Ready for Bounce?

[HerefordSire]

This recession isn't near as bad as the one in the late 70's early 80's yet.
We had double the unemployment rate as well as double digit inflation.
There were mass migrations of famlies to the areas that had promise of a job, Houston grew in leaps and bounds from people up north. The oil boom hadn't went belly up yet.
The big difference is you had a generation that still operated on cash and not plastic, for the last 20 years Americans have been on credit spending spree/ along with the government forcing loans to unqualified borrowers.
We have had a generation of Americans dancing and partying and now it is time to pay the fiddler.

There is a slight misconception of investors and the public in general. When the Dow was @ 14,000 how many people were concerned with a recession or depression or losing their job? Heck, that was the time NOT to buy, as we well know, especially since the movement upward since 2003 was almost straight up. But you couldn't tell anyone because they won't listen. Just the opposite is true now. They won't listen now either. Now is not the time to sell when things look grim and dim and slim. This is where the real money to be made comes from on the buy side. Fear is widespread. Many people are not rational. Do their nerves not allow them to think straight because they are scared to death of losing their retirement? Many think one thing and do another. There is nothing we can do about this. It is out of our control. However, might as well make a boat load of money while they are scared to death, so back the truck up. There is no need to rub it in either, once we make a lick or two. Usually, people won't believe you anyway. They may think Armageggon is coming. I see things different, but I am no fool either. I am in and out. I don't trust anything or any human being.

 

[1982vett]

You might be able to trade the market and make some big money, but investing for the long haul right now is a suckers bet until stability returns to the market. Even good companies are being taken out a being shot. For no other reason than being in an index or an ETF, they get sold. Can't own them till "change" arrives on the scene. Change got us here, it didn't start in November, it didn't start 8 years ago or 16 years ago (although policy changes during these times helped get us here). It started when "equal opportunity" was changed to "all for one and one for all".

I'd love to be able to throw money at the market like congress throws money around. I can waste it just as fast. But until wealth destruction is abated or a new market trading system is put in place, hold on tightly to what you already have. It will be as challenging as building wealth.

Just the opposite is true now. They won't listen now either. Now is not the time to sell when things look grim and dim and slim. This is where the real money to be made comes from on the buy side. Fear is widespread. Many people are not rational.

Have to ask yourself, "can things get worse?" or "what is happening to make things better?"

 

[HerefordSire]

You might be able to trade the market and make some big money, but investing for the long haul right now is a suckers bet until stability returns to the market. Even good companies are being taken out a being shot. For no other reason than being in an index or an ETF, they get sold. Can't own them till "change" arrives on the scene. Change got us here, it didn't start in November, it didn't start 8 years ago or 16 years ago (although policy changes during these times helped get us here). It started when "equal opportunity" was changed to "all for one and one for all".

I'd love to be able to throw money at the market like congress throws money around. I can waste it just as fast. But until wealth destruction is abated or a new market trading system is put in place, hold on tightly to what you already have. It will be as challenging as building wealth.

Just the opposite is true now. They won't listen now either. Now is not the time to sell when things look grim and dim and slim. This is where the real money to be made comes from on the buy side. Fear is widespread. Many people are not rational.

Have to ask yourself, "can things get worse?" or "what is happening to make things better?"

Thank-you for the comments 1982vette.

Most investors have been taught through various ways to buy and hold long term. In my view, this is a fallacy. I call this propaganda and mind control. I realize there are many people that trust the markets and have literally made fortunes by long term holding of quality company shares. Times change. Generally, a public corporaton shares are used for financing. Our economy depends on this source of funding. This is the main reason why big conservative money, like teachers retirement pools, can play in this casino. This leads me to a set of questions: How many public companies can you list that are over 70 years old? How about 50 years old?

If one were to comprehend all the available information, such that the information known by us was perfect, we still wouldn't know for sure what was going to happen in the future. In a way, it really doesn't matter what happens in the future or the past in regards to markets or economy because it is out of my control. It doesn't matter how bad or good the news is because there is nothing I can do about it. What does matter, if we make money or not. We can think of millions of reasons not to make a purchase decision when staring at a depression. The opposite is also true when the masses become euphoric.

To make a long story short, it is very simple to me. I don't believe most things I hear, almost nothing I read, and half of what I see.

 

[1982vett]

Generally, a public corporaton shares are used for financing. Our economy depends on this source of funding. This is the main reason why big conservative money, like teachers retirement pools, can play in this casino. This leads me to a set of questions: How many public companies can you list that are over 70 years old? How about 50 years old?

