Blood in the Streets by Sean Brodrick
Happy New Year's Eve. What a year, eh? Speculation causes a massive market collapse ... gold prices soar ... leading bankers fail ...
But I'm not talking about today's market woes!
I'm talking about the Panic of 1873.
That was a panic that makes our current market downturn look like a tea party. And there's a good lesson for today's investors to learn from those hard times.
It Was Bad in the U.S., But in Europe ...
The Panic of 1873 makes our market downturn look like a tea party.
Here in the U.S., the Panic of 1873 (which started in 1869) was a combination of railroad speculation, a run on physical gold, and brand-name bank and brokerage houses failing.
Across the pond, in Europe, it was much, much worse. And it gave one of the world's most legendary capitalists the chance to make a fortune for himself and his friends.
I'm talking about Baron Nathan Rothschild. Rothschild was a respected French investor who became the stuff of legend during the financial crisis.
It was a terrible time. A building boom ended with a mortgage bubble bursting. This was followed by a swoon in the prices of many industrial commodities. There was even an energy crisis of sorts — an outbreak of equine influenza (horse flu) saw many forms of transportation temporarily grind to a halt.
Europe fought the Franco-Prussian War, which ended in defeat for France. Emperor Napoleon III was captured, and the French government collapsed. The economic woes combined with military defeat allowed socialists to seize control of the French capital. Paris was turned upside down, and mobs ruled.
And that's when Rothschild told his clients ...
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It Was Time To Buy
The story goes that a panic-stricken investor turned up at Rothschild's office and exclaimed, "You advise me to buy securities now? NOW?! The streets of Paris run with blood."
Rothschild, calm as ever, answered, "My dear friend, if the streets of Paris were not running with blood, do you think you would be able to buy at the present prices?"
There is a second part to Rothschild's quote — one that is perhaps even more impressive: Buy when there's blood in the streets, even if the blood is your own.
Rothschild proved to be quite prescient. French bankers were able to fund a counter-revolution. And the investments that Rothschild and his friends made doubled in value ... and then went higher!
While many U.S. banks failed in the Panic of 1873, we got off lightly compared to Europe. The global depression lasted until 1879. And the end result was the center of gravity for the world's credit shifted from Europe to the U.S.
Fast-Forward To Today
We've seen a building boom end with a mortgage bubble burst. And we've seen the Reuters-Jefferies CRB Index of Raw Industrials, a gauge of the cost of 22 items including scrap copper, cotton and hogs, and a good indicator of economic health, fall off a cliff.
It's down a staggering 39% from its peaks to its lows, as factory production fell 7.3% through November.
Now, though, the CRB Raw Materials Index looks like it's starting to hammer out a bottom. Once a bottom is in place ... the Index could go a LOT higher.
Are Things Bad? Yes!
There are parades of bad news up and down Wall Street and Main Street ...
On Wall Street, the easiest way to get your hands on truckloads of government bailout dollars is to own a bank. Heck, you won't even have to tell the Treasury what you do with the money!
And if you don't own a bank, you could go from being chairman of the Nasdaq to setting up a hedge fund so secretive that your closest friends don't know you're ripping them off for tens of billions of dollars.
On Main Street, manufacturing has slumped to its lowest level in 26 years ... employment has dropped to a six-year low ... retail sales are plummeting. In fact, many experts expect a whopping 25% of U.S. retailers will go bankrupt in 2009.
Problems are rippling around the world, too ...
In Japan, industrial production has taken a header — down 8.1% in November from October.
Even China has caught the recession flu. In Dongguan, where many of Santa's gifts are really made, nearly half of the 3,800 toy factories have closed or plan to shut down. China's steel production has dropped by 12%, and electricity demand is down 9.6%.
Yep ... things are bad. And things in this downturn seem to be going at lightning speed compared to previous economic hard times ...
For example, in the last five months, base metals have fallen in price, on a percentage basis, more than they did during the entirety of the Great Depression!
