Although Stock-Trad3r deserves some beating for his unfamous "This is the way it is going to be", I also think that it is a little premature, after 1 or 2 days, to say that he is wrong for his longer term prediction. I guess that, in a remarkably predictable fashion, many traders are going to jump on the "I told you so" bandwagon and start selling or shorting. It should be an interesting end of the week, going into election's day. By the way I have not heard about the manipulation to move the market up to election day in today's comments of the "Sell-off".
Why don't you read the thread below, and then make a decision as to whether we are being difficult with poor old Stocktrader3 http://www.elitetrader.com/vb/showthread.php?s=&threadid=71967
In that thread he mentions I think when he uses suring is he means soaring. Anyway the stocks plummeted. He didn't sell any of them, and he became a buy and hold investor due to necessity. I guess he really didn't make $20,000 since he didn't have the brains to sell. He made many predictions throughout the thread. He told us all how easy trading was, and alas he was wrong in every instance.
Interesting statement. I was actually thinking the same thing. Back in 1998, at least in our area, real estate was at the end of nearly 10 years of low to no growth. I sold a 10 acre waterfront property with a 4000 sf home for $150,000.... and put it into the stock market.... in 1998. Last year, my old home sold for $2.5 mil. And what happened to the money I didn't see growing on the real estate market? I put it into the stock market... in 1999. Can you say hard lessons learned? Over the last 3 years, I've been crawling back to my original $150,000 in that account, just for pride's sake. Buy/Hold isn't the best strategy over time, as I learned the hard way. All my mutual funds tripled in that same time frame, and that particular account is still down 80% (I had a few jewels like MCI, Global Crossing and Loral). To remind myself of the lesson, I still hold my $70/shr Cisco, my $84/shr TWX, and my $70/shr Lucent from 2000. Maybe before I retire, I'll see them even again, just for that 20 year satisfaction, since today, with this 'bull market', they aren't even a piss in a bucket at 100 shares each. On the positive side, I've managed to make 400% from the account's low point over the last 3 years. If I can keep up exponential gains, I'll have that money back in a few more years. If only I knew as much about the market then... but I'm determined to never make the same mistakes again or the lesson would have been wasted. My personal story above was to point out that Buy/Hold is not a great strategy unless you are a serious value investor ala Warren Buffet. That is, you bought GLW at $2 (I did in 2003... a move that helped saved that particular account). In 2002 and 2003, there were plenty of deals as good as that. Not now tho. I won't buy near a top unless it's with a married put. And I have trailing stops on everything now. Hindsight is 20/20, but if you don't learn, you're doomed to repeat it. I only commented because it seemed that stock trad3r was taking a verbal beating, and I'm interested in what he has to say. While his actual investing method may not be the wisest, he seems to do his research. He DID call the bottom on Aug 17... I just read that entire thread... while all the same people making fun of him now were then telling him how dumb he was because the bull market just ended. No, the BEAR market just ended there, and the little bull market began, almost to the day he called it. He was right on the money, if a hair quick to dive into the stocks. If he BOUGHT when he called that bottom... he'd have made quite a bit on those 5 stocks he liked. Did anyone really fade him? Because you lost your ass if you did, and are now licking wounds. Why are some of the same people making fun of him again? Yes, the last few days could go either way... so I bought some puts and put in some trailing stops. But I'm not ready to short this market. If you bought at the bottom like Stock Trad3r called it, you're up by quite a bit, you can afford a $2 trailing stop on all your notable gains. The point here was the real estate. Each area of the country had slightly different growth and growth rates... but for most areas of the country, the Real Estate explosion happened over the last 5-6 years. Did this corresponding to all the people who got scared out of the market in the 2000 dump? Everyone was afraid to get back into the market... so they bought real estate. Who wants to buy real estate for investment now? So what do the investors who took their money, or are taking their money off the table going to do with it? CD's and T-Bills? At 4-5%? Bonds? At 3-5%? Forex? Most retail investors don't know a thing about that. Gold? Possibly... but most retail investors aren't sophisticated enough to think about gold either. Most stock market investors buy mutual funds or stocks. Today, another hottest thing are ETFs. What happens when that money hits the brokers and fund managers? They buy because they have to. Most funds must be 80% invested as part of their mandate. Economy notwithstanding, I can't fathom where else that small investor money can go, unless someone can tell me different. As that 'excess inventory' clears out... that's the investors dumping their investment properties... it will leave a whole lot of liquidity. Yes, there's a lot of $$, he's right. Retail investors caused the housing runup, not people buying homes to live in. There were house/condo 'flippers' in every city. Businesses were even getting into flipping for investment. People who ran away from the stock market in 2000-2003.... and now... have to run away from Real Estate. Now, if you just sold 2 or 3 condos, vacant lots or investment homes... what would you do with the money if you want higher than average returns? Brokers still tout the S&P's 10% average return over the last 70 years. It sounds a whole lot better than 5% CDs at the bank. The question isn't whether that liquidity will show up in the market, it's when.
He is a permabull. He calls the bottom on every post he makes. Since the market naturally has an upward bias he will be correct on some occasions. On June 29th he said there was a MASSIVE MARKET SURGE. The nasdaq then proceeded to drop an additional 6.21% in 20 days. The bottom line is if you are going to make money in the markets you have to have a strategy THAT WORKS. Wishing the market will go up when it is in a downtrend and then allowing your profits to turn into a loss is just plain ignorant. Yes there is a lot of money on the sidelines right now. It eventually will find its way into the market but only if corporate profits are there. If the profits are not there and we fall into a recession people will put their money into gold ,bonds, and high dividend paying stocks. Stocks will drop. Why would anyone with real estate profits put their money into a falling market? The answer is they won't unless they feel the market has bottomed. Preservation of capital is more important during a bear market than trying to pick bottoms in the stock market. I'm not saying we are going into a bear market, but it is certainly a possibility that is increasing in probability over the next 6-8 months.
Out of Ben Bernanke's helicopter hahaha. CrAnK Up ThE pReSsEs. To bad only people with good credit can participate.
A lot of money will just stay in cash rather than chase performance, until we get some sort of correction. @ 5 to 5.5%, cash isn't a bad place to be right now. And let's face reality, the U.S. macroeconomic picture is deteriorating. Asia, baby.
You can forget about real estate being a mechanism to put money back in the market. there is ZERO liquidity in real estate, that is why inventories are so high...nobody can sell without taking a loss. i doubt there will be much from that area. As far as "new money" coming into the market...it has to come from funds and institutions. At last look the average fund had only 4.4% in cash to invest further..and most of that they need to keep in cash for liquidity. with all the big boys missng numbers (WMT, CAT Etc.)and bad economic and retail numbers...you need to be VERY careful in this market. not to mention gorssly overbought conditions a==on all major indices. If i had to pu a ratio on the odds of this market continuing to ove up in the next few weeks/months...i would say the odds are less than 20%. but that is an arbitrary number that cant be measured.