Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on Marlin Rifles. (See the Tangibles Investing section.)
Precious Metals:
It comes as no surprise that just as the stock market was in its “orderly decline” on Wednesday, spot gold jumped $15 per Troy ounce.
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Economy & Finance:
Aha! Higher interest rates are now being felt, in earnest: U.S. new home sales near two-year low as mortgages rates rise
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Some ominous news at Zero Hedge: Over Half Of America Gets More In Welfare Than It Pays In Taxes
Stocks:
Wednesday: Stocks fall, Dow sheds more than 150 points. Meanwhile, S&P 500 dropped 85 points (3.1%). There was then a rebound on Thursday of around 1.6% on the DJIA and 1.8% on the S&P. But the turmoil is far from over. Look for increasingly volatile equities markets this fall and winter. I’m confident that you all have your stop loss orders in place, Right?
Friday Morning Update: Dow erases gains for the year, tumbles more than 600 points as stocks extend October swoon
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Hoarding cash grows in popularity as market volatility increases
Tangibles Investing (Marlin Rifles):
One almost completely ignored niche of gun collecting is Marlin rifles that were either special ordered “back in the day” , or that are presently coming out of Marlin’s Custom Shop. Because Marlins are considered “second tier” in desirability by most gun collectors and dealers, few folks have made a study of the price differential between standard Marlins versus custom Marlins. Thus, if you do your homework and do some searching, you can find custom feature guns selling for the same price as standard feature guns. That differential represents most of your potential profit. You can find such guns at gun shows, pawn shops, gun stores, in classified ads, and at estate sales. Just as with most other collectible picking opportunities, you can “Buy locally, but sell nationally.” Gun auction web sites such as GunBroker.com and GunAuction.com (aka AuctionArms) will provide you an entree to serious Marlin collectors.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often get the scoop on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
I cannot overstress how important it is to not put stop loss orders in your brokerage firm’s computers. I speak from personal experience here. In August of 15 there was a flash crash. The prices of a couple of stocks dropped dramatically at the market open, and recovered within an hour. Unfortunately, I owned an exchange-traded fund (ETF) with those stocks in it. The darn thing sold at a very bad price, because a few stocks in it essentially had no price (zero) for a few minutes, which pulled the ETF’s price way down, triggering the stop loss order.
I still use trailing stop losses (on every position), but I keep them on a website (tradestops.com) so that I get notified by email and text when a security closes at or below its stop. Then I sell the next day at the open. This gives me enough time to figure out whether there was a flash crash or not. Note I have no relationship with tradestops other than as a user.
If you were carrying a 1911. would you have it cocked or cocked and locked?
I agree with you for the most part but I don’t believe the average person understands it well enough. When I was a wire operator in the late 60s and early 70s, and responsible for sending in the orders for the various exchanges, including commodity exchanges, the markets were downright comatose compared to today.
Here’s what can happen with stop and stop limit orders. They did have some relevance to containing losses in calmer markets. But what happens under the following circumstances?
As I type this the Dow is 24,659.52, down -325.03. It was down over -450 an hour ago.
As an example let’s say the Dow closes at 24,000.00 to make it easier to understand. So you have a stock that’s $40.00 a share and you put in a stop order to sell it at $36.00 when that price is reached. That’s reasonable. It’s 10% away from your price now.
Let’s say something happens over the week-end which is perceived as bad and the stock market opens at 22,800. That’s a gap of 1200 points! It would not surprise me to see your $40.00 stock OPEN at 30 or 33. Do you think your stop order is just sitting around at $36.00 a share? The first trade below your stop and it becomes a “market” order and you’ll get the next price whatever that is. It could be 25 or 28. How does that protect you?
And if after it opens down 1200 points and continues to perhaps 21,600 the exchange will be closed for an hour for everybody to stand back and take a quick breath. Circuit breakers. Remember those which were instituted after the crash of 1987? The chances that everyone who can will throw in market orders when it reopens will be great and contribute to the selling pressure.
My advice? If you’re young and have good stocks then weather the downdraft and sit through the turbulence. The market has always come back. If you’re much older then take some chips off the table slowly. Now. Don’t delay.
I personally have always avoided stop and stop loss orders and especially now because of the increased volatility. Pay attention to the market. If it ends very bad one day put a sell order in before the market opens the next day as a “market” order and take what you get. At least you’re out.
