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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
The big lie is simply a lot of the companies that went bust were
in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Should be the New Dow or the 2012 Dow..... Dow12 maybe now the Dow13. Martin On 1/27/2013 3:22 PM, Banging Eric Burnett like a drum wrote: Back to a 10 year high after it was destroyed by the Republicans in 2007 -- you know .. the "party of business" .. snicker |
#2
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
"Martin Eastburn" wrote in message ... The big lie is simply a lot of the companies that went bust were in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Hogwash. Of the 30 Dow components in place during the recent lows of 2009, only 3 have been replaced. Of the three replacements, ( Traveler's Companies, Cisco, and United Health Group ) Traveler's has almost doubled in valuation, representing a slight underperformance; Cisco has VERY significantly underperformed, and United Health Group has performed only slightly better than the overall averagel. |
#3
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On Sun, 27 Jan 2013 21:42:13 -0600, Martin Eastburn
wrote: snip The big lie is simply a lot of the companies that went bust were in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Should be the New Dow or the 2012 Dow..... Dow12 maybe now the Dow13. snip ========== Even if there were no change in the composition of the Dow, this neglects the effects of inflation. Dow 14000 Oct 2007 CPIU 208.936 http://www.bls.gov/news.release/arch...i_11152007.pdf Dec 2012 CPIU 229.601 http://www.bls.gov/news.release/pdf/cpi.pdf Inflation C/F 1.0989058851 Oct 2007 Dow in Dec 2012$ 15384.68 In inflation adjusted terms a 14,000 Jan 2013 Dow, neglecting change of component companies, is down 9% compared to a 14,000 Oct 2007 Dow. When the combined effects of the change of base and the understating ("adjustment") of the CPI-U are considered, the shortfall is much greater. Unless you own a brokerage or are a broker, the market is a sucker's game. -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
#4
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On 2013-02-01, F George McDuffee wrote:
On Sun, 27 Jan 2013 21:42:13 -0600, Martin Eastburn wrote: snip The big lie is simply a lot of the companies that went bust were in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Should be the New Dow or the 2012 Dow..... Dow12 maybe now the Dow13. snip ========== Even if there were no change in the composition of the Dow, this neglects the effects of inflation. Dow 14000 Oct 2007 CPIU 208.936 http://www.bls.gov/news.release/arch...i_11152007.pdf Dec 2012 CPIU 229.601 http://www.bls.gov/news.release/pdf/cpi.pdf Inflation C/F 1.0989058851 Oct 2007 Dow in Dec 2012$ 15384.68 In inflation adjusted terms a 14,000 Jan 2013 Dow, neglecting change of component companies, is down 9% compared to a 14,000 Oct 2007 Dow. When the combined effects of the change of base and the understating ("adjustment") of the CPI-U are considered, the shortfall is much greater. Unless you own a brokerage or are a broker, the market is a sucker's game. Keep in mind that the Dow is net of dividends. Assuming it was 4 percent for the years discussed, the dividend yield would have added about 25% to the above discussed return. 25% minus 9% is 13 percent return, which is not much to brag about, but better than one would get from banks. The calculation is not quite exact. For an in depth discussion of this, read this article: http://online.wsj.com/article/SB1000...285657442.html i |
#5
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On Feb 1, 6:45*pm, F. George McDuffee gmcduf...@mcduffee-
associates.us wrote: *Unless you own a brokerage or are a broker, the market is a sucker's game. -- Unka' George The market is the best game around. Dan |
#6
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On Feb 1, 6:10*pm, " wrote:
On Feb 1, 6:45*pm, F. George McDuffee gmcduf...@mcduffee- associates.us wrote: **Unless you own a brokerage or are a broker, the market is a sucker's game. -- Unka' George The market is the best game around. * * * * * * * * * * * * * * * * * * * * * * *Dan Typical that you can't see the big picture, Dan. Suggest you get some clues because you badly need them: http://www.nytimes.com/2012/03/26/bu...anted=all&_r=0 http://www.nytimes.com/interactive/2...Documents.html |
#7
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On Fri, 01 Feb 2013 18:46:34 -0600, Ignoramus17564
wrote: On 2013-02-01, F George McDuffee wrote: On Sun, 27 Jan 2013 21:42:13 -0600, Martin Eastburn wrote: snip The big lie is simply a lot of the companies that went bust were in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Should be the New Dow or the 2012 Dow..... Dow12 maybe now the Dow13. snip ========== Even if there were no change in the composition of the Dow, this neglects the effects of inflation. Dow 14000 Oct 2007 CPIU 208.936 http://www.bls.gov/news.release/arch...i_11152007.pdf Dec 2012 CPIU 229.601 http://www.bls.gov/news.release/pdf/cpi.pdf Inflation C/F 1.0989058851 Oct 2007 Dow in Dec 2012$ 15384.68 In inflation adjusted terms a 14,000 Jan 2013 Dow, neglecting change of component companies, is down 9% compared to a 14,000 Oct 2007 Dow. When the combined effects of the change of base and the understating ("adjustment") of the CPI-U are considered, the shortfall is much greater. Unless you own a brokerage or are a broker, the market is a sucker's game. Keep in mind that the Dow is net of dividends. Assuming it was 4 percent for the years discussed, the dividend yield would have added about 25% to the above discussed return. 