If people are being influenced to <i>buy</i> because the <i>big ballers</i> are buying or have already bought, then they are a trend follower -- momentum player. In this environment, they are likely to lose money because: 1. There is very little reason to justify a longterm bullish scenario at the moment. 2. There are fewer committed (hardcore) Bulls among small investors in the market compared to 9 - 12 months ago and less monetary firepower in the market to push it higher. There are estimates of substantial sums waiting on the sidlines to get back in, but it will take a good while for some to regain confidence and buy again. For some it will take months, others years and others will probably never have the confidence to put money in the stock market again. 3. Hedge Funds, Investment Banks and similar big participants of the past have been chopped down to size because of reduced levels of leverage and fewer available funds. So, they also have had their firepower restricted. 4. There is probably increased usage of <i>Stops</i> to protect profits and minimize losses. Sometimes hitting one Stop will trigger a: * Chain Reaction * Cascade * Waterfall in that enough stock will be put on the market to push the price low enough to trigger another Stop and the process will continue for a while. 5. XOM at $80 and crude at $40 is hard to justify in an economic/financial sense. Some are able to recognize that and will get out. Others are slow to grasp it and end up paying some <i>Tuition</i> in the <i>School of Hard Knocks,/i> 6. XOM had already peaked before today, so that was a signal to me that the market was on borrowed time no matter what was announced by the government. 7. There are some things that will take time to resolve and mend. Those expecting the government to wave a <i>Magic Wand</i> and cure all ills in 6 months are/were foolish. <hr> That sounds good in theory, but seems to have difficulty in the real world. If strictly applied as the dominating criteria you suggest, there would be some major companies in bankruptcy court or out of business rather than being supported by the government. There have been speculative bubbles in various investments over the centuries that defied economic reality such as fundamentals and earnings. Crashes * Overseas investments * Tulips * Florida land * Ponzi scheme * Stock market Crash of 1929 * Dotcom -- Tech Boom of the late 1990's -- 2000 * Housing boom of recent years * Crude Oil 2008 * Stock Market for the past several decades
Entered a small UYG position at 3, was tempted to sell it at a 5% loss (which was the LOD), then watched it rip on the subsidized mortgages rumor. Helps to be lucky I guess.
Well, I pretty much stayed pat and ended up on the day, mostly thanks to being in gold, I guess. I put in a buy limit order on MSFT at $18.50 a couple of days ago. Stupid stock went down to $18.54 and took off again.
i sold out when the dow was down about 120, then i bought back in when it was down 200+ .. so not bad for today at least
yup...basically the market is trading down on the horrible euro news out over the weekend. the chart of the euro and the us markets are pretty similar.
That sucks because I think this guy is from Houston too I remember seeing that building across the street from the galleria and thinking to myself if they would fall as well. Well it looks like anybody can go down with ship now a days lol.
No news here. Anyone who buys a CD with promised returns anywhere near the double digits is a naive idiot.
Man I wish! I see more bad news on the horizon than good. My best guess is that the market bottoms in the first half of 2009 and weakly rebounds in the second half. 2010 should be a good year for equity return. All said, now is likely not a bad time to buy if you are willing to hold for 2 years. I will be looking to add to some of my positions if the market drops another 5%, though if it does not I will be kicking myself two years from now for not buying now.
I jumped back in the market with both feet today. I sold all my gold and went bargain hunting. I bought Ford, CP, and Autodesk, and I'm looking for good penny stock bets.
Dow will break 7000 to the downside. said it time and time again. John Mauldin's newsletters pretty much sum it up. www.frontlinethoughts.com
