I am of a like mind. I am a little under 50% in cash at this point. I don't know where the bottom is, actually i think it may well be quite a bit lower, but we see what looks like many bargains. My approach, in investment accounts, is to sell a few puts (never leveraged of course), not many, and continue selling them as long as we keep going lower, and there is enough panic to keep the prices at what seem to be absurd levels. I consider this to be buying through the backdoor, as i am perfectly happy should i be assigned. I sell them relatively far out and a little out of the money. I will either get assigned at what i consider to be very fair net prices or i will make money on the puts, enough to compensate me for having to buy stocks at a higher price later, the same as would have happened if i waited to buy and we were in fact nearer the bottom than i realized. I would think it unlikely that the vix will stay above 50 for to many more weeks, and i want to sell those expensive puts until i run out of money. I still like the April FTO puts, and many others. One of the features i like about the refiner puts is that the probability calculations don't take into account the seasonal nature and that should give a little edge. If FTO is at 4 to six bucks in April (and i doubt that) i'm still Ok with having paid 7.50 for it. I see traders referring to this as trying to catch a falling knife, but i consider that to be going short when something is falling at close to terminal velocity (i.e., chasing) . Instead, I'm trying to get long close enough to impact to have a reasonable chance of the bounce off the floor carrying me past my profit point. In any case, you won't here any whining from me. I think this is going to be a doozy of a long, deep recession, so i won't be shy about grabbing profits on long positions if and when the opporunities arise. This behavior from me and others is going to make for a long, torturous climb off the bottom.
sitting in the office (not trading, regular IT job), been hearing people sigh about the big drops in the past weeks.... and today, lots of talk about guys pulling money out of IRA, 401K, education funds etc. Capitulation is already here.
Maybe this time we won't get capitulation. Maybe this time a slow drop is what we will see until everyone is totally satisfied selling. Have been a bear as well and think that this market is not worth shorting at this moment if anything I would wait patiently for the next bear market rally to get back in on the short side. Everyone knows earnings are going to be down significantly and to be honest with you earnings are the last thing on investors minds right now. Get the libor rates down and maybe are next concern will be earnings.
You may be right. Although Im not sure I would call this slow selling. there are sectors that have lost 75 percent of there value in the last two months. I have no doubt the short ban is making thinking worse. And Bernanke doesnt have a F$$king clue what he is doing. If this isnt a collapse than I dont know what is.
don't any of you guys recall 2000 -2002. We sold off 78% So how can anyone pick a bottom without seeing something tangible to hang their hat on. ANY upside will be met with selling by people who are just waiting to get out at any premium to the last couple of weeks crash!
2000-2002 had some of the most violent short term rallies imaginable. I could care less if we're close to THE bottom, but I really do think we're very near a tremendous oversold bounce. The fact that 90% of ET thinks we're going straight to DOW 8000 makes me even more convinced it won't happen.
When Buffy buys the common of GE and GS then I would consider that support of a co and confidence. Ole Buffy got sweet terms that you or I will never get....you do realize that don't you?
He is getting preferred stock and some 10% guaranteed income, and the convertibility on. So what exactly is your point?
Is the bottom near? Depends - do you mean from a timeframe or a number? Because I cannot possibly see how - if the Dow continues to fall at about 400-500 points a day, that the bottom is that far off. What's that mean? We hit 8000 in 3 or 4 days? Something HAS to give.