The ongoing financial turmoil and financial discussion thread

[flamesfever]

This market is far to volatile for my blood. I don't believe anyone knows what will happen in the short run - far too may unpredictable variables.

Thanks for your posts Claeren.

[Bertuzzied]

Still holding strong. Up 682 points right now. haha. Yahoo is still down. Must be the only down stock on the nasdaq today.

[MoneyGuy]

Originally Posted by flamesfever

This market is far to volatile for my blood. I don't believe anyone knows what will happen in the short run - far too may unpredictable variables.

Thanks for your posts Claeren.

I've been doing this stuff for many years now and here are a few facts you folks should remember:

1. The short term doesn't matter. Short-term money shouldn't be in the market.
2. No one knows if the next 1,000-point move will be up or down. However, the market has only one permanent, undeniable direction - up.
3. If you're young (as most of you are) and in your 20s, 30s and 40s, this stuff shouldn't matter. If you're going to be in the market for decades, you shouldn't care where the market is today, or next week.
4. Corrections like this are rare opportunities to buy into a rising tide at reduced prices.

Start buying, folks. If you wish, dollar-cost average in, but start buying.

[flamesfever]

Originally Posted by MoneyGuy

I've been doing this stuff for many years now and here are a few facts you folks should remember:

1. The short term doesn't matter. Short-term money shouldn't be in the market.
2. No one knows if the next 1,000-point move will be up or down. However, the market has only one permanent, undeniable direction - up.
3. If you're young (as most of you are) and in your 20s, 30s and 40s, this stuff shouldn't matter. If you're going to be in the market for decades, you shouldn't care where the market is today, or next week.
4. Corrections like this are rare opportunities to buy into a rising tide at reduced prices.

Start buying, folks. If you wish, dollar-cost average in, but start buying.

Where are they going to get the money? Would you recommend borrowing to invest in the market?

[Finner]

I sure wouldn't buy today. Markets aren't even close to bottom in my opinion. Markets are only up because:

A) The SEC released an "emergency order" preventing short selling in about 600 stocks, and the shorters are scrambling to cover.

B) The US Feds are going to create a "black hole" account to place bad debt in....it cheered investors but i have no idea whose going to pay for it.

They'll fall back down in the next week.

[HotHotHeat]

What's the biggest single day gain for the TSX? This is ridiculous, if not completely artificial.

[Claeren]

- A lot of people think it can only go up now so they are buying in.

- The big players started buying to build initial momentum and are now using that momentum to sell everything they can to all of those that think the market can only go up today.

- Then the market will drop again, maybe Monday maybe in a month but sometime again soon.

At the end of the day:

U.S. Treasury Secretary Henry Paulson sketched the outlines of the still-developing plan that he said would "restore our financial institutions to a sound footing."

"We're talking hundreds of billions" of dollars, he said when asked about the cost,

And I would suggest he is being conservative with that answer. He really has no clue, just that it will be 'a lot of money'.

No matter how they get that money, when you add it to the massive deficits the US was already running pre-meltdown, the cost of the war(s) and the cost of the bailouts already made you are talking about TRILLIONS of dollars that need to be found. That wealth has to be erased from somewhere, whether it is investors, taxpayers, bondholders or currency holders (or some combination thereof).


My opinion anyways.
Claeren.

[MoneyGuy]

Originally Posted by flamesfever

Where are they going to get the money? Would you recommend borrowing to invest in the market?

Of course, I'm taking about people who have some cash on hand. For those who don't have cash on hand, they might consider borrowing to invest. This will shock some of you, but think of this. Sure, the market could have more downside, but no one knows that. I'm not sure I'd suggest investing a lot of borrowed money right now, but here is a plan to consider. Let's use a sum of $25,000 for an example. Decide that $25k is your target and decide on a plan to deploy it over period of, say, six months. Make the first deposit of $4167 immediately (better to have been yesterday, but what the heck) and arrange for an automatic deposit of that amount on the 15th of October and the 15th of every month going forward until the money is all invested. That reduces your risk.

Where will the investments be in a year? Haven't a clue. However, I'm guessing that the median age around here is maybe low to mid 30s. If so, you folks will be in the market for maybe up to 60 years. That's plenty of time.

