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TranceAddict Investors Club @ Marketocracy (pg. 7)
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| Krypton |
| Opportunity comes when everybody else is freaking out in a panic. Start looking for bargains guys. Good stocks are becoming cheap! |
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| Capitalizt |
| quote: | Originally posted by Krypton
Opportunity comes when everybody else is freaking out in a panic. |
Absolutely right.
But the general public isn't close to a panic yet. ;) |
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| Krypton |
| quote: | Originally posted by Capitalizt
Absolutely right.
But the general public isn't close to a panic yet. ;) |
Yesterday was a panic. The big players took profits. The small guys followed suit. The smart guy is the one who buys during panicky selling. I mean, if you saw all your stocks across the board in the red, wouldn't you be tempted to sell too? |
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| Capitalizt |
| quote: | Originally posted by Krypton
Yesterday was a panic. The big players took profits. The small guys followed suit. The smart guy is the one who buys during panicky selling. I mean, if you saw all your stocks across the board in the red, wouldn't you be tempted to sell too? |
Aww come on man, the "little guy" doesn't follow the markets on a daily basis. They read their quarterly 401k statements and are going to have no idea about the dip yesterday.
If you want to see what a real "little guy" panic looks like, pull up a chart around 9/17-9/22 2001. That is when EVERYBODY had their money on their mind. Everyone was worried about their portfolios, so they wanted OUT of the market immediately. That was a true panic, and even with the electronic trading "curbs", we still had 500-600 drops every day that week.
A couple 2% down days mean nothing in the grand scheme of things. The markets have been going almost straight up for the past year, and it seems everyone is completely ignoring our "forgotten" problems like North Korea and Iran's nuke programs. These are farking HUGE threats building overseas, but they have been completely off the radar for several months now. It's only a matter of time before they start making headlines again.
Combine two nuclear-powered anti-American dictatorships + worsening civil war in Iraq + record home forclosures in America + $3 gasoline, and I think we are very easily going to drop 20% in all markets over the next six months.
This kind of drop and political uncertainty may very well cause a panic among small investors, flushing them out of the market and taking everything down another 10% very quickly..
When everyone is bearish and even CNBC can't find anything to cheerlead about, THAT will be the time to buy.
;) |
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| Krypton |
| quote: | Originally posted by Capitalizt
Aww come on man, the "little guy" doesn't follow the markets on a daily basis. They read their quarterly 401k statements and are going to have no idea about the dip yesterday.
If you want to see what a real "little guy" panic looks like, pull up a chart around 9/17-9/22 2001. That is when EVERYBODY had their money on their mind. Everyone was worried about their portfolios, so they wanted OUT of the market immediately. That was a true panic, and even with the electronic trading "curbs", we still had 500-600 drops every day that week.
A couple 2% down days mean nothing in the grand scheme of things. The markets have been going almost straight up for the past year, and it seems everyone is completely ignoring our "forgotten" problems like North Korea and Iran's nuke programs. These are farking HUGE threats building overseas, but they have been completely off the radar for several months now. It's only a matter of time before they start making headlines again.
Combine two nuclear-powered anti-American dictatorships + worsening civil war in Iraq + record home forclosures in America + $3 gasoline, and I think we are very easily going to drop 20% in all markets over the next six months.
This kind of drop and political uncertainty may very well cause a panic among small investors, flushing them out of the market and taking everything down another 10% very quickly..
When everyone is bearish and even CNBC can't find anything to cheerlead about, THAT will be the time to buy.
;) |
Well now that a recession seems more likely, value stocks look to begin outperforming growth stocks. |
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| Capitalizt |
You know Krypton, it's perfectly ok to be OUT of stocks (or short stocks) during a recession right? :)
I hate to sound like a doom and gloomer...I would love for the economy to boom and for people to make tons of money, but I think the opposite is going to happen over the coming months. And if it's going to happen and there is nothing you can do about it, why not profit from it?
You don't always need to be in the market. That can be a losing proposition when things don't look good for our economy. Even "value" stocks go down during a bear market...maybe not as much as growth stocks, but why risk it? Better to get in cash and wait for the storm to pass, earning a guaranteed 4-5%...or if you are more pessimistic on the future (like me), you might want to look at the Profunds short and ultrashort ETF's. They trade like every other ETF, only they short the market (or certain sectors) instead of buying them.
http://www.proshares.com/funds
If you think oil is hitting a short term top around $80, you can you can short the oil and gas sectors...If you think the dollar is due for a bounce here, you can short the gold and precious metals sectors...It's quite convenient. And unlike traditional shorting, your losses are limited by the value of the shares you buy...rather than being theoretically *unlimited* if you were forced to buy back the shorted shares at a much higher price.
Wait for a bounce, close your longs, and short this overvalued market! ;) |
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| Krypton |
SHorting is easier during a recession. you don't have to be completely out of stocks. I sold 50% of my portfolio a few days ago, out of capital preservation. The stocks sold had lost their fundamentals, and I felt I no longer could trust them to bring me value.
Alan Greenspan said a few months ago there was a 1/3 chance of a recesion this year. I can't wait for that to happen if it is happening.
Keep an eye out on Sunoco (SUN). Their stock has gone down more than 10%, but it is still a good company. I'm going to be studying the charts waiting for the buy. |
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| Shakka |
| Anybody who thinks shorting stocks is easy has never shorted stocks. I never recommend individual investors sell short. The potential risk is unlimited while upside is limited. I would recommend looking at put options instead. You can be wrong and still not lose your shirt. |
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| Capitalizt |
I don't know about the fundamentals, but I'm loving that recent chart on SUN ;)
I only buy stocks after they crash horribly. Bigcharts shows a huge recent crash and a current p/e of 7.8
Looks good to me!
They are in the energy business so they actually have some real assets backing their company too...always a big plus. I think oil is getting toppy here though, and if we see a correction down to $71/barrel, it may take SUN down further to the absolute "screaming buy" level. |
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| Shakka |
| People are going to realize very soon that this is no longer just a "subprime" issue. AHM is down 90% today. CFC got hammered last week on problems in their prime portfolio. This is a credit story and there is a contagion. It's not a question anymore. The credit cycle has turned and the private equity/LBO market is quickly grinding to a halt. Hold on to your pants, Batman! |
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| Capitalizt |
Well I thought today's 300 point swing was pretty exciting. Up 150 then down 150.
Did you short the bounce like I told ya krypton? ;) |
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| Krypton |
I've taken a bloody beatdown. Knocked off 1/2 my gains in 1 week. My turnover is abismal. My portfolio became abismal, so I had to sell. My unrealized gains are in the negative. No sweat, I'll increase my stop loss to 20% and try to steer my ship out of this storm.
| quote: | Originally posted by Shakka
People are going to realize very soon that this is no longer just a "subprime" issue. AHM is down 90% today. CFC got hammered last week on problems in their prime portfolio. This is a credit story and there is a contagion. It's not a question anymore. The credit cycle has turned and the private equity/LBO market is quickly grinding to a halt. Hold on to your pants, Batman! |
Yep, read in the Wallstreet journal corporate buyouts will replace LBOs.
| quote: | Well I thought today's 300 point swing was pretty exciting. Up 150 then down 150.
Did you short the bounce like I told ya krypton? |
I can't short in my marketocracy or in real-life. I've only got $800 invested, and I would need a $2000 margin account to short. |
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