Discussion in 'Trading' started by Mvic, Apr 25, 2007.

Where do you see investor complacency today?

  1. At extreme high levels

    15 vote(s)
  2. Above average

    8 vote(s)
  3. Average

    6 vote(s)
  4. Below average

    6 vote(s)
  5. At extreme low levels

    3 vote(s)
  6. haven't been watching markets long enough to have an educated opinion

    4 vote(s)
  1. Mvic


    Where do you feel we are in terms of investor complacency?

    I feel that we are experiencing very high levels of complacency where risk is erroneously perceived to be well managed, well quantified, and counterparty's well funded.
  2. john12


    the problem is our fed has temporarily taken all risk out of the market. we;ve gone 4 long years without a 10% correction so people feel invinsible. we've probably had the lowest volatility in history the last 4 years. look at the mockery analysts have made of earnings by low balling est's to death so all can kill. in the not to distant future the rubber bank will viciously swing to the other side and we'll have a huge correction
  3. bh_prop


    I think VIX is hanging out near 13 lately vs 10-11 area during the Feb highs. Not near as complacent as it used to be.
  4. Mvic


    Loks like we have two people who don't know what the word complacency means :D
  5. I voted the last :D

    I'm no Jesse Livermore

    But I think it's ok, because I found my alpha..
  6. Mvic


    A little honesty goes a long way on ET, good for you. And you know it isn't where you start in this business that is important it is where you finish. Good luck.
  7. hels02


    I don't know why people think there's complacency. You can tell right on this forum, every time there's a slight down day, everyone comes out yelling about black swans, shorting, and calling tops. Everyone is ready to push the sell button for every single little thing, every bump, every dip.

    You can track the complacency quotient just on here by looking at the down days in the last month, and the number of new posts on those days calling tops are in, lets look at 1960, lets look at 1999, lets look at black swans, lets look at this article about sub-prime lending falling apart, bad gov't reports, etc.

    How often do you see threads with, "big deal, it just gained X points, it has to consolidate!". You don't. Complacency? Where? Ask yourself if you are ready to bail after a few down days... if the answer is yes, you aren't very complacent.
  8. TOM134



    Here's what is going to happen:

    ".....What is the dollar cost of these misadventures? Joseph Stiglitz, Nobel-prize winner in economics, estimates a total cost to-date of Iraq II alone at about $2 trillion - includes ongoing veterans benefits, equipment repair, etc. Meanwhile, the U.S. is trying to militarize space - further adding to our military expenditures and indebtedness.

    Finally, Johnson sees our military costs eventually bankrupting the U.S. (if our escalating trade deficit doesn't first), aka Rome.

    Unfortunately, it all makes sense to me."

    You must read:

    Nemesis: The Last Days of the American Republic:

    Our $ will be worthless in a very short time!


  9. hels02


    Tom, all the more reason to make more as you can.

    I have not read the book, so am only qualified to discuss your response. Basically, the term 'bankruptcy' means very little when talking about a nation... who's going to 'collect'? Will the US government default on the bonds, the loans, the T-bills? No.

    When push comes to shove, a government can print money, and it can inflate our way out of debt. The analogy is like buying real estate 30 years ago. What % of your current income will the payments to service that mortgage mean to you today vs what % it meant to you then? Your payment gets cheaper and cheaper doesn't it?

    The dollars the government pays your bonds, T-bills, loans back with are not worth as much as the dollars they borrowed, and they can accelerate this at their whim, since they control interest rates.

    Knowing this, we don't need to prepare for the worst by building bomb shelters and buying small farms in Iowa, but we do need to try to ensure that the dollars we have can beat that inflation and doesn't depreciate.

    Can that happen buying 5% T-bills? No, because that's how the government will get out of or reduce national debt... by ensuring that the debt is worth less at payoff than it is today. That's the measuring stick wouldn't you think?

    So... where can we put our dollars today that can beat government controlled interest rates? If we all think the same thing, the stock market is going up.

    More interesting... propping up our lousy economy and overwhelming debt is of great importance to other nations.

    If you foreclose on a house worth only 1/2 of your loan, you are going to lose a lot of money... helping the guy a bit so he can pay you fully later is a better idea under those conditions.

    Soo... what keeps US consumers spending? A happy stock market and no immediate worry about their retirement or pension funds (vested in Mutual Funds... in the stock market)?

    Where do these foreign nations keep all that money we give them anyway? In US dollars... I don't think they want the dollar to become worth less either.

    It's a pretty delicate balance, but it behooves everyone to maintain it. So if your book is all about doom and gloom because we're in debt, I think it's wrong.

    How will it all end? I may not be a nobel laureate anything, but I think we will inflate our way out of debt if we have to, it's just a very painful pill to swallow at once.

    Propping up the stock market is the logical tactic, as we inflate our way out of debt, because people keep spending (keeping up GDP), we won't panic about our future (keeping us spending), and if we can try to drop the value of the dollar vs other currencies, we can rebuild our industrial base again, keeping employment higher and us happier with our politicians. And lo! We have a stock market crash protection team now... hmm.

    These are my thoughts only of course, but it seems to me that some people focus too tightly on the trees, and just don't see the whole forest. Just what can happen to an entire nation that goes 'bankrupt'? Not a thing. We all wake up the next day anyway.