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I feel stupid selling SKF earlier today when it rallied past $250. I bought in at right around $170. I turned a nice profit though. I live to trade another day. It sucks though because we've broken a technical barrier and there is so much money to be made as we ride down into the 6000's. And I didn't hold SKF for more than three days, so the money I made on the sale won't show up into my account until Monday. T+3 rule is killing me. Bulls and Bears make money, but pigs get slaughtered. Remember that folks. Happy trading.
So far, it's acting similar to the pop and drop after the AIG bailout on September 17. The market was trading in a range and started to break down as it became apparent AIG was running out of capital. When the government rescue of AIG was announced, the market rallied 800 points in two days and right back into the previous trading range. As we now know, the market continued downward after the forced short-covering was exhausted. It's now apparent that initial price tag of $85B was far too little. The market will soon realize the same of the $20B injection into Citigroup.
Predictions for the next 5-10 years (posted for posterity on the internet )
-Commodity bull market continuing. The Jim Rogers commodity super cycle theory. Started in 98, will end in 2018, 2025? Much higher oil, crb, gold, everything.
-Much higher interest rates. Basically a 20 year bull market in bonds from the early 80's to 2003. Bonds are making a big top now. Will be down for years and years. How do bonds stay low when you're adding trillions of dollars in national debt?
-Stock returns. Marginal over cash. With the potential for more drops. The S&P chart may look like Japan if we keep propping things up.
It's hard to believe *all* the bad news has been factored into stocks already.
Pick a point in the 90's (Greenspans irrational exuberance in 96). 20-25 years out, stocks will be flat from that point. That's how it worked from the 20's to 40's, 60's to early 80's. Japan, mid 80's to the present.
I'm personally not in stocks, 0% equities.
I think the volatility will get worst. We've had all these little 5, 6, 7% drops, but we haven't had a crescendo crash. Wouldn't be suprised if we ultimately see a 15, 20-30% one day crash. Maybe a 50% one day crash (wouldn't that be fun?).
The '87 crash was 20% in a day. But that seems so outdated by now. Hard to believe all this volatility will suddenly end.
-Housing, back to the mean, too easy But, might be good to buy now if you plan on staying where you are for 5-10-15 years.
Eventually this paper era is going to be over. A cover of Forbes or Business Week, and someone is holding a bunch of worthless paper (stocks, bonds). And eventually a big shift to real assets.
It's mostly volatile on the upside. The market seems to be trending downward at a steady pace now. The announcers and the WS sales force love to say volatility instead of declining or falling because they believe the latter scares off new money.
Dow 50,000 by the end of 2010 and Chia pets will be traded on an exchange going for $5,000 a pop because by then people will have forgotten we even had this economic meltdown, just as they so quickly forgot about the dotcom bust and every other bust in the history of the world. Remember that people are stupid and will continue being stupid. A market meltdown will not change that.
Baseless is right, nobody has a clue what will happen tomorrow, let alone months / years in advance.
My guess the future is far more negative than bright for most folks. This is not the same country, things will not work the same. Lots of companies will not be the same. It ain't over till its over, if ever.
You are a bit of a fool to be thinking about investing. It is only a trading game, has been for quite a while now. I actually predicted (well sort) of what was coming in 2004 / 5 and was well out of expensive house, most stocks a bit early. Better to have the timing be off and be right than just plain wrong. Better to miss a few pennies than cry the blues.
Best to try to focus on what the major events could be. Murphy's Laws are in effect, surely there are events that is going to blind side the USA, maybe even the World. Buy very preselected stocks on major slides and be out almost immediate on any bounce up, more is coming. Some things might be the "Big One" earthquake in CA, bigger than predicted or thought could happen. A major accident at a nuclear power plant with screams / panic to shut them all down. Another major terrorist attack in the USA, maybe even some nuclear type strike somewhere in the World. It is dangerous out there. How do you time / predict anything in an uncertain World? This financial stuff ain't fixed, they are trying to jury rig it to play another fool's game, especially for the unwary. Better to do nothing than smack the tar baby and get stuck. All that buzz word stuff and pretending to have the inside track info in a rigged game is nuts, the lil guy is a fool to play, especially until things get better sorted out. Lots of them boys just want to make a paycheck any way possible.
Maybe think about how Peak Oil scenario will unfold. World oil production probably has peaked but the peak will not be as sharp as it might have been without the recent economic mess. The decline will set in slower but the possible remedies that could delay it will also not happen at the needed pace. More of the Boom / Bust cycles typical in the energy sector.
For the very long term, try snagging prime oil / gas stocks at bargain basement prices and tucking them away in a sock. Lots of natural gas around, best not to be biting there too soon. Prices are probably going south some more for a while.
Then the question about how the politics of it all will develop? Somehow that will happen in some form. Without some type reform that is almost common sense based things can really spin out of control. Greed is one thing but how do you actually understand the risk as it continues to unfold? I survived this one in total good shape, do not want to risk joining the crowd in the pool of blood, it might get a lot deeper before (if) if gets any better. Always remember Murphy's Laws always apply.
If you got to make a quick buck, right now and fast, lots of luck. Tempering your greed is prudent. Remember all the Big Boys, Talking Heads and folks that make real money are always doing the opposite of what they are recommending. Trust nobody.
We're all going to be working in the nut mines for the squirrel overlords, when acorns become the new medium of exchange when world currencies fail. By then Coke and Pepsi will control all the worlds drinkable water while I take a swim at my beach side home in Denver.
Seems about as likely to come to pass as anyone else's wild prediction of doom and gloom.
It's about supply and demand. More debt is being 'temporarily' pulled out of the financial system than the system is currently creating. The Fed has purchased over half a trillion dollars in mortgage-backed securities and treasuries from the primary dealers over the past six weeks. The system is over-leveraged so they've decided that pumping liquidity into the system wasn't working. After they started the purchases in early March, the Fed made the public announcement to encourage the big investors to put more money into equities.
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Predicting is totally worthless......
