Investing 2010 – Whom Do You Trust?

May 10, 2010 by  
Filed under Investing

Last week the equity markets fell, hard. Have you heard or read a reasonable explanation for this? Mr. ToughMoneyLove hasn’t.  He is disturbed yet not surprised about that.

I believe that dramatic events involving money or asset valuations should be at least partly explainable with logic or science. Give me something to anchor my trust in the operation of the markets. Call it fundamentals, technical analysis, world calamities. Call it something.

I’m not feeling it this time. Are you?  In my book of trust, “we don’t know what caused that” is not even close to being an acceptable response.

Do you get the feeling that some entity is pushing a button that controls the value of your investments? Do you also feel that you don’t know the entity, the location of the button, or what the button controls?

I have that feeling. It’s a sick feeling.

Maybe that entity and that control button are a computer? OK – who is programming the computer? I want his or her name. I want their supervisor’s name. I want to see the algorithms. I want more transparency and explanation than we are receiving.

I don’t trust any of them with our money – government regulators, economists, brokers, market makers, computers or advisers. None of them. They are all named Madoff or Goldman Sachs until proven otherwise.

This is why I am a cautious DIY investor. If the “experts” cannot explain sudden and dramatic movements in the market, they don’t know any more than I do. They aren’t true experts. They are salesmen and hired guns for the salesmen. They aren’t worthy of our trust.

Look out for yourselves, folks. Get educated. Protect your financial future because no one else can or will do it for you.

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14 Responses to “Investing 2010 – Whom Do You Trust?”
  1. Rick Beagle says:

    The market needs to be regulated more, and the regulations on the books need to be enforced. The field – imho – has become stacked in the favor of businesses such as Goldman Sach and with technology not being adequately reigned in, prime for manipulation (which is what I think happened).

    The sad part for this progressive, episodes like this erode confidence in our markets (nothing new there), undermine innovation and economic growth, and make the current regulating agencies look like the buffoons (as if they needed help).

    I am generally not one prone to violence, but it would do my heart good to see the responsible parties face some “Gitmo” quality time. Capitalist Terrorists – their motives are to make as much money as possible regardless of the consequences to our economy. Water board the ******** and feel free to use water from the Gulf.

    On a positive note, five months of job growth, but before you celebrate, the unemployment rate actually went up.

    Rick Beagle

    • MasterPo says:

      “The market needs to be regulated more, and the regulations on the books need to be enforced.”

      So if the current regulations aren’t being enforced how can you say MORE regs are needed?!

      ps- Capital Terrorists. Lord! I so love it. You’re so killing me. That’s why I keep coming back here. :-)

      • Rick Beagle says:

        The world is not static, and it is important that we are constantly adjusting our regs to reflect these changes. Not sure why you don’t get that?

        Rick Beagle

  2. Another Reader says:

    And the talking heads on CNBC and Bloomberg wonder why the retail investor has stayed out of the market since the crash…

    Economists know very little and are likely to be eating Alpo in retirement themselves, unless they wrote a much used textbook, started a prestigious consulting company, or had a very successful career in government. I pay zero attention to them when making investment decisions. My opinion of their relevance is unchanged by the events of the last two years.

    The smartest and most knowledgeable people in the room are the investment bankers. The hedgies are up there with them. Next come the insurance companies and mutual fund companies. At the bottom is the retail investor. You have no choice but to become educated and be skeptical of everything you see and hear if you want to grow and protect your wealth.

    It’s interesting to see where some of the Wall Street folks put their money. I recall reading on Minyanville a few years ago that the founder, a former hedge fund associate of Jim Cramer, kept his retirement money in US treasuries. That says a lot, doesn’t it?

  3. MasterPo says:

    I do believe that *some* blue chips will do well in the future, like AT&T.


    Only if the Federal gov can keep their grimey little hands off them.

    And that’s a big “if”.

    Which is a big part of the problem: At this stage of things IMO the politcal risk out weighs normal economic and market risks. Specifically, you just don’t know who the next industry will be the target of Washington’s villification or nationalization.

    2 years ago did ANYONE here (even you Ricky) ever even *dream* that the U.S. gov would be a major owner of the auto industry? Banking industry? Healthcare industry?

    And if things go sour (as I strongly believe they will) imagine the next 2 years…

    • Rick Beagle says:

      The problem MasterPo is that our policies are reactive rather than proactive. Seriously, did you all not see the multiple crashes, or hear about the financial problems in other countries? Why would you continue to push the status quo in light of such dramatic and catastrophic failures?

      I don’t like the government handing over cash to the financial industry (still think it was a gift Kitty), buying stakes in the automobile industry, and let’s not even start on the stimulus package. But honestly, the path we were on wasn’t working.

