Hiding Bear Posted July 22, 2004 Report Share Posted July 22, 2004 Welcome to B4 The Bell! Yesterday, the Jedi returned and struck back against the plans of the evil Microsoft empire. Well not exactly, but an unusual and negative chart pattern was formed. The bulls are on the run as liquidity still drains from the economy and the GSEs look like their lending growth has slowed way down. Thursdays are important days for Fed activity. Let's see if the Fed today is really as confident as the Lizard King that the economy is improving. Good trading! PS Some fine discussion last night of various issues. http://www.capitalstool.com/forums/index.p...80entry322775 Link to comment Share on other sites More sharing options...
DrStool Posted July 22, 2004 Report Share Posted July 22, 2004 Gold No Haven When The Well Runs Dry Your Golden Stool, including short and long term updated charts and price targets, is loaded. Even if you are not a goldbug, you should check out the Golden Stool. It's in your Anals daily. Take a subscribatory and download the Golden Stool RIGHT NOW! 30 Day Intro Subscribatory. Just $16.99! Get In RIGHT NOW! Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 From prior thread: Doc says: The cost of debt lower than the cost of equity? Maybe that's the way it should be, but it hasn't been that way for the last 20 years. Companies that produce no earnings have been able to raise all the capital they want and then some. The cost of equity has essentially been zero. That might be true in technology but only during the past 10 years or so. As for the balance of the economy which represents the vast, vast majority of capital employed which is what business essentially has to finance it is most certainly not the case. Paradoxically, it is also not true that over the long haul risk takers will outperform lenders. Over the very long haul (80-100 years), equity returns are hardly greater than the risk free rate of return. Your first sentence contradicts the second, Doc, and you are in any case mixing apples and oranges in comparing the risk-free rates with a corporate cost of debt. Anyway listed equity returns certainly do outperform debt returns over the long haul, particularly so when dividends are taken into account. Maybe not by as much as is widely believed but they do. However, particularly prior to the last 5-10 years listed equity returns have been a very poor proxy for total societal equity returns since companies should theoretically have reached a certain level of maturity prior to listing implying significant pre-listing equity returns. For example, consider the nature of typical private equity/venture capital returns. Equity returns are superior to debt returns over the long haul. Period. Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 Plunger, too many points in your post to address but consider your statement: It's very easy to see that the VAST MAJORITY of risk takers are nearest the bottom of the food chain, and the bankers are at the top. If more money flowed toward risk takers than banks, the risk takers would be at the top. First of all borrwoing for consumption has nothing to do with risk taking More substantively as to the second point, ask yourself whether relatively speaking bankers are wealthier and more influential today than they were 100 years ago. The answer is absolutely clear to me. Link to comment Share on other sites More sharing options...
machinehead Posted July 22, 2004 Report Share Posted July 22, 2004 Plunger said in the previous thread: As for entrepreneurs...Are you prepared to enter into a long term lease on a commercial space to open a new enterprise in this environment? Are you prepared to secure that lease with your house as collateral? If so, what business would that be? What market is presently underserved ...? I've been asking myself and others this question for many months. So far, have not been able to come up with any answer or proposal. Does anyone foresee opportunity in an entrepreneurial-level business which is not massively capital intensive? Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 MH: Auto reposession is a growth business - though you'd want to be the guy in the office running the show, not the guy towing the cars. Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 More substantively as to the second point, ask yourself whether relatively speaking bankers are wealthier and more influential today than they were 100 years ago. The answer is absolutely clear to me. I made no mention of whether or not bankers were more or less powerful today than 100 years ago, and this appears to be a change of subject. So it is then your position that risk takers ARE above bankers on the food chain. OK Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 Plunger said in the previous thread: As for entrepreneurs...Are you prepared to enter into a long term lease on a commercial space to open a new enterprise in this environment? Are you prepared to secure that lease with your house as collateral? If so, what business would that be? What market is presently underserved ...? I've been asking myself and others this question for many months. So far, have not been able to come up with any answer or proposal. Does anyone foresee opportunity in an entrepreneurial-level business which is not massively capital intensive? Simple: Nightclubs. During tough times people will always wish to go out to get pissed and generally forget their troubles. Remember the economic malaise in the 1970s? Party time! Furthremore nightclubs are effectively pre-financed by breweries and drinks companies. Perfect. Link to comment Share on other sites More sharing options...