Those who had limit orders in during the crash of ’87 were in a bad way because it was 2 days for reports to come in and they were unable to make a trade because they didn’t know if their stop orders had been executed. This will be magnified to those trading on computers today.
As a rising tide lifts most boats so does a falling tide lower them. Todays ETFs (exchange traded funds) are going to present a real problem in the next serious drop. Just as air gaps happen in individual stocks it will be magnified in ETFs. Beware. Very smart people are talking about this now. It’s no secret.
I do not believe stop loss orders should be recommended in todays markets. That’s 50 year old advice.
It’s always possible to come up with a scenario that renders a particular strategy useless. Knowing when to sell, however, is one of the hardest decisions in investing. Using stop loss orders as a discipline is a great way to limit downside risk over the years. Not every decline will happen as you described, although one certainly could. Inserting yourself into the process by using a website and keeping your orders out of corporate computers is a good way to further control potentially bad decisions. Just because an idea is old, that doesn’t mean it’s bad. The ten commandments are even older, and they still work pretty well.
People are emotional, and this often leads to self-defeating behaviors. Having a disciplined exit strategy can dramatically reduce the financial cost of those behaviors.
Not so fast ZH. Social security is not welfare for those who paid into it.
“Social security is not welfare for those who paid into it.”
actually, yes it is. what was paid into it is long spent, and all outgoing payout is supported by taxes alone.
Social Security is not welfare,it is a Ponzi scheme of false promises on a negative return(you have put in more than you can get out,without manipulation)
Socialist Security is perpetual theft. Steal from the young to buy the votes of the old. Demanding that the government continue the scam by looting your children and grandchildren just so the scam pays off for you is shortsighted at best.
I have paid into social security for 45 years. Yes.I expect the feds to honor their commitment and start paying me back at age 62. There are literally 1000’s of govt programs that are nonsense, push that money into social security and it would be well funded. Stealing from my children and grandchildren…never have, never will. If you don’t want what you paid in that’s your privilege…don’t take your check.
“I have paid into social security for 45 years.”
and everything you paid in is long spent.
“Yes.I expect the feds to honor their commitment”
no congress is bound by any previous congress. a previous congress told you that future taxpayers would pay you, knowing there was no guarantee of anything. sorry, social security is unsecured debt, nothing more, nothing less.
There are many forums for Marlin and other leverguns on the web to help in research. Since the buy out by Remington a few years back, be sure to look for the JM (in an oval) stamped on the barrel, left side near the receiver, of genuine original Marlins built by Marlin. There may come a day, (already here?), that they command a better price premium that parallels the same pre ’64 Winchesters. I have always been partial to lever actions with a preference of Marlin over Winchester, however I do like them all, repeaters and single shots.
SS. OK, if we’re going to stop the SS scam now I’d like to have all my money back I put in there please, all 45 years worth. I’m going to start SS next June, looking forward to the paycheck, never thought I’d live this long or SS would still be there if I did, shocked actually.
Marlin rifles. Can’t warm up to them, the new ones that is. Now the stuff made 80-140 years ago were great guns, especially in the large rifle calibers.
I have long enjoyed hunting deer in Wisconsin with vintage rifles. A few years back, I found a Marlin 336 in 30/30 that was built in 1950. It is still a solid rifle with a known history. Much of the blueing is worn, the rear buck horn sight was filed flat (common) , and it has been drilled and tapped for a scope (again common). These older Marlins used the Ballard Rifling that Marlin used at the time and is a fine example of American craftsmanship.
These vintage deer rifles ( Marlins, Savage 99, ect.) are not a huge investment so the average owner can still use and enjoy these firearms.
Italy! The pros and dot gov(s) are keeping it quiet. Something is wrong, the same something as ’08…and Deutsche Bank. Italy is not Greece. It’s a fairly major economy.
Speaking of wrong, maybe inflation is the monster and deflation is the canary. I may have been wrong, we shall see. This ain’t 1929 and we are not the orderly Wiemar. It will not be peaceful this time. In all that, I’m not calling The Top, but if the S&P breaks the Feb lows, it looks to be a top for sure. The underlaying internals are still ugly. The wide majority of stocks are already in correction or bear territory. Have a great weekend.
@Doc Strange
Why double your steps? You put it on anothers computer who will tell you when you’re stock has reached its price you picked. Then you’ll think about it overnight and decide the next morning what you’ll do?
