, at the moment. Please read.

    Great Depression coming



    Johny. :)
     
  9. wdongli

    wdongli Well-Known Member

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    Update mind asks less sleep! LOL!

    Haha Johny, in this market sentiment, all of active retail investors and traders have been afflicted and wonder where the economies and market would go.

    My problem is this time I know I have made a series of mistakes while in IT bust I did feel I was great but not lucky only. I want to let remember what, why, how, where, and when I made these silly mistakes. I want to hold what I have got with enough cash inflow even XAO crashes to 1000 and stay there for a decade.

    I war born to be a bargain hunters and optimism and then I tend to buy when no one wants to buy but I also tend to be over-optimism when everyone would like to pay premiums for their buying. The worse point to me is once I am synchronized with the bullish market sentiment, I tend to hold what I have even I seldom buy more by ignore the system risks. I should ask a question what if the market doesn't follow me always!

    When something, which are wrong seriously, has been mixed with your blood and bone, you have to be taught by some big enough mistakes and don't let the mistakes go without enough lessons. It costs the money to learn some great things always. I am not really worrying what market does. I do worry about what I should do but I just don't do.

    This crash tells me the basic again:
    1. we could not buy and hold forever if we don't buy part of businesses and the businesses have not big enough economic moat and we don't have enough cash inflow to hold. It has two necessary conditions to do so:

    a>. you know the business and its economic moat;
    b>. market could over-price and under-price a business with economic moat so that you have to buy with margin of safety;
    c>. you have to get enough cash inflow from some sort of fixed price investment to support your holding.

    If we miss any one of the above conditions, which are necessary ones, we could not buy and hold. Actually we hold longer we lose more.

    2. we could not buy at the lowest tail of price probability distribution if we could not sell on the bullish road to lock the profit.

    The bullish road would inevitably result in the price swings back to the mean and overshoot to the range higher than the mean. There are catches for this approach even if you are right the return could be fabulous. What're the necessary conditions for profit with this one?

    a>. The lowest price is not made by the business itself but the system risk forced the people sell on fire
    b>. Diversification is a must tool to cover your human errors
    c>. Carefully checking of the survival capability of the business must be done. Without this survival capability you would get falling knifes
    d>. Time average to buy between the assumed worst time and the time when the Sun comes back to the market
    d>. You must have enough cash reserves to buy more without affect your family life.

    3. We always find excuses to ignore these basic and necessary conditions especially when the market sentiment is very bullish, which once result in big enough paper profit and capital losses, our instinct would challenge our wisdom in the most cruel ways.

    ***
    I like this article very much. It just tell us if we could keep the necessary conditions to be value investors, we don't need to worry what the market is doing. Life logic is simple and any math formula has some necessary condition to be viable. To get the results we have to get sufficient conditions before we start to solve our market formula.

    My cash inflow is not enough from my fixed price investment since I don't have too much. I have broken the necessary conditions for profit as a dirty-cheap fish collector and I am not a traditional "buy and hold" value investor. I need to change my blood and bone to be a real value investors but it needs more time than I am allowed to pay. I have to get all of necessary conditions for fishers to make profit and wait for the market sentiment change or a good black swan hit some of my dirty-cheap fishes.

    Where could I get more cash inflow than my rental income with 100% sureness if market just wants to make joke with me? In long term I am confident XAO would come back to 5000. In short term, it could be anything between 0 - 4000. Human is crazy. I am crazy naturally and I need to be not crazy but it would take time without matter I like or dislike.

    I have got nearly three years to be a full-time market student. I like it and enjoy it very much but a man has to change if the necessary conditions for life need to be satisfied. Do I have other options? All around me want me to sell all of my assets and investments, which they thought big enough for a reasonable life or at least I could keep the existing life style without needing to work in the office and workshop. I could not buy it.

    I like the market and really want to be in the market until my last day. To get what I want, I have to be self-reliant on my own money until I die. All around me don't buy it too! I love them and don't want hurt them a little bit so I have to setup my last defending line strong enough for them and what I want.

    Seriously saying I deserve to be shocked mentally this time. I lay the greed seeds into the soil and then I should harvest the shocking and work on to get the necessary conditions for profit back if not hara-riki. Blaming, excusing, ignoring the broken necessary conditions, and doing nothing is wrong and a fatal mistake which would lead self-destruction if not hara-kiri.

    Yes, if we don't know what XAO will do, we should have chances to see XAO shooting back to 5000 in a great swing. It would be a problem and to run our market business we do need to fix the problem. What would be my problem? It stays there or worse and I use up my cash reserve without good enough cash inflow. Don't want to sell on fire? It would be a dream if it happens. I need to do is never letting the sale on fire become true.

    Once you have left your office for three year, it is not least effort way. Get the tarnish covering of your spade need the determinant and clear mind. I work on it with the hope my fishes could be hit by a good black swan, which could not be counted on until it is there.