The question now is: Are we close to blood in the streets ... the time when Rothschild would advise buying?
I'll give you my opinion on that in a bit. First, an important difference between now and the panic of 1873 ...
The Loosest Money Policy Possible.The Long-Term Effects Are Horrific!
In 1873, the U.S. moved to the gold standard, which meant it stopped minting silver dollars altogether. This reduced the domestic money supply, which hurt farmers and anyone else who carried heavy debt loads.
Today, by contrast, we have the loosest money policy possible ...
The U.S. Federal Reserve recently cut its target for overnight interest rates to — zero to 0.25% — its lowest level on record dating to July 1954 — and said it would likely keep it at "exceptionally low levels for some time."
In addition, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke have been handing out cash by the hundreds of billions to every Tom, Dick and Citibank who drives by with a sob story.
The long-term effects of that free and easy money policy are horrific!
Through December, Washington had already spent or pledged $8.7 TRILLION. As a result of all the bailouts for banks, automakers and other new federal outlays, our nation's budget deficit is expected to reach $1 TRILLION in 2009.
And that's just the tip of the iceberg ...
The Grandfather Economic Report series calculates that America now owes a total debt (including government, household, business, financial sector, etc.) of $53 trillion. That's $175,154 for every man, woman and child in the country, an increase of $33,781 per family of four over last year.
However, that's longer-term. In the short-term, that easy-money policy could be just what the doctor ordered for an ailing economy.
Sure, it looks like consumers, who power 70% of America's economy, are in a power dive. But we've also been lucky that oil prices have been falling like Wile E. Coyote, and gasoline prices are tumbling, too. That puts more money in consumers' pockets.
While the Grinch may have stolen Christmas, on an inflation-adjusted basis, consumers spent 0.6% more in November than they did the month before. Disposable income also rose on an inflation-adjusted basis, by 1%, compared with an increase of 0.7 percent in October.
Plus homeowners have rushed to refinance their loans to cut costs or switch from adjustable-rate mortgages to fixed-rate loans. Recently, mortgage applications jumped to the highest level in five years.
My point is that things may not be as bad as they seem. Maybe we have much worse to come. Or maybe we are near the point where Baron Rothschild would tell his clients to buy.
So when that time comes, what should you buy?
Here Are Three Ideas ...
1) Gold Miners. Gold, with its historic outperformance during times of trouble, is looking better and better. Sure, I've been pounding the table about gold for some time now. And it's been zig-zagging higher. And "buy" signals on select gold stocks are flashing on my board like holiday lights.
2) Oil Companies. Say what? Why buy oil when many analysts are predicting $25 oil in 2009? My reason is simple: Enjoy the cheap oil, because it won't last. We've seen oil prices plunge about 73% in six months. That has never happened in history before — ever.
The current price of crude signals that something is very out of whack in the oil markets. And I can tell you what the effect is: Projects that cost more than the current price of oil are being taken offline — slowly at first. But the process could quickly start to cascade.
That should quickly bring supply and demand in balance. And if prices go higher, we can always bring more production online, right? Maybe.
But the kind of black swan event we've seen in oil markets leaves long and deep scars in the conservative psyches of oilmen. That's why I think it's going to be a while before anyone goes after new deepwater wells that cost $80 a barrel.
So who will profit from this? Major oil companies with lots of cash.
That brings me to my third recommendation ...
3) Big Companies With Lots Of Cash. For smaller industrial firms that relied on seasonal demand and outside capital, the Panic Years of the 1870s put them in one heck of a bind.
As capital reserves dried up, so did their industries. Who thrived? The large companies with guaranteed contracts and the ability to force deals on their suppliers and vendors.
Baron Rothschild would tell you to make the most of troubled times.
Andrew Carnegie and John D. Rockefeller had enough capital reserves to finance their own continuing growth. Both bought out their competitors at fire-sale prices.
