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Old 09-02-2009, 09:35 PM
 
Location: San Diego California
6,797 posts, read 6,639,309 times
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Quote:
Originally Posted by user_id View Post
Read what I said, I never claimed stocks are a good value right now. Rather I stated that there is no good reason why stocks would collapse between October and December. A The P/E ratio, etc are all known right now why would this cause a collapse in a couple of months vs right now? .
Because that is how the game is played. The big players accumulate at the market low causing prices to run up and bringing new investors into the market (usually too late) as it heads up, the big money begins distribution slowly to the new investors, when the market begins to run out of new buyers as can be seen by lower volume it rolls over and party over. Volume has been steadily decreasing since May. Will the drop happen by December? Who knows, but it is getting too close for me.

Quote:
Originally Posted by user_id View Post
Prime mortgages reaching resets? Huh? I assume you are talking about prime ARM mortgages? If so the rates on most of these have reset. Perhaps you are referring to Option ARMs recasting into fulling amortizing loans. In which case, you should realize that many of these people have already defaulted. There is not going to be a big flood of these defaults in the future..
You must be referring to this statement from a Barclays Capital annalist
"About 40 percent of borrowers with option ARMs are already delinquent and “many” of the others will start missing payments before their obligations change, the Barclays mortgage- bond analysts wrote in a July 24 report."
This is not good news, it does not mean the problems have been dealt with; it only means it is happening faster than they had anticipated. More inventory on the books or coming to market in the winter and spring.

Quote:
Originally Posted by user_id View Post
Commercial RE is a much different issue than the real estate RE and is unlikely to cause the same sorts of problems. Most of the RE loans going bad are from relatively small banks (they could not compete well in the mortgage market so they did commercial RE instead) that are rather easily to unwind. At worst the FDIC is going to need money from the treasury to handle these bank failures. But besides the money, there is nothing particularly problematic about it from a systemic point of view.
Bank failures have a very negative effect on confidence. When you have a credit based system that exists solely on confidence Bank failures are very problematic. The other aspect is the 4% commercial loan default rate that puts downward pressure on values, we are close to that figure now and it will cause more defaults down the road due to surplus supply.
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Old 09-03-2009, 10:36 AM
 
Location: Wherabouts Unknown!
7,805 posts, read 17,574,417 times
Reputation: 9435
With the market uptick and my biweekly contributions, my 401K is at about 94% of it's all time high in May 08. A few weeks ago, I put the whole 9 yards into a money market fund. The DOW has dropped only slightly since then. Now I'm hoping for a significact drop so I can get back into stock funds at a lower price, then ride it up again.
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Old 09-03-2009, 10:42 AM
 
Location: Great State of Texas
86,068 posts, read 76,799,237 times
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Quote:
Originally Posted by CosmicWizard View Post
With the market uptick and my biweekly contributions, my 401K is at about 94% of it's all time high in May 08. A few weeks ago, I put the whole 9 yards into a money market fund. The DOW has dropped only slightly since then. Now I'm hoping for a significact drop so I can get back into stock funds at a lower price, then ride it up again.
I've read not to be afraid to jump out and back in to hedge your losses.
I've done that as well..I was lucky enough to have gotten out in 2007 with my retirement money but I have another account for "trading".

I'm not ready to go back to buy and hold until I see company profits being generated from revenue instead of cutting operating costs. To me this is a good time to study and pick out some "future buy and hold" stocks.
How they weather this recession, to me, is a good indication of how the company is run.
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Old 09-03-2009, 10:43 AM
 
14,256 posts, read 16,233,836 times
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Quote:
Originally Posted by CosmicWizard View Post
With the market uptick and my biweekly contributions, my 401K is at about 94% of it's all time high in May 08. A few weeks ago, I put the whole 9 yards into a money market fund. The DOW has dropped only slightly since then. Now I'm hoping for a significact drop so I can get back into stock funds at a lower price, then ride it up again.
Don't count on it. I bailed out of RODM a couple of weeks ago - with a very nice profit - thinking that it could not go up much farther. Well it did

While I don't blame you for adopting a conservative strategy with your 401K, I just don't think this market is predictable.
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Old 09-03-2009, 03:52 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,211,495 times
Reputation: 4343
Quote:
Originally Posted by pghquest View Post
A
The incorrect part: Commercial RE actually is a much bigger problem then residential ones because most commercial properties are financed with 5-7 loans which then get refinanced. 2009-2010...
I'm aware of what you're saying and again "from a systemic point of view". I don't believe the problems in Commercial real estate pose the same [i]systemic[/I risk as residential real estate does/did. Although the defaults are likely to put strain on Bank's balance sheets (mostly smaller banks, but big ones too), its unlikely to create the sort of panic that existed in the summers of 2007 and 2008.
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Old 09-03-2009, 04:01 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,211,495 times
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Quote:
Originally Posted by pghquest View Post
It doesnt matter how they compared to March, or last year, what matters is, what companies make good economic investments now, or what ones are you willing to invest in knowing that they will turn around and offer an acceptable rate of return for the time period one is looking to hold?
Huh? I'm talking about trading and in that sense who cares if the companies "make good economic investments now". Why do I care? They can flush their money down the toilet, but so long as their stock is volatile I may be able to profit from it.


