September 2008 - A Conversation with Barbara

Re: Why I'm 100% in Bonds (Part 2)Saturday, September 20, 2008 7:38 PM
From: This sender is DomainKeys verified"b@yahoo.com" View contact detailsTo: winkfieldtwyman@yahoo.comWe need to talk because this stuff is way over my head:) since I am home feel free to call me anytime at home or cell ...I need some one on one tutoring.
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From: Winkfield Twyman
Date: Sat, 20 Sep 2008 16:48:17 -0700 (PDT)
To: Barbara
Subject: Why I'm 100% in Bonds (Part 2)


The economy moves in waves and cycles. Sometimes we are in times of prosperity. Sometimes we are in times of deprivation and depression. After studying the stock market every day (it's my hobby/smile) since about 1996, I think we have entered a long-term Bear Market of a long duration (15 years or so). Bankruptcies and foreclosures are rising. The federal government doesn't have $1.5 trillion to bail out all banks. The entire federal government budget comes to about $3 trillion. And I haven't mentioned the nightmare of derivatives that are leveraged investments in the neighborhood of $500 trillion! If the future looked bright, the stock market would keep going up with corrections. Instead, it seems to have peaked last August despite federal interventions.

If you have a long-term horizon and don't want to think about such things, then it's ok to remain invested and just wait out a 15-year Bear Market.

I've decided to step into a safe haven for now. If we're in a Bear Market where the market keeps making lower highs and lower lows, then bonds are a good thing to be in. Outside of the TSP system, I would suggest cash, gold, silver, shorts and puts. For example, PMPIX is an excellent gold fund. QID is an excellent fund for shorting high technology stocks.

Good luck.

(P.S. Schuyler invested in QID @ 41 back in June. QID is now 45, although it was up to 55 on Thursday.)

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