hmmmm…I wonder how long the wait will be before we see new “golden parachutes” and mega-bonuses for the CE0s,high management folk, and mega-profits by financial institutions. Our great leaders will indeed take care of their friends.
Sure! Buy today and sell tomorrow – before the market plunges again. By the way – do you sleep OK at night?
You’ve got to be crazy!!!!
The market is no where near finished its wild ride. Those sub-prime loans – if that is what’s causing this mess – still have 50+% to go. Those gurus are still hiding stuff, and there are no regulations in place.
Hey, we haven’t seen anything yet.
Sure, the governments are all making ‘tut tut’ sounds and promising that all will be well and ‘advisers’ say those in cash will be the loosers. Well, so far I earn a little every day and I’m not trying to ride the wild bull/bear and having a nervous breakdown.
On Thursday, I bought some stock. It wasn’t much and I didn’t do it to gamble. I think there are good companies that deserve a little consumer confidence. Just before that, I spent a couple of dollars at a local store on something I didn’t absolutely need just to inject a little capital into a good business. I learned about lack of greed from parents of the depression and I hope not to see the likes of what they had to live through. They also taught me never to extend yourself past your means and don’t invest in the stock market anything you’re not willing to lose.
Hi, Should I sell all my stocks that are not in a 401 or IRA take the tax deduction and buy back into good stuff after earnings season and after October (October 1929).
Afternoon Paul….
Before the market bottoms out, I would imagine that the public would need an answer to a number of questions about our economy and our “leaders” (and I DO use that term quite loosely in this context). The answers I would need before I reinvest back into the market this time would be many; Is the new President going to investigate and indict Paulson & possibly Bernanke? Is he also going to bring Wall Street up on charges after intensive multi-pronged investigations? Will he also indict same party accomplices within and out of government? Will he conduct a much needed public audit of US gold supplies? Will investigations be made specifically in regards to market manipulation by the PPT? Will ALL the monies spent for ALL of these bailouts be accounted for within a realistic amount of time? Will our new President and administration spell out for the American populace just how they intend to reduce this deplorable deficit in a realistic way without “magic fairy dust” and specifically state what cuts will be made in governmental spending to accomplish same? What will the new Administration do when other countries stop purchasing our bonds? What is the fallback position the new Administration will take when the country crashes? Will the new administration pledge to stay out of the “Fed piggybank” and the taxpayers pocket for further bailouts? Will the new Congress pledge to quit spending money like drunken sailors? I have approximately 38 additional questions needing serious answers before I reinvest in Wall Street.
About a week ago, I was getting a feeling of deja vu from 1991. A year or two after the S&L bailout (you remermber the one that was only supposed to cost us 20-billion instead of the realistic 150-billion?), scared to death it might happen again, I cashed out all my stock while the DOW was passing 9500 (also on the way down) then. I was told this was stupid – it was time to BUY, not sell. Instead I bought and paid for a home, barn, land and water with the proceeds. I was told that was stupid as well – you should NEVER pay in full for a home for tax reasons. Seven years later, we are now 95% self-sufficient (giant vegetable garden, orchard, cow, & chickens), I make NO money, file NO taxes, live in a “cash friendly” state with no state income tax, haven’t had to pay $1104 a month in house payments, nor water/trash bills, nor association dues, nor extreme utility bills for seven + years. I just concluded a conversation on the phone with my old “your making a stupid mistake” financial advisor – he’s had a “run of bad luck”, had to “deleverage” (read: get foreclosed upon and move his family into a rental), he’s lost one of his vehicles to the repo man, his marriage is in shambles, and he now drinks more than when I was a drunk.
When will the stock market bottom out? Easy answer…..When we have a responsible government that doesn’t lie to us, when we’ve seen all the “players” that are sitting at the same table, when rules don’t change weekly, and when common people and politicians are held accountable for their crimes. I think many States of the Union will be seriously considering seccession before the market starts rising again from the dead. I wish there was even a bit of good news – but it was spent or stolen many many years ago. Even with the lies and deceit perpetrated on the American public, most I think realize and accept the fact that the worst has to transpire before this Nation gets any better. The public is much smarter than the government and wall streeters give them credit for and they’re in the mood for a good fight!