Air gaps happen to indexes as well as individual stocks. If the Dow opens up 1200 points below what it closed the previous day I’ll bet any stock loss order 10% below your current stock price will be executed. Let’s say you have a stock which is $40.00 a share and you put in a stop loss order at $36.00. If the Dow opens up with a huge gap I’ll bet real money your stock could open up at 30 or 33.
What people don’t realize is that once below your price, your order will become a “market” order and will be executed at the next price which could be 25 or 28. What good did your stop lost do then? And if the market gets down 10% in one trading day then it will be closed for 1 hour for everybody to take a deep breath. You think it will be nice and calm when it is re-opened?
Look at the market at the end of the day and if you want to sell put your order in before the market opens up the next morning and do it as a “market” order not a limit order.
In 1987 the worst fate a lot experienced was limit orders where reports on status were not received for up to 2 days it was so chaotic. This will be exaggerated for those trading on computers at home today.
The best advice I could give anyone is this. If you are young weather the turbulence because you have time and the market has always come back. If you are not young and can’t or don’t want to wait out the recovery then start to lighten up now. Don’t wait.
Stop loss advice was appropriate 60 years ago but is not appropriate, in my opinion, in todays fast moving markets. I say this as a wire operator (yes, there was a time before computers) who was responsible for putting in orders to the various markets, including commodities, during the late 60s and early 70s.
And the big problem I’m reading about lately are the problems going to be caused by ETFs (exchange traded funds) in the next chaotic downturn. Sure, you’ll just buy an index consisting of big, solid stocks so they are safe when the inevitable comes? With everybody loaded up with ETFs who’s going to place that bid to buy them when they
start falling apart? Some very smart people are very worried about this.
I agree with part of what you said. The problem with index funds and ETF’s (most of which follow some index) will be liquidity. You’ll see that word over and over in the next crisis. What it means is that there is no one to buy certain securities, which causes their price to go to zero, at least temporarily.
What this suggests to me is that as the market proceeds, and in particular if it starts shooting upwards like 1929 or 1999, I would start narrowing my stops on all index-based investments (maybe on everything), which would limit my risk.
Many analyses of market action ignore investor psychology, which is a huge mistake. Most investors consistently reduce their returns with a variety of self-defeating behaviors.
If the market drops 80% it would have to go up by 400% just to break even. We’re talking about decades for a recovery, although I believe one would eventually occur. Younger investors will not stay the course. They’ll ride the beast down, get scared, and get out at the bottom or shortly thereafter. They won’t bet back in until the market has generally recovered, and they’ll miss years of some kind of return.
Everyone has the responsibility to learn about investing and avoid being the “dumb money.”
We’ve had the never-ending discussion about Social Security before. I think we all realize it should never have existed in the first place. The SS system is based on theft, at gunpoint. That being said, it exists, and it should be paid as a moral commitment. In this I completely agree with the great Ron Paul who takes the moral high ground on federal commitments.
The federal government has a net worth, at market value of their assets, of roughly $225T. Let’s first sell off assets, at market value, not at crony value, to pay off the existing national debt. Then start selling assets to buy out those folks who are have just come on SS and those who are about to come on SS. Let’s set a value of your SS payments at exactly double what you paid in (including that part your employer paid in for you). In my case, my wife and I have paid in roughly $400K just to SS. At an $800K buyout, believe me, I’ll take the buyout. I think most people would. Now the government can not borrow the money, they can not print the money, they must come up with the cash through the sale of assets only. So this costs the fedgov exactly NOTHING.
It takes roughly 5 people paying in to SS to pay for me and my wife. I want my 2 nephews and their wives, they are all in their 20’s, to no longer have to pay in to the system. They should have both halves returned to them in their paychecks. I want my grand niece to never have to pay into the SS system and never have to even think about it. As each person takes their buyout, forced if 59 or younger, optional if 60 or older, and 2 more people no longer have to pay into the system, a hole appears. No new people going on, no new people paying into the system. In thirty years or less the system ceases to exist. Moral obligations are fulfilled. We the people are more free. Oh, eventually even the young folks, like my nephews and their wives will get their money back, doubled.
All taxation is theft. We have a moral obligation to end the theft. Under Mosaic Law, theft must be paid back double. The beauty of this, no cost to government or the taxpayers. Everything is already paid for. Also there would be, over time, a huge cost savings as the fedgov’s vast inventory of stuff is liquidated.
