WHOMP....recession?

Robboo · 05-01-2008, 19:59

Whomp due to the high traffic at Cfc i figured I'd ask here.

IS teh US heading to a recession ?
IF so how will it effect the every day guy? Any place to invest if it happens to make some money thats fairly secure? And what investments should you avoid.

We are finally a point with only a house and auto payment after i kill this student loan in the next 2 months. I can see some additional income in the next 2 to 3 months with raises so we should have some "investment money" in addition to my normal savings. Retirement is thru work pretax.

Just curious as to what i should expect or do now...besides horde massive amounts of gasoline. ( joking)

killercane · 05-01-2008, 20:54

My personal take is it is hard to bet on stock growth with so much uncertainty right now. Maybe I am too conservative, but guaranteed 5%+ yields with CDs and such right now is hard to beat. Stash it away for a while and see if you cant come back in at a more advantageous time.

Long term though you want to be in diversified stocks since you are young. High yield bond funds are interesting but I dont know much about them. If you can deal with the headache, take up some rental properties. Something I am doing right now is rent to own houses/trailers; you can sell home ownership but still kick delinquents out faster than foreclosure. Illegal aliens are relatively good tenant prospects for this approach in my opinion. You are still a landlord for legal purposes however.

Im not a pro like Whomper though. And I never thought Apple would flirt with $200 freaking dollars either.

Pastorius · 05-01-2008, 21:13

it is generally better to enter the stock market when it sucks than when it does not suck.

But who am I to talk- I have not studied finance...

Robboo · 05-01-2008, 21:54

I am staying out of properties. With "katrina" problems down here still lingering the price range is beyond what I can do at this time. property values were I am at practically doubled overnight because of the good schools and lots of pasture land that could be made into houses. last year based on comps in the area my house increased in value about 8 % in a year.

yndy · 05-01-2008, 23:02

Quote:

quote:Originally posted by Robboo

Whomp due to the high traffic at Cfc i figured I'd ask here.

IS teh US heading to a recession ?
IF so how will it effect the every day guy? Any place to invest if it happens to make some money thats fairly secure? And what investments should you avoid.

We are finally a point with only a house and auto payment after i kill this student loan in the next 2 months. I can see some additional income in the next 2 to 3 months with raises so we should have some "investment money" in addition to my normal savings. Retirement is thru work pretax.

Just curious as to what i should expect or do now...besides horde massive amounts of gasoline. ( joking)

Far across the Atlantic pond, i'd suggest you stick to the 5% CDs. I don't know if you have investments in other currencies available, the $ seems to be out of luck for several years. Personally I dumped all my $ 5years ago and stuck to the local currency of Romania. Now I'm moving towards the euro. The US recession will probably impact the entire world, i'm scaling down my stock exchange investments as well. But i'd stay away from property also, the turmoil is too big, maybe you should wait for it to settle.

Whomp · 05-01-2008, 23:33

I guess I'd say I don't know and don't really care Rob. I try to just accumulate stuff and stay tactical in my investments. I suppose there's a case for a weaker economy but there's also a case for a slower economy. Exporters (or more specifically foreign affliated companies) are huge beneficiaries right now and it's a much larger percentage of the economy than housing.

I also think some of the Asian currencies will get very strong relative to US and European currencies. They can't continue to move lock step with the dollar because it's causing enormous inflationary issues so expect their central banks to tighten credit while we loosen credit. Short term the dollar may be weak however the Euro looks extremely overvalued to me.

Tactically, companies with large affliate businesses and certain manufacturers are interesting to me. Why? It cost more to ship iron ore than it costs for the actual iron ore due to a huge shortage of shipping and bulk shipping cost have tripled over the last couple of years. Companies like Tower Tech (TWRT) Cicreo, IL and Manitowoc, WI based company is something I'm buying small and tactically. Tontine Partners is a hedge fund that has a huge stake in the company and I have a lot of respect for the guy who runs it because he's usually 4-5 years ahead of major trends. The company manufacture wind turbine gear boxes and tower along with servicing them. They're one of the few US companies that are in this biz. Danish company Vestas (I own) is looking to make a huge move into the US and China now that most European markets are fairly saturated. Don't be surprised if we see huge wind farms on the Great Lakes.

With that said max out your 403B and consider a Roth IRA for excess. Use a flexible mutual fund in a Roth and dollar cost average. Their diverse, more moderate in risk and can invest anywhere in the world or type of market (Stock/bond/cash). I own WASYX. Remember it's a market of stocks not a stock market. Keep your eyes open (IE Apple selling ipods was pretty obvious to me 5 years ago) and then explore furter. I trying to find great alternative energy companies right now and so far so good. WFR and SPWR have been very rewarding.

Robboo · 06-01-2008, 02:15

Thanks....My retirement is pretty good. Its a state government thing that is based off the high 5 year average times a factor times years of service. I have a small retirement fund(previous job) which I am about to roll into a IRA so I can add more contributions. Hopefully pretax--might take two moves to do so--this fund to an IRA to my 403B that my job has.

