starting a small portfolio - thoughts?, page-20

3gb,

I did say to 'expect to lose the lot' because it would make the left over capital look like a bonus. I have many reasons for saying this but here are the main ones:

1. Tenderwarrior said that he has only been in this game for a couple of years... this just happens to coincide with a bull market from the March 2009 low... bull markets will make anyone look and feel competent when in fact they were just lucky to be in the market at the right time

2. Market valuations are a psychological phenomenon... for the vast majority of people this is never understood, and and for the rest they usually need to lose their shirt before they even ask the right questions.

3. It seems to me that everyone on this thread, including tenderwarrior, is discussing various speculative mining/resource stocks... in the last stages of a commodity boom!! All or at least the vast majority of these companies may well have great business plans at the moment but what will happen when the next downturn in commodity prices arrives? When that happens it's only the companies with the low operating cost bases (i.e. bhp, rio, cvrd etc.) that will make it through while the rest (including all of tenderwarrior's 5 or more stock portfolio) can very easily go the the wall...

4. The financial system is a complete fraud and has been since the banks defaulted on their gold and silver backed currencies. What this means is that the total money supply in circulation is entirely elastic and can expand or contract as much or as little as people choose to borrow. Since the 1930's this has meant a near uninterupted trend of inflation but this trend has now switched to deflation. The last two times this happened coincided with the 'Great(!) Depression' of the 1930's and the post civil war(US) depression of the 1860's. The current circumstance is more severe than anything that the world has ever seen or will ever see again but using the 1860's as an example the money base contracted over a twenty year period from around $50 per person to $7 per person... and the bear market in stocks was directly proportional to the contraction of the money supply (as you would expect).

5. Just my personal observation... world markets will top some time before the end of this year (if they haven't already done so)... and the bear market that follows will catch everyone that trusts the market completely unawares.