GM, Ford, Chrysler, John Deere, Kelloggs, Kraft, JPMorgan, Coke, Pepsi, General Electric, Wells Fargo, Alcoa AT&T, Bank of America, Bowing, Procter & Gamble, Walt Disney, 3M............Plenty of old companies out their. Some teeter on bankruptcy. While you said corporation shares are used for financing, I'll agree, but they also represent ownership of that company. So what you are saying is once a company goes public, ownership should take a back seat and let the rest of the world pillage it? If you did their wouldn't be any point in owning a share of a public company which brings me back towards my original point. Investing for the long haul right now is a suckers bet until stability returns to the market. Even good companies are being taken out a being shot. For no other reason than being in an index or an ETF, they get sold. Can't own them till "change" arrives on the scene.


Trade 'em but don't own 'em. Is it to late to sell? Don't know, some say it is never to late to sell. Only when they go to $.00 is it to late to sell. Selling seems to be the thing to do right now. Am I selling, haven't since September. Am I thinking about it? You betcha. What's the point in willingly walking out in front of the firing squad. Have I bought recently? Yep, trickled a little in a week ago. Got my head handed to me to the tune of 12% in 5 days. Every rally in the last 3 weeks has lasted less than 1 day. Investors have lost confidence, apparently even those that supported our new president and congressional leaders. Why buy Monday when you can buy cheaper on Friday, and why buy then. All that is left are the flippers.

If that is what you want to do it's your choice. I would prefer to invest in a company that is producing products or services to individuals or other companies for a price which is affordable and gives its employees fair compensation with enough left over for the company and shareholder to prosper. At the present time, with the speed and connectivity we have with today's technology and with trading vehicles which give a large amount of leverage with small sums of money, it my very well be such investments have gone the way of the dinosaur. If that is so, then the markets have become nothing much more than a big casino. Only difference, in a casino, you put your money on the table before you spin the wheel and collect only after it stops.

 

[HerefordSire]

1982vette...I appreciate you sharing. No offense...I believe anyone holding long term is a sucker (the system teaches to breed suckers) no matter what time frame or what the future holds. I think many executives and board members are evil (and also many financiers and bankers). Here are some things I learned about the markets (not just stock markets) based upon my experience and contrary opinions:

(1) Public corporations evaporate. They can be here one day and gone the next. They are designed to be a temporary entity contrary to popular belief.

(2) The money that goes toward an investment position may not actually be used towards the position.

(3) Take delivery of a security position when and where possible.

(4) The last to buy a security is always a loser. Likewise, the first to sell a security, is always a winner.

(5) The Federal Reserve is a private corporaton owned by banks. This entity controls the interest rate through the Federal Funds Rate.

(6) When taking an investment position, be aware of who your possible counterparties are in the transaction. A transaction is a buy and a sell.

(7) When a transaction is made, the transaction may have never been executed at the market. The order may have been filled internally and recorded electronically.

(8) An entity controls an investment when owning more than 50% of the available investment. This may seem obvious. It isn't.

(9) The true entity behind the control of an investment is usually hidden behind other names.

You will not learn these things above on CNBC.

 

[1982vett]

No offense...I believe anyone holding long term is a sucker

Nothing I disagree with their anymore. I'm only guilty of believing those that were supposed to be "watch dogs" are nothing more than a bunch blundering idiots.

 

[HerefordSire]

No offense...I believe anyone holding long term is a sucker

Nothing I disagree with their anymore. I'm only guilty of believing those that were supposed to be "watch dogs" are nothing more than a bunch blundering idiots.

I will give you a good recent example: suspected Bernie Madoff supposedly responsible for investment funds (heresay..$50B) and noone can find the money, what does that tell you? What it tells me is an investment is a hot potato. It is almost like tossing it around in a circle so we won't get our hands burnt. In and out.

 

[1982vett]

No offense...I believe anyone holding long term is a sucker

Nothing I disagree with their anymore. I'm only guilty of believing those that were supposed to be "watch dogs" are nothing more than a bunch blundering idiots.

I will give you a good recent example: suspected Bernie Madoff supposedly responsible for investment funds (heresay..$50B) and noone can find the money, what does that tell you? What it tells me is an investment is a hot potato. It is almost like tossing it around in a circle so we won't get our hands burnt. In and out.

Looks like he's just another crook. And where were the "watch dogs"?

 

[HerefordSire]

What I am wondering...is the Swiss banking deal where the US government wants account records of US investors from a Swiss brokerage firm......if it has anything to do with suspected Madoff's investment money. I heard there were about 52K US citizen accounts there. The Swiss Bokerage firm already settled for almost $.9B out of court to the US. Now US Governent want the names of US citizens for tax purposes. Watch how quietly this goes away.

