wtf with the markets

[S.C. Joe]

If you want to play it safe buy the SPY..thats the index of the S & P 500...back in the 80's you could not buy 10% of the Index....if the index was at say 6000, you needed 6000 dollar to buy 1 share and I think it was traded in the 100 share blocks, so you needed $60,000.

Now about 10 years ago, they came out with index funds..many still are blocks of 100 shares but its 10 %..now SPY is different...you can buy any amount....it closed at $88.50 a share...52 week high is $157....and the fund won't go bankrupt...it won't go up 3-4 times thou, like a $15 stock could go to $50 a share in 1 year.


Its almost a "sure bet" that within 5-10 years you get more than $88.50 a share but it won't "beat the market" cause it is the market. Market goes up 10% the SPY went up 10%.

 

[zekestone]

i lost 25K this week

BS!

I'm more or less in the same boat. Good thing I'm not planning on retiring soon.

Yup... it seems the time to sell and put everything in money market funds was the summer of 2007. No point in selling anything now unless trying to offset a big gain with a loss.

I've been watching the market since the 1980s... in terms of sheer panic, I think this is as bad or maybe worse than October 1987... and that was a huge panic... but followed with a fairly quick recovery that got killed off with high interest rates needed to control inflation that was mostly caused by government deficits.

Anyway, I have all the credit I need and have been able to pick up some stuff really cheap. I've already got investment balls of high-grade steel that I developed when investing in tech stocks in the late 1990s.

 

[diehard]

I lost almost 2k, so I bailed out.

no more mutual funds.

 

[fuji]

You guys read way too much into this.

The money you lost was paper money you gained by the same casino gambling/stock market previously.

I'm not reading anything into this. I'm being realistic: The markets are going to be in a slide for the next 3-4 years and it is probably 10+ years before they recover to the values they had last year.

That's how long it took for the markets to end their decline and then recover last few times we had a slide this large.

Anyone who thinks this is going to turn around this year is dreaming, there are serious fundamental problems with the economy that caused this, and there are no quick fixes.

The fix is for the people who were living beyond their means to go bankrupt, the companies that were using unrealistic levels of leverage to go bankrupt, and new firms sprout up to replace them.

That takes time. It took time last time. It'll take time this time.

 

[RogerRabbit]

Really?



Here's another chart showing the stock market that goes back to 1870

Thanks for the chart.

Is anyone else here able to read/ use charts?

Looks like a classic double top now, which means short the market to make $$$ and hedge long positions to protect capital gains, anyone else who actually understands technical analysis well, I would love if you jumped in with your thoughts? I would say short term there are a few buys, but more things worth selling. Just take small risks, not big ones and you can build back what you lost over time. I am an "accredited investor" (OSC lingo), I use CMC to go long and short, used to have an acct. at REFCO, back in the day.

I agree don't panic, if it was a good company before August and still is, hold on, you only need to see what happened to the nervous types who sold income trusts a few years ago, the good ones came back. Get a second opinion, you would if you found out if you had cancer, right?

If you need to mitigate/ hedge your losses buy some of these 2x bear ETF funds in the sector your stock is in, or if haven't done this before, get an experienced broker who has a great track record for good and bad markets to steer you, don't be afraid to ask for help people, don't let ego and emotions rule. It is not about being right, it is about making $$$, especially if you have lost $$$$$. Good luck, it is a jungle out there...

 

[RogerRabbit]

we are due for a Depression, if you look at trading patterns for the last 500 years..

I'm not reading anything into this. I'm being realistic: The markets are going to be in a slide for the next 3-4 years and it is probably 10+ years before they recover to the values they had last year.

That's how long it took for the markets to end their decline and then recover last few times we had a slide this large.

Anyone who thinks this is going to turn around this year is dreaming, there are serious fundamental problems with the economy that caused this, and there are no quick fixes.

You are quite right, most companies/ people will go bankrupt in the USA, as they will not be able to raise $$$, have less customers/ work, etc. Here is a graphic example of how bad it is globally if these numbers are correct:

http://quotes.nasdaq.com/asp/etfsscreen.asp?etfsize=4&etftype=4&etfstyle=5&etfprice=6&etfreturn=1

There will be limited time/ trading opportunities/ windows and a short term trader/ fund who goes with the flow (short/ long/ hedge/ etc.) will do very well, but the "buy and hold" of days gone by are over for many years to come.

Even Mr. Buffet and his company Berkshire will have to trade like a hedge fund, to be viable, unless they offer something unique or a market leader. Maybe that is why he invested in Goldman Sachs, GE (Finance vs. their traditional businesses I hear, as they are getting offered some pretty sweet deals). Nothing wrong with being opportunistic if you are a free market person, just ask the PM:

http://www.thestar.com/Business/article/515946

Some of my favourite defensive stocks are also available at fire-sale prices:
Walgreen Co., the dominant U.S. drugstore chain (about 50 per cent off its 5-year high); Rona Inc. (down about 60 per cent, and takeover bait for Lowe's Cos. or Home Depot Inc.); Big Pharma stocks Merck & Co. Inc. and Bristol-Myers Squibb Co., each trading at little more than half their 2003 price and boasting outsized dividends; and Cisco Systems Inc., the world's best-run supplier of telecom and Internet gear trading 45 per cent below its five-year high.
"There are probably some great buying opportunities emerging in the stock market as a consequence of all this panic," economist Stephen Harper, whose day job is running Canada, said earlier this month. "When stock markets go down people end up passing on a lot of things that are underpriced."
Harper was excoriated, of course, for real or perceived insensitivity to those with paper and locked-in losses, retirees in particular, during the admittedly cruel market of the past several months. But on this point, at least, Harper's empathy deficit doesn't make him wrong.

 

[W3bster]

RR, I only know very basic T.A. but I noticed the double-top as well--I'm sure most do but who knows. This may be of interest to see what "T.A.-ists" are thinking: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=public&cmd=show&disp=RED Whenever I check it out I almost always refer to Peter B. Robinson's charts--sometimes there's a very small blurb in there. I have a day job so I don't have time to go toy through all of them and am not thoroughly knowledged on this kind of stuff.

For me it feels like there's just way too many variables now for any level of comfort or predictability right now. Professional money management industry in my eyes has had their reputation tarnished as even they have been slaughtered in all of this. I'm sure a few have had losses of up to 75%, and with all the richie riches, oops, I mean accredited investors (lol) having panicked and pushing the sell button, their redemption payments are delayed to the end of this month to the next couple of months. The only way managers can generate the cash is if they unwind the majority of their now very reduced portfolios--meaning many will shut down and just liquidate their entire portfolio now and in the coming months. I think T.A. shows support in general at nearly 10% lower than where we are now, but the effect of the panic selling that has already been ordered can push it that little bit more. The redemptions can't be cancelled, but they can repurchased without any impact but how many are going to do that?