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Soros, Faber And Rogers Now All Saying Stimulus Bounce

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http://www.istockanalyst.com/article/viewa...ticleid/3409953

The Economy Is On The Rebound

By: Wall Street Window

Wednesday, August 12, 2009 10:25 AM

In an interview yesterday billionaire George Soros said, "the economy has actually bottomed and I think we are facing a positive quarter, and I think that is largely due to the stimulus."

You may hate Soros. If you are a hardcore Republican and watch FOX News then you know he helped fund Obama's race for the White House and gives money to liberal causes. But whatever you may feel about him he is one of the most successful investors of the past fifty years. He started with nothing and became a billionaire by playing the commodities boom in the 1970's, investing in foreign markets, and by betting against the pound.

A year and a half ago he shorted bank stocks and warned everyone of the coming stock market crash.

His track record when it comes to investments is undeniable and it is because of that fact I bring his comments to your attention.

He now joins the list of Marc Faber and Jim Rogers who think this upswing in the market will continue.

Yes it may be a very weak recovery. Most likely a "jobless" recovery. It is a recovery not fueled by real economic growth, but by government spending and bailout. It will probably end in another mess. But it should last for a year or so and end with much higher stock prices then what you are seeing now.

We are going to have positive GDP growth for the rest of this year and a recovery in real estate next year. Later the Fed will have to raise rates to deal with the inflation that will come from all of the money printing and that will cause problems for the economy and the stock market, but that is in the future.

For now the stock market is set to rise for the rest of the year and well into next year. Yes it will have it step backs and pauses, but the overall trend is up.

The question is what to do? You always have to ask yourself what is the best way to profit from the current trend of the market. You then do that until it stops working and tells you that the trend has changed and then move to a more appropriate tactic that fits the new situation. Last year shorting was where the money was to be made.

Going forward I believe it will be in individual stocks.

Interestingly, that is not what the individual investor is getting into.

According to a recent article in Investors Business Daily, the number of daily trades done through online brokers Charles Schwab, TD Ameritrade, and Etrade has fallen since the March low in the stock market.

When it comes to stocks the average investor has backed away from them since March - which is incredible.

What they have been doing is moving into ETF's and the wild Forex currency market where they can gamble it up on 100-1 leverage.

In June and July trading volume in individual stocks through online brokers fell 15%.

It isn't that people are not trading.

By moving into leveraged ETF's instead of buying baskets of stocks traders now just make one trade in the ETF instead of several. That translates into fewer overall trades.

At the same time Forex trading is exploding. Average daily trading volume for Forex has soared 500% since 2001 and now is over $77 billion a day.

Forex has become what daytrading was in the late 1990's or online poker was a few years ago - a fad bringing lots of amateurs to the table.

I don't know if you have noticed, but there is a proliferation of Forex scams all over the Internet now. There are websites that claim to have "trading robots" and "automated systems" that will give you computerized trades that can take a few thousand dollars and make you a millionaire. It is unlikely that a single one of these things really work, but every week a new one of them pops up on the Internet.

What it tells us is that there is a flock of uneducated investors that are prey to these scammers.

Ironically I believe this is exactly the time when it makes most sense to play individual stocks. I told people in 2007 I would not give out any stock picks, because I saw a vicious bear market coming so I'm not someone who just tries to sell you stock picks. But with the market healthy individual stocks is the best place to make money now.

Much better than ETF's.

The reason is risk to reward. You can risk five or ten percent in a stock and if you buy the right one make 30% in just a few days. It is hard to do that in ETF's.

We have seen some profit taking the past few days. It is tough to get a market like this to fall much, but if the selling were to continue you should expect to see huge support in the 950-960 area of the S&P 500. But the market is so bullish now that it would be hard to even get it to go down that much.

My advice is to NOT worry about the stock market too much right now, but to focus instead on looking for opportunities in individual stocks to buy and then take them. Yes at some point I'd expect to see a quick five percent or so drop in the market at some point this year - probably in September or October - but you can't just worry about that and be afraid to do anything.

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Contrarian indicator! SELL

:lol:

Lol, no stock markets go up in a straight line. There will be heavy profit taking at some point.

So you stock lovers out there, there's plenty of opportunities to buy in.

Water companies appear to have been left behind, so that might be a sector worth looking at (if you must).

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Yes it may be a very weak recovery. Most likely a "jobless" recovery. It is a recovery not fueled by real economic growth, but by government spending and bailout. It will probably end in another mess. But it should last for a year or so.

How the f*ck can the word recovery even be wedged into these two sentences? :rolleyes:

Why can't they just call it a dead cat bounce?

Edited by MOP

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Contrarian indicator! SELL

:lol:

Lol, no stock markets go up in a straight line. There will be heavy profit taking at some point.

So you stock lovers out there, there's plenty of opportunities to buy in.

Water companies appear to have been left behind, so that might be a sector worth looking at (if you must).

Water companies just got their hands tied behind their backs by OFWAT (not to mention the concrete shoes). Expect our water and sewage infrastructure to be in more trouble in 10 years.