What watchdog are you referring to...SEC? NASD? HAH! :mrgreen: :mrgreen: :mrgreen:

The only reason you are realizing this is because of news headlines. It has always been the same system, at least since 1933-34 when the Investment Securites Act became official. Sounds like you are beginning to understand the true nature. Wait until you start trading other positions. For example, the currency markets are not regulated at all. Take a position is the US dollar and it is everyone for themselves, legally and specifically. Here, we call our markets regulated, but you can read headlines almost every day about a new swindler. Last was Friday about a London Merryl currency trader where $400M came up missing. That guy might have been framed, you never know.

 

[1982vett]

What watchdog are you referring to...SEC? NASD? HAH! :mrgreen: :mrgreen: :mrgreen:

Goes all the way back to the local yokel sheriff letting buddy Billy Joe off for running the stop sign at the 4-way, even if only 10 cars pass thru it a day. Unrealistic? Yes. None the less, the stop sign is their for a reason.

 

[HerefordSire]

What watchdog are you referring to...SEC? NASD? HAH! :mrgreen: :mrgreen: :mrgreen:

Goes all the way back to the local yokel sheriff letting buddy Billy Joe off for running the stop sign at the 4-way, even if only 10 cars pass thru it a day. Unrealistic? Yes. None the less, the stop sign is their for a reason.

Billy Joe and the sheriff are kin, no?

Read this...
http://biz.yahoo.com/ap/090307/na_us_ai ... .html?.v=1

 

[HerefordSire]

Very speculative play...look @ ticker FAS after reading the article below....

Look at the volume and after hours trading action.

http://finance.yahoo.com/q?s=fas


According to Reuters, a U.S. House Financial Services subcommittee is expected to hold a hearing on mark-to-market accounting rules as soon as March 12. The SEC's chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the report said.

If that meeting results in the government relaxing mark-to-market rules, Najarian thinks the stock market could explode.

He says, "if the government relaxes mark-to-market for 12 to 18 months you could see financials move 100% in a matter of hours."

http://www.cnbc.com/id/29510966

Background

U.S. industry groups have urged the SEC and FASB to significantly alter or suspend the accounting rule, saying it is undermining the government's multibillion-dollar effort to stabilize the financial sector.

Mark-to-market accounting requires assets to be valued at current market prices. Some banks say it forces them to mark down assets to artificially low prices in the current financial crisis, even when banks intend to hold the assets past the current reporting period.

What's the trade?

Jon Najarian suggests a higher risk play – he suggests long the Financial Bull 3x ETF [FAS 2.64 -0.11 (-4%) ] which is triple long ahead of the mark-to-market hearing.

http://www.cnbc.com/id/29549920

 

[1982vett]

Cat's out of the bag already. FAS popped 13% in the last 15 mintues of trading and another 4% after hours. I think once a stock pick has hit the media you best leave it alone. But if you alread own FAS, Monday would be an opporutnity to sell on the hype and reload later if you still like it.

 

[Rod]

There are still good buys out there. I wouldn't put any money in the market unless I could burn it and never miss it though.

 

[chrisy]

I read some where that it will take until 2030 before this World recession recovers fully, back to how we knew it a few months back. That's a heck of a mess these so called bankers have got us into.

 

[HerefordSire]

Cat's out of the bag already. FAS popped 13% in the last 15 mintues of trading and another 4% after hours. I think once a stock pick has hit the media you best leave it alone. But if you alread own FAS, Monday would be an opporutnity to sell on the hype and reload later if you still like it.

Normally, I would agree with you. Buy on the rumor and sell on the news seems to be the modus operandi on the street. I believe this could be a special case because the price to the 3X ETF financial bull has gone straight down with the banks. Could rise all the way until the meeting on mark to market accounting. Upside could be about 300% or so if not playing options.

Recent price was $58 per share not too long ago. In only February was $11.50 per share. Closed at $2.64 per share on heavy volume. Shown below is a hourly chart where one candle is one hour. Noone has a lower price than $2.34 per share. Should test $4.00 and then $7.15 per share soon. One can even play the options in a variety of ways to provide insurance or more leverage to increase return. For example, simultanously buy a short term in the money puts against the same quantity of long shares. Puts would be the insurance premium and the break-even would be a little higher than the price the shares were purchased.

I should also add, this is usually not my style even though I am aggressive but it certainly caught my attention.

 

[HerefordSire]

There are still good buys out there. I wouldn't put any money in the market unless I could burn it and never miss it though.

Here is a quote from Warren Buffet:

"When investing, pessimism is your friend, euphoria the enemy" and "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down" and "Beware the investment activity that produces applause; the great moves are usually greeted by yawns."