Yes, the market is close to hitting bottom, but it might still fall further. I know: a really decisive answer. Anyway, we’re a lot closer to the bottom than the top. Still, it’s difficult to fathom a situation where it quickly goes down 80% or 90% (it’s down about 45% already from the peak, so far). Go back to October, 2007. If all of the finance companies (20% of S&P500 back then) had suddenly gone to zero (and they still might), that’s only a 20% drop. So, this thing is way beyond reason. Liquidation of Lehman assets may be causing this turmoil; picture vultures tearing chunks of meat from a dead carcass.
Don’t wait for housing to ‘bottom’, as it still has quite a way to go. Prices got bid way too high from 2002 through 2007; five years up means five years down, which means 4 more to go until housing prices flatten out. They will not march upwards; the buyers finally got smart and have mostly stopped overbidding.
I haven’t started buying stocks, but I’m readying my shopping list. There are some real bargains out there: start with profitable companies only, then screen for companies with growing earnings, then screen for the cheapest of those, then wait for the bottom, and then buy. It’s hard to lose money by (buying stocks that are) making money.
Money-losing non-banks will close. Work hard, support your local credit unions and commercial banks, and keep your heads down until the shooting stops.
the tech bubble fell 38.6% the now finanacial bust has sent the Dow down 44%.
Thats it, we put the brakes to this fall.
Monday, buy something especially one of the Dow thirty since everyone will be looking for guidance from the big board.
We can do this.because we all want it.
pass the word
good luck and good hunting.
I just read stocks trading at an average of 9.5 times earnings…WOW…lets buy, buy, buy…and put more of this sh.t in everyone’s 401k or IRA..IN OTHER WORDS YOU ARE GOING TO BUY SOMETHING FOR LETS SAY $10.00 AND ITS WORTH ONLY A COUPLE OF DOLLARS PLUS OR MINUS…OH BOY, WHAT A BARGIN !!! American’s will be dependant on this crap for their retirement…Are you all crazy ?? The stock market is like a casino…WAKE UP PEOPLE…no guarantees !!! No more retirement money in the stock market or shall I say the WALL STREET CASINO…ITS YOUR LIFE SAVINGS YOU ARE GAMBLING WITH !!!put it somewhere safe…The market is DONE…Europe is pissed because the WALL STREET CASINO USED LOADED DICE…THEY WON’T DEAL WITH THE U.S.A. FINANCIAL INSTITUTIONS AGAIN…THE U.S.A. WILL BE DOING BUSINESS WITH EUROPE ON THEIR TERMS WHEN THE DUST SETTLES…SO PEOPLE OF AMERICA WHY DO YOU INSIST ON MAKING THOSE WHO TRICKED AND SWINDLED US HARD WORKING TAX PAYING CITIZENS RICHER…SUCH AS THE KUDLOW’S AKA GOLDY LOCKS AND THE CRAMER’S AKA I’LL FIND YOU A BULL MARKET SOMEWHERE…I SAY TO THEM BULLS..T…BOTH OF THESE TWO POMPUS FELLOWS BELONG IN SIBERA…AND FURTHERMORE NO MORE MONEY FOR THE BANKS OR CORPORATIONS UNSECURED…ANOTHER JOKE…DOES EVERYONE OUT THERE UNDERSTAND WHAT UNSECURED MEANS ??? AND WHAT IS GOING TO HAPPEN WHEN BANK OF AMERICA GOES UNDER…ITS ON ITS WAY LIKE A FREIGHT TRAIN….STOP THE GIVE A WAYS NOW…GIVE IT TO THE PEOPLE!!!
Come on, Paul ! A few months ago, you said that whoever expected more pain to stocks were ether short-sellers or masochistic.
Why don’t you call them realists. I would not invest a dime in stocks until it comes back to REAL fundamentals: book value with the attractive discount across-the-board. So, we are looking at S&P around 200-300. See you there.
