JasonC SBB

That's what they said in 2000. And 1929.
If you ride this sucker all the way down, a loss is still a loss.
If you sell between the top and the bottom, and buy back in after the bottom, you'll come out way ahead.

There are lots of reasons why this is gonna be a bad recession.
Manufacturing is down 30% already and still in freefall, for instance.

Arkmage

iTrader: (3)

some of you folks are spot on... some of you are just plain aggravating to read.

the fact of the matter is that by pulling out you are going to make matter worse for everyone else. take one for the mother ****'n team. support your damn country. a temporary loss in the market is a lot more patriotic than taxes!

944obscene

Oh no! The market is going down! I better remove my money since I've lost a percentage so far! Nevermind the fact that it will go back up later!

Lesson learned by my girlfriend's brother. She told him to invest in a couple businesses. He did so, under the false pretense that he would make bank. She kept her money in while he withdrew after 6 mos. He got half of what he invested, due to falling stock values. A couple months later, the stock went straight up and my girlfriend got lots of money, while her brother enjoyed the sweet taste of failure. That stock money is what helped her buy her second Porsche 928. It only cost a few thousand, but that was pure profit that she put to use. No money that she had initially invested had been touched. That's smart.

I do not agree with anyone that yells wolf and tells you to sell when everything is low. HOW DOES THAT MAKE SENSE? The ONLY people that make money on those selling low are the people that buy low. You're retarded if you think someone isn't banking off our current situation. Think about it. You hear the market is going back up, so you buy. Or maybe you invest when stocks are high. How does that make you money?

You make money through buying stocks that are low or are bottoming out. You make money off of stocks that are peaking or really high. Anyone that tells you to sell as the market is going down only does so for those that want to buy things up while they're low.

Steve Jobs didn't make any money off of Apple did he? He invested when they were all but gone. Then one day, while Apple is thriving, he takes a look at his portfolio, beats off to the numbers and smiles. Why? Because he made EASY ******* money.

I say, buy Ford. Buy GM. Buy the stocks that are near crashing. Don't be stupid. I mean. You're already gambling on your money anyhow, but don't go and buy the "Next Enron". Who's going to let Ford go under? I ask you. Police and Govt. use American made vehicles for daily operation. Someone will kick Ford and GM in the *** and their stock will jump back up. But only when the opportunity is right.

So you go sell your stock. Go empty your pockets. I'm gonna start scoping my future investments, because the first thing I'm doing after I pick up a new car (or maybe before, who knows) is dumping money in the market.

naarleven

iTrader: (2)

Sound logic 944.

Joe Perez

iTrader: (8)

I'm not sure you're fully appreciating the scope of the argument being put forth by the doom-sayers.

What you've stated (buy low, sell high) is something we all accept as a axiom. A corollary to that might be "Sell low, buy lower."

Those who are shouting "Get out, now" are firmly of the belief that the market is going to continue to decline radically in the days and weeks to come.

Let's work this through. Say that you own 1000 shares of HYPE, a stock which tracks the DJIA (on a percentage basis) exactly. You bought on October 9, 2007, when the price was $14.16 per share, an investment of $14,160.

As of COB Friday Oct 10, 2008, HYPE was trading at $8.45, and the NAV of your shares is $8,450.

Now, there are two ways of looking at this:

1: Alice believes that HYPE is not going to significantly decline much further, so she decides to remain long.

2: Bob believes that HYPE will diminish appreciably before it recovers, so he decides to jump ship. We'll assume that Bob's shares trade at exactly $8.45, ignoring the spread.

Now, I'm going to get out my trusty 57-sided die, and we'll roll to determine what happens.

(sound of rolling die.)

Well, how do you like that. At Tuesday's opening bell, the market rallies briefly before turning into another nosedive. Within two weeks, HYPE has fallen to its ultimate low of $2.80. Eventually the market begins to stabilize, and by late November is clawing its way out of the mire. Within three years, HYPE returns to $14.16.

So, now that it's October 2011 and we're all living under a sky with two suns, let's review our portfolios.

Alice, who rode the bear all the way, has broken even. Her investment is worth $14,160, exactly what she paid four years ago. How nice for her.

Bob didn't quite call the bottom, but after a great deal of hemming and hawing he did buy back into the HYPE in Jan '09, at $4.65. His $8,450 from the original sale netted him 1,817 shares. Come Oct 2011, his investment is now valued at $25,728. Not bad for a loser who sold on the downside.


So, the question really is this: What's gonna happen? I'll gladly pay $25,000 in cash to the person who tells me, with absolute accuracy, what the markets are going to do over the next twelve months.

944obscene

Good point. I'm no expert on the subject. Lets get that out of the way. I'm in no way assuming a point of Authority on any of this. I'm simply arguing the point because I do not agree. However, since I have no money invested at the moment, my views may be different than if I had.