Quote:
Originally Posted by pghquest View Post
I'm a stock investor, and I cant tell you the last time I've looked at the DJIA, or the S&P 500 to see where they stand. They could go to $100 and I wouldnt give a flying fig..
They could go to $100? Huh? So you're a stock sucker...I mean investor..and you don't look at the major indexes. And...?
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Old 09-03-2009, 04:11 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,211,495 times
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Quote:
Originally Posted by jimhcom View Post
Because that is how the game is played. The big players accumulate at the market low causing prices to run up and bringing new investors into the market (usually too late) as it heads up,
The "big players" are often just as stupid as the individuals in the market, this is not really how it works. Regardless, the price of stocks have not been justified by fundamentals for rather long periods of time, there is no reason why that can't happen today.

Quote:
Originally Posted by jimhcom View Post
This is not good news, it does not mean the problems have been dealt with; it only means it is happening faster than they had anticipated.
C'mon read what I said, " There is not going to be a big flood of these defaults in the future..". I never stated that its all been "dealt with", I said there is not going to be a flood. These loans will slowly default over the next few years, contrary to people thinking it was going to be a repeat of the subprime experience.


Quote:
Originally Posted by jimhcom View Post
Bank failures have a very negative effect on confidence. When you have a credit based system that exists solely on confidence Bank failures are very problematic.
Not really, most people are too busy watching America Idol to care. The failures are managed and as a result there is little panic or confidence lost. The number of bank failures has gone up, yet public confidence is not moving with it.
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Old 09-03-2009, 05:20 PM
 
Location: San Diego California
6,797 posts, read 6,639,309 times
Reputation: 5180
The failures are managed and as a result there is little panic or confidence lost. The number of bank failures has gone up, yet public confidence is not moving with it.
That is a nice way of saying it is being kept below most of the publics radar screen, but this could easily turn into headline news under the right circumstances such as a major bank failure. Containment is not always a sure thing.
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Old 09-03-2009, 05:33 PM
 
69,360 posts, read 58,542,499 times
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Quote:
Originally Posted by user_id View Post
I'm aware of what you're saying and again "from a systemic point of view". I don't believe the problems in Commercial real estate pose the same [i]systemic[/I risk as residential real estate does/did. Although the defaults are likely to put strain on Bank's balance sheets (mostly smaller banks, but big ones too), its unlikely to create the sort of panic that existed in the summers of 2007 and 2008.
I can tell you first hand that the commercial real estate market is indeed full of problems, lots and lots of them. Do you think the owners of all of those empty Circuit Cities, CompUSA's, Movie Galleries, Dilliards are paying their mortgages?
Quote:
Originally Posted by user_id View Post
Huh? I'm talking about trading and in that sense who cares if the companies "make good economic investments now". Why do I care? They can flush their money down the toilet, but so long as their stock is volatile I may be able to profit from it.
Was there a point to all of this babble? You can profit from volatile stocks, you can profit from non volatile stocks, you can lose money, I mean seriously, whats your point?
Quote:
Originally Posted by user_id View Post
They could go to $100? Huh? So you're a stock sucker...I mean investor..and you don't look at the major indexes. And...?
Ahh, nope.. I do mostly 3 week trades, I'm sure that classifies me as a trader, not an investor, but that doesnt mean investors dont make money. It doesnt take looking at indexes to find out that retail sales are down, auto sales are down, to know what way the price of fuel is going. No one really needs to look at an index and doing so could actually lead one to mis-guide the industry. Its perfectly logical that retail sales can go down but Wal Mart go up, fast food sales can be down, but McDonalds go up. I'm not investing in indexes, or the DJIA, or the S&P, I'm investing in ONE company from one segment of an index and all I care about is that one company. Only a fool would sell their stock in a company because the companies competitors are losing business, which is what an index is. i.e. retail sales down, so you dont sell your Wal Mart stock simply because Target and Best Buy is down.. Its perfectly logical to consider that maybe they are down because Wal Mart is taking their market shares.. And no, I've never owned any of these, but using these as an example so that a 7th grader might understand..
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Old 09-03-2009, 07:55 PM
 
Location: Great State of Texas
86,068 posts, read 76,799,237 times
Reputation: 27652
Quote:
Originally Posted by jimhcom View Post
The failures are managed and as a result there is little panic or confidence lost. The number of bank failures has gone up, yet public confidence is not moving with it.
That is a nice way of saying it is being kept below most of the publics radar screen, but this could easily turn into headline news under the right circumstances such as a major bank failure. Containment is not always a sure thing.
Friday at 5pm..yup definitely below the radar and by Monday all but forgotten.

What is interesting is that they only count the bank and not all the branches.
If branches also counted then we'd be up in the thousands.
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