depends Posted July 22, 2004 Report Share Posted July 22, 2004 I've been asking myself and others this question for many months. Me too. Especially for the kids who have the energy to run a business, but am I willing to risk the capital to set them up? Can't do it. Too risky. So I'll trade the market for money. What a waste. This country is messed up. Corporations are just awful. When they break the law they should have to go to jail too for one thing. I had a good business for years once. A corp. came into my neighborhood and took my business in sweetheart deals with my suppliers. So I bumped em. Took the money and left them with a pile of old crap. Link to comment Share on other sites More sharing options...
Butterfield 8 Posted July 22, 2004 Report Share Posted July 22, 2004 http://www.fxstreet.com/nou/content/106560...chnicalanalysis Euro chart - a visualization of gold futures pa watched one hour of crapvision europe - candid discussion of likelihood of deflation. Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 More substantively as to the second point, ask yourself whether relatively speaking bankers are wealthier and more influential today than they were 100 years ago. The answer is absolutely clear to me. I made no mention of whether or not bankers were more or less powerful today than 100 years ago, and this appears to be a change of subject So it is then your position that risk takers ARE above bankers on the food chain. As to second point, yes, it is my contention that bankers are today relatively speaking far less wealthy and powerful than they were 100 years ago. No doubt about it. Regarding your first comment, if you say so, Plunger. Link to comment Share on other sites More sharing options...
Guest yobob1 Posted July 22, 2004 Report Share Posted July 22, 2004 Plunger said in the previous thread: As for entrepreneurs...Are you prepared to enter into a long term lease on a commercial space to open a new enterprise in this environment?? Are you prepared to secure that lease with your house as collateral?? If so, what business would that be?? What market is presently underserved ...? I've been asking myself and others this question for many months. So far, have not been able to come up with any answer or proposal. Does anyone foresee opportunity in an entrepreneurial-level business which is not massively capital intensive? Pimp Link to comment Share on other sites More sharing options...
DrStool Posted July 22, 2004 Report Share Posted July 22, 2004 Crapper- Your unequivocal pronouncements from on high are not going to fly here. Sorry. The long term rate of return on stock indexes, which are managed and regularly culled, before taxes, before management fees, is around 7.5%, including dividends. (See Shiller for the data.) If you take out taxes, commissions, and managment fees, to say nothing of the fact that managed indexes do not include the drag on performance of stocks that become worthless, that will leave the typical investor with an after tax return of around 3%. If you include the drag of all of the stocks that go to zero which would be in a diversified portfolio, then the return is going to be even lower. How much lower is anyone's guess, but it would appear to me that this is going to be substantially less than the long term return on debt. If you have facts that would support your argument, fine, but pronouncements in the absence of factual support are not very helpful. Link to comment Share on other sites More sharing options...
DrStool Posted July 22, 2004 Report Share Posted July 22, 2004 Big Move Coming But Which Way Uncle Buck and the Long Bong Hit, including short and long term updated charts and price targets, is now loaded. Take a subscribatory and get the latest whiff of Uncle Buck and the Long Bong Hit. 30 Day Intro Subscribatory. Just $16.99! Get In RIGHT NOW! Link to comment Share on other sites More sharing options...
Guest Posted July 22, 2004 Report Share Posted July 22, 2004 According to Greenie, the Household Survey indicates unprecedented jobs growth among home-based entrepreneurs. For these, their home is their headquarters and their SUV is their business vehicle. These "risk taking entrepreneurs" write off a portion of their homes and their vehicle purchase/use on their tax returns...as many need a means by which to haul trash from garage sales to their homes prior to selling it on EBAY. Welcome to the New Economy! Jobless Claims down 11,000 Link to comment Share on other sites More sharing options...
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