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American Capital Agency Corp. Message Board

  • dr_klumps dr_klumps Mar 25, 2014 10:28 AM Flag

    Markets are very Unstable !

    Characteristic of the top or peak in this cycle. Everything is headed downward in the future. Be very careful, this instability could break dramatically to the downside at any moment. Best raise cash and get prepared for an opportunity of a lifetime.

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    • You may be right. With everyone thinking that the fed has signaled for interest rates to go up maybe it is time to get out of stocks until the carnage is over and just play the market volatility.

      One could creditably argue that the fed has caused a market top. Those who get spooked early have already left and those who are observing market conditions and considering the reaction to the fed are contemplating leaving before the market loses what support that it now has. I don't see how the market can go up significantly higher from here with this kind of sentiment based on an expectation of rising rates. Maybe it is time to take 1/3 to 1/2 off the table and wait and see what happens next. I'm starting to feel like a deer in the head lights and I personally I think that is a dumb place to be.

    • My cost basis is $18.80 and I think that was an opportunity of a lifetime, Now if i figure in the upcoming .65 divvy it will bring it down to $18.15, Wow.

      Sentiment: Buy

    • is that all?

    • Some Wisdom from John Hussman of Hussman Funds, very true stuff here........
      Fed-induced speculation does not create wealth. It only changes the profile of returns over time. It redistributes wealth away from investors who are enticed to buy at rich valuations and hold the bag, and redistributes wealth toward the handful of investors both fortunate and wise enough to sell at rich valuations and wait for better opportunities. There won’t be many, because rising prices also encourage overconfidence in a permanent ascent. Few investors are capable of enduring the discomfort of being on the sidelines for very long if a speculative market proceeds further without them.

      Only those who sell at extreme valuations have the potential to capture any benefit from them, and that benefit only comes by saddling some other investor with poor returns going forward. This is redistribution, not creation of wealth. For those that fail to exit, speculation only changes the profile of returns over time. Excessive reward for short-run risk tolerance goes hand-in-hand with punishment for maintaining that risk tolerance over the longer-run. Over the next few years, the contrast between these short-run rewards and their long-run punishment is likely to be epic. The median stock is more overvalued than at any point in history. Broad market valuations on the most historically reliable measures we identify now exceed the 2007 extreme, and are on parity with 1929. Only the 2000 peak went further

 
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