And today, large, well-capitalized companies could be the way to go.
Indeed, these are tumultuous times. Yet I'm sure that Baron Rothschild would tell you to make the most of them.
I wish you all the best for 2009.
Yours for trading profits,
Sean
About Money and Markets
For more information and archived issues, visit http://www.moneyandmarkets.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Tony Sagami, Nilus Mattive, Sean Brodrick, Larry Edelson, Michael Larson and Jack Crooks. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amber Dakar, Michelle Johncke, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau and Leslie Underwood.
Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.
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Showing posts with label Bear Market. Show all posts
Showing posts with label Bear Market. Show all posts
Wednesday, December 31, 2008
Tuesday, October 07, 2008
Buffet and the Bear
Buffet and the Bear by Nilus Mattive
I listen to Warren Buffett's words carefully. Not because I'm a hero worshipper, but because the Oracle of Omaha knows the investment world inside and out. His conglomerate, Berkshire Hathaway, has returned a compound annual gain of 27.1% over the last 42 years (through the end of 2007). And individually, he is the richest man in the world.
So, what has Buffett been saying lately? Here are some of his comments made last week ...
"In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now."
"The recession is going to get worse. I don't want to hold out false hopes that — by some magic bullet — that things will turn around in a couple months."
"This really is an economic Pearl Harbor. That sounds melodramatic, but I've never used that phrase before. And this really is one."
Discouraging stuff, to say the least. And unfortunately, I agree with all of it.
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People are panicking more than I have ever seen. The minute I got back from my trip to Asia, I felt it. The country's mood had changed. What were once distant possibilities had become immediate dangers.
Everyday Americans, not necessarily even investors, were angry and worried about the pending bailout. My mother asked whether she should move her retirement account to another institution. And this past weekend, while visiting my wife's family and friends, I was questioned on the markets by nearly everyone I encountered.
Warren Buffett is worried about the current environment, but he's also buying despite his fear.
There is no question that the worry is well founded. Like Buffett, I have been saying for quite some time that even if our country is not in an official recession, it sure feels like one. Falling investment values, rising prices for daily necessities, money markets freezing out investors ... these are serious threats to our nation's wealth and security.
And I am now certain that we will ultimately see two consecutive quarters of GDP growth before all is said and done, too. That will make it official for the economists, and likely means more downside for stocks in the short term.
However, There Is Also Wisdom in Another Buffett Saying: That We Should Be Greedy When Others Are Fearful ...
This is easier said than done, of course. But some investors — even as they openly worry about our country's future — are making bullish bets on the U.S.
Buffett is a prime example. While he is talking about the sad state of affairs, he is ACTING on the belief that things will improve.
I have pointed out some of his earlier moves in 2008, but here's a quick refresher:
His investment firm, Berkshire Hathaway, bought a 60% stake in Marmon Holdings, an industrial group that makes everything from railroad tank cars to wires and cables. The firm plans on acquiring the rest of Marmon over the next several years.
Berkshire bought 751,400 shares of U.S. railroad company Burlington Northern, boosting its overall stake to 17.6%.
Buffett launched a new business unit that will insure bonds.
And he is helping finance two mergers involving companies I recommended to Dividend Superstars subscribers — Wrigley and Rohm & Haas.
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FINANCIAL CRISIS GETS WORSE!GOLD CAN BE YOUR SAFE HAVEN!
Wall Street cratered on Friday, and the parade of pain is just getting started. Today, global markets in Asia and Europe sold off hard, and Wall Street faces more troubles dead ahead. But do you want to know what's looking good today? Gold!
Prices are being supported by strong investment demand for gold coins and bars, traders say, as well as money pouring into bullion-backed exchange traded funds.
Click here for more information ...
Now, just last week, as he made the negative comments I cited above, Buffett committed $3 billion to General Electric and $5 billion to Goldman Sachs in exchange for preferred shares in the two companies.
