Dow 5000? A Bearish Bet That Looks Quite Possible

Wall Street Journal ^

[Two Kids' Dad]

Would any of you care to lay out the steps for a rookie investor that wants to short the Dow or the S&P and make a few bucks from the falling market? I’ll need it to be simple, with maybe a few suggested places to open an investment account. Also, any advice on how to best leverage my money to maximize the benefits?

I fully understand that advice given here is not guaranteed and blah, blah, blah... (insert standard legalese disclaimer here). I’m just looking for input. Any risk is solely my own.

Thanks in advance.

[hinckley buzzard]

More properly called "The Owlgorian Locketbox" it serves as a theoretical repository for dedicated tax revenues.

heh. it's the "theoretical" part that stands out for me.

That was interesting about the old Canal company.

[hadaclueonce]

less than 5K

[hadaclueonce]

they will just change to what stocks are in the running to pump it up.

Enron was included until they went in the tank then DOW dropped them like a hot potato.

[muawiyah]

It's amazing isn't it? Doggone thing continues to chug along ~ no water in it ~ but it rents lots to build houses.

There are other such creatures throughout the United States. All of them have a dedicated tax resource to pay for the bonds they're allowed to sell (or, rather, that they "were allowed" to sell.

Owlgorian Locketboxes, every single one of them!

Whoops, almost forgot. The latest version of one of those pre-Civil War era Midwestern canal companies is GENERAL MOTORS.

The Leftwingtards were planning to Loan/Give/Bequest large loans to General Motors if it would agree to build ELECTRIC cars.

They'd already set aside funds for that purpose. Now watch as GM goes through bankruptcy it's going to show up on the otherside with its claim on $25 billion for electric cars still intact ~ and if you could come back a century from now, or even two centuries, GM, which by then will probably be building kitchen blenders, will still have a claim on that $25 billion provided it ever gets around to building electric cars.

[muawiyah]

Well OK, then "blah, blah, blah, blah" ~ two ways to "short the market". When it's going up, and when it's going down. The tactics differ ~ there is no assurance that the markets will continue tanking.

Beyond that all I can say is you'd be just as well off consulting with Bernie Madoff.

[The Duke]

I guess I'm the ultimate bear - I'm predicting 1800. I base that on the fact that it was at 1800 in 1985, which was about the time that I think our economy entered Fantasy Land.

Now, one might bump that up to compensate for inflation, however I also believe that momentum will cause the market to undershoot before stabilizing. I hope I'm wrong.

[Canedawg]

The Record (Bergen County, NJ), April 18th, 1991

04-18-1991 DOW BREAKS 3,000 MARK — WHAT’S NEXT? MOST EXPERTS ARE CAUTIOUS By Warren Boroson,
The best-known gauge of the stock market’s health is now at its all-time high, and in the topsy-turvy world of investing, that can mean only one thing: Sophisticated investors are worried.

The general advice among market professionals is that people lighten up, especially on any stocks that...
* * * * *

There’s a lesson in here somewhere...

[stylin_geek]

I use sharebuilder.com for my stock purchases.

My only suggestion is that you stay on the sidelines when it comes to stocks right now. Short selling really isn’t recommended for rookies.

[Oatka]

This is not a typical bear marker operating in the arena of free ideas and competition anymore.
A very perceptive point, which I believe, many have not recognized. We're in terra incognita here as we don't know how much damage this man and his backers can inflict on this country's economy. There's a distant hope that the more moderate Democrats will start to get scared and try blocking him. Until Obama is out of power, I'm not going near this market. Preservation of capital and patience are the tactics for these dangerous times, Plenty of time to make millions when this country gets back on track.

In the great depression, the DOW lost 89%. From the 14,200 peak, an 89% loss is 1560.
You're getting close. If you're into charts, check out where the major support lies. I see nothing of significance until the '65-'82 time frame, which is at the heart-stopping 1,000 level. IMO Even if it hits that horrific level, there won't be a "V" recovery; more like an "L". This country is broke and is going through a watershed in its history.

[rb22982]

Depends on when that bounce is. If it’s around current levels, we could easily see a retrace to 8200ish. If it drops to 5k, the retrace probably just gets us back to where we are now, or even less.

[rb22982]

My guess was short covering. People are afraid to hold positions over the weekend both ways and the shorts had made a ton of money already.

[wardaddy]

5000 is pretty damn low.

i thought the triple bottom from may 2000 of 7500 would hold

what do I know?

good thing I don’t own stocks..

[rb22982]

S&P & Nasdaq are in free fall too, not just the 30 Dow Components.

[wardaddy]

nothing personal but this forum is pretty much a “man the fallout shelters doom and gloom “ bunch on equities regardless of POTUS or congress period.

been here 9 years now...the talk is always “it’s over, buy gold and ammo”...which is correct eventually but meanwhile the markets go up and down

there are a few that talk straight but it’s mostly a circle piss here on stocks

lol....it’s a tradition

ok...I win....I say the DOW goes to 1

[Publius]

You're right on the money. I see the DJIA and gold crossing at 3000 some time this year. Gold will hit 3500, then correct deeply before its next upward wave. The Dow will hit 1800, then rally strongly to 4200, at which time its next downward wave begins.

The absolute bottom for the Dow will come on June 13, 2001, when it will hit 400 (plus-or-minus 20 points).

[Publius]

Make that 2011, not 2001.

[catfish1957]

400??..No way. 3000? Quite possible. There is enough liquidity in tangible assets to prevent that. You are predicting a 97.1% market loss.

I actually predict a 2010 huge Republican rebound. That perceived financial restraint (if they do) will slowly rebuild confidence in our economy. As far another 14,000 Dow....Very few of us will see it in our lifetimes.

[jacquej]

Thank You, hinckley, will pass it along to my DH, who just keeps his nose to the grindstone, and never invests.

Knowing the terms is a big help.

[Huck]

So the pattern would be that GOP contol leads to unsustainable bubbles?