carseller

This Is The Bottom For Stocks

393 posts in this topic

Or so I think. Maybe not the final one, but stocks are very cheap, and pessimism is widespread. This is probably a good times to buy the dow jones, or nikkei.

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Myself going for 10,000 as the limit, so selling with a stop around 10,500 hoping it carries on falling. With volatility highest in decades it's the only way I feel safe over days.

Being short I should get paid for carrying it over.

16/10/08 23:49 Order Wall Street Cash - Web xxxx -0.4 8985 10500 G - Guaranteed Position opened: xxxx

Edited by Nicholas Cage

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Or so I think. Maybe not the final one, but stocks are very cheap, and pessimism is widespread. This is probably a good times to buy the dow jones, or nikkei.

My view also.

Volatility, accumulation, technical indicators, VIX/VXO, re-tested last weeks lows yesterday and held. US elections, oil halved. Near-term bottom at least. DOW could go to 11,000 from here fairly soon I think, maybe even 12,000 and SPX 1200-1250. I wouldn't rule out more plunge days to around 8,000 though and continuing volatility, so excessive leverage will be punished.

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Myself going for 10,000 as the limit, so selling with a stop around 10,500 hoping it carries on falling. With volatility highest in decades it's the only way I feel safe over days.

Being short I should get paid for carrying it over.

16/10/08 23:49 Order Wall Street Cash - Web xxxx -0.4 8985 10500 G - Guaranteed Position opened: xxxx

Mr Cage

I am intrigued with this spread betting (IMHO this appears to be what you are talking about!) malarkey. The Dow closed at 8979.26 last night and futures are currently showing 8760 ish for todays opening, so down. Your betting the Dow will rise over the short term to 10000, so I take it you have bought at 8985?

"so selling with a stop around 10,500 hoping it carries on falling", also I dont quite get this, do you mean you have capped your profit to 10500 in the hope that if it hits this it will then plummet?

Also, not wanting to be too nosey but what do you usually bet per point?

I stand to be educated, hopefully!

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Or so I think. Maybe not the final one, but stocks are very cheap, and pessimism is widespread. This is probably a good times to buy the dow jones, or nikkei.

But are stocks that cheap? Undoubtedly there are a few sucked down unfairly, but what is going to happen to earnings as we go into recession depression? I don't think, on a whole, stocks are very cheap at all. I would be thinking long and hard about earnings reality in individual names before being sucked into the "stocks are cheap" meme.

And now that the leverage rug has been yank out and the first lot of boomers start retiring soon, the overall market could just struggle... really struggle.

Just a thought.

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Mr Cage

I am intrigued with this spread betting (IMHO this appears to be what you are talking about!) malarkey. The Dow closed at 8979.26 last night and futures are currently showing 8760 ish for todays opening, so down. Your betting the Dow will rise over the short term to 10000, so I take it you have bought at 8985?

"so selling with a stop around 10,500 hoping it carries on falling", also I dont quite get this, do you mean you have capped your profit to 10500 in the hope that if it hits this it will then plummet?

Also, not wanting to be too nosey but what do you usually bet per point?

I stand to be educated, hopefully!

Until Nick comes back I read his post the opposite of what you are saying. i.e. he thinks 10,000 is the likely upper bounce, hence is shorting with a stop at 10,500 in case he's wrong. He's capping his losses at 10,500. Stand to be corrected.

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Until Nick comes back I read his post the opposite of what you are saying. i.e. he thinks 10,000 is the likely upper bounce, hence is shorting with a stop at 10,500 in case he's wrong. He's capping his losses at 10,500. Stand to be corrected.

This one.

Anyway I only had 180 point limit so am out of the bet now.

DEAL Closing trades 17/10/08 Wall Street Cash - 8985 $ -0.40 8805 $720.00

Edit: pasted correct deal.

I'm happiest losing 100 then making 100 instead of actually getting a profit, still lost money since I started but it's getting smaller.

I don't think anyone starting out like me can make money because the capital required to cover the volatility is too much of a risk.

Much better to do it for fun and hope to break even.

Edited by Nicholas Cage

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Some stocks I bought earlier this year, fishing for a bottom is down more than 90 %, and nothing fundamentally have changed. I think this is the bottom. In these stocks I am going to double up, so I get twice as many shares as I already had.

Lower short term rates (not central bank, but market rate), and higher long term yields, double bottom in 10 year treasuries, double bottom in the dow.

This is the bottom, nothing to discuss.