Yes, he negotiated far better deals for Berkshire than you or I would get. But Buffett's moves are bullish nonetheless.
And never forget that Buffett has also made billions of bullish bets using options on not just the S&P 500, but also three other unnamed foreign stock market indexes.
While the details are scant, Buffett has said all of these bets expire between 2019 and 2027 and were struck at the market. In other words, he believes stocks — both in the U.S. and in other foreign markets — will be higher 10 years from now than they are today.
Again, I agree with him. History is certainly on our side.
Consider What Has Happened in Past Bear and Bull Markets ...
This latest bear market officially began on July 9, when the S&P 500 index closed 20.5% lower than its high made on October 9, 2007.
How low can stocks go based on history?
The average bear market in the S&P 500 has seen an average loss of 34.1% over 20 months. That would take us to 1031.49, approximately where the index sits today.
It's worth noting that, technically speaking, the "500" does have a lot of support in the low 1000-range, too. However, the 20-month average would take us out to the summer of 2009.
The last bear market — which lasted from March 2000 to October 2002 — took the entire "500" down 49.1% over about 30 months. If we apply that loss to this cycle's current high point, we arrive at an S&P 500 bottom of 796.66 somewhere around March, 2010. Yikes!
Worst case, historically speaking? The fiercest bear occurred back in 1937-1942, with the index losing 60% of its value over 62 months. Today, that would mean an S&P 500 of 626.1 in the beginning of 2013.
This table breaks out each historical bear market for you ...
Bear Markets
START
END
MONTHS
CHANGE
03/05/33
04/28/38
62
-60.0%
05/28/42
06/13/45
37
-29.6%
08/01/52
10/21/53
15
-21.5%
12/11/57
06/26/58
6
-28.0%
02/08/62
10/06/62
8
-22.2%
11/28/64
05/25/66
18
-36.1%
01/10/69
10/02/70
21
-48.2%
11/27/76
08/11/78
20
-27.1%
08/24/83
12/03/83
3
-33.5%
07/15/86
10/10/86
3
-19.9%
03/23/96
10/08/98
31
-49.1%
AVERAGE
20
-34.1%
Source: S&P Index Services
As you can see by these numbers, there could be plenty more pain ahead. But I want to come back to the greed part ... the reason to buy when everyone else is fearful.
I'm talking about what has happened during the average bull market: A whopping 164% return over 57 months!
Take a look at this table for a complete breakdown of past bull markets. As you can see, even the last bull market was good for a 101% gain over five years ...
S&P Bull Markets
START
END
MONTHS
CHANGE
05/31/28
03/05/33
57
325%
04/28/38
05/28/42
49
158%
06/13/45
08/01/52
86
266%
10/21/53
12/11/57
50
86%
06/26/58
02/08/62
43
80%
10/06/62
11/28/64
26
48%
05/25/66
01/10/69
32
74%
10/02/70
11/27/76
74
126%
08/11/78
08/24/83
60
229%
12/03/83
07/15/86
31
65%
10/10/86
03/23/96
113
417%
10/08/98
10/08/03
60
101%
57
164%
Source: S&P Index Services
The historical lesson is clear: Bears can be absolutely brutal, but the ensuing bull runs have always paid off handsomely for patient investors.
Am I saying that right now is the absolute bottom or the time to buy with both hands? No.
But I do think we should all keep the market's history in mind as we watch the daily ticker tape ...
We should pay close attention to what legendary investors like Warren Buffett are not only saying, but DOING ...
And by using strategies like dollar-cost averaging, dividend reinvestment, and hedging with inverse ETFs, we should be setting ourselves up for long-term gains with a strong element of short-term protection.
Best wishes,
Nilus
P.S. I should also note that dividend stocks continue to hold up significantly better than shares that don't pay dividends. Payers in the S&P 500 outperformed non-dividend stocks in September ... year-to-date ... and over the last 12 months!