25% minus 9% is 13 percent return, which is not much to brag about, but better than one would get from banks. The calculation is not quite exact. For an in depth discussion of this, read this article: http://online.wsj.com/article/SB1000...285657442.html i ========== Yes, but the time value of money/opportunity cost and tax effect were not considered either. For example, if the Dow had gone to 15,384 and you bought at 14,000 in 2007, you would still loose if you sold because you would pay tax, even if it is at capital gains rate of 20%, on the inflation "profit" of 1,384. 1,384/0.8 = 346 or a total of 15,731 to "gross up" to zero, and this neglects the time value of money (5 years) / opportunity cost. Any dividends would have been taxed at ordinary income rates [20-30%], reducing their contribution. Compounded time value of money at 5% for 14,000 at 5 years is 1.05^5 * 14,000 = 1.2762815625 * 14,000 = 3,868. In a more complete analysis, the Dow would have to be at least 19,600 when tax effect and time value of money @ 5% compounded [inflation and tax effect excluded] is included just to break even. When tax effect and inflation are considered on the time value of money/opportunity cost, we are over 20K for a break-even Dow.[And now you know where your retirement went.] In the casino called the market, not only does the house have an edge, the cards are marked and the dice are loaded... -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
#8
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On 2013-02-02, F George McDuffee wrote:
On Fri, 01 Feb 2013 18:46:34 -0600, Ignoramus17564 wrote: On 2013-02-01, F George McDuffee wrote: On Sun, 27 Jan 2013 21:42:13 -0600, Martin Eastburn wrote: snip The big lie is simply a lot of the companies that went bust were in the Dow and they were replaced with other companies. In other words - the books have been cooked - slowly but the name never changed. Should be the New Dow or the 2012 Dow..... Dow12 maybe now the Dow13. snip ========== Even if there were no change in the composition of the Dow, this neglects the effects of inflation. Dow 14000 Oct 2007 CPIU 208.936 http://www.bls.gov/news.release/arch...i_11152007.pdf Dec 2012 CPIU 229.601 http://www.bls.gov/news.release/pdf/cpi.pdf Inflation C/F 1.0989058851 Oct 2007 Dow in Dec 2012$ 15384.68 In inflation adjusted terms a 14,000 Jan 2013 Dow, neglecting change of component companies, is down 9% compared to a 14,000 Oct 2007 Dow. When the combined effects of the change of base and the understating ("adjustment") of the CPI-U are considered, the shortfall is much greater. Unless you own a brokerage or are a broker, the market is a sucker's game. Keep in mind that the Dow is net of dividends. Assuming it was 4 percent for the years discussed, the dividend yield would have added about 25% to the above discussed return. 25% minus 9% is 13 percent return, which is not much to brag about, but better than one would get from banks. The calculation is not quite exact. For an in depth discussion of this, read this article: http://online.wsj.com/article/SB1000...285657442.html i ========== Yes, but the time value of money/opportunity cost and tax effect were not considered either. For example, if the Dow had gone to 15,384 and you bought at 14,000 in 2007, you would still loose if you sold because you would pay tax, even if it is at capital gains rate of 20%, on the inflation "profit" of 1,384. 1,384/0.8 = 346 or a total of 15,731 to "gross up" to zero, and this neglects the time value of money (5 years) / opportunity cost. Any dividends would have been taxed at ordinary income rates [20-30%], reducing their contribution. Compounded time value of money at 5% for 14,000 at 5 years is 1.05^5 * 14,000 = 1.2762815625 * 14,000 = 3,868. In a more complete analysis, the Dow would have to be at least 19,600 when tax effect and time value of money @ 5% compounded [inflation and tax effect excluded] is included just to break even. When tax effect and inflation are considered on the time value of money/opportunity cost, we are over 20K for a break-even Dow.[And now you know where your retirement went.] Your understanding of opportunity cost is incorrect. Opportunity cost is what you could make doing "something else" that is easily available. Examples of such things are 1) Doing nothing with money (keeping cash in a mattress, not the worst option in life) 2) Investing in government securities None of these produced comparable returns. In the casino called the market, not only does the house have an edge, the cards are marked and the dice are loaded... I simply go by the price of what I pay in relation to value, and it seems to work out OK. i |
#9
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THE DOW WILL BREAK 14000 THIS WEEK !!!!
On Fri, 01 Feb 2013 21:57:22 -0600, F. George McDuffee
wrote: snip In the casino called the market, not only does the house have an edge, the cards are marked and the dice are loaded... snip You should find this of interest [pun intended] http://www.bloomberg.com/news/2013-0...benchmark.html -- Unka' George "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves" -Norm Franz, "Money and Wealth in the New Millenium" |
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