Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - The ongoing financial turmoil and financial discussion thread

Claeren · 11-21-2008, 08:24 AM

I have already said that I think we are (finally) potentially near bottom, that is not my primary concern though.

My first contention was that people kept saying we were at bottom all the way down. Thus it is not that I don't think 7500 is low -- it is that I was one of the few that thought 10,000 was not low, 9000 was not low, 8300 was not low, etc. Regardless if 7500 is low the idea that people think 'it cant go lower so invest invest invest' is just as strong as it was at 10,000 and that is worrisome to me.

My second point is that it just seems prudent to keep cash because this is not just some 'on-paper loss' in the markets, it represents the entire decline/reckoning of the American economy.

If GE, GM, Ford and/or Chrysler fail, along with CitiGroup, AIG and the iBanks (etc) that have already disappeared, and unemployment runs well into the millions and America is literally bankrupt do you care if the market is 6300, 7300 or 14,000?

To me that scenario is actually more likely than a full recovery at this point - I have yet to see true leadership or innovation among America's leaders to suggest otherwise. As such there will always still be time to 'buy the dip' because even if the dip does not get worse it will not get better, and those that have cash are going to be offered all sorts of great opportunities (in all assets classes, not just equities) once things actually get bad.

Look at it this way, as much money as a select group of people have lost, the REALLY bad part of a recession (not to mention depression) have only just recently started to appear. I am not sure why this recession should be worse on-paper than virtually any before it but should recover and rebound as fast as any average old dip? People are going to feel some real world pain this time around (sadly) and until that happens there is no rush to going heavy on the equities.

That all being said there ARE a couple decent buys out there and if you are wealthy enough to both keep decent cash reserves AND invest in equities then you are in a lucky group no matter what happens.

I see less downside than ever (45% drops in the market tend to do that) but as I said before, there are a lot of very large unknowns that could easily easily easily come crashing down and take another 20% of the market with it.

What 'experts' are not telling the people they are telling to invest invest invest is that this last 10% drop (or the 40% before it) might not be recovered for 10 years or 20 years. They go on and on about how you might miss out on the first 10% of a recovery though don't they?

For example Japan (And I think America is in more trouble than Japan was):

Claeren.

11-21-2008, 08:24 AM	#568
Claeren Franchise Player Join Date: Jul 2003 Location: Section 218 Exp:	I have already said that I think we are (finally) potentially near bottom, that is not my primary concern though. My first contention was that people kept saying we were at bottom all the way down. Thus it is not that I don't think 7500 is low -- it is that I was one of the few that thought 10,000 was not low, 9000 was not low, 8300 was not low, etc. Regardless if 7500 is low the idea that people think 'it cant go lower so invest invest invest' is just as strong as it was at 10,000 and that is worrisome to me. My second point is that it just seems prudent to keep cash because this is not just some 'on-paper loss' in the markets, it represents the entire decline/reckoning of the American economy. If GE, GM, Ford and/or Chrysler fail, along with CitiGroup, AIG and the iBanks (etc) that have already disappeared, and unemployment runs well into the millions and America is literally bankrupt do you care if the market is 6300, 7300 or 14,000? To me that scenario is actually more likely than a full recovery at this point - I have yet to see true leadership or innovation among America's leaders to suggest otherwise. As such there will always still be time to 'buy the dip' because even if the dip does not get worse it will not get better, and those that have cash are going to be offered all sorts of great opportunities (in all assets classes, not just equities) once things actually get bad. Look at it this way, as much money as a select group of people have lost, the REALLY bad part of a recession (not to mention depression) have only just recently started to appear. I am not sure why this recession should be worse on-paper than virtually any before it but should recover and rebound as fast as any average old dip? People are going to feel some real world pain this time around (sadly) and until that happens there is no rush to going heavy on the equities. That all being said there ARE a couple decent buys out there and if you are wealthy enough to both keep decent cash reserves AND invest in equities then you are in a lucky group no matter what happens. I see less downside than ever (45% drops in the market tend to do that) but as I said before, there are a lot of very large unknowns that could easily easily easily come crashing down and take another 20% of the market with it. What 'experts' are not telling the people they are telling to invest invest invest is that this last 10% drop (or the 40% before it) might not be recovered for 10 years or 20 years. They go on and on about how you might miss out on the first 10% of a recovery though don't they? For example Japan (And I think America is in more trouble than Japan was): Claeren. Last edited by Claeren; 11-21-2008 at 08:56 AM.