I short-term trade, but with a bias. Right now it looks like the best risk/reward scenario is to have a bullish bias ("buy when there is blood in the streets"). In January the most lucrative thing one could've done was short tech, the IPPs, and telecom. Cut losses and ride the winners. Right now, I think the best thing is to find stocks with no debt, lots of cash, lots of cash flow, low P/Es, earnings growth, dividends, good management, and, ideally, a military connection. In this environment anything you want can be found.
It's true that there are differences in regards to the taxes and money supply. The money supply (M1, M2, M3) today is currently increasing as per government policy; during the Great Depression the money supply shrunk which was one of the key causes of the depression. The government under Hoover also had a policy of "hands-off" and let the economy perform necessary "liquidation". Also the taxes greatly increased during the depression which put a further damper on business and recovery. Smoot-Hawley was not signed into law until June 17, 1930 by President Hoover. While the current tariffs do not match the level of the 1930 tariffs; the trend is towards greater & increased tariffs which will generally put pressure on world-wide business & trade. - Greg
People throw around "but the government can always print more money" as if the process is like baking a cake. You can always print more money but that doesn't solve the problem because money obeys the laws of supply and demand just like everything else. Printing more money might settle some fears for oh about a week, but when you get violent and quick currency devaluation, then the real fun starts. Ik
Historically we are still over valued, and the VIX is reaching relative lows, but look at it on a very long term chart (years). It's mean reverting and should continue lower over time. Also, the economy and the stock market are not the same thing, which is probably the most important thing to remember that no one is telling you. But if you are trading, dont pay attention to this, I know you have to for your IRA and what not if you have one, but as a trader don't concern yourself with it, when you have long signals buy em, when you have short signals short them. Brandon
this is one of the few threads I've actually read from start to current finish. A very interesting read. About derivatives...we talk about JPM's 'exposure.' Does anyone know what their cost basis is on the instruments in question? Did they take on LTCM's positions at discounts?
There are 5 Billiond Dollar managers long this market, graduate of Wharton, Harvard, Princeton and Oxford. There are smaller investors long this market. Someone will alwys be right. Follow the charts thats all you need to do. It keeps you in the present unlike everyone who tries endlessly to explain the past and predict the future. Who the hell knows. I don't and never will.
"I'm capitulating. I can't take it anymore despite the mountain of evidence that one should be long this market." Vishnu, No offense -- BUT how can somebody take on the handle of Vishnu and then allow his intellectual attachment to what should or could be cause such suffering??? Wouldn't the wise and illumined man get out of his own way and allow his Self to get into harmony with what is... PEACE and goodtrading Vishnu, Publias
Yep, we need more traders thinking this way......more to throw in the towel.....more funds, more mom and pops to throw in the towel. More post like the intro to this and maby i will try to rationalize a reason to go long. Oh yea, i forgot, we are "technically" oversold er