Do scrapyards still take scrap ?

[Richard]

In August, I attended a retirement seminar and the financial planner/ investment guru they brought in was the owner of a small but well reputed investment firm. He discussed his family history growing up as the heir apparent of a small scrap business in West Virgina. He had different plans for his life than his father did but he claimed that he has always watched the scrap metals markets very closely and used it as one of the best indicators for not only certain sectors but for the general economy. He claimed that in 2000 he liquidated 90% of his investor's stocks to cash just prior to the dramatic downturn in the markets and did so based solely on indicators from the scrap markets. His theory is that material needs are a direct indication of how much business certain sectors will be doing and an excellent forecaster of the near future economic trends.

I'm a financial advisor, though perhaps, not a guru (been in biz for 23 years now)

If this guy did exactly what he said he did, then I've got a couple thoughts:

bunk



If he did that then I'd suggest he sold and was (in hindsight) lucky and is now trying to put a spin on it so he'd be viewed as a guru.

To illustrate the point (or blow it up?) Prior to the tech boom, I had a client on the phone and during the chit chat, one of my exact sentences to her were..."...I really think we might have a market melt UP" (instead of melt down)

I DID have a little voice in the back of my head that made me think that HOWEVER, did I capitalize on it by pushing everyone into tech stocks or something similar? Nope.... Now, SHE on the other hand, when HER account went up 7 fold...thought I was a freaking genius. Interestingly, later on, I had ANOTHER gut feeling regarding her (her stocks had peaked and were now moving sideways)....I thought the run was over and she might want to take some profits in her retirement account. Now, being greedy, SHE said to me that she thought the market was going to continue up and keep what she has. I think she sold her $90 stock 6 months later for $30. She'd bought it at 12 so she still did "ok" BUT!!!

Second story of 'guru'... in March, literally what turned out to be maybe 2 weeks before the begin of the bubble burst... I had my mother on the phone. I said to her... (and I swear this is true) "Mom.... I've got a little voice inside the back of my head that is telling me to take you 100% OUT of the market and just go to cash"

Instead of her asking me about the voice or saying do what your gut is telling you to do, she yacked on about her grand-neice and changed the subject...Of course, she (we) never sold.

HAD I sold her out, I still wouldn't have taken EVERYONE out of the market so again, it would have been a "from HER perspective, I'm a genius"

Last story... 15 months or so ago, the dow jones was peaking a bit over 14,000 and went down...back over...and went down....

I had my little voice pop up again and told me to get out of the market AND don't even THINK about getting back in for 6 months.

Having been burnt on the earlier occasions, I yanked Mom, me, sisters, wife (even my wifes 401K) and anyone that cared to listen to me out to cash/money markets.

I sold when the dow was over 14,000 but I don't recall by how much.

six months went by and I still didn't feel good about buying back in because the market was still funky. The current funk we're still in.

Truth be told... just about a week or maybe two weeks ago, I FINALLY started to make some purchases in my wifes 401K back into the market.

Ok, I lied...one more comment

When the dow had fallen to 10,000...my little voice spoke up again. I had a gut feeling that we'd see 8,000 and I refused to listen to it.

That would be ANOTHER 20% drop from 10K and I didn't want to see that. As we all know, we've now traded just under 8,000 a couple times and even as I write this, we're dancing at 8,288.

Some might say all this is poppycock and I won't try to force anyone to belive me. I DID however, state on a public forum (so I can 'prove' part of my comment) when the dow was at 9,000 that I felt it would hit 8,000 but that's not as good a warning as had I spoken up when my little voice did at 10,000.

Anyways.... I think your investment guy is simply trying to slick talk.

 

[Richard]

I have been to some of these financial seminars and to my mind they don't have any better indicators of the market than you or I. They start out with " I can get you 9% on your investments " so I say.... put it in writing and then comes the long pause......... They are after the commision rate for bringing in the business and I am willing to bet others in the backround make the final decisions. If they knew beans they would borrow a huge chunk of cash and multiply it over and over again. They would not bother trying to con you or I out of 10k at some hokey low dollar restaurant free meal gimick. I think most aspire to be used car salesmen.

They (we) do get paid for transactions. That doesn't mean the transaction is specifically good (or BAD) for the investor. I can cite examples where trades made (that paid me) have absolutely saved someones hiney. I'm not getting obtuse, just trying to illustrate that just as you do something that pays you, so do we.

Someone in background making decisions? I can't say it doesn't happen but I'd suggest it's not as common as you might (accidently?) imply. I've personally never seen it happen.

Aspiring to be used car salesmen? ouch.... could I at least, aspire to be a parts salesman for a used tractor dealership?

 

[Richard]

When you all speak of 'scrap', do you mean SCRAP as in oxidized junky metal (old engine block, old tin building that had a tree fall and destroy it, old rotary cutters....?)

Or do you mean scrap like "bar stock" or something you might build/weld with?

I'd be TICKLED if someone could come to the farm and haul away a couple truckloads of scrap metal. Primarily from a tin shed that got oblitherated by a huge oak tree that fell. Several old rotary cutters, an old hay bailer....

Do they take these kinds of things?

If I could load/transport said items, I'd be happy to just GIVE them to the scrap yard so they could be recycled and I'd not care for any payment.

 

[bobodu]

Geez Richard...
I'm really surprised someone didn't steal that a few months back!! Could have been worth several hundred bucks.

 

[bdeboer]

Richard, Local guy here had an all metal manure spreader stolen from his barnyard when prices were up.

 

[Richard]

I really am laughing out loud... good thing my wife isn't here.

Well, if you guys knew just how far I am off the beaten track... then, once on the farm, you have to travel to an overgrown place in the woods....

lol.... I WISH someone would have stolen it... but they'd have to call me first for directions to my house

 

[Taylortractornut]

Richard I wished you didnt live so far off lol. Id come take every old farm machine off your hands. Those cutters make great trenchers, the gear box off one could also bring 100 or so dollars to some one that had a bad one. Also teres many things that can be made from an old baler. Those old cutters also have a heavier box alot of people here buy them and mount them on their lighter attachments to make them a bit more bullet proof. And a baler depending on the type can be made to make a leaf picker out of a round bailer, or a rapid wood splitter out of the bale chamber and plunger from a small square baler. Also it may have a few cylinders a couple shafts and a gear box or 2 that are handy when building something. I bought a hull of New Holland baler once about 7 years ago finally used it down to the unusables. I used its parts on about 125 differnt things i made in the shop. The wheels and stub axles, and part of the tongue went into a log arch for a sawmiller.

 

[BungeeII]

I received $30/ton for unprepared metal last week in central ohio. It was over $200 in the spring.

Holy crap, I had no idea it was that low. We had 100's of pounds of scrap metal @ 200 per ton this summer. Hundreds of pounds of aluminum @ .70 per pound and copper was over 2 bucks. Heck, even cable in harness was getting .95 per pound and circuit boards were 1.50 per pound. I've been letting another batch build up before we go again, but now I'm wondering if that opportunity has passed us by.

 

[Iowachild]

A scrap dealer here in NW PA is advertising on the radio that the "bottom has fallen out of the scrap market" and if you are not really hurting for money you should just hang on to your scrap for now.

 

[HappyCPE]

I'm a financial advisor, though perhaps, not a guru (been in biz for 23 years now)

When the dow had fallen to 10,000...my little voice spoke up again. I had a gut feeling that we'd see 8,000 and I refused to listen to it.

That would be ANOTHER 20% drop from 10K and I didn't want to see that. As we all know, we've now traded just under 8,000 a couple times and even as I write this, we're dancing at 8,288.

Some might say all this is poppycock and I won't try to force anyone to belive me. I DID however, state on a public forum (so I can 'prove' part of my comment) when the dow was at 9,000 that I felt it would hit 8,000 but that's not as good a warning as had I spoken up when my little voice did at 10,000.

Anyways.... I think your investment guy is simply trying to slick talk.

OK Richard, you're hired!
Now that the dow finished today at 7552, what is that little voice in your head saying now?
TBN needs your sage advice