I think it takes more than a little skim over the market to determine the right plan of action. Watch what your stock is doing. Be sure you know what's best for you. Selling might be the best option, BUT AT THE SAME TIME, I do not agree that one size fits all. In this case, telling people to get out now seems off. I would be inclined to ride it out if my stocks weren't dipping much, but showing no real improvement at the moment. However. If I were losing consistently and I thought I could sell and come back later, like Bob, then I'm right with ya. Lets sell and get out.

My point was, that I don't see a point to abandon ship unless we know for sure that everything is going to go bottoms up and leave us dry and broke. Wasn't that what the title of this thread insinuated? Sell while you have a chance? That's the message I got when I saw the thread.

I still think that some of this recession is manufactured. I can't see how someone isn't making money on our situation right now. Maybe I've seen too much "Zeitgeist". I had my opinion before reading into some of this conspiracy talk, but after peering into the monetary system, I'm sure someone is banking on a mass evacuation from the market, and they are the one's that will come back and own it.

P.S. You sure like ducks, huh?

patsmx5

iTrader: (16)

I think everyone can agree with this.

Joe Perez

iTrader: (8)

Well, I'd say that to a point, every recession is "manufactured", in that they are the result of groupthink and mindless panic. For the most part, the market as a whole has been riding on hot air and promises for quite a while, however that seemed to be working pretty well. And in all truth, there is no reason whatsoever why the failure of a couple of large banks needed to have this significant of an effect on every other sector of the economy. (just because mortgage lending dries up doesn't mean that manufacturing automatically takes a hit.) Unemployment still isn't all that horrible, the GDP is doing pretty well, and with the exception of domestic automakers (and mortgage lenders) I don't see any particular industries really struggling.

But of course, a few people panicked and decided to unload. Other people saw this, panicked, and unloaded as well. Then the media started in with breaking news about the collapse of western civilization and it was all downhill from there. At that point, it became a catch-22: people hurriedly closing out their positions is what's driving down stocks, however the fact that stocks are being driven down means that closing out your positions is a wise move. And so it goes, and so it goes.

There was a great little dialogue in the movie "Sneakers" back in 1992, between the characters played by Robert Redford (a reformed hacker) and Ben Kingsley (his old partner turned meglomaniacal billionaire- think Richard Branson):But all kidding aside, the people making the money are:
1- Those who saw the writing on the wall and lept into the "lifeboat" investments (ie: gold) first (I do not fall into this category) and

2- People like Bob, who recognize a fire-sale when they see one.


At the moment, I'm down just shy of $100k, and I think I've decided to join Bob. I'm liquidating those positions I have which are still in a net gain situation overall (just under half of what I have) and we'll see if we can call the bottom and buy back in at that point.

It's a very long story. I with I could make the avatar a clickable link to send people to where they can read the whole story, but alas, even the great powers of the moderator have their limits.

JasonC SBB

Joe, did you see the bit I posted demonstrating Gary North's accuracy in calling the housing, stock market, and gold peaks?
https://www.miataturbo.net/forum/sho...2&postcount=32

He says the bottom is at least a year away.
And in 1 or 2 years could be a good time to buy real estate.

A third of the US economy is manufacturing, and its index, PMI, is in free fall:
It's 43.5. Anything below 50 is contraction:
http://www.ism.ws/ISMReport/MfgROB.cfm

JasonC SBB

You and I are leaves in the breeze here. It's the big boys (hedge funds, investment banks, institutional investors), that are the movers and shakers.

brgracer

iTrader: (14)

Jason,

Anyone, who cries wolf enough may be correct a few times. Before resting on the laurels of Gary North's correct calls, how about presenting a balanced view because he has certainly been DEAD wrong in the past as well. He has a loooong history of being a doomsdayer and hey, anyone who predicts consistent market declines will be right a few times.

1) In the 80s, Gary North told people to stockpile gold because he predicted a likely nuclear war with the then Soviet Union. He warned his followers to buy "gold, silver, a safe place outside the major cities."

2) He predicted that AIDS would overwhelm the world's hospitals. "In 1992, we will run out of available hospital beds.... The world will eventually panic," he wrote in 1987.

3) He was one of the loudest doomsayers that the Y2K bug was going to bring global chaos. "A bank run like no other will bankrupt banks all over the world in 1999," he stated in mid-1999.


Also, stock market crashes of 1929 and 2000 had much different fundamentals than now. The details of which are too complicated to write in one post, and am not saying that I understand everything about economics. One quick fact, in 1929 $4 out of every $10 lent by banks were used to buy stocks. So when stocks went to zero, people had 100% losses of borrowed money. While currently real estate may be overvalued and the forclosure rate may increase, leading to the devaluation of mortgage backed securities and the associated derivatives, those underlying properties will always have some residual value vs. a stock which can go to zero.


Furthermore, while your idea of selling low and buying lower has theoretical merit, I think history/academics/people have proven that timing the market is pretty much impossible, and often people are more often lucky versus good. If anything, it has been shown in market declines, people error on the side of being too late and missing the rebound versus too early in getting back into the market. It's actually better to be early to the party so to speak than late. Warren Buffet, who I admire a hell of a lot more than Gary North, has recently put a lot of his chips back on the table which is yet another vote of confidence.


