Why are you lashing out like this? You sound angry and bitter.
.

I think Rob and Jim are both right, but talking about two different things. China’s Bubble has burst as I write this comment, and I’m wondering to myself where did all the money go?

As you know companies have what’s called Market Capitalization this would be the total price of the company if it were to sell all the shares at the last quoted price. I could take a snapshot of the companies’ assets, add up all the assets: non-cash, cash, intellectual property, etc and it won’t be as high as the Market Capitalization because the Market Capitalization reflects future earnings as well; this is the reason for the volatility in the market. The *poof* that rob is talking about is the no confidence in future earnings.

All companies have their own treasury. The ‘real worth’, the $10 that Jim is talking about sits in the treasury. Your investment is used as capital in the operation of the company. That money either sits in the treasury or gets circulated in the economy as the company’s expenditures, its operational expenses: employees, property (owned or rented), etc. Lets say crash was really severe and the company goes bankrupt, because the company made no profit. The $10 was used up in running the company. The company hangs up its Closed for Business sale and everything will be liquidated. The office printer sits in the corner unused until someone buys it for Mark-to-Market value.

Bottom line, energy is neither created nor destroyed, just dreams, and neither is money. Your hard earned cash is now circulating outside of the company, vested in another business.

Rob

Thanks guys,
-J$

My belief is that we’ll all be a lot better off when we can talk this stuff over as friends. I think John Bogle is a genius. I can say openly and enthusiastically that I have learned important things from hundreds of people who are big believers in Buy-and-Hold. How many Buy-and-Holders can say the same thing going the other way? Why not? Is it really possible that the people who came up with Buy-and-Hold discovered every last thing that we will ever know about investing?

I think not. Buy-and-Hold was a huge advance. I am grateful to all the people who taught us so much. But it is my sincere take that Bogle and all the others are flawed humans, like all the rest of us. They got a lot of stuff right, they got some important things very, very wrong. And we all should be trying to help them come to grips with this reality and to move forward to an appreciation of some better ideas.

That’s my sincere belief, in any event. Given that its my sincere belief, I believe that I am required in conscience to put it forward in all my writings and podcasts dealing with investing topics. I’ll continue to do so regardless of whatever intimidation tactics Carlyle and his Goon friends direct at me. And I will continue to urge Bogle and Monevator and all other responsible Buy-and-Hold advocates to disassociate themselves from the Goon element that purports to speak on “the same side.” These sorts of tactics make Buy-and-Hold look like something a lot worse than just a discredited investing approach.

Holy moly!

Rob

http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl?num=1189390571/4#4

It’s also interesting to note how Mr. Bennett demands that he be given unfettered access to express his views at any blog where he chooses to post but heavily censors opposing viewpoints at his own blog.

http://www.passionsaving.com/investing-discussion-boards.html

This is why we are experiencing an economic crisis today. We learned what really works in stock investing in academic research that was published 30 years ago. But we cannot talk about it because it hurts the feelings of some of those who have advocated Buy-and-Hold strategies for people to learn the realities. So large numbers continue to advocate what doesn’t work and millions suffer the financial consequences of not being able to learn about the realities (we learn by talking things over in civil and reasoned and friendly and warm discussions).

Heaven help us all!

Rob

That’s easy, Rob. It is always a relief to rid yourself of an incessant internet troll and idiot posing as something he is not.