Before someone shoots me down, I'm in my 50s and I've leveraged an amount that's well into six figures.

There are certain criteria that you should be able to meet before considering this, such as job security and the ability to make the interest payments. Done wrongly, leverage can be a wealth destroyer. Done properly, it can be a tremendous wealth creator.

This strategy is best done with non-reg investments, so that your interest should be tax deductible.

Oh, I should say this: If you scoff at this idea, how do you think true wealth is made? Look around you at the folks who are wealthy. Very few of them achieved it without leveraging.

[transplant99]

Originally Posted by HotHotHeat

What's the biggest single day gain for the TSX? This is ridiculous, if not completely artificial.

It may be ridiculous, but it sure aint artificial. Those are real dollars being made and lost today.

Thats the market...up and down and all around again.

Capitalism at its finest!!

[Claeren]

Originally Posted by MoneyGuy

Oh, I should say this: If you scoff at this idea, how do you think true wealth is made? Look around you at the folks who are wealthy. Very few of them achieved it without leveraging.

Kind of an ironic statement during a massive credit crisis.... lol



Claeren.

[MoneyGuy]

Ironic, yes, based on current events, but still true.

[Phanuthier]

MoneyGuy & Finner - any good long term buys right now that you see? (ie. a couple years)

I see alot of good buys, but would be interested in your thoughts on which ones are the best. I'm looking more for some undervalued blue chip stocks. What do you feel about a company like Micron? BNS?

[Gozer]

I seem to remember the American Congress freezing all home forclosures. Is that true? Did that happen, or was it just suggested?

If yes, then what impact did that have on these banks?

[Wookie]

Wow - that was a big day for the TSX... seemed to look like it was breathing a bit early morning, it did... but then continued to roar.

I totally thought there would be more of a sell off.

[I-Hate-Hulse]

Originally Posted by Bertuzzied

Hope you guys bought stocks or mutfunds the past couple of days. This market is going to skyrocket today. All the pre-openings are up huge.

You may suck at Flames player predictions... but damn you were on the ball on this one!

[Bertuzzied]

Originally Posted by I-Hate-Hulse

You may suck at Flames player predictions... but damn you were on the ball on this one!

I do not! Damn you Kobasew!! hehe

ummm it was actually pretty easy. I get pre-openings bids and asks on my streaming etrade power program. They were ALL up at 7am. hehe. I would be amazing if i posted this last nite, but not at 7am. hehe

[Bertuzzied]

Also if you had guts, Lehman Bros. stock went from 5cents to 21 cents on the pink sheets. Up over 300% today.

[MoneyGuy]

Originally Posted by I-Hate-Hulse

You may suck at Flames player predictions... but damn you were on the ball on this one!

Maybe so, but you should not be buying stocks or funds based on expected one- or two-day movements. Unless you're a day trader, which means you have bigger balls than I do.

[Phanuthier]

Originally Posted by MoneyGuy

Maybe so, but you should not be buying stocks or funds based on expected one- or two-day movements. Unless you're a day trader, which means you have bigger balls than I do.

Yeah, something like that scares the crap out of me. I was sort of thinking the stock market might go back to what it was intended to do, buying companies based on value value then speculation. Speculation is what got us into this mess.

$1 trillion, christ.

[Finner]

Originally Posted by Phanuthier

Yeah, something like that scares the crap out of me. I was sort of thinking the stock market might go back to what it was intended to do, buying companies based on value value then speculation. Speculation is what got us into this mess.

$1 trillion, christ.

I day trade options all the time actually. In fact I made a killing on my october potash calls. Got killed on my september SOLF calls though.

In terms of good blue chip long term holds, I still think Bank of America, though you would have done better when i originally posted that...since then its up about 10 bucks.

If its a long term I think oil and other commodity stocks are a good bet. Encana seems like a good buy, especially with the upcoming split. Canadian banks are also a pretty good buy and hold (maybe not after today). TRP seems like a safe bet too.

If you are looking higher risk, solar companies can always be fun. I've done some day trading and options trading on SOLF and LDK. They are a pretty high growth industry, although they do rely on high oil prices to maintain sales growth, as well as there materials (silicon wafers) are expected to get more expensive into next year.