There is not going to be a bottom to this thing for at least 30 years.
Retired people are going to start taking money out faster than non retired people are putting in so it will keep going down down down down.
Law of supply and demand. High supply of stocks to be sold (from retired people trying to keep their life style going) and little demand (from young people who are only making $12 an hour if they are lucky).
Good luck everyone.
How does NEXT YEAR sound?!!
Alpert’s 9.5 for the S&P’s current P/E based on 2009 earnings estimates is DUBIOUS. It is based on the wall street “pros” prediction that 2009 earnings will be up 20%! Yeah Right!! More than likely the 09 earnings will be flat at best, which gives the S&P a current P/E of around 13. And 13 is not nearly low enough to get into this stock market crash. Not when we also face a major recession that has been delayed for years with easy credit.
For anyone who wants to play this market for a rally be my guest. Surely one is coming and it could be really big and exciting for a few days. Just long enough for Mr. Market to separate a few more people from their money.
It is not silly to look back at the Dow of 1929 to get an idea of how bad this could get. No guarantees of course, but I don’t need to put my safe retirement funds into a market crash that could still have another 40% downside.
The market may not have bottomed yet.
On the other hand, on a short term basis the market is definitely oversold. A corrective move upward is definitely in the wings in a week or two, as confirmed from market index charts which indicate certain amount of buying action has started to occur now.
I don’t see a bottom coming till 7500 or less. I believe it will reach that and have a slow come back until the bottom drops out when the dollar is no longer the reserve from all of this stupidity of printing more money to save banks.
The question really isn’t is the stock market at the bottom.
It is a question of if the ECONOMY is at the bottom yet.
I mean, no matter how cheap the banks make credit, people are still over leveraged as individuals. Our government is so totally bankrupt it makes me shudder.
And neither banks nor our leaders are telling us the truth yet and until they do, the “crisis of confidence” wont stop being a problem.
So everyone raise their hand who thinks either one of those are going to stop lying in anytime soon.
How can anyone talk about the bottom when the fallout from CREDIT DEFAULT SWAPS hasn’t even begun to play out. This market is alleged to be somewhere between $50-60 TRILLION and so opaque as to defy transparency.
Indeed, the uncertainty surrounding these financial weapons of mass destruction [Warren Buffett's epitaph for CDS] is what has banks hoarding cash. Of course, if you are leveraged at 30-40:1, would you be willing to lend only to be left holding the “hot potato” CDS when it comes knocking?
A bit of good news might be welcome right now, but realism would be much more appreciated. It took years for this housing bubble/credit crisis to develop, it will take more than a month or two of bloodletting to turn the corner. Meanwhile, my money will sit on the sidelines a bit longer…
Good luck to those ready to dive back in.
My personal opinion is no the market is not close to a bottom. However, as always there are far too many factors for anyone to make a grand argument either way. But looking at the facts of how far the market has dropped and knowing that there is most certainly an element of fear in play, there is more to come.
Media and the government, bless their hearts for at least trying, are making a noble effort at trying to point this out, that a part of this selloff is due to fear. However, the initial reaction, which is the part we have witnessed over the past couple of weeks (months), is due to avid investors reactions and repositioning. If fear persists and the common investor (investments related to retirement lets call this “dumb money” inserted into the system by the general populous) gets anxious the markets could see a huge lemming effect in a flee to safety. Before anyone says anything about the statement of “dumb money” I am not calling the general populous dumb, rather the fact that the money invested is typically under the principal that the people in charge of the fund are going to do the best for it so the general public doesn’t take the driver seat. When, or if, they do decide they are best in the driver seat expect a well warranted drive to safety which will drive the floor down.
Always on the hunt for bargains…so I hate to say it but SELL SELL SEll. (So I can buy buy buy.) But there are a lot of stocks I won’t even touch with a twenty foot pole.
It will fall farther. This crisis isn’t even close to being over, not until the collective stock-holders of the nation, of the world are willing to risk confidence in the market again. Until then, I just want my golden parachute handy so I can bail out too.