“The federal government has a net worth, at market value of their assets, of roughly $225T”
(shakes head) dude. the fedgov is US.
Now the government can not borrow the money, they can not print the money, they must come up with the cash through the sale of assets only.”
$225T? dude, there’s only $90.4T currency (digital/physical) in the whole world. can’t. all of it – ss, ebt, you name it – is supported and is going to be supported by endless generation of permanent inextinguishable fiat debt. the people who own the fiat debt dollar have made sure of that.
Gman, dude, it won’t happen over night. It takes years. This won’t be a fire sale. It would be a carefully managed sale of assets, over a 30 year period, longer if necessary. As people are moved off the system other monies will be available to bring the system to a JUST close, as it should be.
The national debt has interest payments of over $400B per year. There is a net savings of $12T in just the interest alone in those same 30 years. The money is there if it is used properly. There is a vast amount of savings available over time, monies that can also be applied to ending the system even faster, promoting even more savings.
Medicare can also be brought to a just close, over time, as it should also be. Different problem, requires different solutions, but the solutions are out there, if applied. In that same 30 years, both SS and Medicare can be brought to a JUST close, as they should be.
“(shakes head) dude. the fedgov is US.” (Also shaking head) That being the case, I want my money back, as is my right, and yours, dude.
We as preppers look for solutions to our problems, seen and unseen, known and unknown. This is a known problem, there are solutions that need to be explored and implemented.
Why all the negativity, dude?
Thank you for at least proposing a solution. If you want to know why Gamma is so negative, Goggle concern troll.
@Doc
Sorry for the double reply. Waited 30 minutes after clicking Reply but it never showed up so started my second comments thinking the first got lost in the Twilight Zone. My commuter is old and slowly giving up.
I agree that everyone should have a plan that works for them. My remarks about limit orders becoming market orders on a large gap opening were especially directed to those who had never heard of it. Since you’re in the market like me I’ll wish us both the best of luck.
I, too, got burned in the last big downturn with limit orders. Be careful. There are many computer-generated trades and they are huge and fast.
You cannot phase out SS or any other social welfare problem, without eliminating all of them. The entitlement crowd would just switch from one program to another or vote to keep their benefits. Do not forget there are now more Americans on the dole than those supporting themselves and paying taxes.
The problem will resolve itself when our monetary system collapses.
What is all this talk of having “paid into” social security. you didn’t pay into anything you were TAXED that amount. Social Security is not a retirement program where you put money in, its invested and you get that money back with interest in the future. Its a government tax that they can and have used however they want.
I’m surprised to see so many people here who don’t know that, apparently the popular/incorrect view of SS has infected more people than i thought.
Notax – Thank You!! I was wondering why I seemed to be the only person who thought that. SS is/was not the government “borrowing” your money so that they could give it back to you! It was them STEALING it from you (via taxation) and then, if you are/were lucky enough to live to a certain age, they give SOME of it back to you. Everyone saying “I paid in, I want what’s mine!” has completely missed the whole point! That money is gone. It was taxed out of you a LONG time ago, and used to purchase the votes of your parents and grandparents. And all those who say “I’m almost 65, I want what’s mine!” are merely selling your votes as well. Herein lies the problem though. Your selling your votes for the money robbed from your children.
What cash I have on hand, I put in a clean mayonnaise jar and bury it in the back yard. Pre-1964 silver coins still have value. The tribe has them also, for possible trade and barter. I took a substantial haircut in 2008. I will not go near the market. I also keep the minimum amount in the bank, to cover the bills. The federal courts have already ruled that if you do not have “your” money in your hand, it does not belong to you. Enough said. Get out of the Market and if you can, get out of debt.
Jason:
And all those who say “I’m almost 65, I want what’s mine!”
It is not quit that simple! I am 68 and work full time and had no interest in SS or Medicare as I had good insurance. Then they changed the rules (State Employee) and I had to apply for SS and Medicare at 66 or loose my State Health Insurance.
Now I am another SS and Medicare Zombie while working full time. And just to add insult to injury – I still pay into SS while receiving a small monthly SS check. And Part B that I must have, costs me 468.00 a month because of my total income. Health Insurance now costs me over 700.00 dollars a month when it used to cost me less than 300.00.
I agree that it is nothing more than a tax scam to redistribute wealth and buy votes!