      In case you have been asleep, the path we were on can be summed up as spend more (deficit spending), and cut taxes. Which any half wit can see as a recipe for disaster, but alas, we still have people drinking the koolaid even in light of repeated failures (the latest being heart wrenching).

      Do you know how much those tax cuts of Bush’s added to the national debt MasterPo? I will give you a hint, it has a trillion at the end of it.

      Rick Beagle

      • kitty says:

        “still think it was a gift Kitty”
        Even after they paid back some huge dividends? Silly me, I thought government made money on the bank part of TARP… Did you miss it when they mentioned it in every business-related publication?

        On the subject of regulations. The problem is – while some of them may look good on paper, it’s unintended consequences that’s always a problem. Back when the economy was tanking in Russia in the 90s, one of their politician mentioned a phrase which was translated to English like this “We wanted the best, you know the rest”. I think this is what usually happens with government regulations. E.g. – set interest rate caps leads to restricted credit for businesses. I’d imagine there could be more examples… Some regulations may be for the best – e.g. bringing back the uptick rule, eliminating naked short selling, etc. But they should be thought long and hard about.

  4. MasterPo says:


    Do you know how much GROWING and INCOME GENERATION the Bush Tax cuts ADDED to the economy? I sure as hell spent a heck of a lot more back then than I do today. And every dollar that *I* spent added to the economy, jobs, personal income etc.

    So the path (if that’s what it really is) *is* working?! U6 is at 17% and growing!!

    Please tell me just one nation in human history that is known far and wide for it’s glorious taxation?

    If taxes are the answer then why doesn’t the gov of CA just sign an Executive Order to double the state’s income tax, sales tax, property tax etc?? That would solve their problems according to you.

    I ask again: Just show me one nation in human history that has been in the edge of financial ruin and has taxed itself back to growth and lasting prosperity.

    Just one.

    ps- Why doesn’t Greece just raise taxes more??

    • Rick Beagle says:


      Like the rest of your Koolaid drinking brethren you really are stuck in a rut. Here is something for you to read from the NRO.

      Now, go read, learn and quit parroting lines that have not basis in reality.
      Rick Beagle

      • MasterPo says:


        Still waiting for you to show me a nation that taxed itself into prosperity.

        Just one.

        Come on. Can’t be that hard if taxes and more taxes are such a great thing.

        Just one.

        • Rick Beagle says:

          “Still waiting for you to show me a nation that taxed itself into prosperity.”

          You already asked this and got a in depth answer in the other post. Succinctly, the US taxed itself into prosperity.


          The problem with Tea Party members is their insistence on continuing to roll around in their own ignorance.

          Is it a jackass to water or horse? Can’t seem to remember the cliche. :-)

          Rick Beagle

  5. MasterPo says:

    We taxed ourselves into prosperity?!?!

    When did this happen? I must have been asleep.

    ps- Don’t try that history revisionism on me. You liberals LOVE to SLAM President Reagan on his tax CUTS. But now he’s your hero because the DEMOCRAT congress he worked with raised a few taxes here and there?!?!

    Come down from the ivory tower. The thin air is causing damage to the gray matter.

  6. Rick Beagle says:


    Hmm, must be nice to go through life ignoring little things like facts in favor of your own opinion. Whatever. Go mingle with the Tea Party crowd, seems like you would be a perfect fit.

    Rick Beagle

  7. Jack Clark says:

    “ps- Don’t try that history revisionism on me. You liberals LOVE to SLAM President Reagan on his tax CUTS. But now he’s your hero because the DEMOCRAT congress he worked with raised a few taxes here and there?!?!”

    Master Po,

    You clearly do not have a grip on your history.

    A. Reagan went with Tip O’Neill on the tax increases together.

    B. Reagan only cut taxes once in ’81.

    C. Reagan raised tax eight times over the next seven years and negated around 65% of the ’81 tax cut by the time he left office.

    The taxes that were raised were far more than “ a few taxes here and there”. The biggest increase came in ’82 the year after the tax cut.

    Reagan and O’Neill raising taxes and keeping non-military spending somewhat in check are what began the ‘80s boom years.

    There is nothing to slam. Reagan is responsible for the biggest tax decrease and increase in our nation’s history, period.

    You just need to come to grips with the fact that the taxation done in ’82 and ’93 helped our nation economy immensely. And that like it or not the Republicans currently are bringing nothing to the table to solve the problem.

    The Left may not be doing a great job, but the Right is rudderless, clueless, and idealess.
    You’re not going to win many elections being the party of No and with no ideas other than tired twenty year old ideology.

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