Ben Johnson: Bears are facing elite players in a hostile environment in
Detroit
-
Johnson spent the last six years on the Lions' staff before he was hired as
the Bears' head coach.
2 hours ago
Tuesday, October 13, 2009
Sunday, October 11, 2009
What is a Bear Market and Why Is It Good?
You might remember this recent post of mine.
http://cornholiogogs.multiply.com/journal/item/947/947
Talking about how young people do not trust investments in general. Young people are well , young. Meaning their experience is pretty much limited to the immediate. Although like I mentioned in that piece, even older people feel the same way. All because right now we are experiencing what has always happened since the beginning of recorded time. That is a bear market. Maybe you know the phrases bear and bull markets but don't know the origin of the terms. When a bear attacks you it is with downward motion from it's paws. When a bull attacks you it is with upward momentum from its horns. There you have it.
Nick Murray is a person who has helped me understand investments even though I am horrible at the execution part of it. I was fortunate enough to hear him speak back in the nineties.
Just understand a few basic principles that will eventually be elaborated on.
1) The long term values of companies will always go up long term and easily surpass any kind of cash or debt instrument.
2) The price of being in the best long term performing investment is the dips in value that you will see often during the life of the investment.
3) What good news can you get from the dips? Well your investments are on sale!! Buy more!
4) Is this understanding beyond your grasp? No!!
Ed
http://www.nickmurrayinteractive.com/articles/sample2009_four.html
THE FOUR ESSENTIAL CHARACTERISTICS OF ALL BEAR MARKETS
THE FOUR ESSENTIAL CHARACTERISTICS OF ALL BEAR MARKETS
This material is loosely adapted from my forthcoming book, Behavioral Investment Counseling. Bits and pieces of this material have certainly appeared, explicitly and implicitly, in this newsletter over the years, and will not be unfamiliar to longtime readers. They are collected, synthesized and offered here in the interest of rushing some more long-term perspective to the front lines in the current pitched battle against panic.)
A bear market, as I ve suggested elsewhere in this issue, is a period of time during which people who believe this time is different sell their common stocks at panic prices to people who understand that this time is never different. The very first truth of bear markets the perception after which we must order all our other perceptions is that all bear markets are fundamentally the same.
If and to the extent that this is true, the question then becomes: in what identifiable (and therefore predictable) ways are they all the same? What can we know about a bear market as we are going through it despite all its apparently unique terrors which will never fail to restore our perspective and defeat the urge to capitulate? I believe that there are four such immutable truths.
(1) Bear markets are an organic, natural, constant element of a never-ending cycle. The capital markets are capable of perfectly psychotic behavior -- constrained only by their capacity for emotional excess -- in the relatively short term (a year or two; rarely more). In the intermediate to longer term, the capital markets in general and the equity market in particular are powerless to do anything but reflect the underlying economic fundamentals.
And as long as human nature is the essential driver of all economic activity, economies will alternately cycle above and then below their long-term sustainable trendlines -- overshooting their capacities in optimistic expansions, and then undershooting them in frightened contractions. The dot.com bubble is an example of the former; the great unwinding of 2000 - 2002 the latter. The cheap-credit-fueled real estate/mortgage bubble of 2003 - 2005 typifies the former, and the current unpleasantness the latter.
Human nature being what it is, any economic enterprise worth doing is worth overdoing, and the capital markets must follow not just a similar but the same cycle of euphoria and panic. We have met the enemy, as Pogo Possum said all those years ago, and he is us.
(2) Bear markets are as common as dirt. We are currently struggling through the thirteenth bear market (which I and most others define as a decline in the broad market of about 20% on a closing basis) since the end of WWII. Thirteen episodes in 63 years seem to imply that they occur on an average of about one year in five (though with lamentable irregularity). At that rate, you ll see eight of them in a 40-year career of working and saving, and six more in the average two-person retirement.
One had better get used to them. Moreover, since their beginnings and endings are impossible to time, one had better develop the emotional maturity and financial discipline to remain invested through them.
(3) Equities great volatility is the reason for, and the driver of, their premium returns. Volatility does not, other than in the hyperbolic lexicon of catastrophist journalism, mean down a lot in a hurry. (Nearly four years in five, equities go up a lot -- quite often in a hurry -- but journalism somehow never characterizes such markets as volatile. ) Rather, volatility refers to the extreme unpredictability -- up and down -- of equity returns in the short term.
