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I definitely don't think the market is going to colapse (it was not my intention to be scary with this writeup, at any rate) but it's something to be aware of, at least.

Over valuation was huge during the late-90's boom, but I think that people who bought into the market in 1999 or 2000 with 20 or 30 year investment horizons will be OK anyway. Just like people who bought in just before the 1987 crash would have come up on top if they held onto their investments today instead of panicking and selling.

This should be of most concern to those with shorter investment horizons, like the proverbial victims who had to put off retirement due to the 2001-2002 decline. People in that situation should seriously consider their situation, because sitting around and waiting for the market to return to where it "should be" may be the right thing to do, as long as you aren't holding your breath.

For people with long investment horizons like me (I am 22, less than a year out of college) market undervaluation (or lack of overvaluation) is good, because stagnant markets for the next few years means more of my money gets in at the ground floor. I want the markets to stay where they are (well not really, because stagnation is bad for the mood, jobs, etc., but purely from the investment point of view, any near-term growth is contrary to my long term interest) whereas people who will need the money sooner rather than later, may be severely screwed if their portfolios continue to be worth less than they've bought them for.

 
It is much easier to put a $13,000 401(k) investment someplace that will grow than it is to place a $36 billion cash hoard.



Not really. You can't buy Yahoo on e-trade (your subsequent example) with your 401k, as your 401k must be invested in a fund or a selection of funds with which your employer has signed. Most funds that are more aggressive than an index, seek out undervalued securities into which to invest the billions of dollars they're entrusted with. While as an individual investor you may luck out and find a great place to stick your 13k into, chances are your fund manager is in the same boat as Berkshire's management.



Of course you'll never hear your fund managers write about that in your quarterly statements. Fund managers are paid a percentage of the total investment in the fund, rather than a percentage of the growth. It's in their interests to amass money in the fund and invest it.


jun jun chen chen fu fu zi zi

 
I don't think what you describe is going to be a big problem at all.

Why?

Because there's a huge influx of money into the 401k system and therefore into the market. What's more, the 401k system was created in 1978 and the first one was established in 1980. I can't find the numbers but I am guessing that it took a few years for the system to become really popular, therefore most of the money in there isn't "old" money, it's investments of under 10 years old. That means the system is a lot less vulnerable to baby-boomer retirements than Social Security (I am paying that tax without expecting to see anything for it, but thats OK). Plus, the limits for 401k contributions are rising (12k per person last year, 13k this year, 14k next year, and (IIRC) 15k the year after that)

Now, certainly, it's possible that the 401k cash-out (as well as folks selling their non-401k portfolios) will have an affect on the market that will devaluate stocks just a little bit, I think that the influx/outflux of cash into the system will be healthy enough that it will go through that healthily enough.

Mainly, this is going to be hard on some brokers now that funds won't be needing to BUY a lot of stock, as they can just replace the outgoing cash with the incoming cash 'stead of buying.

 
Spanish Bombing

This is what terrorism is. Innocent people, on the train, on a bus, at work, getting murdered because it fits someone's agenda. This is the same whether the people are in New York or Jerusalem or Madrid or Moscow. There's nothing more to say that hasn't yet been expressed in the thread yet. I am sorry for Spain, I am sorry for Spaniards, for all people of Europe whose sense of safety may have been decreased just like that of us Americans was decreased after 9/11.

One thing I found disgusting in this thread is the bitter bickering about prematurely assigning blame. Look, this may be ETA (though they deny it,) this may be Muslim terrorists (looking more like it with the found van and claims of responsibility) or it may be something else entirely, but what the FUCK is the point of spewing venom at your fellow Plasticians when they voice who they believe the likely suspect to be. In a few days or weeks, we will know who did this. Yelling at someone that "Remember when OK City bombing was blamed on Arabs?" as if that's a relevant argument to this is just dumb.

Oh, and one more thing. If it IS Muslim terror, it's got nothing to do with Iraq. No one who's leading terror cells (especially outside Iraq) gives half a shit about Iraq.

I am reserving further judgement until more data is out. And for those of you who have voiced strong opinions here about who did it, I hope that once the info comes out, you do look back and see how right or wrong you were.

By the way, if anyone here is from Madrid, and you're really shaken up and disturbed and you're sensing tension and a sick vibe in your city... hang in there. It was like that in NYC for months after 9/11, but things eventually return to normal.

 
My two favourite bathrooms in NYC are at Tao's (58th and Park) and CBGB's



I work accross the street from Tao now, but the first and only time I was there was during college. We were really drunk (and probably more) and I had to take a piss. I found the doors were labeled Ying and Yang. It took me a minute to (cleverly) deduce which one is men's.



I love CBGB's because it's such a non-pretentious low brow establishment. The bathroom is no exception. Any time the door opens anyone who happens to be in the hall outside can see you lined up pissing into the urinals. There's a concrete platform about 2 feet above the floor on which there's a toilet. No stall or anything, just a dominating throne. But I figure that by the time you're in position of having to take a shit at CBGB's you really aren't goint to care.



Public bathrooms also available: Central Park, on those stairs leading down to the fountain from the promenade. Bryant Park, next to the library.



But I certainly have had to resort to public urination once or twice.



Ah, great places to eat:



A Schichwan restaurant on 2nd Ave at 55th.

Agra, Indian on Lexington and 60th or so (upstairs)



Mamoun's on McDougal, in the NYU area, gives you falafel at $2.00. Also very low-brow, which I like. The red ketchup-looking thing on the table is not ketchup or bbq sauce, it's made from red chilly pepper so apply to your falafel with caution.



