"The Stock Market Discussion thread "Post all your thoughts on this recent volitality"

gwu1986 said: I'm taking profits. The reason being my non-fundamentalist DH thinks we are "safe" until mid August. I've often told him he is looking at the charts/#s upside down. He thinks the broad market (nasdaq or S&P) will go up, I invest opposite from what he thinks.

My accounts are +5k from 12/31/08 close, and +3k from 12/31/07 close. Overall, my accounts are up 127% net, so ~ 6-7%/year. Plus, a 16.89% yearly dividend return on basis. My IRAs are dogs, only up ~1% since inception 20Y ago. Very ugly. Thus the need to take tax-free profits where I can find them.

Show the man some respect, you were dead wrong on this one. Even though you were both wrong in thinking that you knew which way the market was going to go in 1 month's time...

They are the same thing but hey, nobody went broke by taking profits!

Herrmann on Bloomberg was interviewed and he is all positive. "15 month rally with GDP up 4.1% third quarter."

JesseLivermore said: Interesting Chart

1."biggest decline on record"... excluding the Depression, I presume, since the chart only goes back to 1935 or so.
2.fortunately, we just had the 'biggest decline on record' in the equity markets, excluding the Depression, so equities accurately reflected the decline in earnings.
3.hopefully no one is thinking that we should apply an average P/E of 10 or 15 to current S&P earnings; that would suggest fair value of the S&P of about 20. Is someone suggesting that's fair value?

I am glad I kept up the dollar cost averaging.

Now I'm just down a good pile of money and not a TON of money like before!
I averaged down (maybe averaged up now?) but still down.
Plus I have a lot more fixed income investments now.

I'll admit it: I am not good at stocks. 2008 was a good learning year. Stocks are liquid - but if they go down a ton, you might not be able to take that hit.

I'm facing marriage, children, cars, houses, vacations, etc in the next 10 years. I cannot afford to lose 50% of my "disposable" income because you know what? I may just NEED that money.

Yeah, I don't like taking risk - so enjoy. We'll see how the 401k/IRA goes with stocks.

PolarDude said: Looks like the dollar is getting ready to break down. Oil up above $70, and talk of new Iran sanctions.. and hurricane season in full swing. Yikes!

Hurricane season? Has that started already?

wilkinru said:
I'll admit it: I am not good at stocks. 2008 was a good learning year. Stocks are liquid - but if they go down a ton, you might not be able to take that hit.

You should work on tradnig options. Im currently doing almost all options in my accounts except my Scottrade since they make you fill out some application and crap although I plan to transfer out soon too. I started a few months ago and now im on positions all the way out to Jan 2010. It also allows you to contol profits/losses which I really like.

PolarDude said: Looks like the dollar is getting ready to break down. Oil up above $70, and talk of new Iran sanctions.. and hurricane season in full swing. Yikes!
Why would the dollar have risen in value so much on Friday? The only thing that happened was the unemployment rate didn't drop as much as everyone thought. Interest rates still being what they are, you'd think that wouldn't have happened as much. Just curious to learn as I'm kind of new to this.

jfharper said: PolarDude said: Looks like the dollar is getting ready to break down. Oil up above $70, and talk of new Iran sanctions.. and hurricane season in full swing. Yikes!
Why would the dollar have risen in value so much on Friday? The only thing that happened was the unemployment rate didn't drop as much as everyone thought. Interest rates still being what they are, you'd think that wouldn't have happened as much. Just curious to learn as I'm kind of new to this.

The dollar went up because the employment report was bullish.. but IMO it was a pretty weak bounce. The trend lately has been hitting lower lows. This week, a good chance we retest last weeks lows, and eventually we may test 70 on the dollar index. A break below 70 would set off alarm bells. Bonds got HAMMERED hard friday.

the problem is interest rates are too low and people don't know where to put their money. Raise interest rates and we will have better savings.