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Water companies appear to have been left behind, so that might be a sector worth looking at (if you must).

Cos ofwat capped their price rises for the next few years.

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It is a recovery not fueled by real economic growth, but by government spending and bailout. It will probably end in another mess.

Take note.

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I could give good advice today, then see one of my key economic barometres take a dive, then change my advice tomorrow. Thats why I dont like to give financial advice, because someone will be left with my old opinion and stay the course even if situations change.

These three guys will bail out of stocks, comodities etc and short the lot if they think thats a better bet, and they wont be coming on to bloomberg to tell you this until they are fully removed from the pain to come.

So just take what you read with a pinch of salt.

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Guest Daddy Bear
Dead cat bounces last a week or a month - not 6-12 months.

Youve missed the bottom - it was Feb.

Hi Bruce

Glad to see you have turned bull.

What has happened to your signature and avtar - you need to get that sorted?

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Dead cat bounces last a week or a month - not 6-12 months.

Youve missed the bottom - it was Feb.

You're a **** and I claim my 5 Australian Dollars.

Edited by MOP

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You're a **** and I claim my 5 Australian Dollars.

Whatever - I read your posts on here. You, cashinthematress and interestrateripoff (when rates are at .5% ironic) are the biggest tin foil hatters in here.

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Whatever - I read your posts on here. You, cashinthematress and interestrateripoff (when rates are at .5% ironic) are the biggest tin foil hatters in here.

Whatever - I read your posts on here. You and xcojo (when gdp goes down it actually goes up) are the biggest dunce hatters in here.

businessman-sitting-in-corner-with-dunce-hat-posters.jpg

Edited by MOP

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On the day the unemployment figures have been released, and they're pretty bad, I think the ONLY logical conclusion is that prices will fall further. The economy is in such a mess.

There is very little little logic in the current situation. We are watching massive government engineering playing itself out. Unemployment in the US is still going up like a rocket - although slightly less so than earlier this year. The UK unemployment climb isn't far behind although our figures are heavily 'massaged' for media consumption. Gordon Brown is willing to do anything to engineer a quasi-recovery purely for political reasons. Whoever wins the General election here is irrelevant because thats when the real pain begins of slashing budgets and wages while raising taxes to pay for the bailout. Bank lending isn't about to take off. This situation is full of anomalies and therefore by definition is unstable. I'm not offering expert advice but I am no longer surprised by anything in this unsustainable Alice in Wonderland world of finance.

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Whatever - I read your posts on here. You, cashinthematress and interestrateripoff (when rates are at .5% ironic) are the biggest tin foil hatters in here.

You seem to know a hell of a lot of detail - for one that joined 5 hours ago.... :rolleyes:

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You seem to know a hell of a lot of detail - for one that joined 5 hours ago.... :rolleyes:

I think xcojo has created a new user after being humiliated beyond redemption yesterday.

Or it might just be Rinoa again.

Edited by MOP

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There is very little little logic in the current situation. We are watching massive government engineering playing itself out. Unemployment in the US is still going up like a rocket - although slightly less so than earlier this year. The UK unemployment climb isn't far behind although our figures are heavily 'massaged' for media consumption. Gordon Brown is willing to do anything to engineer a quasi-recovery purely for political reasons. Whoever wins the General election here is irrelevant because thats when the real pain begins of slashing budgets and wages while raising taxes to pay for the bailout. Bank lending isn't about to take off. This situation is full of anomalies and therefore by definition is unstable. I'm not offering expert advice but I am no longer surprised by anything in this unsustainable Alice in Wonderland world of finance.

Yes, yes, yes!!!

As you say, this whole this is rigged, jigged and frigged. Intervention has distorted all market signals - up is down, down is up - no one seems to know what is good or bad. People are confused and dare I say it frightened because they no longer seem to know what the rules of the game are - the only signal that seems to be worth watching is weather the bail-out tap will be kept open or not - and even then I suspect that eventually when all savings have been sucked in (and short of the printed money being put into peoples pockets) then the market will have to wither and die.

Trouble is I and man others suspect that governments may not stop even when whellbarrows are being used to collect their taxes. :(

Your point is that the government is the driver of the market and that is true. But can it get out of the driving seat?

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Yes, yes, yes!!!

Your point is that the government is the driver of the market and that is true. But can it get out of the driving seat?

The million $ question. Any politican who does try to get the gubbermint out of the driving seat anytime soon is going to need either a death wish or have cojones of purest titanium because of the pain that will follow. I'm not hopeful.

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Well we'll see if he's right. If he is and the effect on houseprices is that from here to next spring they are up or neutral then I will sell into the next spring "bounce" in the sure knowledge I have done it half right.. even if I get within 15% of the top I'll still do it I think.

Now onto stocks... I've been buying and I'm going to keep buying this year... hopefully i will be fully re-invested come christmas and then I'll just sit tight. But to be frank its the house direction that concerns me most... I was going to be happy sitting there just taking a 35% hit and then waiting for a recovery but I think if it does go up then the second leg down is going to potentially be more severe.. or it'll just stay in the dolldrums for a decade which is no good to anyone.

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