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AllezAllez510
Trad climber
Santa Cruz, CA
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Topic Author's Original Post - Mar 2, 2009 - 02:30pm PT
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Just read that the Dow went below 7000...with the S&P 500 plummeting further as well. I was nervous about this thing before...now I'm downright scared.
Is anyone else feeling like this...or should I shut up and look at this as an opportunity to climb more?
This is my "first" recession, so it's bit weird for me. Since I started working in '96 there has been nothing but economic growth; keep in mind people my age have never seen a REAL recession.
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BooYah
Social climber
Ruby Range
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Scared, huh?
Fool....fear is it's own punishment.
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Ricky D
Trad climber
Sierra Westside
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Self fulfilling or not - but some of the pundits are talking the Dow at 5000 by summer!!!
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Porkchop_express
Trad climber
thats what she said...
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I dont know how helpful it is but my mindset has always been to plan for the worst and hope for the best. Keep my cost of living low and be ready for the bottom to fall out. Eventually the effects will reach down the economic ladder to those like me, but the lower you are the less distance you have to fall. Ultimately, if the situation is beyond your control then you should focus on being happy and not fret about the markets. Be fluid and ready to adapt.
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AllezAllez510
Trad climber
Santa Cruz, CA
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Topic Author's Reply - Mar 2, 2009 - 02:47pm PT
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Having just gotten my lay off notice it feels pretty real to me. I do agree on the media frenzy...
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Norton
Social climber
the Wastelands
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I was a stock and commodity futures broker in the 70's, and hence have lived through literally hundreds if not thousands of both bull and bear markets. The stock market is, obviously, in a huge protracted bear market. I would never, ever, consider buying in a bear market. I have had the best two years of my 37 year trading history the past two years, by selling short stocks.
Billions of dollars are being made on the short side of the stock market by professionals. They recognise that just like in a bull market you don't try to play Jesus and pick the top, so as in a bear market you don't try to pick a bottom, you just stay short until your trailing stop is hit.
The public is always the bag holder, always taking more time to educate themselves about a furnace energy rating than what can and is happening to their entire stock "portfolio".
The public is always "long" stocks, or buy and hold forever.
The pros realise stocks trade and trend both up, down, and sideways, and adjust their positions constantly, long or selling short, to take advantage of that.
CW, or Conventional Wisdom, has succesfully programmed the public to always be bullish, to never really accept the fact that bear markets do indeed happen, and are devastating. People are told by the pundants to just "hang in there", maybe buy some more because prices are cheaper today than yesterday, never ever educate yourself on the concept of "market timing" because, "it can't be done". BS, many many professional traders make enormous profits by timing the markets. No, you can't do it, you are not a full time market trading professional. Accept this fact.
Bottom line, stay away from what you do not really, honestly,understand. Yes, you may get lucky from time to time, but that kind of buy, hope,and pray it goes your way, is a prescription for ruin.
Not meaning to anger anyone here, just my experiece talking.
Tip, if you cannot right now say you understand the concept of selling short, and intend to use that concept as easily as just buying, than you have no business speculating with your hard earned money in any market. And make no mistake about it, you are not investing, you are speculating, when you have no clue, education, or history, of studying constantly, the effects of both bull, and bear markets, have on your account balance with your broker.
The dow lost 89% of its value in the 1930's, a move that significant would put this dow under 2000. Like a deer in the headlights of a hunter, the public is programmed to do nothing, never get out, never place protective stops, always be bullishly hopeful, always take tips. And this time is no different from the sequence of events and human psychology of any other bear market in history.
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Norton
Social climber
the Wastelands
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I am not gloomy Fattrad, my post had no "fundamental" posturing in it. New lows continue as I type, I trade momentum, not opinion. Opinions are a dime a dozen, they are worthless.
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Norton
Social climber
the Wastelands
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No, t, not wallow in them, but profit by being short.
Only fools wallow in misery.
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couchmaster
climber
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I am promising to minimize my traditional knee jerk reactions. This came about when last night, as my wife and I were driving along, the car radio announces that AIG was in trouble, despite the earlier purported US Government interventions.