Wow, I'm not sure what's worse.. her prediction, or the fact that you remembered and came back on the day you said you would..

Either way.. we're just in a grand experiment now. I think IYHTA was intentionally being a bit of a sensationalist (isn't she always?) vs. that being a hard prediction. Also, the fact that our government is buying its own debt (THE definition of a circle jerk), I wouldn't hold it against her too hard. We've certainly pushed the *print* button much more than anyone would've thought.. not to mention the huge deficits/etc. Folks ought to remember that you can't magically fix a debt problem with more debt (sorry, I don't buy the Keynesian BS), and we will have to pay the piper eventually (the dollar hanging around all time lows is part of that).

nycll said: Don't diss the main reason you are not ruled by either a farcist or a communist that easily.

Ok...? Perhaps I should clarify myself. I'm not convinced Keynesian economics works, when things are too out of balance. He believed in cutting back spending during the good times, and raising it during the hard times. It seems like we just always want to increase spending. Keynesian economics is largely bastardized these days by many people that support deficit spending that "we should spend money to reignite the economy" w/o even asking the question of whether it truly CAN even be "reignited." So, perhaps I shouldn't have said I don't believe in Keynesian economics, but the bastardized version that people think it is.

nycll said: The only failure of Keysian theory is the stagflation in the 70s. To that I say nothing is perfect and right now wage inflation would be a desireable thing (hence won't happen easily since I want it!).

Ya.. the concern these days is having price inflation without having wage inflation. I know it's kind of a debatable topic of course, but things were certainly different in the 70s than they are now. Unions had much more power during the time and higher wages could be pushed through to consumers. With cheap labor and "globalization" all over the world, that's much harder to do. So, I think a bigger worry would be price inflation without wage inflation, which just lowers the standard of living here. If we have inflation here, that's unfortunately how I see it playing out. Lower standard of living in the US. Hooray..

Dealguy123 said: Wow, I'm not sure what's worse.. her prediction, or the fact that you remembered and came back on the day you said you would..

Either way.. we're just in a grand experiment now. I think IYHTA was intentionally being a bit of a sensationalist (isn't she always?) vs. that being a hard prediction. Also, the fact that our government is buying its own debt (THE definition of a circle jerk), I wouldn't hold it against her too hard. We've certainly pushed the *print* button much more than anyone would've thought.. not to mention the huge deficits/etc. Folks ought to remember that you can't magically fix a debt problem with more debt (sorry, I don't buy the Keynesian BS), and we will have to pay the piper eventually (the dollar hanging around all time lows is part of that).

we still don't know how accurate the doom and gloom message is going to turn out in our life times

maybe a government backed ponzi scheme can last a few hundred years

beethovengirl said: On 2/10/09, ifyouhavetoask said: I'd say you have less than 6 months until the US Treasury defaults.
http://www.fatwallet.com/forums/finance/708018/m13447797/#m13447797

FAIL.In case you didn't notice... the US Treasury has defaulted. The Fed is hiding it with a shell game...for now.

Or, are you still on board with the official story that we are "turing the corner"?

America is bankrupt. We are borrowing unrepayable money to give to citizens to buy cars they can't afford to make the payments on. We are discussing a healthcare plan that we can not finance.

By default, that is a default

Or, I guess we could look at America like a married couple who both lose their jobs, blow through their savings, max out their credit cards and sell everything inside their house to keep up outward appearances??? I'm sure it will be ok...so let's go to the Outback Steakhouse tonight and write a bad check to pay the bill!!!

I have to agree there is a huge confidence game being played right now.

CFC is symbolic of this.

Let the junkies load up on more debt to delay the inevitable.

kamalktk said: IYHTA quotes:

Jun. 26, 2008 "$7 gas is coming to America. It's coming soon."

Mar. 31, 2008 "The Fed may keep printing money to give us the illusion of a Dow that's above 10,000, but the real bottom, adjusted for inflation, is going to be in the 2,500 range."

