Thread: What will the mob do

I believe that the "bad" news about the economy will start coming out soon and it will be the catalyst for a short term pullback. That will set up a great buying opportunity as the Fed should start to feed the economy at that as you mentioned.

Once again the herd will be selling the bad news at the worst time, when it seems to be compounding - Right when we would want to be buying. I'm thinking later this month or February.

We're also going into the strongest part of the Presidential cycle, which is the last 2 years. The fed should stop the modest strangle hold just in time for the start of that cycle. Looking to be in stocks starting with any major pull back (or when Tom gives the go ahead). Currently 50g 50f.

Your post was right on taget about the Fed, but actually this is just the 2nd year of the presidential term (Inauguration was Jan 2005). That is usually not as strong, or at least there tends to be a decent pullback during the 2nd year. I'm hoping that comes sooner rather than later.

Tom

Originally Posted by tsptalk

I'm hoping that comes sooner rather than later.

No room for hoping and wishing trading stocks....lol
11/30 and 12/30 was your chance to get in at the pull back...
1249sp ready to breakout above 1275 "if" it does look out..
maybe friday with the jobs report..

Skip

Originally Posted by Skip

1249sp ready to breakout above 1275 "if" it does look out..
maybe friday with the jobs report...

You can only hope

Originally Posted by tsptalk

You can only hope

Tom
I said that because alot of traders when in a losing position just hold on and hope it will come back to where they got in...
Only to see their trade follow the trend and go lower and lower...
In this business of trading stocks or our tsp accounts learning to admit your wrong on a trade is the biggest step forward that you can make.. Waiting and hoping just don't get it.. If you jump in and your wrong about the timing learn to get out without HOPEING it will turn around... Ride the winners and dump the losers fast....
PS we broke out today "I was HOPING we would"
L8er
Skip

Very interesting!!!! 3. Investors Cheated by Stock Buybacks?

BusinessWeek has the inside scoop on stock repurchases - and it's not pretty.

This week's issue features an article titled "The Dirty Little Secret About Buybacks," which points out that stock buyback programs aren't boosting the fortunes of average investors. In fact, they might even be costing investors some money.

BusinessWeek points to Intel as an example.

"Reading Intel Corp.'s latest annual report, you might think the chipmaker has returned huge sums of cash to its shareholders through stock buybacks," says the magazine.

"Since 1990, the report boasts, the company has repurchased from shareholders ?2.2 billion shares at a cost of approximately $42 billion.' That's a lot of stock - about a third of Intel's total shares outstanding. There's just one problem: Intel had as many shares, split-adjusted, at the end of 2004 as it did in 1990."

Most of that money went to support "hundreds of millions of shares" that Intel was issuing for employee stock options, the magazine reports. Joseph Osha, a semiconductor stock analyst at Merrill Lynch, tells the magazine that half the cash devoted to stock buybacks in general serves as little more than "backdoor compensation" for employees.

And Howard Silverblatt, a stock market analyst at Standard & Poor's, estimates that the companies in the S&P 500 stock index spent some $315 billion on their own shares last year - nearly 2.5 times as much as in 2002.

That frantic pace should continue, he tells the magazine, as public companies flush with cash accumulated since the end of the recession in 2001 continue to plow money back into stock buyback programs.

"The logic of buybacks is sound," says BusinessWeek.

"Companies with excess cash return some of it to shareholders by buying shares from them. Since there are fewer claims on the company, each shareholder's stake becomes proportionately larger. Plus, without buybacks, investors in some companies would see their stakes significantly diluted by options."

"The point behind the stock buybacks is to return value to shareholders," Intel spokesman Tom Beermann tells the magazine. "There is no other reason."

That's all well and good if you can discern how much of that cash finds its way back to investor's portfolios. But you can't.

Thomas M. Doerflinger, an equity strategist at UBS, conducted a study on "vanishing buybacks." He discovered that the number of shares in the S&P 500 has continued to increase despite the bigger share-repurchase outlays by companies.

"In 2004, when companies reported spending some $197 billion on buybacks - nearly 2% of the market value of the index - the number of shares outstanding increased by 1.8%," says Doerflinger.

"In the 12 months through June 2005, shares increased 0.7%, and only a third of the companies actually shrank their share counts by at least 1%."

BusinessWeek, citing the UBS reports, points to Microsoft as an example.

"During its three fiscal years ending in June 2005, the company reported spending $18 billion to buy back 674 million shares. At the same time it issued 666 million shares for $8 billion. In the end, Microsoft, which has some 10.6 billion shares outstanding, had reduced its total count by a negligible 8 million shares and had spent just $10 billion - $6.6 billion after tax," said the article.

"Yet Microsoft execs present the gross sums they spend repurchasing stock as being on par with dividends they pay, including the huge $33 billion special dividend in December 2004."

BusinessWeek does say that more companies are taking steps to cut their share counts.

During the 12 months through June 2005, 108 companies in the S&P 500 reduced their counts by 2% or more, up from 55 companies the year before. And 41 reduced shares outstanding by at least 5%, including Intel. Cisco Systems cut its count by 6%, and Dell pared its outstanding shares by 4%.

But it's a hard slog for investors, as many of them aren't even aware that the companies they're investing in are giving them the shaft.

With how the TSP reallocation is set up, I think people need to be more like a financial analyst rather than a market trader. With "trades" settling according to forward pricing rather than timely, I think forward thinking is the situation, and not the daily swings.

new to the posts, just trying to get a dialog going with a few thoughts.

It does seem to have worked better for me over the years to participate by selecting postions/trends that seem to justify me entering/exiting by spreading my purchases/sales over a multi-day period. Trying to devine closing prices at 11:30 a.m. EST is a little beyond my capabilities on most days. Still, once in a great while, factors align that give me the confidence to swing for the fences in a one day move. The longer I've been at this though, the less frequently do the factors ever add up to making that bold short term move. Maybe I'm getting wise, maybe just overly cautious - results are the grade of course.

Originally Posted by rlboa

With how the TSP reallocation is set up, I think people need to be more like a financial analyst rather than a market trader. With "trades" settling according to forward pricing rather than timely, I think forward thinking is the situation, and not the daily swings.

new to the posts, just trying to get a dialog going with a few thoughts.

http://www.fedsmith.com/articles/art...tArticleID=816
http://www.fedsmith.com/articles/art...tArticleID=428



rlboa,

I agree with oldschool on moves, trends/positions is the way I play it. Examples overbought/oversold, trending up/trending down and sentiment is a big one!!! I don't make many short term moves. But when I do, it's only when in my opinion, the Market is over sold and the technicals support it. I also play Trends on the upside. I don't short on the downside.

Article on Sentiment. Tom talks about this frequently in his daily comments.
http://www.garsworld.com/Contrarians.htm