Registered: Mar 2012
07-01-12 07:17 AM
This is mostly useful to investors in making decisions on long term positioning.
The deeper the crash the farther supply/demand can recover toward the fundamental ranges. The bigger the temporary demand suppression caused by a panic the bigger the rally potential.
The fed has and always will save the market unless the system itself were to end.
Just buy the crashes and don't worry about it like warren buffet. The market will always return to supply/demand equilibrium with the market fundamentals.
If buying crashes were not to work anymore... You wouldn't need to be worried about the market, because there would be no more US stock market period and it would be Armageddon.
So, as many investors have said... Just buy the crashes and sell into the euphoria. There is no other choice if you want to make money as a long term trader/investor.
To the naysayers who say the market could go down to S&P 300-500 and stay there... That won't happen. If the market were to go that low the system would go into a death spiral to zero... A global reset with all stock markets closed and a lot of fiat currencies blown up.
Don't worry about it because there wouldn't be anything you could do anyway except hide in the woods with some military quality semi-auto M16's and buried silver and gold.
The entire government retirement system and everything is linked into the stock market and the 401k/etc system... Stock market levels will be defended and protected like never before because the vested interest in keeping the system together is so high. The stock market in the past wasn't linked to the stability of the system, but nowadays it is.
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