About Money and Markets
For more information and archived issues, visit http://www.moneyandmarkets.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Tony Sagami, Nilus Mattive, Sean Brodrick, Larry Edelson, Michael Larson and Jack Crooks. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amber Dakar, Dinesh Kalera, Christina Kern, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau and Leslie Underwood.
Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short paragraph:
This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.
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I listen to Warren Buffett's words carefully. Not because I'm a hero worshipper, but because the Oracle of Omaha knows the investment world inside and out. His conglomerate, Berkshire Hathaway, has returned a compound annual gain of 27.1% over the last 42 years (through the end of 2007). And individually, he is the richest man in the world.
So, what has Buffett been saying lately? Here are some of his comments made last week ...
"In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now."
"The recession is going to get worse. I don't want to hold out false hopes that — by some magic bullet — that things will turn around in a couple months."
"This really is an economic Pearl Harbor. That sounds melodramatic, but I've never used that phrase before. And this really is one."
Discouraging stuff, to say the least. And unfortunately, I agree with all of it.
Internal Sponsorship
Shocking CNN poll: Six in Ten Americans SayA DEPRESSION is Coming!
THIS FRIDAY: Urgent online Q&A session to help you protect ...
Your income and financial security ...
Your savings, checking and brokerage accounts and your money market funds ...
Your life, health and property insurance policies and annuities ....
Every kind of money you have!
Click here for more information ...
People are panicking more than I have ever seen. The minute I got back from my trip to Asia, I felt it. The country's mood had changed. What were once distant possibilities had become immediate dangers.
Everyday Americans, not necessarily even investors, were angry and worried about the pending bailout. My mother asked whether she should move her retirement account to another institution. And this past weekend, while visiting my wife's family and friends, I was questioned on the markets by nearly everyone I encountered.
Warren Buffett is worried about the current environment, but he's also buying despite his fear.
There is no question that the worry is well founded. Like Buffett, I have been saying for quite some time that even if our country is not in an official recession, it sure feels like one. Falling investment values, rising prices for daily necessities, money markets freezing out investors ... these are serious threats to our nation's wealth and security.
And I am now certain that we will ultimately see two consecutive quarters of GDP growth before all is said and done, too. That will make it official for the economists, and likely means more downside for stocks in the short term.
However, There Is Also Wisdom in Another Buffett Saying: That We Should Be Greedy When Others Are Fearful ...
This is easier said than done, of course. But some investors — even as they openly worry about our country's future — are making bullish bets on the U.S.
Buffett is a prime example. While he is talking about the sad state of affairs, he is ACTING on the belief that things will improve.
I have pointed out some of his earlier moves in 2008, but here's a quick refresher:
His investment firm, Berkshire Hathaway, bought a 60% stake in Marmon Holdings, an industrial group that makes everything from railroad tank cars to wires and cables. The firm plans on acquiring the rest of Marmon over the next several years.
Berkshire bought 751,400 shares of U.S. railroad company Burlington Northern, boosting its overall stake to 17.6%.
Buffett launched a new business unit that will insure bonds.
And he is helping finance two mergers involving companies I recommended to Dividend Superstars subscribers — Wrigley and Rohm & Haas.
Internal Sponsorship
FINANCIAL CRISIS GETS WORSE!GOLD CAN BE YOUR SAFE HAVEN!
Wall Street cratered on Friday, and the parade of pain is just getting started. Today, global markets in Asia and Europe sold off hard, and Wall Street faces more troubles dead ahead. But do you want to know what's looking good today? Gold!
Prices are being supported by strong investment demand for gold coins and bars, traders say, as well as money pouring into bullion-backed exchange traded funds.
Click here for more information ...
Now, just last week, as he made the negative comments I cited above, Buffett committed $3 billion to General Electric and $5 billion to Goldman Sachs in exchange for preferred shares in the two companies.
