Retirement plans.

[Eli]

Lotus pm me if you're interested in doing this on a full time basis and would be willing to move to Chicago. I have clients that have a very successful futures trading firm. They are very young, growing rapidly, trading 24/6 on a ridiculous technology platform. They generally hire engineers without egos out of college but I'm sure they'd be willing to talk to you.

May I wonder why specifically engineers?

 

[Whomp]

May I wonder why specifically engineers?

They're critical thinkers and problem solvers. Business majors are more about theory.

 

[Eli]

They're critical thinkers and problem solvers. Business majors are more about theory.

Interesting.

Is this something unique this company does or is there a big market for engineers for such jobs?

And how's the paycheck comparing to traditional engineering jobs?

 

[Whomp]

Interesting.

Is this something unique this company does or is there a big market for engineers for such jobs?

And how's the paycheck comparing to traditional engineering jobs?

This occurs quite a bit in the trading industry. IE the largest trading firms hire primarily people in the fields of maths, risk managers, computer science, neuroscience and engineers with a heavy focus on PhDs (quants in general). The reason is these firm spend their research dollars on creating and busting mathematical models for identifying trends (positive or negative including arbitrage). They could care less about fundamental trends since they really don't matter in the larger context of trading and are much more subjective.

Generally, these firms recognize if they can be successful on 40% of their transactions (generating 2-3% profit) and lose on 60% of their transactions (losing 1%) they are performing at a very high level. It's all about risk management.

The income they make is substantially greater in the financial services industry than it ever could be in the field of academia or corporations.

 

[Lotus49]

@Lotus49: It is far simpler to pick the major market swings. Buying the S&P or Total market in March 2003 and selling at the soon-to-be-forthcoming top will net a larger gain without any cost or risk of your frantic day-to-day scramble.

That is precisely the conventional wisdom. Maybe I'm just a rookie, but I find it easier to predict what a few people are going to do, in one particular area, at one particular time, over the very, very near future... rather than try to determine what the whole mob is going to do, 12-18 months out.

Did you call the "exquisite-moment-bottom" in March '03? Where are you calling the top? I'm still waiting - it was supposed to be in Q1 or Q2 of 2005. Then '06. Now '07.

The recovery from the huge down-turn is going to take a considerable amount of time - much longer than the typical cycle, to recover. (Not my words, some guy named O'Neil -founder of I.B.D., several years ago) When everyone is this cautious, I see no reason to bail out, or run for the doors. (Warren Buffet had a quote...)

Slow-down, sure. P:E compression? -Hmmm... remains to be seen. Hey, like I said, I''m a rookie, maybe doomsday is upon us. But, as long as I can make at least a thousand bucks a week trading intra-day, it really doesn't matter (which, if I apply myself, that is a piece of cake).

There are other markets, though. U.S. housing market is not the only thing that makes or loses money in the world. Somebody, somewhere is always making money - and a lot of them are obvious long-term international plays that can't lose.

Index funds are great - IF you're in a bull market. Otherwise, they BLOW. Everybody was hyping index funds back in '03 and '04. Suddenly '05 rolls around, and nobody talks about them anymore. Just like when speculation was the Fed was going to 5.5% or more, CD's were all the rage. Now? See, you guys are chasing the winds more than I am. Ironically.

Every trading day various stocks are taking part in certain moves, for whatever reasons. All I do, is log in, watch them (and TV at the same time, maybe music, maybe have a game window open), and act accordingly. I often exclaim, "It can't be this easy! It CAN'T be...!" -Not exactly a "scramble", as you say.

Or, you could sit around, and watch mutual funds slowly fluctuate, as the sands of time slowly pass away...

18% this year! Hot-diggity DOG!

 

[Birdjaguar]

That is precisely the conventional wisdom. Maybe I'm just a rookie, but I find it easier to predict what a few people are going to do, in one particular area, at one particular time, over the very, very near future... rather than try to determine what the whole mob is going to do, 12-18 months out.

Did you call the "exquisite-moment-bottom" in March '03? Where are you calling the top? I'm still waiting - it was supposed to be in Q1 or Q2 of 2005. Then '06. Now '07.

The recovery from the huge down-turn is going to take a considerable amount of time - much longer than the typical cycle, to recover. (Not my words, some guy named O'Neil -founder of I.B.D., several years ago) When everyone is this cautious, I see no reason to bail out, or run for the doors. (Warren Buffet had a quote...)

Slow-down, sure. P:E compression? -Hmmm... remains to be seen. Hey, like I said, I''m a rookie, maybe doomsday is upon us. But, as long as I can make at least a thousand bucks a week trading intra-day, it really doesn't matter (which, if I apply myself, that is a piece of cake).

I was fully invested all through the 90s, Went to 60% cash in January 2000, I was pretty heavy into GNMAs and international funds until mid March 2003 when I went back to a fully invested position in the market. I expect the S&P to trade in the 1400-1450 range before things turn south. So when that comes, it will get my attention. The market still looks very nice. At this point any new money goes in via dollar cost averaging. The nicest thing is though is that I can sleep easy at night.

 

[Lotus49]

I was fully invested all through the 90s, Went to 60% cash in January 2000, I was pretty heavy into GNMAs and international funds until mid March 2003 when I went back to a fully invested position in the market. I expect the S&P to trade in the 1400-1450 range before things turn south. So when that comes, it will get my attention. The market still looks very nice. At this point any new money goes in via dollar cost averaging. The nicest thing is though is that I can sleep easy at night.

