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Newcastle Investment Corp. Message Board

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  • robertat40 robertat40 Oct 2, 2009 4:51 PM Flag

    selloff is irrational, but what's new

    Without question many folks in NCT are both day traders and long terms traders. I know I am since the price swings are just to wild and predictable not to day trade it.

    I sold out last week in two batches capturing most of the highs, and came very close to buying back in today as I watched it hit $2.10, but my gut is saying the market has to test the July lows before heading higher, and NCT could be back to the $1.20 - $1.60 range soon enough.

    Fortunately earnings season is around the corner which will quickly set some direction, but I believe the correction downward will continue until Alcoa sets the stage.

    In the meantime I am sitting on 70% cash, just in case earnings season is a huge disappointment and we revisit the march lows.

    Personally I actually hope it does happen so I can enjoy the ride back up again.

    Side note: Peter you should do like to play in the riskiest stocks out there. I hope they don't represent the majority of your portfolio.


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    • At about 50% cash myself.

      Can't even find any decent high-yield bonds anymore - even they have rallied.

      I don't think the markets will crash back down to the March lows, but I do think the rally up to Dow 10,000 was over-doing the rebound, with unrealistic expectations of a quck recovery.

      'Recession over' does not equal 'everything is good again'.

      Technically, the recession may have ended - there are specific criteria for a 'recession', if you remember, in the early stages, things were treacherous, and every common man could tell you things were bad, but economists, Bernanke being economist #1, were saying, 'we're not in a recession'. Again, technically, they were right....

      I will stand by my conviction (one shared by Volcker), that until the US trade deficits are reigned in - ie, consumption goes down, and productivity goes up - we'll have a rough time.

      The rebalancing that should have taken place didn't. Instead, the Federal Government has acted as 'consumer of last resort', printing money to directly buy, or subsidize private buying, of goods and services.

      The most obvious: Housing - subsidized low interest rates, tax credits.
      Auto: cash for clunkers.

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