For example, you have not only never seen but cannot even imagine bonds providing a 20% total return in one year (through a combination of interest and price appreciation), and then posting a 20% negative return the next year. You would intuitively say that bonds just aren t that volatile, and you d be right.
Equities do it all the bloody time. Equities are that volatile. You just never know what they re going to do from one period to the next. And the premium returns of equities are an efficient market s way of pricing in that ambiguity. There are no good markets and bad markets; there is one supremely efficient market. And its way of dealing with equity volatility is to demand -- and get -- returns which have nominally been about twice those of bonds, and -- net of inflation -- real equity returns that are nearly three times greater. Premium equity volatility and premium equity returns are thus two sides of the same coin.
Take care then, in moments of great stress such as the current environment occasions, not to wish away the volatility of equities, because you are, whether you realize it or not, wishing away the returns.
(4) A bear market is always -- repeat, always -- the temporary interruption of a permanent uptrend. As I write, the broad market, as denominated in the S&P, is in the neighborhood of 1200, late in the thirteenth of these very common ends-of-the-world (for so each and every bear market is characterized by the media). The tippy-top of the market the night before the onset of the first of these thirteen cataclysms -- May 29, 1946 -- saw the S&P close at 19.3.
Think of it, dear friends: from the peak before the first bear to something approaching the trough of the thirteenth, stock prices alone (ignoring the compounding of dividends) have risen more than 60 times in about as many years. And why? Because earnings are up 60 times -- and, in this great golden age of globalizing capitalism, they are of course still going up. The advance is permanent; the declines are temporary. Always.
**********
But mustn t there be some way of defending capital against these horrific if transitory episodes? Must there not be some formula, some reliable strategy for taking capital out of harm s way? As a matter of fact, no.
Bear markets begin and end often, but not regularly: there is no consistent way of anticipating when an ordinary market correction will deepen into a genuine bear, nor when -- having done so -- the bear market decline will run its course. Peter Lynch wrote something to the effect that more money has been lost by people trying to anticipate and avoid bear markets than in all the bear markets themselves. (This is the equity market corollary of Paul Samuelson s observation that the consensus of economists had forecast nine of the last three recessions.)
Bear markets are so irregular and evanescent, and bull market advances so powerful and long-lasting, that trying to time the market becomes the ultimate fool s errand: it is a formula for long-term returns which are a fraction of the market s. Churchill famously said that democracy is the worst form of government ever formulated by man, except for all the others. Buy-and-hold is, in exactly the same sense, the worst equity investment strategy ever devised by man.
Except for all the others.
Tags: investments, fear, young adults, financial education, trust, money, finance
Saturday, October 10, 2009
What Is Love? POTM Video
What is love
Oh baby, don't hurt me
Don't hurt me no more
Oh, baby don't hurt me
Don't hurt me no more
Song by Haddaway
Talk about every cliche lyric.
For many years I so much looked forward to CKVU TVs Sports Page Plays of the Month. What you are about to see is the side effect of having gobs and gobs of VHS tapes. I loved them. They picked all kinds of genres and at the end of the month they would show all the plays that fit into the one song. And the best part was they would show clips that were not sports related . Witness this sample which shows the skit of Will Ferrell, Chris Kattan and Jim Carrey taken from Saturday Night Live. I always knew what month they came from based on what sports were in season.
Ed
Thursday, October 8, 2009
The Complete Opposite of a Sell Out
Ed
http://sports.yahoo.com/golf/blog/devil_ball_golf/post/Ryan-Moore-the-golfer-who-left-300-000-on-the-?urn=golf,185653
Ryan Moore, the golfer who left $300,000 on the table
What would it take for you to wear top-tier golf clothing and play with top-of-the-line equipment? Would you don somebody's logo if they gave you a few free shirts? How about if they offered you, oh, three hundred grand?
If it was me, I'd've sold out at the free shirts. But Ryan Moore, winner of this past weekend's Wyndham Championship? He goes logoless to every match, preferring to wear his own gear. It's a mix-and-match collection of various brands, all of which Moore bought himself. As Golf.com notes, here's what he's leaving on the table each year, broken down by equipment:
Hat: $200,000
Chest logo: $50,000
Golf bag: $50,000
Ouch. That's a lot to stand on principle, but that's exactly what Moore is doing. As he said in January, this isn't about some anti-sponsorship tilt, it's about focusing on golf itself: "I pick a club because I want to play, not because I have to make it work. To me, there is a lot of comfort and a lot of confidence in that," Moore said. "Everything you see me wearing, I paid for."
