Board-Ansicht
Mix-Ansicht- Anderer Kontinent, andere Menschen - aber genau dieselben Sorgen.............. - Emerald, 28.03.2004, 23:03
Anderer Kontinent, andere Menschen - aber genau dieselben Sorgen..............
-->
Dow 700?
That's the $64 trillion dollar question, isn't it? One way to get of sense of timing is to watch the real experts in money management. I had a chance this week to put some questions to E. Robin Landry. Elaine & I have known Robin several years - he runs a small brokerage firm (by Wall St. standards - in Shawnee Oklahoma. One reason I've found Robin such a good contact is that he has made serious money for his clients. He's more often than most on the winning side of market moves. His approach is that of a very disciplined technician. He uses a wide range of tools including all the oscillators, trend lines, and Elliott Wave theory to arrive at his predictions.
Robin's also not a"pessimist". He's a very level-headed,"what makes sense" kind of fellow. So you can imagine my surprise when he disclosed that his family in Oklahoma is getting ready for a big downturn in the near future. Here's a Q&A with him:
1. Robin, we’ve known each other a number of years - and while you’ve been correctly long the market, when you start talking about “survival mode” it tells me that you sense something really ugly ahead. What has happened to get you into “survival mode thinking?” Is it one thing, or a lot of little things?
It is a lot of little things, things I see happening around me here in Oklahoma and other places I travel. I'm talking about such things as the decay of the downtowns in cities all across the country and even in Europe. The closing of all the mom and pop business', the problems with pension plans, social security, Medicare, etc. I could go on and on. Yes, many of them have been going on for sometime and still the public has been reluctant to take action on their own, instead expecting someone in government to fix it. They can't fix it because the public won't accept the medicine needed for the cure and the politicians don't have the nerve to tell the truth. I talk to clients each day and it continually amazes me to hear them say they expect the government to come up with a fix and so they refuse to save, continue to spend and are headed for one HELL of a retirement. In the markets I see a lot of negative divergences, yet the market keeps rising. It can't go on forever and I think it will turn down this year w
ith a vengeance. The NASDAQ is already showing signs it may have already turned down. Unless it can get back above the 50 day moving average very soon. the top is most likely in.
2. When the next turn in the market comes, how far down will “down” be? I know you’ve been a tremendous Elliott theory follower - and just based on that approach, how bad could it get?
If the worst case wave count happens, i.e. that a Grand Super Cycle top is happening, The bottom will be in the 700 area of the Dow Jones. No that is not a typing error. 700 is the target area. How long will it take? The last Grand Super Cycle Depression was over 200 years ago and it lasted 68 yrs if memory serves me right. The path will most likely be that the next decline ends around the 5000 area of the Dow then another rally lasting a year or so then another decline to the 700 area with the bottom happening sometime between 2008 and 2011. It could happen much sooner, or take much longer. One thing I have learned over the last few years is that the market has held up much longer than I expected, but then fell much faster than I expected. The long sideway movement in the market will take years as people get back to basics, work their way out of debt or file bankruptcy and then have to work to rebuild their lives, hopefully not on credit. Will it take 20 yrs or more? I think at least that. It will take a who
le new generation growing up, one that has not experienced the fall and willing to look forward to the future, who will be willing to take risk and build a future for themselves and the country. How good a future they have will depends on how we handle the decline and so far I am not encouraged.
3. Any idea what us “little people” with 401-K’s can do? Is it time to say “To heck with penalties…go to hard assets?” Or, is there some other way to play it?
