STOCK MARKET: Let's talk stocks and investing

I didn't touch my 401k, I sold half my position in my IRA's, and I still own a bit of JNJ in my "trading" account (why, I don't know). I wanted some money to put back in when the market begins a climb back up, slowly as it may be.

Nobody knows where the bottom is - it's all a wild guess. The markets haven't been moving based upon anything fundamental or technical, so what are your predictions being made upon other than "a hunch"? Most "pundits" have said it will bottom as the DOW hits between 8000-8800 with a few saying it'll go to as low as 7000.

You want to see a guy whose words were documented in media about the impending financial/derivatives collapse? Read what Warren Buffett said about 5 years ago and how specific they are to the situation 5 years later. Talk about an "I told you so"... :

http://news.bbc.co.uk/2/hi/business/2817995.stm

 

I hear you, but I'm just talking about large mutual funds with a long history of growth that are typically in retirement plans, not individual stocks. I don't see any of them crashing to the ground any time soon. At least I hope not.

 

It will go a lot lower than the optimists think, but not nearly as low as the pessimists think.

 

After I wrote this, I remembered its was munis not treasuries, but she still has most of her net worth in bonds.

I found this on the net here:

Orman estimated her liquid net worth at about $25 million, with an additional $7 million worth of houses. With just $1 million of that in stocks, it means that just 4% of her liquid net worth is in the stock market.

What does Orman do with the rest of her money? Solomon asked, and was told: "Save it and build it in municipal bonds. I buy zero-coupon municipal bonds, and all the bonds I buy are triple-A-rated and insured so that even if the city goes under, I get my money. I take a little lower interest rate to make sure my bonds are 100% safe and sound. "

As for playing the stock market, Orman said "I have a million dollars in the stock market, because if I lose a million dollars, I don't personally care."

Given her net worth and her income and royalty stream, she does not need anymore net worth. A nice problem to have.

 

I think JPM is a good long term play. It will remain very volatile as the rest of this crisis sorts itself out, but it's clear at this point that they were one of the few to have the foresight to see this crisis coming and the strength to navigate it. Their moves over the past year have also shown that they have unsurpassed business acumen, especially with the way they handled the acquisitions of BSC and WaMu. I wouldn't be surprised to see that stock trading in the $150 range in the next few years, and JPM standing head and shoulders above everyone else when all is said and done (yes, I'm looking at you, BAC).

WMT is probably due for a little correction, but they're not going anywhere soon. Another stock to consider for the long term. At this point you have to start thinking world domination and who's going to be a big factor in that space.

 

JPM is definitely one I'm looking at. Even some of the commodities and infrastructure stocks that have been obliterated may be worth a shot if you've got more than a few-month time horizon. Retail stocks are the ones I'm worried about - the Targets, Walmarts, and Costcos could probably do better than the rest in a recessionary environment.

All this is moot now as I still see manic trading today. Can't wait until around 2-2:45pm to see what happens. Or even tomorrow - if you somehow made money, do you hang onto your position over the weekend? That's how people are thinking now. Ugh.

 

Weekend? Psh, please. Now that fundamentals are basically out the window and pretty much EVERY stock is trading below it's 200 day MA, I'm too wary to even hold a position overnight. I wish I had the capital to day trade.

 

As a value investor, you can't do anything but enjoy moments like these. Everything is on SALE. You raise some cash by selling of some of your positions that have done better or are now overvalued and you solidify your stronger positions that have devalued. The key however, is being confident in your decisions and doing your due diligence to know what a company is about, what they sell, and who runs it to assign an ideal value to their earnings. It takes a bit of know-how and experience to get good at it, but once you can assign a value to a company, it is much easier to make investment decisions as most of the time, the markets correct themselves and every bit of information is priced into the stock.

If you're a short term investor or a day trader, good luck. I never believed in that kind of trading and never will but if you're willing to risk more for quicker profits, then more power to you. Somebody once told me that when you're in a recession, if you can smoke it or eat it, buy it. There are plenty of people out there who might not be able to afford that Lexus they wanted to buy this year, but they sure as hell aren't going to kick their pack a day habit.

 

I have decided to liquidate today, and will wait until the market stabilizes to get back in.

I am primarily in two big First Eagle funds, and will leave a little in because the funds are closed unless you are already in them.....

I believe what is happening is more panic induced, but being that I live on the principal and interest that my money generates while I am raising capital for my new venture, I can not sit by and let the money just go down the drain because of others panic.

So, until the credit market loosens up, I am out...for a time.

Basically, I am saying even if it goes up a bit, I think the financial crisis will get worse, and that there will not be a real turnaround for at least a few months.....

I could throttle my Broker, I wanted out at 10,500...and he talked me into staying.....lost a lot since that time...dang it....I should have trusted my instincts.

My prediction is the bottom is somewhere around 8,000....

DD

 

You've only lost a lot since 10,500 because you liquidated today. Otherwise, it's not a loss.

 

True, but it's probably one of the safest nowadays...that and gold...

 

The market is being manipulated, and I feel sorry for those who lost their retirement.

I blame the fuzzy wording of the 14th Ammendment granting human rights to corporations.

 

Also, the biggest problem with getting out early is trying to figure out when to get back in. Luckily, I got out about 2 weeks ago except for my 401k which is getting whacked, but I'm not worried about that as much. Now my biggest problem is knowing when to start nibbling my way back in.

 

You do understand that you turned unrealized losses into realized losses right?

 

Here we go... Dow broke through 9000 with relative ease.

Next stop: 8800... the bottom is nearer than when we first believed.

 

Don't be so hard on dadakota. Not only is he straight ballin' with his kajillions of dollars, he has a lucrative side gig as a chris farley impersonator.

 

Looks like 8800 can be reached in a couple of mins....it's already sub 8900

 

Starting to look like tomorrow is apocalypse day.

GM was just put on "watch negative" by S&P.

 

GM = General Meltdown