Certainly, the market is now getting closer to bottom than the top.
We have a long long way to go for the companies, media, financial professionals, and government to earn trust back.
When this finally ends Paul (if you are still reporting) I am sure the bears and market technicians will also be poorer from the fake rallies and Government interventions.
Waiting for the “bottom has been in for five years — get over it” video…
Calling a bottom is somewhat meaningless in this market. It may be a bottom for a month or six weeks and then revist later. We have signigficant deleveraging going on and it will not return to the recent highs for a long time. If you are a dollar cost average type person stay the course. If you have been fortunate enough to be sitting on the sidelines; ease in steadily over the next 12-18 months- there may be several new bottoms over that period.
You are correct in stating that fear is driving this market Paul. Everyone is still waiting for “the plan” or vision from the Bush administration and so far from what I can tell it’s been fire fighting and not in a consistent manner either.
Until the Bush administration lays out a viable plan, and I mean lay it out such as step 1. we do this, Step 2. we do that, etc, the fear will continue because there is no leadership being perceived, and the investors will stay on the sidelines.
As far as the bottom goes, I won’t even attempt to guess, too many variables in play. I do know this, if you’re like me and have another 25+ years left to work, now is a good time to increase that 401k allocation if you can.
“Buetow…said that the markets will remain extremely volatile until the housing market recovers.”
I agree with this guy. How do you know what a company is worth??? all these businesses who made a killing off of people’s home equity…that equity is gone for many, and is going bye bye for others still. those profits are all based on money people don’t have and never really did have. so how far back do you go to determine a company’s value now that no one has the debt to buy more and more.
perhaps the last crash or the crash before that one. credit is the ultimate problem, and when it is used too much and over long periods of time, people start to believe in wealth that doesn’t exist.
you think the same companies that make up all these indexes are going to exceed prior year profits by consumers who have no choice now but to pay for things with actual cash instead of equity. the growth that was seen in the past years is unsustainable in the long run, on so many levels not including economic.
it took a long time to hit this point, and it is going to take a long time to come out of this. this problem is not going to be fixed overnight. i have lost alot of money, but i have kept it where it all is. i am not panicing. everyone is panicking which is why no one is lending. no one ever said the market is a sure thing that you will always make money. for now, we are loosing money but in time we will make it back and then some. people need to be patient and stop reading everysingle article on this mess and stop listening to the news everyminute. it will take time and may even possibly get worse – but once we get thru this we will be okay aeticct sir
In this case, precision is not necessary. We are much closer to the bottom than the top. Any further downside risk is minimal relative to upside potential in the longer term. This is the sale of the decade in stocks. Opportunity is knocking. Who will answer the door? Who will stay on the couch?
Paul,
You probably think I am a huge pessimist, but I have been buying stocks for the last week or so… and I have been really burned, but remain optimistic in my picks.
We are probably not near bottom, though, and I feel that anyone who thinks they have the answer is either lying or a fool. With all of the Government intervention, both real and speculative, the usual signals for people to start investing again are either muted or completely wrong.
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A few thoughts:
The stock market is a slow-motion Ponzi scheme, with elements of check-kiting thrown in, but called “buying on margin” and “short-selling”. It needs a continuing supply of money coming in to keep it going. Guess what – that supply got cut off suddenly. They could not persuade Congress to “allow” people who paid Social Security taxes to instead steer the money to “investment plans”.
People who buy stocks on margin, gambling they can sell when the price will go up and pay off the loan, the interest, and make enough profit to cover losses on other stocks and to live off the rest of the profit are being burned big time.
Look at the blade on an upside-down hand-held saw. The teeth form a pattern, called a sawtooth pattern, going up slowly, then down rapidly, then up slowly again. That will be the pattern for the stock market. A saw-blade ride, not a see-saw ride. You get cut trying to time the market.
Isn’t it kind of stupid for people who work in small, privately owned businesses to invest their retirement in large, stock-based companies?
For example, the owner of a small pet supply store buys Wal-Mart stock. Wal-Mart is a competitor! And will put them out of business!