Slava plays Clairvoyant of Calgary

[Slava]

Bump....and of course a market update: TSX down 711 pts this morning. (I can't pass up a chance to say that I'm right, even if the first day of the week isn't even over yet!)

[Nancy]

And in the "I can't believe that's news" category, CNN has just released a news alert that the Census Bureau has officially declared that the US entered a recession in December of 2007."

[Sylvanfan]

Originally Posted by fotze

The predicting down part wasn't the hard part, its that its going to have to start going up now that will prove your mettle. You better be right I have tkane all the equity in my house and put all my life savings into your prediction.

I sold my house in August and am preparing to move into a stick shack in the mountains in January. I estimate that if I can do that, hunt for most of my own food, I should be able to survive a 14 year depression in which I can't make a dollar on my current savings, and not touch my RRSP's (which are worth nothing right now anyways). Hopefully the NDP and Liberal coalition government can figure out how to pay EI for 14 million unemployed Canadians and keep doing it (they've always claimed to be that smart anyways haven't they?)...it would extend my stay of execution.

[Slava]

Originally Posted by fotze

The predicting down part wasn't the hard part, its that its going to have to start going up now that will prove your mettle. You better be right I have tkane all the equity in my house and put all my life savings into your prediction.

lol....well I know that if the markets were up by 700 this morning than I could've signed in here to see a "Slava has no idea what he is talking about" post in the thread, so I had to point this out.

On another point though: you still have equity in your house? Clearly the housing sector is due for much more of a crash!

[Phanuthier]

Good job Slava! I took your advice and had my eyes on a few stocks, they weren't at their 52W lows with the drop today but I liked their company, management and future prospects so I bought into those TSE stocks today.

[MoneyGuy]

Originally Posted by Nancy

And in the "I can't believe that's news" category, CNN has just released a news alert that the Census Bureau has officially declared that the US entered a recession in December of 2007."

How can that be? A recession is generally defined as two consecutive quarters of negative economic growth. If we've been in recession for a year now, why announce this now? Maybe CNN defines it differently, such as the time when some of their economic reporters were laid off.

[bluejays]

I was gonna bump this one myself. Never bought today, but probably gonna jump on tomorrow or Wednesday as I'm guessing we'll see a small drop again considering there wasn't a recovery today at close. I guess we shall see!

Thanks Slava!

[Slava]

Well RRSP season is upon us and the markets have yet to recover. A lot of you probably wonder about what to do with your contributions that have to be in by March 2nd, so I figured I would dredge this thread up again and make another few predictions. Of course you should speak with an advisor for your situation or at least weigh my general predictions carefully before commiting to anything.

Also, (much to the glee of some posters I'm sure), I will eventually be wrong in my predictions and prognostication. Its a fools game, but it is entertaining to me!

I suggest that mounting evidence shows that the TSX will re-test the November 21 lows. This means that while we are at approximately 9000 this morning, we would see a 15% drop this spring. I think that this is likely for a number of reasons and could get into this if people are interested in hearing it.

What does that mean for your RRSP's or investments? Well there are a couple of ways to look at this.

(1) I read that thought, but that guy doesn't know what he is talking about. In this case ignore this, poke fun at my prediction and do what you think is best.

(2) If you believe this is the case and will want this money in the near term you might want to consider putting your investment into cash until the lows are re-tested. You also might look at investment options where not all of the cash is deployed at once (a dollar cost average strategy that still gets the money into the RRSP before the deadline though).

(3) Similar to the first point; the markets are down without question. You have riden things this far and another 15% won't matter even if I'm right. Buy equities and enjoy the ride for the longer term. There is nothing wrong with this approach as you will come out ahead over the longer term.

(4) Buy bonds and get paid to wait. I think that with further rate cuts to come and still a couple of months until a recovery is imminent this could be a decent place to sit. You could still see some appreciation here and have flexibility to move to equities when things bottom out.

Further to my prediction, I think that once we hit this 7500-7700 level we will shake out a lot of the problems that we've had. From there I think that the market begins its recovery and you need to be invested!

[macker]

Here was a pretty accurate prediction made by Jim Rogers on March 4, 2007.
http://www.reuters.com/article/newsO...s&pageNumber=1
Almost scary how clairvoyant he was!

[Dan02]

Originally Posted by macker

Here was a pretty accurate prediction made by Jim Rogers on March 4, 2007.
http://www.reuters.com/article/newsO...s&pageNumber=1
Almost scary how clairvoyant he was!

with the number of people throwing their hat into the ring to quess at what's going to happen, one of them is bound to be right, or atleast pretty close.

Props to this guy for being close though.

[Cowboy89]

Originally Posted by Slava

(4) Buy bonds and get paid to wait. I think that with further rate cuts to come and still a couple of months until a recovery is imminent this could be a decent place to sit. You could still see some appreciation here and have flexibility to move to equities when things bottom out.

From a fixed income perspective: This strategy isn't necessarily without downside risks through this anticipated period. All the money that MoneyGuy and Slava were previously predicting to spearhead a "Spring-loaded" market recovery back in November/December went into bonds big time, namly corporate bonds. Investment grade corporate spreads have been tightening and premiums have shrunk. New issues have been dramatically oversubscribed to reflect this demand. What this means for investors is that they could be buying corporate bonds at a time when bond prices are higher and yields are much lower than a period after signs of recovery are present and fears of deflation subside. Timing the market is important to this strategy if it is to include corporates. Buying treasuries offer record low yeilds for the short-term stuff, (in fact a lot of investment savings accounts beat treasury rates, so why bother!).

In my opinion if I were more risk adverse, Slava's option 2 allows you to make the RRSP contribution and recieve your tax refund on 2008 income(Which for a lot of people might be significantly more than 2009's or 2010's income), without exposing your money to the volatility of either bond or equity markets until such time as you're comfortable.

[MoneyGuy]

Originally Posted by Cowboy89

From All the money that MoneyGuy and Slava were previously predicting to spearhead a "Spring-loaded" market recovery back in November/December went into bonds big time, namly corporate bonds.

What I said and continue to say is that when the market turns, it will really take off. When we reach bottom (no one knows when that will be), I feel it will be the investment opportunity of a lifetime.

This is what I'm doing. My TFSA contribution is going into high-risk stuff, while my RRSP contributions are going into equities. I'd rather be in the market for a further 10-15% drop than miss the big up, which will come. I haven't been proven right yet, but I will be.

Originally Posted by Slava

(3) Similar to the first point; the markets are down without question. You have riden things this far and another 15% won't matter even if I'm right. Buy equities and enjoy the ride for the longer term. There is nothing wrong with this approach as you will come out ahead over the longer term.

[Fozzie_DeBear]

Originally Posted by MoneyGuy

This is what I'm doing. My TFSA contribution is going into high-risk stuff, while my RRSP contributions are going into equities. I'd rather be in the market for a further 10-15% drop than miss the big up, which will come. I haven't been proven right yet, but I will be.

I was thinking of doing something similar with TFSA...maybe an Gold focused ETF...although my financial planner is recommending dividend stocks and global equities

[Slava]

Originally Posted by MoneyGuy

What I said and continue to say is that when the market turns, it will really take off. When we reach bottom (no one knows when that will be), I feel it will be the investment opportunity of a lifetime.

This is what I'm doing. My TFSA contribution is going into high-risk stuff, while my RRSP contributions are going into equities. I'd rather be in the market for a further 10-15% drop than miss the big up, which will come. I haven't been proven right yet, but I will be.

That is a given, no question about that!