Is the market coming roaring back? Very unlikely. Will we see a protracted recession? Probably. Is the sky falling and we should sell all our stock and stockpile cash? I'd say no.


Finally, in every market decline, while plenty of people lose their shirts, the few brave enough to buy when everyone is selling often make a killing. Case in point, Benjamin Graham, author of classic book The Disciplined Investor, made a fortune following the 1929 crash because he was buying when everyone was selling.

JasonC SBB

"Wolf"? Do you think that's all he said?
Did you miss the part that he said get out of the stock market Sep 17? It was at just the right time.
Did you miss the part where he said sell gold just before it dropped from $1,000 to $850?
How about the part where he said real estate was peaking right in late 2005 while everyone was still buying up homes?

brgracer,

I don't give a rat's *** about his NON FINANCIAL predictions before 2000. He's been very accurate with FINANCIAL predictions since I started reading his articles. Perhaps he's learned something since 2000.

He's the only one I've seen who has been accurate, and gives advice that isn't just the same thing over and over again (e.g. "buy gold", "buy EuroPac funds").


That's dumb. If you think we're facing a recession, sell your stock. Use the cash to buy assets near the bottom. Why hold on to a depreciating asset? See Joe's post above.

I will take advice from someone who has
a) a good track record
b) knows and says the Federal Reserve system is a scam

Can you show me an analyst who's been right more than North?
Or should I listen to you instead, who just says "stay in the market even though we're facing a recession"?

JasonC SBB

Some more on the massive corruption that led to this crisis:

http://www.financialsense.com/Experts/2008/Burrell.html
http://www.deepcapture.com/
http://thesanitycheck.com

brgracer

iTrader: (14)

I am not going to get into a protracted arguement, but TWO of the above WRONG predictions had FINANCIAL advice. And to take someones record only for certain dates is just plain poor judgement. Wow, this guy was right since X date so even though he's been wrong in the past, suddenly he knows what he's doing. Gee, anyone can follow the advice of the guy who's been right recently. It's like following the advice of the guy who told you to buy before the internet boom. In 1999, he sure looked pretty damn smart. I gave you the example of Warren Buffett, who is not an analyst, but has a much better track record over the past 20+ YEARS, not just the past few.

On a side note, I am not only keeping my money in the market, but I'm putting more in, not because I think I can predict a bottom, but I don't think we are going to have a drop like 1929. Again, if you look at 9 of the past 10 recessions, the stock market rebounds long before the economy does.

Not trying to tell you what to do with your money. It's yours so do with as you see fit, and I'll do likewise, BUT this is not a financial forum so please keep your alarmist "advice" to yourself. It's one thing to reply to people asking for advice, it's another thing to push your advice into the face of people who might not want it.

944obscene

On the flip side of my views, I'm not about to invest in the market at the moment. I have no money in and I'm not throwing any in just yet. I too will be waiting to call bottom and see what happens. I'm going to talk with my girlfriend and speculate for a while before making a decision. Hopefully I can plan right and make some good returns. However I expect to loose initially, because I won't be able to predict lowest possible price, unless I'm really hella lucky.

JasonC SBB

That advice hinged on AIDS and NUCLEAR WAR. His advice the past several years that I've posted are based on FINANCIAL indicators.

So do you own Berkshire Hathaway stock?

Besides, Buffett doesn't give advice for the common man. He's a mover and shaker himself, in that his moves can change the direction of the assets he buys. If you can't buy the same stock the same time as him, you don't make the same money. His purchase of Goldman Sachs shares was a special sweetheart deal not available to small fry like you and me.

I don't disagree. Neither does Gary North. But this is NOT the bottom. It has only been dropping for a few weeks.

I know that. And the banks that created a lot of those MARGIN LOANS, the SAME owners as the Federal Reserve, CALLED IN their loans at the same time, forcing margin account borrowers to sell their shares all at once, precipitating the crash. That was MASSIVE CORRUPTION then.

You didn't read the links in my post #53, which is a possible NEW factor why this market may crash as badly as 1929. MASSIVE corruption in DERIVATIVES. BTW that stuff isn't by Gary North, it's another guy, Bud Burrell.

BenR

iTrader: (2)

I was actually planning on buying ford last friday when it closed at 1.99. I didn't get around to it, I'll wait a few days to see if it drops back down, It's a great buy right now, and very undervalued.

JasonC SBB

Is their market cap now below the value of their assets?

BenR

iTrader: (2)

http://finance.yahoo.com/q/ks?s=F


Correction, it may not be a great buy (but not bad) at 2.50 but at 1.99 it definately is.

johndoe

iTrader: (5)

can anyone recommend a book to read that explains market terms and wise investment practices because most of what you're saying is greek to me.