I will not respond to these comments in kind. I wasn't even interested in investing in equities back in 2003. I was focused on developing commercial and residential real estate, which has been a family business (and still is) for two generations of my family. If you read my posts here, you will see that the first time I became an investor, to any degree, was June of 2006. Draw your own conclusions about what that says or doesn't say about me. Had I been investing in the equity markets back in 2003, I'd like to believe I would have done diligent research and would have recognized it as a good time to invest. Maybe I am wrong, and would have been afraid to have invested at that time. Had I been invested then, I do believe that I would have done well, as even average performance during this run has been outsized compared to historical norms. The companies I like now have done very well since that time period. Maybe I am wrong. Who knows. Maybe I would have lost my total investment during a period when we witnessed historically high returns.
But analysis of the concept, of: money pools drawdowns trends market participants if you look at the attached SP500 chart, it implies 'micro drawdowns' flushing out micro money pools to the intermediate term participants, a intermediate term drawdown flushes out intermediate term participants into long term participants money pool. Long term participants uncle point will be hit when a breach occurs at that trendline, and people will start screaming bear market. The intermediate term duration seems to be getting longer with each intermediate term drawdown. To eventually in the future a final result being a bear market.
You never know until you're in the moment. No one wants stocks at a bottom. And in fact, at the 2002-2003 bottom, there were many, many traders who were expecting lower prices, not higher prices. They claimed there had not been "capitulation". I then watched many, many retail traders short the market all the way up. Someone mentioned Apple computer. LOL. That was a favorite short of traders all the way up. Hell, the day it jumped big from what...12-15 (pre-splits) on news of ITunes, Merrill Lynch downgraded the stock because ITunes would never turn a profit he said. The one thing that is definitely true about bottoms...most people don't buy because they are fearful, they've already been killed by stocks...they're hoping beyond all hope just to get even. And when stocks finally do take off, they go up so fast everyone knows they'll pull back, top out, gone too far too quick, overbought, etc etc. Bottoms look easy in HINDSIGHT. But good luck at the next bottom. LOL. OldTrader
too true. If there were no business cycles and recessions etc. how else would people "buy low, sell high"? But especially for traders these ups and downs bring excellent opportunities to "play both side" and maximize profits by shorting/going long. Only trick is: you have to be on the correct side at any time. Gotta keep alert and in tune with the markets and "follow the trend", otherwise even recessions won't help http://lauristonletter.blogspot.com/
You are lucky to have exposure to numbers before they hit income statements and revisions of forecasts. Do you think its just that company for their products, or more general? What you said there were also the first signs in 2000 and back in 1980. The first nose under the tent is contracts and orders, followed by production, sales, and then inventory when the realize its too high for sales. I noticed recently that companies are starting to cut production schedules. And you know a week or two later you'll start to hear about job cuts, too. That tends to cascade because when mgmt sees cutbaks at other places and notices soft order input, they tend to pull in the horns, cut the cap ex, inventories and headcount, too. From there it can easily become a self-fulfilling prophecy. Maybe in another month or so we'll see further softening in retail sales, and jobs as a result. I think the determining factor as to whether it stays a slowdown or becomes a recession will be housing and credit, and whether those things recover for spring and summer selling season. Its 12% of the economy, so if it screeches to a halt, its going to have many ripple effects. This time people won't be able to refi their way to more spending money, either.
There's no recession going on now, and there is not going to be one. The market is acting normally. Stocks are usually down during the winter months. Just Buy during the summer and Sell when winter rolls around, and you'll make a profit.