Edited by carseller

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Some stocks I bought earlier this year, fishing for a bottom is down more than 90 %, and nothing fundamentally have changed. I think this is the bottom. In these stocks I am going to double up, so I get twice as many shares as I already had.

Lower short term rates (not central bank, but market rate), and higher long term yields, double bottom in 10 year treasuries, double bottom in the dow.

This is the bottom, nothing to discuss.

It very well could be the bottom.

But then again it might not. How do you know fundamentals have not changed? If so, why are they 90% down? What are other stocks in severely hit sectors NOT down 90%? eg HSBC in the banking sector? Fundamental analysis in this sort of environment requires some forensic accounting skills as the published figures are lagging and may be changing rapidly.

Cheers and good luck

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Some stocks I bought earlier this year, fishing for a bottom is down more than 90 %, and nothing fundamentally have changed. I think this is the bottom. In these stocks I am going to double up, so I get twice as many shares as I already had.

Lower short term rates (not central bank, but market rate), and higher long term yields, double bottom in 10 year treasuries, double bottom in the dow.

This is the bottom, nothing to discuss.

I'm one third in the last two days, the remaining two tranches will go in this coming week. The missus has given her blessing, and we have waited patiently for many years this opening so we're not letting this slip through our fingers.

Eyes wide open, it's a gamble but not everyone has cash to get stuck in at the moment. Even if earnings come down 25% I feel confident that the right divvies will far exceed cash in the bank, particularly as we are moving into a low interest rate environment.

The world does not owe me a living, I am fully informed, caveat emptor, and I can wait, wait and wait to sell.

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I'm one third in the last two days, the remaining two tranches will go in this coming week. The missus has given her blessing, and we have waited patiently for many years this opening so we're not letting this slip through our fingers.

Eyes wide open, it's a gamble but not everyone has cash to get stuck in at the moment. Even if earnings come down 25% I feel confident that the right divvies will far exceed cash in the bank, particularly as we are moving into a low interest rate environment.

The world does not owe me a living, I am fully informed, caveat emptor, and I can wait, wait and wait to sell.

For the record, I'm buying a little bit for the bottom drawer as well. All I'm advocating is viewing the published fundamentals with suspicion, particularly those whose share price has really taken it up the backside.

fwiw

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For the record, I'm buying a little bit for the bottom drawer as well. All I'm advocating is viewing the published fundamentals with suspicion, particularly those whose share price has really taken it up the backside.

fwiw

Aye, do your own research and don't fight your cynicisms!

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Or so I think. Maybe not the final one, but stocks are very cheap, and pessimism is widespread. This is probably a good times to buy the dow jones, or nikkei.

heh I thought RBS looked cheap at 180 so I better not call the bottom this time. Personally don't think it is yet anyway, I think we saw the big crash last week but reckon it will slide for another 6-12 months from here. Some sectors have still got a long way to go yet, retail, travel, . And some bombed out stuff will start giving out too (inexplicably, dogs like Barratt and Taylor Wipeout still exist?!)

Agree that the Nikkei could be oversold in the short term though, it got slaughtered this week!

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It very well could be the bottom.

But then again it might not. How do you know fundamentals have not changed? If so, why are they 90% down? What are other stocks in severely hit sectors NOT down 90%? eg HSBC in the banking sector? Fundamental analysis in this sort of environment requires some forensic accounting skills as the published figures are lagging and may be changing rapidly.

Cheers and good luck

These stocks, mostly small cap car related stocks have went from a minor profit to a loss. Now they are loosing money, they can do that for some time, but eventually they will go bust. They will turn out to be a 20 bagger or something that went to zero. That's why I am doubling up. I think the chance to make a 20 times return is better than loosing it all. I am talking very small sums here, like lottery tickets. I think the recession, and depression everyone is talking about, maybe is a bit overdone. if credit loosen up, some of these soon to be bust companies can refinance. I think it will turn around. When "everyone" are in one side of the boat, it's going to turn the other way.

Edited by carseller

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These stocks, mostly small cap car related stocks have went from a minor profit to a loss. Now they are loosing money, they can do that for some time, but eventually they will go bust. They will turn out to be a 20 bagger or something that went to zero. That's why I am doubling up. I think the chance to make a 20 times return is better than loosing it all. I am talking very small sums here, like lottery tickets. I think the recession, and depression everyone is talking about, maybe is a bit overdone. if credit loosen up, some of these soon to be bust companies can refinance. I think it will turn around. When "everyone" are in one side of the boat, it's going to turn the other way.

