DJIA is down again. 9971 and counting

[lookout123]

It is a great day to buy, my friends. don't miss out on the opportunity to take advantage of the general public's timid nature.

[breakingnews]

Yes, smack in the middle of a very, very disappointing earnings season, which means I've been working 12-hour days for the past two weeks, and will probably put in a couple more long ones next week.

Great bargain buys out there right now. Look away from the tech sector and go for pharma and biotech. Energy companies are also great buys as the price of oil continues upward.

IPO market is a disaster, even though it's doing much much better than the past 3 years. Actually, of the 100 IPOs, only pharmas are doing somewhat well, although their average return dipped into negatives this week.

[Undertoad]

RHAT

Buy it today and you won't have to face the inevitable i told you so

[lookout123]

let's all do ourselves a favor. next time you hear someone say they are pulling out of the market because they have lost too much - slap them across the face. take the time to explain how the market works. for individual investors it is largely psychological: "the news says the market is dropping, my friend pulled out, i better do the same." i just want to beat people sometimes. instead i just ask them "if you find a pair of shoes or a suit that you really like, do you wait for the sale to end before you buy it? no, you buy it when it is one sale and thank god you were fortunate enough to be at the right place at the right time."

[jaguar]

Biotech? You must like playing blackjack, the good money in biotech is private.

There is some good buying to be had but to take it you're taking a serious risk, my gut feeling is the ride to the end of this year is going to be a rocky one, don't risk what you can't lose and happy hunting.

[lookout123]

keep in mind Jag that the numbers that you look at start with M's and B's. most of us on here are looking at tens or hundreds of thousands.

i look at biotech and most other speculative items as a fun diversion. just like roullette - i don't put my serious money there. if you can't lose it you shouldn't be thinking on speculative stuff.

i'm pretty conservative by nature.(no political pun intended) i won't make even stock recommendations to my clients until they have $80-100K in well balanced mutual funds. and then only with a balanced strategy. i get clients that go against my recommendation and they buy whatever they are in love with, but usually they are out of it in 6 months and follow whatever i recommend after that.

[jaguar]

Bs? Ruddy hell i'm not Warren Buffet.

If you can't lose it it sholdn't be in anything with a risk profile above diversified AAA bonds and stable cash (good luck finding that too). Outside a select few there are very few people who don't work in finance that have any business at all buying shares directly full stop. Even after that 100k or so you can start looking at funds that invest in the more exotic end of equities (or funds that invest in funds that get into that end of things, from private equity to junk bonds) and good picking will still put you in a safer position that direct share ownership.

[lookout123]

OMG!?!?! i have found common ground with Jag!
i am a fund junky. i love them. i always recommend funds, unless the objective is purely income, of course - then a nice ladder of corporate and muni's enters the picture.
i make the agreement with all of my clients that i will never recommend a stock until they have at least $100K in funds. after that i still recommend funds but if the client insists they want individual equities i insist that they buy 5 companies at a time and i stick with the blue chips. most clients dabble then settle back into the funds feeling that they got it out of their system. i personally don't own any stock, because i don't feel the need. i'm not looking for lightning in a bottle - i am satisfied with consistant conservative growth. my favorite fund companies aren't exciting, but they are consistant.

we better quit this conversation though, i see tw is on. he'll jump in to point out that i am a self serving whore for selling mutual funds to my clients. as he has pointed out - "mutual funds never outperform the S&P"


afterthought - -- Jag i thought you worked on the analysis side. that is why i said you are used to looking at M's and B's. i wasn't referring to your personal portfolio, although i wish you luck in getting there.

[jaguar]

but even with funds you can do very well if you know where to take risks, it obviously depends how much money you're playing with but there are plenty of high risk, high return funds that'll beat the S&P if you're smart about it. The floors are often high but the rewards can be great.

I know most of the private banks here vet new customers with a 6-7 page 'compass', evaluating how they view money, how much they're putting on the table and what kind of risks they're willing to take, for example.

Would you prefer an investment with:
a: Average 5% return with a maxiumum possible loss of 2% and a maxiumum gain of 7%
b: Average 5% return with a max loss of 5% and a max gain of 10%
c: Avg 5% return with a max loss of 10% and max gain of 15%

You guys use something similar?

[DanaC]

*Starts reading thread......narrows eyes and tries to decipher the strange disquietening language.....realises theyre talking in investerese and leaves quietly*

[lookout123]

Originally Posted by jaguar

Would you prefer an investment with:
a: Average 5% return with a maxiumum possible loss of 2% and a maxiumum gain of 7%
b: Average 5% return with a max loss of 5% and a max gain of 10%
c: Avg 5% return with a max loss of 10% and max gain of 15%

You guys use something similar?

wow - sounds like we are talking about complete different products. what you are describing is somewhat similar to some annuities that i am familiar with. when i am referring to funds i speaking about mutual funds with companies like Lord Abbett, American Funds, Federated, Van Kampen, etc...

with the products i offer my client there are no floors or ceilings. there are also no max profit or loss guidelines. they operate similarly to individual equities, except they have the obvious stability of diversification in place.

my largest account that i have primarily in funds is now just over $2.2million. does the products you are speaking of have a higher floor than that?

[jaguar]

The bit you quoted is more about gauging a client's view of the money rather than portfolio details. That kind of compass is used for bread and butter private banking accounts - 1-5m to help work out a balance between different investment options.

I get what you mean and am familiar with the kind of funds you're talking about but I include hedge funds and other oddities in there as well. Highest floor? Hard to tell, I'm not that familiar with the top end of the market but in certain circles I doubt that would get you in the door. The line between a fund and a consortium of investors gets a bit thin up there, look at the group that are looking out bailing out yukos for example, chances are they're putting up 9 figures each. Wasn't publicly open but if you knew the right people and known to be up for a long enough punt someone might have given you a call, some school tie stuff as well no doubt, was a london job. Some public hedge funds would probably be close to that 2m figure, the serious global macro types that take 10 figure gambles expect a certain level of commitment and a high level of understanding of what you're getting yourself into.

[lookout123]

ok. i understand now.
you're right, the money my clients have doesn't begin to buy into that type of game. and honestly, if it did, i wouldn't be the advisor for them. i know what my limitations are and that water is a little too deep for my comfort.

[jaguar]

If they don't know about it they shouldn't be near it is a fairly good rule

Still, do you guys stick to straight funds and direct stocks? Do the funds diversify much or stick to common equities?

[lookout123]

generally i pick one fund family with the client and diversify within that family. Lord Abbett for instance, they have 40 different funds available to the average consumer. once in the family i can rebalance as needed withouth ever incurring additional charges for the client. within those 40 funds there are a lot of options.

obviously the basics of income, growth&income,growth,and aggressive growth. but there are many choices and strategies within each category. most clients can find a strategy to meet their needs and comfort level with the one fund family.

within the fund family - i split my client between 2 - 10 different funds, depending on $ amount, so you can create a plan to meet their specific needs.

i'll never create a george soros with the options i offer, but it takes care of most of the people i market myself too.

i generally stick to mutual funds and the bond market. i offer individual equities, but i'm not a stock jockey and have no intention of becoming one. i don't handle options and commodities - i just don't find them to be appropriate for my clients.