 

[1982vett]

It does appear have more room to go up than down. How long to buy and hold 10 - 15 minutes? Look at the current reactions of our "leaders" as opposed to their actions. All congress can do is threaten to make more laws and regulations which will most will take 6-10 months for someone to figure out by which time those reactions will no longer apply. Likely will be nothing more than calling in paramedics after the victim has bled to death. Otherwise, Geitner would have already acted (if he had a clue as how to fix what he help break).

http://www.dailynewscaster.com/2009/02/ ... im-rogers/

Brian Kilmeade "Mr. Geitner was at the New York Fed when much of the original TARP was being created. And he was an adviser of sorts to Bill Clinton when the housing bubble was inflated. Is he the wrong guy for the job."


Jim Rogers: "If you ask me he is totally the wrong guy for the job. You just point out he has been around at least fifteen years in all these things. And everything he has done, every policy he has participated in has turned out to be wrong. He was the New York Fed. Brian you know the New York Fed is supposed to be the people supervising Wall Street, supervising the banking industry more than anybody else. That's were all the problems have come from. It's his responsibility. And all of a sudden they have given him the keys to the treasury."

Brian Kilmeade: "It's more ironic, is it not that you've got the president basically bashing Wall Streets and the banks. But Geitner working behind the scenes with the banks. And some saying he's too favorable to them. How do we square that?"

Jim Rogers: "Because he is to favorable to them … All of these policies have been the wrong policies."

http://www.bucksays.com/paulson-to-geit ... nd-dumber/

Paulson to Geitner: Dumb and Dumber
Posted by Buck
February 10, 2009
When the Obama term began I remained anxious about many areas of his philosophy but one thing I was happy about was to see the last of Henry Paulson. I was afraid that each time he spoke that the stock market might just move to zero and close. I had never witnessed a political appointee move so quickly to a position of such power as Paulson had done. He carried his rise with a total lack of humility, humanity and with no apparent care for the effect of his decisions on the general population. His every public appearance produced another new low in the market and the confidence of the nation as to whether we had people in charge who knew what they were doing. Those of us with simple financial knowledge understood that a Treasury policy that handed out billions of dollars of our money without a clear understanding how the money was to be used, was at least a bit nutty. The later revelation that there was no clear record as to who got what, left many of us simple souls convinced that it ws more than just a bit nutty.

I knew I wouldn't miss Paulson.

I still don't miss him but after hearing his successor as Secretary of The Treasury, Tim Geitner, speak today I have to wonder where do these guys come from. It must be a different planet. The financial world and interested by-standers like me anxiously awaited to hear the outline of the plan that was to lead us back to a stable economy.

The President in his press conference last night remarked that he didn't want to step on Geitner's toes since the Secretary was going to speak on the plan today. I got a bit pumped up hoping that someone who knew what they were doing would assure me that Nancy Pilosi was not going to be the only one working on the problem.

I waited with the hope that the brilliance of Geitner would demonstrate why we needed to overlook the appointment of him as a Treasury Secretary that didn't pay his taxes in a timely manner and took his son's summer camp costs as a business expense.

I'm sorry to say I'm still wondering after his sorry performance today. There was no plan and really no confidence building presentation indicting that he really has a clue or concern about the fears of the nation. Look at the sell off in the stock markets that started immediately after his presentation. I'm only part of a crowd that is wondering.

We really have to find a few smarter people to get involved in political office. The President shouldn't worry about stepping on his appointees toes. He needs to kick some butt.

I'm beginning to think we are headed right where they want us to be. More dependant.

Here is a quote from Warren Buffet:

"When investing, pessimism is your friend, euphoria the enemy" and "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down" and "Beware the investment activity that produces applause; the great moves are usually greeted by yawns."

Even Mr. Buffett isn't immune from blundering investments so I'm in pretty good company. Many of his bargain purchases turned out not to be (so far).

 

[HerefordSire]

I read some where that it will take until 2030 before this World recession recovers fully, back to how we knew it a few months back. That's a heck of a mess these so called bankers have got us into.

Chrisy...the graphic shown below agrees with your comment. Try clicking on the graphic to see if it becomes enlarged so the fine print can be read. Notice where the blue vertical line is on the oscillator.



http://seekingalpha.com/article/124668- ... rough-2025

 

[HerefordSire]

It does appear have more room to go up than down. How long to buy and hold 10 - 15 minutes? Look at the current reactions of our "leaders" as opposed to their actions. All congress can do is threaten to make more laws and regulations which will most will take 6-10 months for someone to figure out by which time those reactions will no longer apply. Likely will be nothing more than calling in paramedics after the victim has bled to death. Otherwise, Geitner would have already acted (if he had a clue as how to fix what he help break).

I think it could be held until the night before the meeting. It would be a very speculative trade though. There is no telling when another bank will become insolvent. They are dropping like flies. I have previously disclosed my feelings on information and news. I like to read all the garbage so I am not totally ignorant, but it can safely be discarded. I just focus in on a small piece of the market and become an expert on it. I look at price action inside and out. Over time, I have an ability to feel value and momentum.