<p>My mother bought GE when it was in the 20s, rode it up into the 50s and all the way down. She doesn’t care about the price of the stock. All she cares about is the dividends that it pays her.</p>
<p>I got a stock for free too. It was due to a change in corporate type so my basis is zero. I get dividends every quarter and have watched the price of the company go all over the place and just enjoy my dividend check. I would personally prefer growth but this dividend thing isn’t all that bad.</p>
<p>At some point, perhaps 15 years from now, I may think a lot more like my mother - basically income is the important thing. It just means that I need companies that make stuff that people will need for a long time, competent management that things for the long term and an area that will probably be stable.</p>
<p>Same thing with a house.</p>
<p>It’s shelter. As long as it’s affordable, reliable, maintainable, and work is available, it does the job. Yes, the value will go up and down - but if you’re going to be there for a long time, does it really matter? I’m pretty sure that my mother doesn’t worry about the value of her home because she will live there until she dies.</p>
<p>“housing will not see the highs of recent boom for decades”
I know. read what I said.
"prices will start to rise at a historically normal rate of increase[ not at the unsustainable “bubble” rate experienced in the middle of the last decade ] "
Look at the Case-Shiller chart of historic US housing prices since 1985 </p>
<p>and draw a straight line from 1985 to 2012, ignoring all of the ups and downs of the past 10 years. That shows the normal rate of increase of housing prices over the past 30 years. They will once again go up slowly, as they usually do, save during the Great Depression. The recent boon was an anomaly brought on not by real “upply and demand” issues in the housing market, but by investment hysteria- akin to the internet bubble in the late 1990’s and the Tulip mania bubble in Belgium in the late 1700’s.</p>
<p>I wholeheartedly agree about your view on housing…i make improvements because i want to, without regard to future return…though people that are underwater may disagree about housing… People in their 20-30’s are NOT in the stock market, and may never be invested to the level those of us in our 50’s are…we can handle some declnes because we have been invested for decades…BUT demographics were in our favor, and not in favor of the generation below us, this is a fact…the stock market is about 10 years behind the housing market…the baby boomers drove housing to highs not to be seen for awhile, now we are still hitting the stock market,but the time is coming when we will not be investing so aggressively, and then, watch out</p>
<p>“people in their 20-30’s are NOT in the stock market”</p>
<p>Oh I dont know about that- any young person , and there are thousands around here and in NY, Austin, and other hi tech hot spots- who is working for a HiTech company these days, especially startups, is working there for the opportunity to get shares of stock in that company. They are not just working for a pay check. They are or will be part of the “stock market”. Now, not ALL young people are working for or investing in companies that are or are likely to be publicly traded, but a lot are. My son is starting to invest for the long haul, with a lot of guidance from mom.
I just dont see the “gloom and doom” scenario vis a vis the stock market to be as likely as you do.</p>
<p>I think that it would be to the loss of investors to not invest in stocks. Yes, it
requires the effort to be good at picking companies and stocks but there will always
be good companies making good profits with a good future. My view on companies
like these are that they are free money - whether in the form of dividends today or
appreciation tomorrow or both.</p>
<p>“there will always be good companies making good profits with a good future. My view on companies
like these are that they are free money - whether in the form of dividends today or
appreciation tomorrow or both.”</p>
<p>I do see the doom and gloom scenario. But markets do recover from crashes. And you don’t have to own the whole market. Obviously timing it well produces better results but there are a lot of companies that have done well in crashes. Even during the Great Depression. Homestake Mining is an example - I owned them until they got bought out by Barrick.</p>
<p>The same was said about housing in the 2007 era, you could not lose in housing,timber…</p>
<p>Fwiw, i do 't want to be market negative…i was shoveling money in the market during every downturn in the last decade… But this IS different…i won’t disagree thatnthere are companies that will do well regardless of market environments, but to think the market as a whole will be fine in the next several years is foolish</p>
<p>“The same was said about housing in the 2007 era”-
only by those who were looking at it to make a [quick] buck.