Yes, he negotiated far better deals for Berkshire than you or I would get. But Buffett's moves are bullish nonetheless.
And never forget that Buffett has also made billions of bullish bets using options on not just the S&P 500, but also three other unnamed foreign stock market indexes.
While the details are scant, Buffett has said all of these bets expire between 2019 and 2027 and were struck at the market. In other words, he believes stocks — both in the U.S. and in other foreign markets — will be higher 10 years from now than they are today.
Again, I agree with him. History is certainly on our side.
Consider What Has Happened in Past Bear and Bull Markets ...
This latest bear market officially began on July 9, when the S&P 500 index closed 20.5% lower than its high made on October 9, 2007.
How low can stocks go based on history?
The average bear market in the S&P 500 has seen an average loss of 34.1% over 20 months. That would take us to 1031.49, approximately where the index sits today.
It's worth noting that, technically speaking, the "500" does have a lot of support in the low 1000-range, too. However, the 20-month average would take us out to the summer of 2009.
The last bear market — which lasted from March 2000 to October 2002 — took the entire "500" down 49.1% over about 30 months. If we apply that loss to this cycle's current high point, we arrive at an S&P 500 bottom of 796.66 somewhere around March, 2010. Yikes!
Worst case, historically speaking? The fiercest bear occurred back in 1937-1942, with the index losing 60% of its value over 62 months. Today, that would mean an S&P 500 of 626.1 in the beginning of 2013.
This table breaks out each historical bear market for you ...
Bear Markets
START
END
MONTHS
CHANGE
03/05/33
04/28/38
62
-60.0%
05/28/42
06/13/45
37
-29.6%
08/01/52
10/21/53
15
-21.5%
12/11/57
06/26/58
6
-28.0%
02/08/62
10/06/62
8
-22.2%
11/28/64
05/25/66
18
-36.1%
01/10/69
10/02/70
21
-48.2%
11/27/76
08/11/78
20
-27.1%
08/24/83
12/03/83
3
-33.5%
07/15/86
10/10/86
3
-19.9%
03/23/96
10/08/98
31
-49.1%
AVERAGE
20
-34.1%
Source: S&P Index Services
As you can see by these numbers, there could be plenty more pain ahead. But I want to come back to the greed part ... the reason to buy when everyone else is fearful.
I'm talking about what has happened during the average bull market: A whopping 164% return over 57 months!
Take a look at this table for a complete breakdown of past bull markets. As you can see, even the last bull market was good for a 101% gain over five years ...
S&P Bull Markets
START
END
MONTHS
CHANGE
05/31/28
03/05/33
57
325%
04/28/38
05/28/42
49
158%
06/13/45
08/01/52
86
266%
10/21/53
12/11/57
50
86%
06/26/58
02/08/62
43
80%
10/06/62
11/28/64
26
48%
05/25/66
01/10/69
32
74%
10/02/70
11/27/76
74
126%
08/11/78
08/24/83
60
229%
12/03/83
07/15/86
31
65%
10/10/86
03/23/96
113
417%
10/08/98
10/08/03
60
101%
57
164%
Source: S&P Index Services
The historical lesson is clear: Bears can be absolutely brutal, but the ensuing bull runs have always paid off handsomely for patient investors.
Am I saying that right now is the absolute bottom or the time to buy with both hands? No.
But I do think we should all keep the market's history in mind as we watch the daily ticker tape ...
We should pay close attention to what legendary investors like Warren Buffett are not only saying, but DOING ...
And by using strategies like dollar-cost averaging, dividend reinvestment, and hedging with inverse ETFs, we should be setting ourselves up for long-term gains with a strong element of short-term protection.
Best wishes,
Nilus
P.S. I should also note that dividend stocks continue to hold up significantly better than shares that don't pay dividends. Payers in the S&P 500 outperformed non-dividend stocks in September ... year-to-date ... and over the last 12 months!
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