U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Investing
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-23-2010, 10:17 AM
 
Location: San Diego California
6,797 posts, read 6,329,692 times
Reputation: 5175

Advertisements

charles hugh smith-The Contrarian Trade of the Decade: the U.S. Dollar

In this article the author makes a good case for cash being the best investment for the future and why inflation is a remote possibility. His logic makes sense to me and I would be interested if anyone can find a flaw in his reasoning.
Reply With Quote Quick reply to this message

 
Old 03-23-2010, 10:31 AM
 
22,769 posts, read 26,264,477 times
Reputation: 14558
i am no expert, but my thinking is that monetary inflation (debasement of the USD) is directly related to consumer debt (mainly mortgages).
Reply With Quote Quick reply to this message
 
Old 10-25-2014, 02:41 AM
 
Location: Beverly Hills
1 posts, read 727 times
Reputation: 10
It's good to see a post here that mentions contrarian investing. I created a contrarian test for people to determine whether this investment style is for them or not. Here's the link - [url=http://contrarianadvisors.com/Take-the-Contrarian-Test]Take The Contrarian Test[/url]

How do you score?
Reply With Quote Quick reply to this message
 
Old 10-25-2014, 04:36 AM
 
Location: US
17,957 posts, read 17,902,750 times
Reputation: 13974
@Jim: You posted about increasing cash positions and inplying the next stock market crash was going to happen back in Feb, we are now at all time highs. My advice would be to stop looking for articles that are trying to go against the current. A fish that swims against the current is likely to die before the current changes. If the market is an uptrend, be a bull! Every time we get a little correction you get all these contrarians that come out spewing a bunch of nonsense saying we need to build cash because the doomsday is approaching tomorrow. Would you rather be the person that is wrong 20x during a bull market or be the person is wrong the ONE time that correction turns into a true bear market? It's better to be wrong once than be wrong many times.
Reply With Quote Quick reply to this message
 
Old 10-25-2014, 05:57 AM
 
72,031 posts, read 72,043,164 times
Reputation: 49592
the trend is your friend as they say. folksa forget the point they can drop a sizeable amount in a downturn yet be way ahead of where they would be by sitting and waiting.

sometimes you wait so long for that ship to come in the pier collapses.
Reply With Quote Quick reply to this message
 
Old 10-25-2014, 11:14 AM
 
2,568 posts, read 2,314,761 times
Reputation: 2338
Quote:
Originally Posted by jimhcom View Post
charles hugh smith-The Contrarian Trade of the Decade: the U.S. Dollar

In this article the author makes a good case for cash being the best investment for the future and why inflation is a remote possibility. His logic makes sense to me and I would be interested if anyone can find a flaw in his reasoning.
I think this is another perma-bear trapping himself by his doom-and-gloom circular logic. I remember reading an article by him years ago when he said Dow 500 or so. This has nothing to do with contrarian but rather purist perma-bear.
Reply With Quote Quick reply to this message
 
Old 10-26-2014, 10:05 AM
 
Location: San Diego California
6,797 posts, read 6,329,692 times
Reputation: 5175
Quote:
Originally Posted by Potential_Landlord View Post
I think this is another perma-bear trapping himself by his doom-and-gloom circular logic. I remember reading an article by him years ago when he said Dow 500 or so. This has nothing to do with contrarian but rather purist perma-bear.
Your statement is full of logical fallacy, which proves it is a lie. In the first place you label me inaccurately as a perma-bear, without knowing the slightest thing about me. I will venture to guess that I have made far more money in the markets than you have over the past 30 years.

It would probably be more accurate to label yourself as a perma-bull as you seem to think that the proper strategy is to stay fully invested at all times.
I believe in buying low and selling high. That hardly equates to a perma-bear.

I am grateful however that people with your strategy exist. They make up the market that makes it possible for me to sell at a good price when the time is right.

You see, not everyone can make money in a market, some must loose so that others may win.
Reply With Quote Quick reply to this message
 
Old 10-26-2014, 10:26 AM
 
Location: San Diego California
6,797 posts, read 6,329,692 times
Reputation: 5175
Quote:
Originally Posted by le roi View Post
i am no expert, but my thinking is that monetary inflation (debasement of the USD) is directly related to consumer debt (mainly mortgages).
Monetary inflation is a byproduct of the Federal Reserves fiat money system in which every dollar is borrowed into existence at interest.

When a dollar is borrowed into existence, either by the Federal Reserve, or one it's local member banks at interest, it takes more to repay than it's face value, which means it is worth less than its face value upon creation.

Every time a consumer purchases an item on credit, they create inflation. If you purchase a new car using financing, that money you just borrowed is created out of thin air when you sign your loan documents. Because that money is being created at interest, it is inflationary.

Now if you default on that loan, and your car is repossessed, and resold at a lower price, the difference in what you owed and what it was sold for is money that has disappeared, and that is deflationary.

When you have a situation such as we have today, where debt levels are extremely high and the economy is struggling, you have the very real probability of an economic downturn.

In such a downturn there is a great deal of default on debt which causes deflation.

How serious the deflation is going to be is determined on many factors including, the level of debt, the amount of wealth inequality, the job market, the employment participation rate, the savings rate, and many others.

In our current economy, those factors are not currently favorable. We have high wealth inequality, a week service oriented job market, low employment participation rate, low savings rates, and very high debt levels, even higher than the 2007 level.
Reply With Quote Quick reply to this message
 
Old 10-26-2014, 10:35 AM
 
2,568 posts, read 2,314,761 times
Reputation: 2338
Quote:
Originally Posted by jimhcom View Post
Your statement is full of logical fallacy, which proves it is a lie. In the first place you label me inaccurately as a perma-bear, without knowing the slightest thing about me. I will venture to guess that I have made far more money in the markets than you have over the past 30 years.

It would probably be more accurate to label yourself as a perma-bull as you seem to think that the proper strategy is to stay fully invested at all times.
I believe in buying low and selling high. That hardly equates to a perma-bear.

I am grateful however that people with your strategy exist. They make up the market that makes it possible for me to sell at a good price when the time is right.

You see, not everyone can make money in a market, some must loose so that others may win.
I did not mean you but the quote. I never intended to label you. Sorry for causing the confusing. I meant the author of the article you quoted.
Reply With Quote Quick reply to this message
 
Old 10-26-2014, 02:20 PM
 
Location: 3rd Rock fts
747 posts, read 968,143 times
Reputation: 304
Default OT: Ms Columbo is doing her part

Excellent thread jimhcom!

I think investors—especially ~55 yr old investors'—should be aware/grateful that the FED is fundamentally telegraphing the change that's coming. 6+ yrs. is an ample amount of time to see which way the wind is starting to blow.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Investing
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top