Posted on 06/05/2009 6:13:30 AM PDT by MeneMeneTekelUpharsin
Sounds like he was investing in the short, betting the market will go down. You can short sell stocks, but you also can buy ETFs like FAZ that bet on banking downturns (it peaked at about $200 when the banks collapsed, it is about $4 now). I try to always balance my investments with both bullish and bearish funds (FAZ/FAS) and diversify with long standing, financially stable companies (VZ, WMT, MSFT). I didn't lose a lot in the crash and have made a hefty return this year. (also with a big bet on F when the refused bailout that has paid off).
I’m all cash, plan on staying that way for awhile. I agree with the above posters - the September crash was the result of market manipulation and the bubble now is more manipulation by the same folks. The September manipulation was to sway the election results, the manipulation now is to convince Americans that everything is getting better. But the only problem is that the fundamentals are all wrong for a recovery.
What is an eight word phrase for Manipulation?
Alex, I’ll take The Bleedin’ Obvious for $500.
I have no idea, but I might as well give my guess.
Computer trading, programed to buy on a dip and sell again
when there is an up spike.
High power traders, and maybe puppet masters of Obozo, aka George Soros.
One also has to note that the Obamie media is so anxious to
pump good news. I laugh most every day when I read the market news on Yahoo’s finance page, from AP.
Many 401K contributions are on autopilot
M&As are really picking up as well. When you have a crash, things get cheap and companies reorganize for efficiency.
In the immediate aftermath of the panic last September, stock prices got pushed below their natural levels by herd mentality. Now, they’re recovering to their new natural level, between the pre-panic highs and the post-panic lows.
I missed one 10% spasm in the last 7 months because I was on the sidelines. Last October? November?
A tough thing to understand is that people are talking in different time frames. some time frames are one minute some are one day some are one week some are one month, some are one year, some are ten year.
Some people are talking about what will happen next year. Some people are talking about what will happen two years from now. some people are talking about six months from now.
For example, I bought gold futures several months ago as gold was approaching its old highs and the talk of Gold doubling current levels was fevirish. Its seemed like a safe bet. But almost to the day of its high. Then gold started falling and I sold my position. It made a low a month or two later and now has started to work its way back up.
The stock market is a leading indicator — not a lagging indicator like unemployment. The stock market is currently anticipating a turn around in the fall sometime.
All the protest about government spending is due to government fiscal policy — not monetary policy.
The federal reserve pumped trillions of dollars into the economy last fall and winter to make up for the slowed velocity of money ie 10xvolume=1x velocity
That seems to have healed the ruptured underpinnings of the US and worldwide economy for the time being. The danger last fall was that the problems on the upper floors of the US & world economy would have pancaked down floor by floor like the world trade centers collapsed back in 01.
That great danger has dissipated for now.
A slow recovery is expected starting in the fall. Judging by fed chairman comments — the federal reserve is already starting to drain money out of the system so as to head off inflation.
What everyone is yelling about is NOT federal reserve monetary policy—but rather democratic party fiscal policy. Why. Because for all the money they have allocated—only about 30 billion has been spent. Most of the rest won’t kick in until after the economy has started to recover on its own.
That’s inflationary. That means the fed will have to raise interest rates higher than they would have to do otherwise—thereby throttling the economy more than it would have had to do otherwise.
So that instead of having a V shaped recovery we have a W shaped recovery. And judging by the sound of some of the other stupid stuff the dems are down you’d have to cut off the top half of W.
So as the economy recovers on its own going into next year—democratic spending will kick in—AND the fed will have to raise interest rates higher than normal—ie fiscal and monetary policy will be wildly at cross purposes. It is expected that tight federal reserve monetary policy will kill most private economic growth next and the year after — leaving only the government as a big player in the economy.
You can take or leave this, on other boards not related to politics, brand new posters came onboard saying the market would be back at 8000 and called the timing correctly. These posters have never returned. Any bad mouthing of the WHR(White House Resident) brings them out for the day and gone the next.
I laughed at the prediction of 8000, but am glad I didn’t bet against it.