That's an interesting point. I've been thinking about that too.

That said my old man has shares in Pendragon which is I think the largest retailer of cars in the UK (or one of them at least). Their share price rose to around 125p last year. I think he quadrupled his stake or therabouts. I advised him to sell but he's a long-term "buy and hold" type of investor. At 81 he's entitled to be I guess. Anyway, they're now trading at 6p. I don't know what their gearing is like or whether they will stay afloat, but you have to imagine that at some point in the future people will still buy cars again, whatever form they take. Someone needs to make, sell and service them.

I agree that when the big money moves there will be big share moves, and lots of small guys will have cashed in their chips, pensions, savings and walked away.

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I think we'll rally for a few weeks from here, maybe peaking into the low 10,000s, but we'll be back down again in November - possibly for the 'big' one.

The bunny hop pattern of earlier months seems to be returning to the DOW, now that the severe panic over dying banks has eased, but at the end of each roll-over the market looks straight down into the abyss and says 'should we or shouldn't we?'

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I think we'll rally for a few weeks from here, maybe peaking into the low 10,000s, but we'll be back down again in November - possibly for the 'big' one.

The bunny hop pattern of earlier months seems to be returning to the DOW, now that the severe panic over dying banks has eased, but at the end of each roll-over the market looks straight down into the abyss and says 'should we or shouldn't we?'

I think the dow jones index is cheaper than it seems historically because of incorrect CPI measures. By using the US CPI index it could go down to 3000 to match the 1932 level, but the CPI have been flawed, I think we are closer to a bottom, or at a bottom, even in real terms, than many think, because of these flawed statistics. Look at www.shadowstats.com

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FTSE exploding upwards 8.70% from futures sunday night, open trading, to now. Up 6.01% since the 13th October.

The question is what is there to back this up? nothing.

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The question is what is there to back this up? nothing.

LOOK ! Interest rates will move down, down , down, we are looking at years with 0 %, 1 % 2 % interest rates. Cash will be king, look for traditional bluechip

companies, traditional, boring and safe companies with little debt. The portfolio of berkshire hathaway is perfect in this enviroment.

Stocks like Coca Cola is perfect. Or utilities. Anything that will keep it's payment up, compared to government bonds. It's as simple as that. Companies that yields 3 % is great when the interest rate is 0 % at the same time as the economy is plagued with deflation.

Edited by carseller

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I don't like the fact that this thread is stuck on 666 views.

I still think the market is around a bottom. It might go down 10-20 %, but a further drop is unlikely. The market is cheaper now, compared to in 1938. It's a little more expensive than in 1974. It's around 1/3 of the price level around 1929.

If one think in terms of 1929, that was probably around year 2000 (or 1968), we are now more in the post reflation phase, and now the markets are in what are a 40-50 % correction, resembling the correction in 1938 or in the 73-74 bear market, not a long grinding 1929-1932 like decline, I think the talks about avoiding a new great depression is overdone, as it's already taken care of by Alan Greenspan. What is needed now, is WW3, all the world wars have happened shortly after the times the bond rates have bottomed out.

The dow is not that expensive, when it was at 800 in 1982, it was extremely cheap, extremely cheap, a more right price at that time, would be around the 3000 level. And now it's around 8500, and trading at a 40 % discount.

When stocks are normally priced they are trading at a 1:1 relationship with GDP. now it's around 0,6, back in 82 it was 0,25 or so from my back of the envelope calculations, in 1929, around 3,5

I think the most stupid investment now is the 30 year bond. Probably the 10 year bond to. It's also stupid to think global trade will go on as before, and therefore local stocks are better than exotic markets and bonds, you never know when the war starts and the rules are off. However the TIPS, is not that bad, and it's now getting an extremely high yield as investors are not worrying about inflation even WW3 is right around the corner. Imagine trying to sell your US 10 year treasuries, yielding 3,8 % when the war between russia, china, russia and who more have started.

Because of where we are in the cycle, with a war very likely soon, I think railroads are a great investment.

It's mostly hedge funds selling down now. Their clients are calling and yelling, get me out. And I am getting in.

Edited by carseller

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Still early to call the bottom, however FTSE around 3300 - 3500. DOW, I don't know enought about the companies within it to make a prediction. The US will have to invest heavily on public transport infrastructure as the dollar buys less and less oil and people realise a train beats a 55mph speed limit anyday.

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