The Dividend Pirate

The picture illustrates the sanity(or lack of it) of the market these days.

Popularity: 19% [?]

The plunge in the markets this year has been pretty bad for investors globally. Add to that the credit crunch, inflation and oil prices have been rubbing salt on investor’s wounds. The S&P 500 Index has returned a negative 13.5 % return this year. Feels bad right? Consider that the bear market that ended in 1947 and 1932 each took away 17 years of investment returns. So it might get worse before it gets better. Or maybe things might get better this October.  It is interesting to note that six of the last eight bear markets ended in October.Will the pinch ever end? If yes, when will it end? How do we smell the bottom of the market? To answer these questions I was researching articles on how long do historically bear markets last. Below I am including excerpts from a great article by Dr. Bryan Taylor on Bull and Bear Markets, Past and Present written in 2002. It makes for interesting reading.

Before starting the article, I want to start with the last sentence of the article. “Histories should remind us that bear markets do end, that bull markets are stronger and last longer than bear markets, and that in the long run, the overall rise in stocks far offsets the declines.”

If you don’t have time to read the entire article, below are the highlights,

• The average bear market showed a decrease of 32.7% and lasted 1 year and 2 months.
• Since the reopening of the stock market in 1914, the average bull market showed an increase of 189% and lasted about 3 years and 7 months.
• The longest bull market occurred between May 1947 and July 1957, over 10 years!
• The shortest bull market occurred between June 1932 and September 1932.  In only three months, the market more than doubled in price.

Apologies for being totally out of touch with the readers of DividendPirate. A lot of things happened in the past 2 months. I was in India for 4 weeks. Spent 2 weeks in Hyderabad for some work related training that I had to give and then spent the next 2 weeks in Mumbai with my family. Had a very interesting experience and will try to share it with you all. Mainly I want to highlight a lot of the culture differences that exist between US and India. Also want to update the readers on the investment climate in India. In one sentence the mood over there has changed from “extreme optimism to subdued pessimism”. More about that later.

Among other things my parents are visiting and am really excited to have them here. Its their first trip to US. On the weekends I am busy being their tourist guide. This week we are visiting Crater Lake. Next week we have a week long trip to Las Vegas, Grand Canyon and Los Angeles. We are staying at the Bellagio. Have been to Vegas twice before, always wanted to stay there but never got a chance. Will have to avoid losing money at poker.

And while they are here frugality is totally out. My parents have worked really hard their entrie life and hardly taken any vacation. I want them to have a great time while they are here.

More stuff coming up in other posts. Keep checking…

Adios!!!

Popularity: 7% [?]

My old car (ironically which I have nicknamed Old Faithful) finally bailed out on me. I left my car at the mechanic over the weekend and he said that

- my rear brakes need replacement(~200 bucks)

- so do my front ones(~200 bucks)

- my radiator needs to be replaced(~400 bucks)

- my oil gasket is leaking(~150 bucks)

- my oxygen sensors need to be replaced(~250 bucks)

- my door handle needs to be fixed(~350 bucks)

Grrrr… and this just after I replaced my tires with 4 new ones a couple months back(cost me 400 bucks). How ironic that the tires come with a lifetime warranty . Not to mention that I replaced my car’s starter last week for 250 bucks. How could my car do this to me? Oh and why did this have to happen at this time? I am leaving for India next week and wont have much time to fix the problem or shop.

We are just going through a “bad car phase” in life. My wifes car’s radiator started leaking 2 weeks back and we had to do a bunch of things that cost us 450 dollars.

In a way I am not surprised that my car gave up. It is 1995 made Toyota Avalon XLS with 170K miles on it and very poorly maintained by me. I had purchased it 4 years back for 5500 when it had 137 miles and at that time the car looked new. The previous owner had cared for the car very well. The car looked like it was 2000 built when I purchased it.

Anyhow I am confused about what to do at this point,