The Living Room, next to Pianos, on Ludlow St (near Houston) is a great non pretentious cafe where one can hear 4 or 5 different accoustic acts during the evening. The drinks are reasonablty priced ($5 or $6 for a beer) and at the end of each performance a bucket is passed around for donations for the artist. Sugested donation is $5 but you can adjust that based on your enjoyment of the act and financial situation. The waitress, Anna, is
one of the lovelies in NYC. No contrast to that Goth bitch at CBGB's (but that adds to the flavour of the place anyway.)



Other great things in NYC: take the subway, in the summer, to Coney Island or Brigton Beach. Lovely beach and board walk and a slice of Russia (little Oddessa, actually). Incredibly cheap. We had lunch there for literaly under $1.



Cheap Massages: Fision Herb Center in China town (elizabeth st I thin?) I've got a hour long massage for $40, and that included a tip. You should call in advance to reserve a time.



For a little more upscale evening, check out Otto Enoteca at One Fith Avenue (on 8th st) It's owned by mario Batali. It's a lovely combination of a wine bar with a upscale pizzeria. On my last trip there, we came in and put our name on the waitlist for a table. We were then issued a train ticket with a name of an italian destination (solerno in our case). There is a train departure board mounted on the wall and when you see your destination announced, your table is ready. took about 45 minutes for that. Meanwhile we had a glass of wine at the winebar (there are also standup tables in the firsr room where the wine
bar is, where you can have your wine and cold cuts if you so desire). The glasses of wine were $15 each which makes you drink then very slowly and enjoy every sip. Rather refined crowd. When the "Train" to solerno was finally announced, we had delicious apetizers (I had
something made out of eggplant) and 2 personal sized pizza (one Arugula, one Peproni). the dinner came out to be $40 for both of us + $30 for the wine. A little expensive (and a little high-brow for me) but certainly a great experience to have.



For those of you visiting NYC, don't take cabs from the airport. take, instead, the Air Train ($5) to a subway station (on the A train or the E train) and the subway system ($2) will get you anywhere you need to be in the city. Much much much cheaper than a cab. That's from
JFK. If you arrive at LaGuardia, you can take the city bus to the 7 train (the whole thing will cost you $2) but that's a slightly less pleasant experience.



If you're visiting central park, you'll probably be entering it from the downtown (south) side. Get as far uptown as you can. The scenery changes dramatically as you progress uptown.




When completely bored, take the train to W4th st at night and walk around asking which way Washington Square Park is. I did this when I was lost one night (I was actually looking for chabad house accross from the park) and ended up not only being completely mislead by every person I asked, but talking to interesting people as well "We're from california so we dont know where it is, but you must be cool if you're looking for it at 11 o clock at night. wanna hang?" and "oo, it's cold,
why don't you just stay here instead?" (spoken in a gay lisp by a 300 lb bearded man)



New York!



If you stay downtown, in the NYU/villiage/lower east side area, you're bound to see some fun stuff. Last night I was out with some coworkers when I saw 2 guys and a woman beating the shit out of some poor guy. I stopped to watch (as my pals ran away) feeling guilt (for not helping) and fascination at the proceedings. The "beaters" turned out to be undercover cops, which made me not feel bad for lack of intervention.



Alright, that's all for now. Enjoy New Amsterdam if you're in town!



Oh one more thing, if you're in the mood for a lovely walk, there's a walkway going up the manhatten bank on the Hudson. On one lovely day, we took it from the South St. Sea Port, walked through Battery Park, then up the Hudson all the way to 130th st (harlem) Lots of lovely
things to see along the way.



Also, last summer (and into the Fall) you were able to go to the downtown boat house, get a free cayak for about 30-40 minutes. You were then given a paddle and shoved off into the Hudson. I've done this about 15 times, and survived (although people do question your sanity once they find out that there's a hole on the bottom of the cayak and that you're essentially soaking up hudson water with your ass and balls and whatever else). I am hoping this joy will be available this summer as well — according to the website, it will be.



Did I miss anything?

 
Legendary investor (and the world's second richest man) Warren Buffet, famed for his insightful letters to investors, sells stock for one of two reasons:

(1)
The market judges a business to be more valuable than the underlying
facts indicate it is to him, or (2) because he and his team require
funds for "still more undervalued investments or ones [they] believe
[they] understand better."

In the past year, Buffet has sold some stock and
has hardly purchased anything new. Why? We know the second reason isn't
at play as Berkshire currently has 27 billion dollars in cash. It must
be reason number one, over-valuation, that prompted Buffet to sell.
More alarming, Buffet and his team are unable to find any stock they
feel meets their criteria of being seriously undervalued by the market.

This is a more important issue than it may at first appear to be. According to 3 year old figures, at least 40 million
Americans rely on 401k for their retirement. There must be many others
who invest for their retirement through personal portfolios. If people
such as Buffet are unable to find long term investments worth pursuing,
smaller investors are probably in the same boat. In Buffet's case,
there's a choice of buying companies outright (Berkshire owns GEICO,
for example) – this is not am option for most of us.

Buffet, a democrat (and a supporter of Arnold)
whose company pays over 2% of all corporate taxes in the United States,
does not usually make political statements, though he has been an
outspoken critic of the Bush tax cuts. He sticks to facts and
well-argued opinion, and his reluctance to invest in today's markets is
even more telling than words could be. In particular, those looking
forward to a Clinton-like boom to coincide with the change of
administration should consider the possibility that the market is
already overvalued.

At the same time, Bill Gross, manager of a bond fund Pimco Total Return with more than 70 billion is investments, has been talking about the lack of growth he foresees in the fixed income investments and has been taking his own money out of the fund.

In the upcoming election, the economical focus
will be on job creation, but the health of the general economy is
extremely important. There's no indication (though everyone says so
when it supports their guy) that whoever is in office has any impact on
the economy – jobs and otherwise.