I hear all of this and not having a lick of financial knowledge this stuff gets me nervous with a family and a house note. So I guess the moral is stay out of debt, dont lose your job and still make the same wise investments on developing markets/technology. I got my eye on copper companies but the wind turbines are also a good idea.

sz_matyas · 06-01-2008, 02:50

Thanks for the tips as I have a decent chunk of change (for me anyway) coming out of CDs in the next year (they went in back when any yahoo, including me, could get 5.5% for $10K and 2 yrs). It's a bit harder for me to invest, as I know just enough to be dangerous and as I technically have no "work income" it's hard to use the employer sponsored programs.

romeothemonk · 06-01-2008, 15:22

I do not have Whomp's expertise in investing, but I do know some key info. I work in the frequency control business, which supplies a key and expensive component to all switches, routers, military comm devices etc. There are even quartz crystals inside your PC, but they are built by Asia, being a commodity product. My company, and several like it all focus on highend crystals. The three publicly traded Frequency Control tickers are FEIM, LGL, VPF. I work for LGL. All of these are busier than a one legged man in an ass-kicking contest. Sales are up, and orders on high margin developmental products are up.

Cramer liked Flextronics, an EMS board stuffer a couple of weeks ago. Almost all our products for all 3 companies go through FLEX. Also Cisco's CEO said 16% growth this year, and I don't think he is kidding. I would watch Cisco for when the PE multiple drops to ~18.
With these tech companies, the 10-K and the 10-Q's are very important documents, and as Sarbanes Oxley starts to really force them to be more forthcoming with information.
I have all my pitiful investment/savings tied up in AEO and LGL right now. I am heavily weighted towards LGL, as our Board of Directors is now starting to focus on shareholder value, something they have never mentioned before, and eliminated 2 executive positions and closed a luxury office to save on expenses. All this stuff is public information and is availible on Yahoo Finance. I am not an insider by definition and do not want to intimate that I am an insider, I am just verifying press releases.
If you do invest, make sure you read some 10-Q's and 10-K's as well as some conference calls if they are availible. I wouldn't want anyone blindly jumping into electronics right now with the extereme marktet presure unless you are certain you are picking a winning horse.

Pastorius · 06-01-2008, 18:58

BTW a recession means that GDP falls for 2 consequitive quarters (since I speel Inglish wery vell, let's say the first 2 quarters of this year)

(note, definition may also be less or more strict than mine)

05-01-2008, 19:59	#1
Robboo King Join Date: May 2006 Location: Cajun Country. Posts: 2,002	WHOMP....recession? Whomp due to the high traffic at Cfc i figured I'd ask here. IS teh US heading to a recession ? IF so how will it effect the every day guy? Any place to invest if it happens to make some money thats fairly secure? And what investments should you avoid. We are finally a point with only a house and auto payment after i kill this student loan in the next 2 months. I can see some additional income in the next 2 to 3 months with raises so we should have some "investment money" in addition to my normal savings. Retirement is thru work pretax. Just curious as to what i should expect or do now...besides horde massive amounts of gasoline. ( joking)

05-01-2008, 21:13	#3
Pastorius Custard used tile Join Date: Jul 2003 Location: Opening a can Posts: 3,158	it is generally better to enter the stock market when it sucks than when it does not suck. But who am I to talk- I have not studied finance... __________________

05-01-2008, 23:33	#6
Whomp King Join Date: Mar 2005 Location: Chicago. Posts: 2,388	I guess I'd say I don't know and don't really care Rob. I try to just accumulate stuff and stay tactical in my investments. I suppose there's a case for a weaker economy but there's also a case for a slower economy. Exporters (or more specifically foreign affliated companies) are huge beneficiaries right now and it's a much larger percentage of the economy than housing. I also think some of the Asian currencies will get very strong relative to US and European currencies. They can't continue to move lock step with the dollar because it's causing enormous inflationary issues so expect their central banks to tighten credit while we loosen credit. Short term the dollar may be weak however the Euro looks extremely overvalued to me. Tactically, companies with large affliate businesses and certain manufacturers are interesting to me. Why? It cost more to ship iron ore than it costs for the actual iron ore due to a huge shortage of shipping and bulk shipping cost have tripled over the last couple of years. Companies like Tower Tech (TWRT) Cicreo, IL and Manitowoc, WI based company is something I'm buying small and tactically. Tontine Partners is a hedge fund that has a huge stake in the company and I have a lot of respect for the guy who runs it because he's usually 4-5 years ahead of major trends. The company manufacture wind turbine gear boxes and tower along with servicing them. They're one of the few US companies that are in this biz. Danish company Vestas (I own) is looking to make a huge move into the US and China now that most European markets are fairly saturated. Don't be surprised if we see huge wind farms on the Great Lakes. With that said max out your 403B and consider a Roth IRA for excess. Use a flexible mutual fund in a Roth and dollar cost average. Their diverse, more moderate in risk and can invest anywhere in the world or type of market (Stock/bond/cash). I own WASYX. Remember it's a market of stocks not a stock market. Keep your eyes open (IE Apple selling ipods was pretty obvious to me 5 years ago) and then explore furter. I trying to find great alternative energy companies right now and so far so good. WFR and SPWR have been very rewarding. __________________ If at first you don't succeed, try, try again. Then quit. There's no point in being a damn fool about it.--W. C. Fields

