Is the market over-playing sovereign debt fears related to Greece and Italy? Won’t the EU, IMF and as last resort the BRICs pull out all the stops to ensure a crisis does not occur. I’m look at the performance in September and today wondering if this is a perfect buying opportunity as people seem to be throwing away the baby with the bath water. What would fundamentally support the DOW being below 10k?
No it is not a perfect buying opportunity. How many times are people going to come here and ask that same question? I’ll start buying index futures when Dow is at 8k, and not a penny higher.
^ then be prepared to never buy anything
iteracom Wrote: ------------------------------------------------------- > ^ then be prepared to never buy anything Same thing was said back in 08/09. Enjoy having your arse handed to you!
I’m praying we see a sharp rally soon so that I can sell some of my portfolio and get the hell out of the equity market… I’m very bearish, and I believe we have lots of downside risk over the next year or two… This week has absolutely crushed me, especially since i thought of selling some stuff last week…but figured I’d wait a bit longer…baddd idea on my part. let’s hope for some good news for tomorrow.
BuySideWannabe Wrote: ------------------------------------------------------- > I’m praying we see a sharp rally soon so that I > can sell some of my portfolio and get the hell out > of the equity market… I’m very bearish, and I > believe we have lots of downside risk over the > next year or two… > > This week has absolutely crushed me, especially > since i thought of selling some stuff last > week…but figured I’d wait a bit longer…baddd > idea on my part. > > let’s hope for some good news for tomorrow. If you think the market will be bearish over the next year to two, you should probably get out soon. I’m actually going to laugh when everyone complains about their 401k getting sliced by 50%+ again. Some people never learn.
Zesty Wrote: ------------------------------------------------------- > Is the market over-playing sovereign debt fears > related to Greece and Italy? Won’t the EU, IMF and > as last resort the BRICs pull out all the stops to > ensure a crisis does not occur. I’m look at the > performance in September and today wondering if > this is a perfect buying opportunity as people > seem to be throwing away the baby with the bath > water. What would fundamentally support the DOW > being below 10k? It still does not solve the structural issues. So yes, it may push the can further down the road. Trillions have been spent since the crisis and nothing has been fixed. I am with ManMyth on the direction of the markets, though I do not see DOW at 8000 this year. Expecting futures to tag 1071 or slightly below again and cash market tomorrow. If 1071 breaks big, then probably closer to 1000. In any case I see rally back to the end of this year or beginning of next. IMO, we do not cross the high of 2011. Nothing is written in stone. IN the end, the tape is always right. Actually have enjoyed the volatility from a trading perspective
I think this administration has failed to and continues to fail at addressing the housing/foreclosure crisis and this is a big drag on consumer confidence/spending and growth. It’s as much a failure of policy as it is a structural issue.
Wouldn’t single out this administration. This is the cumulative effect of many years of poor policy attributable to prior administrations too.
It could be a good short term buy. A lot of bad news discounted in the market. Only 9 times in history has the market had a double digit loss in a single quarter like we did in Q3. The market went up on average 8% the following quarter and 8 times out of 9 ended in positive territory for the quarter.
Yeah, the Euro problems are definitely Obamer’s fault. And the China slowdown. And termites too. Those are annoying.
More seriously, when there is a bounce, markets will likely bounce hard. But falling knives are sharp. I’d rather miss the fall than catch the bounce. If you can time the bounce, go for it. I’m not confident enough to do it. There may be points where it’s worth nibbling on the way down. I’m thinking that it might make sense to add a bit as you cross technical levels. The fundamentals are way too fuzzy to figure out fair value right now. Being off by 10 or 20 bps on your equity risk premium assessment can make a difference between fair value at 1100 and 950. Who can buy confidently with that much uncertainty in just one parameter?? And there are other parameters to fit in there too… expected earnings, long term growth, etc… So technicals are all we really have to go on right now. For me, I had really low exposure to equities in August and September, and what exposure I had was to a few EMs. I cut that in half on Friday, so now I have almost nothing. I should have sold earlier, I guess, but I didn’t have that much to begin with, so it’s not that bad. I just have a toe in so that it keeps me watching the stuff and engaged.
@bchadwick Yes, currently IMO it is mostly technicals that one can rely on. Based on that, the risk/reward ratio looks pretty good.
@bchad, Look, I like Obama. I’m a supporter but I think the mark of a true supporter is the willingness to tell the truth. I just don’t understand why all efforts haven’t been made to address this foreclosure issue? Also, this new jobs bill is a joke because Congress is not going to pass it. Obviously, a lot of this was caused by previous administrations but you think if I went to my client and said “oh I haven’t fixed your revenue adjustment issue because it was caused by the person before me and it’s really complicated.” You think I would be getting many more consulting assignments? Let’s stop making excuses for people and get things done. The housing crisis is still a big overhang and the administration is dragging it’s feet on this one. Also, we need a long term fiscal plan that will provide the markets with confidence regarding our long term fiscal prospects not a patch work approach.
We’ve already had bounces… the past 3 months has been hard sell off followed by a hard bounce, that’s not going to continue forever. One of these days, its going to keep selling off. You can’t just keep expecting bounces all the time.
Zesty. If Congress won’t pass a couple of billion for jobs, why would they ever pass something that either 1) forces tens or hundreds of billion in losses for banks and bank bondholders, or 2) forces hundreds of thousands or perhaps millions of people out of homes and onto the streets? If you choose #2 (which wouldn’t be an Obama-esque choice), you’re still going to have the deleveraging problem, because these guys won’t have access to credit even if they still have jobs, so they won’t be spending in either scenario. Yes, we need to figure out the debt problem, but the problem is that the rich Right can whine longer than the Left can afford to be unemployed, and they know it. So their strategy is to obstruct as much as possible, except for those moments when the Left says “ok, we’ll give you that bit you wanted.”
BuySideWannabe Wrote: ------------------------------------------------------- > I’m praying we see a sharp rally soon so that I > can sell some of my portfolio and get the hell out > of the equity market… I’m very bearish, and I > believe we have lots of downside risk over the > next year or two… > > This week has absolutely crushed me, especially > since i thought of selling some stuff last > week…but figured I’d wait a bit longer…baddd > idea on my part. > > let’s hope for some good news for tomorrow. this post is stepped in cognitive biases, I haven’t got to level three yet have you?
yes, I’m in level 3 now… I haven’t started, but I am fully aware of Behavioral Finance issues from my masters program… It’s tough to accept losses…I have a ‘long term’ view, so I can’t get it out of my mind that ‘it will go up once the economy eventually picks up, especially with my highly cyclical stocks’… i’m still relatively new to the market (got in early 2009) so I am learning from my mistakes and hopefully someday can become better - i.e., not let emotions drive my portfolio…
The market has a nasty way of fulfilling its own prophecies. What do businesses and wealthy people do when they see the stock market falling? They shrink up into their shells and stop spending. Assets are then worth less, perpetuating the downward cycle. It is tough to protect wealth in this environment. No one wants anything except for dollars and long-dated treasuries. The “good” news is that much of the liquidating cash is hot money and the shake out will be better for the market long term. Some people are literally terrified though and they do not even know why. Very nice interview on Maudlin’s site by Paul McCulley this morning. http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2011/10/03/greatest-moral-hazard-says-paul-mcculley-is-austerity-here-and-now.aspx
Honestly, I’d probably stay out of the US and buy core Europe, if you’re going into equities. Look at valuations, growth is going to suck everywhere for a little while.