Isn't a bear fund more suitable for market timer or hedger than long-term investor unless you have a personal vengeance against the economy?
David Tice sees multi-year depression coming
- Thread starter turkeyneck
- Start date
Isn't a bear fund more suitable for market timer or hedger than long-term investor unless you have a personal vengeance against the economy?
Brokers have failed (Bear Stearns, E*TRADE etc)
Banks have failed (Northern Rock,IKB etc)
Governments have failed (Just look at the Bush Administration and try NOT to laugh!)
...and we are only 8 months into this mess, oh and I forgot about WaMu,CFC etc
..there will be MUCH more pain, MUCH MORE!
I'm NOT a 'lefty', I'm just a realist.
Banks have failed (Northern Rock,IKB etc)
Governments have failed (Just look at the Bush Administration and try NOT to laugh!)
...and we are only 8 months into this mess, oh and I forgot about WaMu,CFC etc
..there will be MUCH more pain, MUCH MORE!
I'm NOT a 'lefty', I'm just a realist.
Excellent Commentary All
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First of all....what is a depression ?
And to whom is it a depression ?
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Depression defines a period of time in which there is scarcity of the essential and supposedly inelastic products.
For example, each country has a percentage of its population that lives in perpetual depression....but yet the country may maintain that it is currently enjoying prosperity.
Economic depression mostly arises because of lack of money to trade for inelastic products, and is an individual matter....and thus if there are a large number of people in depression, then it is of a national matter.
Perhaps a country that has a depression that is of a national matter....is one in which no matter how a person qualifies themselves for work....there is no work....and if there are no savings....then there is certain depression.
Thus no work....no savings....then there is certain economic depression....which for an individual can occur whether or not a country may maintain that a national prosperity or depression is present.
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A legal largesse depression is one whereby there are assets present, but access to the assets is not possible because of a monetary legal agreement. A needed asset may sit idle for many years, simply because a legal monetary issue is not resolved.
An absolute depression is one whereby there are no assets present, thus even though there may be savings, there are no assets to buy.
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Depression ? What kind of depression it is....and to whom.... is what matters as to its resolve.
......................................................................................
First of all....what is a depression ?
And to whom is it a depression ?
...........................................................................
Depression defines a period of time in which there is scarcity of the essential and supposedly inelastic products.
For example, each country has a percentage of its population that lives in perpetual depression....but yet the country may maintain that it is currently enjoying prosperity.
Economic depression mostly arises because of lack of money to trade for inelastic products, and is an individual matter....and thus if there are a large number of people in depression, then it is of a national matter.
Perhaps a country that has a depression that is of a national matter....is one in which no matter how a person qualifies themselves for work....there is no work....and if there are no savings....then there is certain depression.
Thus no work....no savings....then there is certain economic depression....which for an individual can occur whether or not a country may maintain that a national prosperity or depression is present.
................................................................................................
A legal largesse depression is one whereby there are assets present, but access to the assets is not possible because of a monetary legal agreement. A needed asset may sit idle for many years, simply because a legal monetary issue is not resolved.
An absolute depression is one whereby there are no assets present, thus even though there may be savings, there are no assets to buy.
...........................................................................................
Depression ? What kind of depression it is....and to whom.... is what matters as to its resolve.
No. A well-run bear fund (i.e. one that beats t-bills by at least 2 or 3%) is *ideal* for a long-term investor, far better than for a market timer or hedger. The reason is that it offers positive returns and negative correlation with the stock market. During bear markets the short fund allocation will make nice profits, thus reducing your drawdowns significantly, and over the long-term it will still make a profit.
You could therefore go 110% long stocks, and put say 20% in a short-fund - you would have less long-side exposure, thus less risk and drawdowns, and yet you would have greater overall returns as long as the short fund outperforms t-bills. Less risk and more profit is the holy grail of long-term investing.
libertad - interesting analysis.
One that was not brought when I studied economics in college.
However I did study the great depression extensively. (from the standpoint of the U.S.)
Could you apply your framework to the great depression.
The materials I read seem to indicate all three of your frameworks were in play.
There were assets - there was just no money to pay for them.
Food rotted on farms etc.
One that was not brought when I studied economics in college.
However I did study the great depression extensively. (from the standpoint of the U.S.)
Could you apply your framework to the great depression.
The materials I read seem to indicate all three of your frameworks were in play.
There were assets - there was just no money to pay for them.
Food rotted on farms etc.
I see depression, on the faces of those mothers with kids in tow, after the husband working 18 hours / 6 days / 3 jobs, at the grocery stores, having to steal what they can no longer aford to buy....
Take a look at the malls of the senior citizens no longer getting their food subsidies from meals on wheel programs because the food banks are bare.....
Take a look at ...... (well, you choose)....
Conservative Supply-side economics at work...
wow....deficit after deficit across the country.....
You have the wrong culprit Limitdown, supply side works just fine, what doesn't is a bunch of wall street smart arses run amock being too clever by half with their exotic instruments to securitize the universe and sell it to a bunch of gullible greedy and quite possible corrupt people who had every incentive to maximize their returns and fees and none to protect the capital of those who had entrusted it to them.