MSN still has an article that is two months old fairly prominently displayed. It is a very bearish article about the credit crunch reverberating around the world and causing chain reactions. For all I know, the author was asked to write it to scare investors into selling, but the article paints a very scary picture. Would appreciate any comments. I think the few out there who are calling for new highs by year end are way off base. If we see another 200 points or so, I'll sell most of my stocks. Higher than that and I will continue buying QID or some other bearish fund, and then sell calls against the position. Here's the article. http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx
Das is unargubaly an expert in derivatives market. His insighs could prove precient when the whole derivatives market unwind. Warren Buffet didn't like derivative at all, he got rid of it from Gen Re a decade ago.
We'll see some short term rally. But in the long run, the subprime shocks can be serious shock/threat to the global economy. The whole market can go down substantially. How long will it take for the economy to recover? Dot-com bust may be a history to learn.
Actually, the next problem for the world is not the subprime shock. The next problem for the world is DEFLATION.
US ten year bonds are yielding 3.89% and declining. The three month t bills are yielding 3.03% The US dollar is down nine percent in the last five months telling the Fed they're too tight in the US. They got it, and came out and said (don't usually do that) that they need to lower rates more. The only question is by how much, and I am in the fifty basis point camp.
All the Feds need to start fighting deflation and they do that by stimulating their economies. And then the last leg of this bull market will explode upward.
Thanks for your welcome note.
It has been almost 3 years on CMED board and like our regular contributors...as we all share very good info & trading phillosophy.
Markets were digesting big gain..thus a nasdaq pullback.
I am very happy that you locked profit on AAPL......
Comfort level is important for everyone...so one MUST do what they have to DO.
Looks likethe market is selling off
Sold my AAPL, but RIMM went down so fast that I was in the red
LDK may sell off too? Hmmm market is acting funny. Bought some more DSK and FRO for DIVI and appreciation. Rates fo the tankers are WAY up (huge) even G Kramer says buy.
Thanks Saleem for coming back and posting again.
I humbly suggest...that you should show your OPTIMISTIC side NOW......
Do NOT look for this world to come to an end anytime SOON.
There is tremendous amount of money has been made since May of 06......when this world was suppose to come to an end.
Ben Bernanke and Fed are very FOCUSSED on "navigating this crisis in a HURRY"
When Fed "acts...THING DO get BETTER"
Try to enjoy the beautiful "sunshine in DFW".....
Sell all your QID.....it is NOT a "prudent use of hard earned funds...imho"
You could have bought AAPL instead with the same fund!!!!!!
I am "smiling @ half FULL glass...& BB is pouring some LIQUID in the other half"
There is a famous song "Dont WORRY be HAPPY"...needs to be played in DFW......
Saleem--Thanks for your comments. Don't worry about me, be happy. I actually do enjoy every day and definitely appreciate the climate. In spite of my concern about the legs this rally will have, I am basically a very cheerful, enthusiastic person! My wife accuses me of being like Chevy Chase in Christmas Vacation with the excessive (for the tastes of my neighbors perhaps) lights already on nightly. As I recall you sold everything a few days ago yourself, while I held through the downturn and back up. I won't sell my QID's because I sold covered calls against them. Considering my premium from the calls, I am still profitable. If the market moves gradually higher from here, I can just rewrite the calls and work my way out of the position without a loss. If the market goes onto new highs, I'll be celebrating, as I have a much larger long position compared to my QID's. Still have plenty of BOOM, CMED, some STP, mutual funds and some RIMM bought at $115. I'm annoyed with myself for ALMOST pulling the trigger on DRYS as this rally started.
I'm not a student of TA (beyond the basics) like bux and dream, but as a psychologist am fairly good at watching people and trends. Remember about two weeks before this correction started I began buying QID's? I wish I had more conviction and stuck with them longer. I was, as bux commented correctly, "too early", but only by a couple of weeks. Who knows, maybe I'm an early warning system. I just know that just before the last downturn everyone was partying daily on the tech boards, buying RIMM, GOOG, solar stocks, etc and congratulating each other excessively. We certainly aren't there yet, but I'm watching for a repeat.
Thanks to bux, tjohn, ruby, and dream for your comments as well. As much as I love Christmas and the season, I don't want to leave out one of my favorites stories--the grinch. Guess a bit of him creep in every time we get a nice rally. Best to my fellow longs here!
I agree. The world is breaking out into Capitalism. Billions of new consumers are lining up to participate in this Renaissance. And we are now in the Buildout phase of the Technology revolution which will increase productivity worldwide. The next ten to twenty years will be some of the brightest ever for the human race.
And the bears will always be with us. They see midnight at noon, and will always. They have one prediction: doom and gloom, and since we do live within cycles, they are right periodically, like a stopped clock being right twice a day.
If you look at the trend in history, it has always been upward. At this period, that progress is excellerating and to think otherwise will lead you to miss some of the most rewarding opportunities of our lifetime.
This 'credit crunch' event will be masked in the short term by Fed easing. They will bascially bail out the banks. If u want to really understand what is going on and what will happen down the road U need to read what Harry S. Dent is saying.