06-01-2008, 02:50	#8
sz_matyas Join Date: Oct 2005 Location: Madison, WI. Posts: 555	Thanks for the tips as I have a decent chunk of change (for me anyway) coming out of CDs in the next year (they went in back when any yahoo, including me, could get 5.5% for $10K and 2 yrs). It's a bit harder for me to invest, as I know just enough to be dangerous and as I technically have no "work income" it's hard to use the employer sponsored programs. __________________ \"All men are frauds. The only difference between them is that some admit it. I myself deny it\" H. L. Mencken

06-01-2008, 15:22	#9
romeothemonk King Join Date: Aug 2004 Location: Yankton, SD. Posts: 1,310	I do not have Whomp's expertise in investing, but I do know some key info. I work in the frequency control business, which supplies a key and expensive component to all switches, routers, military comm devices etc. There are even quartz crystals inside your PC, but they are built by Asia, being a commodity product. My company, and several like it all focus on highend crystals. The three publicly traded Frequency Control tickers are FEIM, LGL, VPF. I work for LGL. All of these are busier than a one legged man in an ass-kicking contest. Sales are up, and orders on high margin developmental products are up. Cramer liked Flextronics, an EMS board stuffer a couple of weeks ago. Almost all our products for all 3 companies go through FLEX. Also Cisco's CEO said 16% growth this year, and I don't think he is kidding. I would watch Cisco for when the PE multiple drops to ~18. With these tech companies, the 10-K and the 10-Q's are very important documents, and as Sarbanes Oxley starts to really force them to be more forthcoming with information. I have all my pitiful investment/savings tied up in AEO and LGL right now. I am heavily weighted towards LGL, as our Board of Directors is now starting to focus on shareholder value, something they have never mentioned before, and eliminated 2 executive positions and closed a luxury office to save on expenses. All this stuff is public information and is availible on Yahoo Finance. I am not an insider by definition and do not want to intimate that I am an insider, I am just verifying press releases. If you do invest, make sure you read some 10-Q's and 10-K's as well as some conference calls if they are availible. I wouldn't want anyone blindly jumping into electronics right now with the extereme marktet presure unless you are certain you are picking a winning horse. __________________ I am not crazy cause I take the right pills..................................... Everyday

05-01-2008, 20:54	#2
killercane Prince Join Date: Sep 2005 Posts: 959	My personal take is it is hard to bet on stock growth with so much uncertainty right now. Maybe I am too conservative, but guaranteed 5%+ yields with CDs and such right now is hard to beat. Stash it away for a while and see if you cant come back in at a more advantageous time. Long term though you want to be in diversified stocks since you are young. High yield bond funds are interesting but I dont know much about them. If you can deal with the headache, take up some rental properties. Something I am doing right now is rent to own houses/trailers; you can sell home ownership but still kick delinquents out faster than foreclosure. Illegal aliens are relatively good tenant prospects for this approach in my opinion. You are still a landlord for legal purposes however. Im not a pro like Whomper though. And I never thought Apple would flirt with $200 freaking dollars either.

05-01-2008, 21:54	#4
Robboo King Join Date: May 2006 Location: Cajun Country. Posts: 2,002	I am staying out of properties. With "katrina" problems down here still lingering the price range is beyond what I can do at this time. property values were I am at practically doubled overnight because of the good schools and lots of pasture land that could be made into houses. last year based on comps in the area my house increased in value about 8 % in a year.

06-01-2008, 02:15	#7
Robboo King Join Date: May 2006 Location: Cajun Country. Posts: 2,002	Thanks....My retirement is pretty good. Its a state government thing that is based off the high 5 year average times a factor times years of service. I have a small retirement fund(previous job) which I am about to roll into a IRA so I can add more contributions. Hopefully pretax--might take two moves to do so--this fund to an IRA to my 403B that my job has. I hear all of this and not having a lick of financial knowledge this stuff gets me nervous with a family and a house note. So I guess the moral is stay out of debt, dont lose your job and still make the same wise investments on developing markets/technology. I got my eye on copper companies but the wind turbines are also a good idea.

06-01-2008, 18:58	#10
Pastorius Custard used tile Join Date: Jul 2003 Location: Opening a can Posts: 3,158	BTW a recession means that GDP falls for 2 consequitive quarters (since I speel Inglish wery vell, let's say the first 2 quarters of this year) (note, definition may also be less or more strict than mine) __________________