Printing dollars causes higher prices ( oil, etc too )
The underlying value might be the same, but the dollar is worth less than before...higher prices.
Think of Zimbabwe.
These stop losses ameliorate the natural tendency of traders to ride losses down in the unrealistic hope that the trend will reverse in their favor before they're demolished. Recovering from a 7-8% loss is FAR easier than recovering from a 50% loss.
Unless you know from excellent research and knowledge that a trade or a trend is going to reverse in your favor within a specific time frame it is never a good idea to ride any trade further than a 7-8% loss. Take the loss at that level, reevaluate your strategy and reenter something else. Going past 7-8% also is psychologically impairing. You spend to much time worrying about the current trade/investment and it distracts you overall and skews your reasoning and risk management for future trades towards more risk to recover the large loss.
Two books I'd recommend on the subject of investing are
Financial Freedom Through Electronic Day Trading by Van Tharp and Brian June.
and
How Investors Can Make Money Using Mass Psychology: A Guide to Your Relationship With Money by James Dines.
Don't read them as "how to manuals" (particularly the former) to make money as much as for to learn your reasoning and motivations for how you approach investments. They are REALLY good IMO...
Pre-adjustment for inflation.
Plus, there aren’t any people left who are stupid enough to saty in bonds.
People want and need to make money no matter what ...there was/is a ton of money on the sideline..it is now going back into the market as fear recedes....the market goes up and down
It’s called a Bear Rally. They happen historically between major market collapses and real and true economic collapse.
This is a carbon copy or 1934. And in addition to that, there are things that have been done this time that have never been done before.
This one is prone to set all records and rewrite history. Never before, has a President and Congress spent more than the total of all 44 previous administrations at one time (less than 6 months), or done so many damaging things that have completely removed the foundation holding up what was once the greatest capitalist system every known to the Planet Earth.
Fact: Consumer spending is fully 2/3 of the entire economy.
Fact: Consumer savings rate WAS effectively ZERO as the government measured it, before this downturn.
Fact: Consumer saving is currently 5% a truly HUGE INCREASE.
Fact: As long as consumers continue to aggressively save instead of spend we will stay mired in this downturn
Fact: There is no logical reason for the markets to be rising now and one can only assume this is a bear trap and a lot of suckers are gonna get snagged.
Quant trading by major investment banks and hedge funds accounts for the bulk of market volume. Those that make up the most volume also steer the price.
Those with the volume can cover knowing that those without the volume will need to pay a higher price. Conversely those with the volume can short forcing those without to sell at a loss.
There simply isn’t enough money among those without volume to go up against those with money.
Also if you shorted you had to have a margin account. Your hypothecation agreement allows your brokerage to sell your position data aggregated with others. This allows market powers that purchase the data to force liquidation of yours and others accounts. When you and others buy into a portfolio, the market powers will short and force a margin call. When you and others short, the market powers will cover or buy and again to force a margin call.
Those with stakes in powerful hedge funds can sometimes be on the side of the market powers. For example, when a wealthy billionaire and an investment manager such as Goldman Sachs strike a deal for capital preservation and appreciation. Those without such deals such as American worker retirement accounts will not be protected.
If you are going to trade, your best best is to stick to exchange traded funds (ETFs). These are more difficult for market powers to take over.
As for the present market going up it is the result of a phony recovery in the banking sector driven by rigged earnings.
Fifty years ago, the greatest financial guru of his day (Bernard Baruch) was asked by a reporter where he saw the stock market going. Baruch’s reply was that “It will go up and it will go down”.
It’s one institution that conspirators can only tinker with at the margins. There are too many players with to many agendas and too many points of view. That is the brilliant “invisible hand” of the market, as Adam Smith might say.
IMHO, the market is recovering from it’s earlier panic. What happens next will relate to Obama tax and healthcare policies. If they do not get enacted, the market will continue to slowly inch up. If Obama socialism continues, the markets will drop at a fairly significant rate, until the electorate replaces the current Democratic Congress. Obama will never be held accountable.
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