Thread: Market Talk / Oct. 5 - 11

I have a tendancy to agree with you Mike. But WTF do I know!!!

Originally Posted by Mike

To put it bluntly, I think selling right now is insane.

Unless the market is about to crash, I'd say we are due for an explosive (but sadly short-lived) rally. If you really can't endure more bear market pain, at least wait for the inevitable rally. The odds favor that far more than a crash.

The fact that the tv talking heads are in "the sky is falling!" mode further reinforces my belief on this one.

we are in deep doo doo...all that real estate still waaaay overvalued...we're not goin up until that is cleaned up, and that will take a few more months at least

The ban on short sales is set to expire midnight Wednesday. Anyone heard rumors about it being extended? If it is not, I don't think the world will melt down Thursday morning, but fear of that happening may make Tuesday and Wednesday more difficult than they would otherwise be.

How you view the market going forward depends on how you view the economy - if we assume we're going into a deep recession that will last 12-16 months, then the recovery won't start until the end of next year economically speaking. However, since the market looks ahead six months, the stock market recovery would probably begin by June of next year - which is why I say it's utter lunacy to sell now. The market explodes off of lows. By the time the general public regains confidence, most of the gains have been made.

Originally Posted by Mike

...However, since the market looks ahead six months, the stock market recovery would probably begin by June of next year - which is why I say it's utter lunacy to sell now. ....

OK- I'll buy in next May.

Originally Posted by Mike

How you view the market going forward depends on how you view the economy - if we assume we're going into a deep recession that will last 12-16 months, then the recovery won't start until the end of next year economically speaking. However, since the market looks ahead six months, the stock market recovery would probably begin by June of next year - which is why I say it's utter lunacy to sell now. The market explodes off of lows. By the time the general public regains confidence, most of the gains have been made.

So when, in your opinion, should people on the sidelines move back in?

Originally Posted by Mike

To put it bluntly, I think selling right now is insane.

I agree, well maybe; to sell the C-fund is insane since it is made op of over 500 various companies. To sell sectors such as financials [LEH] Lehman (lemon) is a day late and a dollar short......Are we talking about nuts or melons......

Originally Posted by Pilgrim

So when, in your opinion, should people on the sidelines move back in?

Sometime next year.

Keep the following in mind:
- the avg length of a bear market is 18 months (2000-2002 bear market lasted a little over 2 years)
- the avg length of a recession is one year - though can be as long as 18 months
- current bear market began just about one year ago
- recession *probably* began in the 3rd quarter of this year.

So with all that in mind, the recession will last 'til sometime between July-December of next year, and the bear market will end a few months before that. Given the fact we have a housing market that has collapsed combined with a nearly frozen credit market, I'll go ahead and say I expect this recession to be deep and lengthy. It probably won't end 'til the end of next year - which means this bear market probably won't end 'til June (if we use the six month outlook of the market where traders anticipate the end of the recession accurately). There's no telling how much more value will be lost in the meantime. We could give back all the gains of the last bull market.

Anyone remember the Sep 15 comments where we talked about 1000-1005 as the head and shoulers downside target on the S&P? I sure didn't think we would go straight down there, but here we are at 1012. Perhaps we are close to the end?

http://www.tsptalk.com/comments_arch...s_9_15_08.html

Train wreck.

Well, here it is....America's new sensation...THE BLAME GAME

http://biz.yahoo.com/ap/081006/meltdown_lehman.html

I can see the interviews now.

Rep. Henry Waxman, D-Calif., : Sir, Did you do anything illegal?

Banker: No

Rep. Henry Waxman, D-Calif., : Sir, did you do anything unethical?

Banker: Can you rephrase the question?

Rep. Henry Waxman, D-Calif., : You know, anything anybody else wouldn't do.

Banker: I was doing what everyone else was doing.

Rep. Henry Waxman, D-Calif., : Don't you find the position of your bank's bottom line a travesty to your investors and customers?

Banker: I don't know what you mean.

Rep. Henry Waxman, D-Calif., : Are you kidding me? People have no money, no house, and no job. Don't you feel responsible?

Banker: I gave them those things. Why shouldn't I get to take them away and get paid big bucks to do it?

Rep. Henry Waxman, D-Calif., : Will you still take your bonus from leaving your position?

Banker: Um ,,, Yep. That $50 mil will keep me outta the gutter until I can find a new job after the recession.