"F*ck em", I (knee-jerked) said: "let em fail." Wife, looking ahead, quietly says "I have both the kids college funds invested in AIG Money Market funds".
Hah hah! Ouch:-). I flashed on the millions of other folks perhaps in similar (or worse) situations who believed that insurance companies were so financially strong and stable. Widows with their life's work and savings, perhaps, or others like us who had been scrimping and saving for their children.....We generally keep our money separate, and she handles the co-mingled stuff. Guess I should have been paying attention better.
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dougalclimber
climber
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Norton,
Well put, valuable advice. In the past few days I've looked at short interest outstanding on IYF, the exchange-traded fund for the DJ financials. ShortSqueeze.com. reports short interest amounts to 75% of the total shares. When I first saw this, I thought there must be some mistake as the ratio is much, much lower for individual bank stocks. But I've checked several times and the ratio has always been >60% short in the IYF. Got some ideas about this, but I'm interested in your take. I can personally vouch for a lot of what you're saying. I've traded my own account full-time for four years. As I rarely shorted for the first three years I didn't develop the "head" for that side of the game and have regretted it this past year.
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jstan
climber
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Couchmaster:
Recently got a notice from Fidelity that its money market funds, presently backed by the Fed's recent emergency actions will no longer have this assurance after April 30. After that day broken dollars may become more frequent.
You might want to query AIG right away and find out if the same is happening on your funds.
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Norton
Social climber
the Wastelands
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Doug, I have no opinion regarding the short interest in the dow etf. To me, it, like a million other factoids, is irrelevant.
The ONLY thing that matters is positioning youself in the direction of the dominant trend. I trade futures on the DOW, the S&P, and the Nazdaq. Others trade ETF's, etc, doesn't matter. What matters is identifying the trend and staying with it.
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couchmaster
climber
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Thanks Jstan, I wonder what kind of mega-destructive flight for safety that's going to cause with all the large institutional investors jumping and running full tilt towards safety? For Moi: I have that Yuan in an FDIC insured account. Not that inflation might not eat that up right fast, however, I have some I-bonds, real estate and gold for that eventuality.
Stuffed some guns in a safe in the house, bought a bunch of Mountain house #10 freeze dried foods, spread a bunch of the savings and investments around.... keeping the head down and praying for the best.
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Norton
Social climber
the Wastelands
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Fattrad, what is the matter with you?
Somehow you conclude that "everyone is an expert" on short selling simply because I identified my own style of trading as identifying momentum and going with it?
Who are these "everyone" on this forum you now see as experts?
Name them please. You can't name any. You distort everything.
Why would anyone care what you claimed to say in the past?
Are you looking for a pat on the back? Grow up.
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dougalclimber
climber
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Maybe Fattrad was referring to me, Norton. But in either case, your response is right on.
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pip the dog
Mountain climber
planet dogboy
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i was once in the middle of all the weird nonlinear math of this crap. (i eventually ran away, screaming – as i didn’t understand the math and found most of the slick suits unbearable).
this said, my best read is this: if you are like 30 or 40 something – and hence have at least a 10 year time frame on your 401k, dollar cost average your way back ito the market. slowly. like over the next 18 months. did I mention “slowly”? me, i'd wait a month or three before i did anything. but, all that said, if history and statistics are any guide, you’ll win, well, eventually.
OTOH, if the time frame for any given cash wad you have is less than 10 years – stuff it in your mattress and sleep on the hump.
but then, you must remember to never forget rule one: never, ever, take advice from any clown who hasn’t spent many hours just listening to what your specific time frame and investment goals are.
and definitely never listen to anyone who works on commissions off of your dollars. think of the risk/return line, and how it works. think of what warren buffet and peter lynch keep saying. yeah, like that.
sheesh...
^,,^
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dogtown
climber
Cheyenne,Wyoming
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The Dow will go below 3500 this year some say,no matter how much money they throw at it.
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klk
Trad climber
cali
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ok-- this thread was worth it for the brendapuff pic.
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TGT
Social climber
So Cal
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We've got a lot more down to go.
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