Sep. 17, 2008 "The S&P 500 at 500 is where we should bottom."

Oct. 9, 2008 "At DOW 5,000, acceptabce should roll around."

Oct. 24, 2008 "Dow 5,000 is coming...and then it will fall some more "

Feb. 27, 2009 "Dow 2,000 is on the way."

Apr. 26, 2007 "I am a holder of Euros."

Apr. 12, 2008 "At that point, I can see GE dropping below $5. I'll have a limit order in, waiting for that day"
The order wasn't filled.

May 20 2008, "Look for another 20-30% drop in the dollar over the next year, accompanied by a wave of big bank failures."

Jun. 15, 2008 "they'll be cashing in on $200 oil." (in another thread)
and
Jul. 11, 2008 "Oil will not drop meaningfully until the Iran problem is solved. Either by attack or treaty. There won't be a treaty."
Conveniently enough, oil reached it's all time high of $147.27 during trading on July 11, 2008

Sep. 17, 2008 "I see $1,500-2,000 gold,"
Oct. 7, 2008 "The dollar will soon continue its collapse.... the dollar's downward spiral will continue.
We had a 50% retracement in oil. It's headed back up... well above the previous high of $150... "

Nov. 19, 2008 "Gold will reach a panic-buying situation in 2009, in my opinion. Well over $2,000/oz is my best guess at this point."
and
Feb. 10, 2009 "I'd say you have less than 6 months until the US Treasury defaults."
and
Mar. 2, 2009 "Either way, a default on US Treasury debt is a 100% certainty within the next 3 years. More likely within the next 18 months."

------------------------------
I particularly like these:

Oct 10, 2008 "If we fall too far today, there may be a banking holiday on Monday."
There was a bank holiday on Monday, it was Columbus Day....

Jul. 11, "2008 An attack on Iran is still 3+ weeks off... 13,000 is history, in my opinion. We will now see 9,000 first. $200 oil is going to prevent any meaningful optimism in the US equity markets. Time to buy Dubai real estate"

Oct. 13, 2008 "$83 oil?!?! Dubai is on the verge of collapse. Oil is going over $200."
But On July 11 you told us to buy Dubai RE....

damn, you deserve like a Nobel prize or something for this piece of work. Exponential green!

My sole position now is a raging bull USD.

I know equity markets will crash sooner rather than later, but I'm not about to fight the fed, as I can't stay solvent long on a relative basis taking aggressive short positions (I can take occasional snipes with gambling money).

Massive deflation is on the way, no matter how much quantitative easing, non-easing, or direct or indirect stimulus the gov't engages in, as the macroeconomic fundamentals are anemic or worse, and no amount of papering over the truth will prevent the band aid from being ripped off eventually.

Good luck to all.

p.s. - I genuinely believe, whether history judges me correct or not in retrospect, the biggest fraud is being perpetrated on the American consumer and taxpayer now, as well as certain foreign central banks, as a very well planned propaganda game is being played out, effectively deceiving many into believing a recovery is well underway, when just the opposite is true. This is successfully increasing risk appetite for the worst assets at exactly the worst time. Sometimes simple preservation of assets is the most beautiful thing, and can bear incredible relative real returns.

So many external forces effect the timing. The Fed is totally out of control, and our politicians seem willing to completely play along.
The rest of the world is looking at us sideways. When will they pull the plug on our debt?

Heck, remember when a sub-$500 billion deficit seemed like a bad thing last year? In 2009, we will approach a $2 trillion deficit. We are spiraling out of control. Is a quadrupling of 2009's (nearly) $2 trillion in the cards (or even possible?) in 2010? I think not. The rest of the world will balk at it.

When the reality of that debt finally hits the wall, the equity markets will plunge. Probably this fall. For sure by spring.

Ignore the talking heads, focus on the hard data (shipping indices, unemeployment, trends, peoples buying habits, savings ratios etc). We are screwed