I started reading what De Doom was saying in late 2007, and after getting somewhat burned in 2000 when I did not get out of the stock market soon enough, and because I am married to a RE broker, I saw how “nutty” and unreal the housing market had then become. It was not based on supply and demand for homes to live in- it was becoming based on pure speculation, mostly with new homes in areas where people were buying either second homes or “retirement” homes with money they borrowed.</p>
<p>“But this IS different…”
how?
I see it going sideways for a while overall, but I dont see it going down. Give me specific reasons it will go down vrs sideways…</p>
<p>I haven’t lost in housing. My mother hasn’t lost in housing. My sisters haven’t lost in housing. There are lots of cities and towns where housing didn’t go down or it went down small amounts. As they say, location, location, location. Lots of stocks may go down. The ones that you hold may or may not be among them. Or they may just snap right back up.</p>
<p>Timber is a commodity. Those are quite a bit different from stocks and bonds.</p>
<p>This time is different is one of the most overused statements that has been proven wrong time and time again. However, I believe this time really is different. Never before in human history have the demographics in the developed world from the USA to Japan and emerging countries such as China been such a strong headwind. The lack of huge destructive wars, pestilence and longer life spans makes the future including the stock market less positive going forward.</p>
<p>Lets see, i sold my 1800 sf home for 900k in 2006, with an easy commute to NYC , that held its vale signifcanty better then many places across the country, in an affluent area…today the home would go fo maybe 700k,likley 640k… The buyers have gotten hammered…Me? I continua</p>
<p>Dividends are not sure things. They are not obligations. They can be adjusted. Just like with GE and several banks, they can be adjusted downward.</p>
<p>I don’t think shareholders of GE for the last several years are all that happy with GE. GE cut its dividend a few years ago.</p>
<p>I don’t like the stock picking argument either. It is much easier to make money in stocks in a rising market. In a flat market, it is more of a crap shoot.</p>
<p>I don’t find EQR that exciting. I look at the dividends, profits and cash flow, and see that the div return is about 2 percent or so. There isn’t much cash flow, and the profits of the company are about the same as
the dividends.</p>
<p>Are there a lot of new projects coming on line that will increase cash flow or is the company expecting rent increases to increase cash flow?</p>
<p>I do like that the debt in the company is not large.</p>
<ul>
<li>Budget</li>
<li>Bush Tax Cuts expiring</li>
<li>Healthcare</li>
<li>Structural Unemployment</li>
<li>Europe</li>
<li>Slowing growth in BRICs</li>
<li>Pensions</li>
<li>State budgets</li>
<li>Global political problems within countries and their effect on their economies</li>
</ul>
<p>I have a friend who has/had 20,000 shares of GE…we would meet monthly tomdiscuss investment ideas…She was extremely happy when GE was at 50+ in the early 2000’s …i don’t care what dividends you have received, having a net worth of X, and now X-50% stinks…</p>
<p>Housing is a mindset - if you’re expecting booming returns from
housing (or most other thing), you may be disappointed. Can you make
money in housing? The REITs seem to be doing fairly well at it. People
have to live somewhere.</p>
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<p>My mother is apparently happy with the returns from them. I suppose
if you have a ton of dividend stocks sending you checks regularly,
you can live a fairly decent life.</p>
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<p>I didn’t say that it was easy. I said that it takes time, skill, and
effort to make money in markets. Moreso in falling markets than rising
markets. You could argue that we’re in a falling market. But it’s up
around 8.6% so far this year, right?</p>
<p>Fib retracements are very interesting on the $spx.</p>
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<p>I really don’t need a lot of excitement in my portfolio today.</p>
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<p>I thought so too when I was younger. But I have grown to appreciate
the cash argument. You can’t take it with you but you can live
comfortably while you’re waiting to get there.</p>
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<p>Those are longer-term issues. The others are shorter-term to
medium-term. Europe is at least medium-term.</p>
<p>I should add another problem: a stronger dollar due to a weaker
everything else.</p>
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<p>These are all risks but in differing time-frames. If they all expire,
there will be a world of pain in 2012. Things will eventually adjust
as they always do but it’s certainly a stock market risk.</p>