This is where it really gets difficult. The right thing for one person may be different for another. I can't give specifics to you or anyone else without knowing all the particulars of each situation. As a registered investment advisor the law requires that I know the clients situation before making recommendations. Rather than specifics, I'll give you a few things I have done, or in the process of doing, in my own life. 1) Get out of debt!!!! Sell the house if you can't pay it off. Downsize. Rent if you can't pay the home off. I would sell whatever I had to do to get there. I Did. If you have a 401k, IRA, etc and you don't have control of the investments yourself you are in trouble if the worst happens. Hard assets such as a home, car, food supply, water source, etc are more important to me than gold or silver. Only if you have funds left over after the survival things are done would I look at gold, silver and other investments. I recall you have written and referenced several good sites for people to visit
which do a far better job of preparing people for a self sufficient lifestyle than I could in a short discourse. The only thing I will say with regard to the markets here is that you won't want to be in it when the downturn happens. T-bills are the only place I feel will be the option for most people due to their circumstances. The return OF the money will be more important than the return ON the money until the bottom is in. Others may be able to short the markets or invest in inverse funds such as Rydex or ProFunds. Talk to a qualified investment advisor who is familiar with your own situation.
4. You’ve had a successful small business in a medium sized mid-West town, yet you may have to lay off staff. Yet your business is doing fine right now. How soon before small/medium businesses like your - all over the country - get to that “pull the trigger” point where they have to lay off people who they don’t want to?
This depends on how well they run their business, how much debt they have, and how quickly they recognize the degree of the downturn. If history is any guide, most will wait too long and go under. I always tell my clients that being prepared and it not happening is better than not being prepared and it does. This is the whole premise of the insurance business, but I fear the insurance companies will not be able to survive either, at least not all of them.
5. Elaine and I have been building our micro-ranch in Texas as a survival oasis. Everything from A-Z we can think of to keep us in food and healthy we’re doing right now. What kinds of specific preparations are you making? Do we start pulling money out of banks and stuffing it in mattresses? Bury gold coins in the yard? Empty out safety deposit boxes?
Keeping healthy and securing a food supply is paramount. What specifics you do will depend upon your resources and the location where you live. People in the country and rural areas will fare the best while those in the big cities will have a much more difficult time. I still have my bank accounts and my investments but will act as the market dictates. I do have a reserve outside of the banks and it grows every month. My safe deposit box has nothing in it but copies of valuable papers such as wills, trusts, deeds, etc in case of a fire or other disaster. You, unfortunately, have had first hand experience with this type of occurrence. Then, again as you have written today it may turn out to have been a good thing as someone in the news was always saying.:-)
6. I know you don’t tell the worst case scenario to all your clients - they might think you a big “doomster” - yet among Urban Survival subscribers, you’ve got a darned good track record of being right. What portion of your customers have given any thought to the kind of downside we’re talking about to the point that they’ll be ready to cope with it?
10%. Most follow my investment advice but are still in denial and believe the government will pull a rabbit out if the hat and it will be all be okay.
7. Robin, in 1999 if you had a job in an Internet company and had options - you’d have the world by the tail. Who will have the world by the tail in 3-4 years? The person with a few gold coins, paid up land, and no debts - or the person who just goes along with the run-up-the credit cards approach? In other words, what would do right now today if you had even $5,000 you could put on a 2-4 year bet? People think I’m nuts when I tell ‘em gardening equipment and diesel…
One of the things I have learned about you George over the years, is yes you sometimes border on sounding as if you have gone overboard, but I liken it as to preparing for an exam. Over preparation has little downside except that the exam seemed to be easy. We are now trying to prepare for a situation that is much more important than an exam, SURVIVAL!!!! Without your health, food, water, and shelter, all the money in the world will do you no good. Let's put it this way. You have a million dollars and are on a desert island without any food or water and someone comes by and offers you a way to get off it, but it will cost you all you have. What is your decision? Give them the million dollars of course if you want to survive. Those who prepare now will have little downside if any. They will be out of debt, have less worries, and their health will be much better. If the worst happens, then they will also be in a position to take advantage of the blood in the streets and buy assets at prices they never dreamed o
f if we survive the downturn and the politicians don't get everyone blown up, but that's another story.
Robin's email address is rlandry@charter.net
Thread gesperrtgesamter Thread:
