Kubota still offering 0 percent financing

[Torvy]

What's not being said here Scotty is this institutional money is being moved around by "experts". Not your average Joe.
These people "live" finance. It is their thing. They know the ins and outs and heck, they may even have info that is considered "insider trading" for you and I.
Finance is most definitely a "who (and what) you know world."
That being said, even these folks have had their heads handed to them.

That is demonstrably false. You are taking about individual companies, those are much riskier and a bad idea, typically. Safe investing for amateurs is better to use an indexed broader market fund (S&P, for example). The data does not lie. You can buy these funds yourself Vanguard S&P , for example. Most of the so-called institutional money is people's 401k money. Some try to make a quick buck and those are the ones who fail (effectively gambling rather than investing). The broad market funds are basically buy it and forget it. Unless you panic every time there is a bad quarter and sell low, this is not difficult.

I would happily bet that if we took 30000 and put it in the S&P tomorrow, that in 5 years it will have returned more than what I would be charge in interest for a tractor loan tomorrow. The beauty is that even if at the end of 5 years you happened to be at a low spot, just let it ride and it will rebound. It is axiomatic. The only alternative would be complete economic collapse and if that happens, money of any kind would be worthless. Even real estate would only have value if you had the means to protect it.

 

[rScotty]

Cahaba, I don't know that I agree with that at all. What you are proposing about making more on investing than is being spent seems to work just fine for every bank and financial organization in the country - as well as the entire insurance agency and every retirement fund in every company.

Not to speak of investing being a source of income for every single family trust that keeps its "trustfund babies" and "coupon clippers" not only afloat but luxuriously so. In fact, investing inherited wealth is so successful that a lot of people think it will be the ruin of our country and economy.

So I think that investing really can work as Torvy says. All those industries couldn't be wrong, could they?

As for it applying to Torvy, well....maybe. He works a job so maybe not. But teaching college finance could be his hobby. We do know that teaching college is a hobby for a number of successful people.

rScotty

I wasn't talking about investing in general, I was specifically referencing equities. Equities rise and fall with the economy. Right now equity investors are not having a good time. The stock market I believe has come to the end of an era and the new era is going to an era of high interest rates, inflation and scarcity.

Where I said "investing" I was specifically meaing equities... I believe Torvy was too.
Equities come in short and long term types, same as anything. Short term returns less.

Some equities need to be thought of on a longer term than others. 3 to 5 years is common, twice that long can happen. John Deere stock is an excellent example for this forum. JD stock is a ong term type of equity. It pays pretty well, but needs to ride for longer terms - long enough thatthings like interest rates, inflation, and scarcity all happen in shorter cycles than the equity investment. So short term effects don't matter overall.

If the cycle is adverse, just don't sell at that moment. It will either turn around or the whole thing collapses. This stuff isn't hard to figure out; pretty simple. I'll admit it can be hard to do.

rScotty

 

[rScotty]

What's not being said here Scotty is this institutional money is being moved around by "experts". Not your average Joe.
These people "live" finance. It is their thing. They know the ins and outs and heck, they may even have info that is considered "insider trading" for you and I.
Finance is most definitely a "who (and what) you know world."
That being said, even these folks have had their heads handed to them.

You keep talking about the average Joe not being able to tell when something is a good deal and when it is not. I don't feel that way. Not one bit. So we differ. That's OK by me.

The experts may want you to think they are specially annointed and privy to secrets - but I think that truth is that finance and economics are no more difficult than any other halfway technical subject. It just takes reading, some logic, a bit of study time, and willingness to make mistakes when learning. And I believe any average Joe can do the same.

Please don't encourge anyone to give up before even starting. I believe the average guy has all the tools he needs to figure out the difference between a true zero - or near zero - percent loan and the term "a zero percent loan" that is simply another form of advertising or a sales gimmick.

rScotty

 

[Cahaba Valley Farm]

Torvy and Scotty, I will admit that I am no expert when it comes to investing in equities/stocks. I can see that the two of you are fond of that asset type and I would go as far to say quite bullish. That's fine. What the two of you have convinced me of is you have a perspective about them that I don't have and I am willing to listen to. The two of you have obviously found success with that style of investing or you wouldn't be here passionately arguing your points about it. I can appreciate that as the two of you have made some valid points that I am willing to do deeper thought about. I can obviously learn something from the two of you regarding this subject. Thanks for your input.

 

[arrow]

That is demonstrably false. You are taking about individual companies, those are much riskier and a bad idea, typically. Safe investing for amateurs is better to use an indexed broader market fund (S&P, for example). The data does not lie. You can buy these funds yourself Vanguard S&P , for example. Most of the so-called institutional money is people's 401k money. Some try to make a quick buck and those are the ones who fail (effectively gambling rather than investing). The broad market funds are basically buy it and forget it. Unless you panic every time there is a bad quarter and sell low, this is not difficult.

I would happily bet that if we took 30000 and put it in the S&P tomorrow, that in 5 years it will have returned more than what I would be charge in interest for a tractor loan tomorrow. The beauty is that even if at the end of 5 years you happened to be at a low spot, just let it ride and it will rebound. It is axiomatic. The only alternative would be complete economic collapse and if that happens, money of any kind would be worthless. Even real estate would only have value if you had the means to protect it.

What part is false? That people who run these funds never make mistakes? That you can be in one or two say of the plethora of Vanguard funds and never lose money?
What is not being said is how many of us have the time for a "rebound"?
So would you "happily bet" your house on your statement?
I have been in one particular fund since 1991. I invested $4000 at that point. With the fees they charge, my alleged 4% return has acquired me the grand total of $3985 since then.

 

[arrow]

Torvy and Scotty, I will admit that I am no expert when it comes to investing in equities/stocks. I can see that the two of you are fond of that asset type and I would go as far to say quite bullish. That's fine. What the two of you have convinced me of is you have a perspective about them that I don't have and I am willing to listen to. The two of you have obviously found success with that style of investing or you wouldn't be here passionately arguing your points about it. I can appreciate that as the two of you have made some valid points that I am willing to do deeper thought about. I can obviously learn something from the two of you regarding this subject. Thanks for your input.

These two are not the norm Cahala. They are the exception. It is in their framework, background and experience that allows them to formulate these thoughts.
I hope they may wake up others' thoughts to this end.

As a logger and alone in the woods many a day, (actually most of the time) I thought about things. I had this opportunity of ponderance amongst the silence of the forest undisturbed by the cacophony and detritus of life most experience within their job sites. Even a chainsaw or a nearby skidder was silent in comparison to the buzz saw attitudes and distractions of the populated domain..
30 years ago, I thought what man would be like in the upcoming years and what kept coming up was that "convenience" would be king. The other ideas came from a Star Trek episode when the entire ship was addicted to a game that found its way upon the Enterprise and put the ship in peril. I always thought Gene Roddenbury (creator of Star Trek) was a man ahead of his time.
I was fortunate to get in on the ground floor of such companies like Amazon, Face Book, Apple, Nvidia, Coke, Pepsi, UPS, Samsung, Price Line, a few HMO's, pharmaceuticals etc.
I knew nothing of "companies" or about the "financial world" but introspected much about man as the species and what needs might come to the fore.
I did ok financially but wonder what I would have assessed elsewhere other than if not in the wood and being afforded a preponderance of self thought.

 

[Torvy]

What part is false? That people who run these funds never make mistakes? That you can be in one or two say of the plethora of Vanguard funds and never lose money?
What is not being said is how many of us have the time for a "rebound"?
So would you "happily bet" your house on your statement?
I have been in one particular fund since 1991. I invested $4000 at that point. With the fees they charge, my alleged 4% return has acquired me the grand total of $3985 since then.

Your lack of understanding the difference between a Vanguard fund and an S&P indexed fund is the problem. Vanguard is just a company that sells investment products. An S&P fund uses the same 500 stocks that make up that index. Vanguard is just one company that offer that type of fund. Basically, the fund goes up and down with the broader market. Other funds have completely different makeups and goals. They can have more or less risk than an S&P fund and provide more or less income. Over time (5-7 years) the S&P has almost always produced 10% returns. So yes, I would 100% bet my house on that. The only way I lose would be if we descend into anarchy.

The beauty of an S&P fund is that there are no mistakes to make. They are only invested in those 500 stocks. It is buy and hold. They are not playing games with trying to chase peaks and troughs. They are spread across industries which mitigates risk.

 

[arrow]

Your lack of understanding the difference between a Vanguard fund and an S&P indexed fund is the problem. Vanguard is just a company that sells investment products. An S&P fund uses the same 500 stocks that make up that index. Vanguard is just one company that offer that type of fund. Basically, the fund goes up and down with the broader market. Other funds have completely different makeups and goals. They can have more or less risk than an S&P fund and provide more or less income. Over time (5-7 years) the S&P has almost always produced 10% returns. So yes, I would 100% bet my house on that. The only way I lose would be if we descend into anarchy.

The beauty of an S&P fund is that there are no mistakes to make. They are only invested in those 500 stocks. It is buy and hold. They are not playing games with trying to chase peaks and troughs. They are spread across industries which mitigates risk.

Are there not funds attempting to diversify and investing toward the same indexes? Are not these funds alleged to be run by "financially smart" individuals?
I also think that "anarchy" is not the only thing that might make you lose your house based on financial exploits.
There is part of this world we have little control of.
Look how long it took to rebound from the 2008 fiasco.

 

[Hay Dude]

Yep. And by that same logic, loans with not interest at all would be the least predatory of all and have the most benefit to everyone.

Ultimately, some version of that no interest loan may be where we go. There are some experiments going on. But I feel if it happens it will be in a far distant future, and only if we can survive making the same old mistakes another dozen times.

rScotty

Of course that would never work because the lender isn’t being compensated for his risk and cost of lending.
No, unicorn & rainbow loans aren’t available.

 

[Torvy]

Of course that would never work because the lender isn’t being compensated for his risk and cost of lending.
No, unicorn & rainbow loans aren’t available.

The difference here is that the lender is looking at their entire tranche of loans and how those loans as a group make money. If they make all loans at zero percent, the money has to come from somewhere else. In the real world of finance they may give 0% to 5-20% of their customers. The other customers, with worse credit, pay higher rates. The government tells lenders they have to keep their overall risk at X%. (It changes so that is why X rather than a fixed number). The bank can literally loan out more money by giving excellent credit customers a 0% loan. Many of those customers would pay cash otherwise and those numbers don't offset the riskier deals.

So yes, the bank is going to lose money on some deals, but that helps them make even more money on other deals. The concept is similar to loss- leaders in retail. The grocery store can afford to sell some things at less than cost to get customers in the door. They will make up the difference on other products.