Quote:
Originally Posted by Claeren
You (and this is directed at all of the perma-bulls around here who keep on going with the ' now it is time to buy buy buy, oh wait, no, noooow is the time to buy buy buy, oh wait...') might want to mention that you thought it was low a month ago when the iBanks started falling like dominos and the market had lost 15%
And then you thought it was near bottom two Monday's ago when the bailout package was rejected and the DJI fell 777 points and things were about 25% off peak.
THEN you thought it had hit a new low this Monday when the market fell another 7%(?).
And now you are telling people it has finally hit bottom after a 25% loss on the week and 40% (or more?) since peak?
1) Eventually it will hit bottom and if you said it was bottom the entire way down you will eventually be right. (Yeay for you!)
2) If people bought at any of those previous false bottoms you declared (despite tons and tons of evidence it was no where near bottom - it is not like people weren't screaming it was not bottom, like me) they are out 10%-40% PLUS the time it takes for that money to be recovered.
3) Just because it will hit bottom does not mean it will go right back up. Talk about how this is not like Japan all you want (frankly people in power WISH it was more like Japan), what did it take to fully recover from the Great Depression? 54 years? Something like that?
4) Stocks buy you what is of value in a company. If the entire value of a company has been built on cheap debt and all of the vendors of that company have been built on cheap debt and all of the joe schmoe consumers of that company and that companies vendors have been built on cheap debt is it really going to take mere months for the markets to recover and start growing when there is no more cheap debt??
It IS getting closer to bottom, obviously, but your conflict of interest is clouding your judgement and it could be hurting people here at CPuck. I don't know how much your clients have lost but if people listened to you just last week they are out 10%-20% and if they borrowed to invest they could be out even more.
(As I have said though, this crisis should not about finding bottom in the equity market, it is about perserving capital for the long drought in economic growth that is about to hit us like a brick wall. Those with money NOT invested yet will be the ones with real opportunities in a couple years. Trapping people in what have become, practically speaking, illiquid equities will not help them if those stocks are still flat next year and the one after that.)
If you cannot properly value a company you cannot invest in it -- all you can do is gamble. When you are saying 'now is low' what you are saying is "the dealer has been winning all night, how much longer can it go on for, we HAVE to start winning eventually". Anyone who gambles well knows the problems with this line of thinking.... you are always better to simply walk away and keep your money that night and start again tomorrow than to keep throwing money at it until you win -- because you don't HAVE to ever win....
The market WILL see upward volatility at some point, but until you can value a companies worth you cannot be truly buying at bottom. That is the entire reason stocks keep dropping, no one knows which have TRUE value. IF you insist on buying equities though at least buy the ones that sell real products to real people neither of whom need a huge amount of debt/financing to keep up their end of the deal.
Two asides to all of that:
1) OPEC was to defend oil at $80/barrel. Now that it has finally hit that range it will be very very interesting to see what happens. Looks like there is not much support and outside of OPEC turning the taps off completely it will keep dropping. I would be interested to hear someone inthe industries take on this though??
2) The American Dollars rise is pretty commical. People are buying government debt in USD because it is thought of as safe, yet because there is such an insane amount of that debt being sold it is pushing the currency higher and higher. Yet how can a currency with no underlying value other than trillions and trillions in debt have long term stability?? Boggles my mind. That should be a very interesting thing to watch play out.
Claeren.
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Buying is good advice. Most people shouldn't be in the market right now for quick gains, they should be in for years, especially the young ones that frequent this forum. For all the people that are down 40% in there portfolios they SHOULD be buying. Who cares where the bottom is, average down while you can, especially if the company has good fundamentals.
Based on common market fundamentals most stocks on the market right now are fantastically undervalued. Hell, based on technical analysis their should be a rally on tuesday. Yah you're right it might keep going to the bottom, but if you can't handle risk you shouldn't have bought in the first place. Markets correct...
In terms of blaming people on CP for other peoples losses, that is unbelievably stupid. If you are dumb enough to read some opinions on a forum, do absolutely NO research on your own, borrow money, invest it, and expect to make a quick profit then it's your own fault. You should be doing minimum 10-20 hours of research on each stock you intend to buy, unless you're a technical trader.
If you took some money after hearing that the markets are undervalued (maybe not at bottom) and bought some more stock to lower your ACB then thats great...markets go up and down.
Quit fear mongering .