Well, maybe it's a little anti-sponsorship: "He doesn't want to be a billboard," Moore's brother/manager Jeremy told MSNBC's Darren Rovell. "He doesn't want to look like a NASCAR driver with logos everywhere. Ryan is a unique person and he wants to do his own thing."
Rovell summed up a lot of people's confusion: "The sports marketing world is not used to this -- someone who is seemingly untouchable because they are almost not part of the capitalistic society. The only parallel I can think of in the golf world is the Masters, where Augusta National doesn't care about making the most money they can make."
Somebody who's into golf rather than the money. First question: will wonders never cease? Second question: would you do it?
Rebel without a brand [Golf.com]
Less is more for Moore, but for how long? [Sports Biz]
Ryan Moore is enjoying (sponsor-free) golf more than ever [FanHouse]
Tuesday, October 6, 2009
One Person Wants To Make Dancing With The Stars About Race And Not Dancing
Prejudice : a baseless and usually negative attitude toward members of a group. Common features of prejudice include negative feelings, stereotyped beliefs, and a tendency to discriminate against members of the group.
http://psychology.about.com/od/pindex/g/prejudice.htm
Racism 1 : a belief that race is the primary determinant of human traits and capacities and that racial differences produce an inherent superiority of a particular race
2 : racial prejudice or discrimination
http://www.merriam-webster.com/dictionary/racism
Mike Silver is a writer who has covered the NFL for many years, mostly with Sports Illustrated. You just have to read him once or twice to know that he went to the University of California. Cal just happens to be the university of Natalie Coughlin as well. Now that you know that, it is easy to see why a guy whose day job it is to cover the brutal world of NFL football will help a fellow alum write this book about the brutal world of competitive swimming. I happen to subscribe to Mr.Silver's Tweets. I was a bit startled when I saw his Tweet in Tagalog. For those of you who do not read Tagalog it says :
Let's vote for Natalie Coughlin the Filipina contestant in Dancing With The Stars.
The tweet originated from http://twitter.com/sheilamagno . I have said many times in my blog that it is that irrational, baseless, emotional thinking that gets Erap, Willie Revillame , Richard Gomez, Noli Decastro, Vic Sotto , Noynoy etc running for public office and in some cases winning. It has nothing to do with skill in the political arena but with emotional connection. Let's examine the pleas of ( http://twitter.com/sheilamagno ) . She wants people who will care to listen to vote for Natalie solely on the fact that she perceives her as having the same blood. It has nothing to do with dancing. The fact that she writes it in Tagalog limits her audience to mostly Filipinos. We don't know how well Natalie dances or interacts with her dance partner. Sheila does not care how good or bad the rest of the competitors are. As far as she is concerned only Natalie shares her blood (apparently one grand parent is Filipino). That emotional connection means the rest of the field does not matter. Don't know about you but the criteria for voting is "baseless". I really thought Dancing With The Stars was about dancing and not so called nationality. For me it is possible to discriminate against a group just because you have a "baseless" preference to the one person because of an unrelated trait. I am all for people to pick who they want. But to tell other people to pick their choice in a dancing contest and only their choice on the criteria of 1/4 Filipino blood to me totally goes against the word competition. I want to give Sheila Magno a dictionary and read the definition of the word competition. A test of skill or ability; a contest. (http://www.answers.com/topic/competition) Q: What skill or ability does Sheila Magno want you to base your dancing vote on? A: 1/4 Filipino blood If I had to sum up that logic I would state " stereotyped beliefs, and a tendency to discriminate against members of the group." Ask yourself if this person is campaigning on criteria other than those intended? Is her criteria based on race? Not sure about you but in my world applying race as the predominant reason to judge a contest intended on testing skill is RACISM.
Ed
Links :
http://sports.yahoo.com/nfl/expertsarchive;_ylt=Al3GY6GEE7ysg7T0NTk3OaSr0op4?author=Michael+Silver
http://twitter.com/RealMikeSilver
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previously related posts:
http://cornholiogogs.multiply.com/journal/item/943/What_part_of_beyond_reasonable_doubt_do_you_not_understand_Erap_related
http://cornholiogogs.multiply.com/journal/item/518/Hes_One_of_Us_Thats_Why
http://cornholiogogs.multiply.com/journal/item/263/The_Filipino_Olympic_Effort_and_Results_my_reaction_
http://cornholiogogs.multiply.com/journal/item/886/Discrimination_Can_Cut_Both_Ways
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