Any particuar date / time frame you have in mind? Always tough to call, when the overall market is going to start sneaking to the door, and before you know it, all the bulls are crying uncle.

Second week of Dec.? First thing, new year? After the frist 5 trading days in Jan.? I'd say you're market insight is pretty good, but one thing I'm just not sure about, is timing here.

 

[Bigfoot]

Regarding the OP, my advise is 1) have a long-term plan and 2) create a budget. You don't need to make big $$ to retire well, just make sure that you spend less than you make and invest the surplus. If travel and vacations are important to you, plan for those as well! Actual investment choices will depend on your timeline, your tolerance for risk, etc. Owning your own home also makes a lot of sense, if you have the means. Obviously it has become a lot tougher for first-time hme buyers in the last decade; I don't see how a lot of younger people are going to be able to do it.

Personally, I gave up trying to time the market a long time ago. I like my company 401K plan because of the company match, and I automatically get the benefits of dollar cost averaging. I also have investments outside of my 401K for intermediate-term goals (to avoid a penalty for early withdrawal). I run a simple Excel program after each payday to allocate the money.

 

[Birdjaguar]

Any particuar date / time frame you have in mind? Always tough to call, when the overall market is going to start sneaking to the door, and before you know it, all the bulls are crying uncle.

Second week of Dec.? First thing, new year? After the frist 5 trading days in Jan.? I'd say you're market insight is pretty good, but one thing I'm just not sure about, is timing here.

The question of when the top arrives is not related to months or quarters, it is connected to fluctuating economic factors. The big five for driving a bear market turn are: tight money, rising interest rates, high inflation, rapid growth and overvaluation of the market. At this point in time, these are all behaving OK. So watch the components. My personal view is that baring something unforeseen, we’re pretty good until spring.

 

[Lotus49]

The question of when the top arrives is not related to months or quarters, it is connected to fluctuating economic factors. The big five for driving a bear market turn are: tight money, rising interest rates, high inflation, rapid growth and overvaluation of the market. At this point in time, these are all behaving OK. So watch the components. My personal view is that baring something unforeseen, we’re pretty good until spring.

I concur with this sentiment. Tell me if I'm wrong, but I'm thinking about going (even more) into international funds, for my longer-term investments since I believe the 'global boom' is alive and kicking, and even though the U.S. market may slow down a bit in the interim, good growth can still be found elsewhere.

As for 'calling the top', in a more general sense - are you expecting a "climax top" like 2000? I look back at those charts, and it looks like child's play, compared to what's going on right now. Classic once-in-a-lifetime boom/bubble, then bust. And what a big one. But now what, are we just going to stagnate, roll into a choppy bear market, down 3-5% in an 18-month period, then resume a gradual climb? See, I think people learned their lesson, and are being much more cautious now. I really don't forsee a 'hopelessly depressing market decline' like '01-'02, the aftermath of a market being bid and bought up to totally irrational levels. But anyway, talk more about what you forsee as danger zones, and potential overall market downside, because frankly this type of market cycle -with me paying closer attention anyway- is new to me. Is 'recession' (in the true definition of the word) actually a possibility? Where to go... aggressive international growth in emerging markets?

I'm still long energy - just can't let it go. Long-term, I just think it can't lose. Now (or maybe soon) is perhaps a great buying opportunity. But, oil has been in a bit of a bubble of it's own, with the speculators. Even still, I say this sector can only fall out of favor so much, and we may be pretty close to it right now. So, I'm staying in my PBR's, Russki oils & gas, etc.

I never get bored with this topic. What's boring about money??

 

[Birdjaguar]

As for 'calling the top', in a more general sense - are you expecting a "climax top" like 2000? I look back at those charts, and it looks like child's play, compared to what's going on right now. Classic once-in-a-lifetime boom/bubble, then bust. And what a big one. But now what, are we just going to stagnate, roll into a choppy bear market, down 3-5% in an 18-month period, then resume a gradual climb? See, I think people learned their lesson, and are being much more cautious now. I really don't forsee a 'hopelessly depressing market decline' like '01-'02, the aftermath of a market being bid and bought up to totally irrational levels. But anyway, talk more about what you forsee as danger zones, and potential overall market downside, because frankly this type of market cycle -with me paying closer attention anyway- is new to me. Is 'recession' (in the true definition of the word) actually a possibility? Where to go... aggressive international growth in emerging markets?

Clearly calling the top in 2000 was child's play and that's why trillions of dollars were lost by a bunch of dummies on Wall Street. In hindsight the path is always clear while the future is unknown and always difficult to guess. Today's situation is no more difficult than any other in the past (which, by the way, were very difficult to call at the time).

Jan 2000 was the end of a very long secular bull market (Aug 1982 - Jan 2000) and the beginning of a secular bear market that could last up to 20 years. Since March 2003 we've been in a long cyclical bull within that secular bear market.

The danger zones are what I mentioned before: tight money, rising interest rates, high inflation, rapid growth and overvaluation of the market. When those go bad, the risk of a bear market goes up.

You're a day trader something I know nothing about that and have never done. You ride the daily rush of $200 profits and are always looking for another quick updraft or safe haven while you wait for the next one. I cannot help you there at all. I would suggest that if you want to invest in international stocks you buy Vanguard International Growth fund. It is not very exciting, but you don't have to watch it all the time and you will be diversified and not exposed to specific stock risk.