Stock Market Blues, Greek To Me And State Bird Of Maryland

Baltimore Oriole - the state bird of Maryland

The market continued down its woeful path this week.  It seems folks got all worried again about a little country named Greece.  You may have heard of it.

A place of past glory, we owe a debt to Greece for the beginning of western civilization.  And debt is the key word here.  It seems like the Greek government has spent more, and promised more to its citizens than it can afford.

And this is making the markets nervous.  Which on the surface seems a bit strange.  Because the Gross Domestic Product of Greece – for the entire country – is less than Wal-Mart’s.  And yet the fate of this small country is moving world markets.  Hmmm … down I might add.

Or maybe it’s not so strange after all.  It seems most governments around the world have been spending too much at the request of their citizens.  So perhaps we are all seeing our near and future fate writ large before our eyes.

We just watched the canary in the coal mine keel over.  And we think we are next.  To sleep, perchance to dream, as Shakespeare said.

Which pretty well sums up what many of our crack politicians here in the U.S. have been doing.  That is to say, sleepwalking through the current jobs, debt and economic crisis.  Sleepwalking by locking up the government in total partisan debate.  Or carrying on business as usual favors to special interest groups.  All the while ducking meaningful decisions for the citizens that hired them, by veering off on one diversion or another.

Speaking of diversions, personally, I think a spirited national debate next week over the state bird of Maryland is in order.  I know, I know – Washington D.C. is not technically part of Maryland, but just go with me on this.  Because it will no doubt fill the national media’s news cycles for days on end.

Just think about it.  For starters, is the Baltimore oriole really appropriate?  What are the legal nesting rights of Orioles?  And are radical Orioles burning the flag?  This one is always a great old standby diversion.

Or how about this.  Seriously, are the top 1% Orioles paying their fair share of nesting taxes?  Or is this just bird class warfare?  And how about those evil Oriole speculators?

You see where I’m going with this?  It’s really serious stuff.  Because it keeps the politicians from having to address true job creation, debt and the economic crisis.  Did I mention those already?

One seriously wonders where the adults are these days.

But no matter.  As investors, we’re the adults that will manage our own affairs.  And be adaptable.  Which means there are things we can do right now.

And that is to manage our stop losses carefully.  Which means carefully reviewing each of our stocks.  And if they have dropped by 25% from the highest price we’ve owned them at – we sell.  And if they have not, we don’t panic.  We hang on to them.

Selling those that have passed our stop losses keeps us from turning small losses into big losses.  And it raises cash for when the really big stock bargains come along.

Which no doubt they will.

Like at the bottom of the 2008 crash, when I was able to pick up Mark West Energy for a song because I had raised cash by disciplined selling as the market went down.  And so I could buy it at $13 a share.  Which meant it was paying me over a 20% dividend.  And it’s currently going for over $50 a share, even after the recent stock market drop.  And it’s still paying me that outlandish dividend.

Put another way, that means a $10,000 investment is now worth over $45,000 and is paying over $2000 a year in dividends.

Which proves we are the adults in the room.  And there is always something we can do.  And it is to be adaptable to market conditions — by following our stop loss discipline.

And Washington, which seems a bit short on that discipline thing, can do what it will.

So watch your stop losses.  And look for the great state bird debate — with a heavy emphasis on those evil Oriole speculators.

Well, that about covers it for this issue — adaptability, Greeks and the state bird of Maryland.

Oh yeah, and the stock market blues?  Will here are some blues from my friend Dave Thomas and the Norfolk Band Society to cheer you up.  It looks like Dave’s turned his back on the whole #@$% situation.  Good choice, Dave!

To your health and prosperity – John

P.S. Oh, there’s one other adaptable thing we can do.  I believe there’s an election coming up in November.  Could be we might want to hire some new help in Washington D.C. too.

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