techboy Posted January 20, 2009 Share Posted January 20, 2009 And if the market moves up 1,000 points starting on Tuesday....does everyone have their random theory excuses already prepared? I guess we'll never know... Stocks battered on recession fears Stocks slumped to two-month lows Tuesday as investors looked beyond President Barack Obama's historic inauguration to the battered economy he inherits.The Dow Jones industrial average (INDU) lost 4% according to early tallies, closing at the lowest point since Nov. 21. The Standard & Poor's 500 (SPX) index lost 5.3% and the Nasdaq composite (COMP) lost 5.8%. heh....get ready for a big week people. We should have some fireworks next week.:applause: There were definitely some fireworks today, that's for sure. So, did you stop loss out of your purchases from Friday that were supposed to make a killing today, or are you, well, holding? Link to comment Share on other sites More sharing options...
techboy Posted January 20, 2009 Share Posted January 20, 2009 OK so I am convinced as well that barring an attack of some sort, inauguration day will be the beginning of a rally. Well, the end of inauguration day has left a lot more room to start a rally, I guess... Link to comment Share on other sites More sharing options...
Hubbs Posted January 20, 2009 Share Posted January 20, 2009 And if the market moves up 1,000 points starting on Tuesday....does everyone have their random theory excuses already prepared? Link to comment Share on other sites More sharing options...
McD5 Posted January 21, 2009 Share Posted January 21, 2009 Hubbs.....wrong thread. Here, let me direct you: http://www.extremeskins.com/showthread.php?t=156589 Link to comment Share on other sites More sharing options...
Hubbs Posted January 21, 2009 Share Posted January 21, 2009 Hubbs.....wrong thread.Here, let me direct you: http://www.extremeskins.com/showthread.php?t=156589 While I'm there, mind if I post this picture of you? Link to comment Share on other sites More sharing options...
techboy Posted January 21, 2009 Share Posted January 21, 2009 Hubbs.....wrong thread.Here, let me direct you: http://www.extremeskins.com/showthread.php?t=156589 Hubbs is being rude, and this is actually a pretty decent retort. I'm wondering, though, if you have any comment on the claims made in this thread? Link to comment Share on other sites More sharing options...
McD5 Posted January 21, 2009 Share Posted January 21, 2009 Hubbs is being rude, and this is actually a pretty decent retort. I'm wondering, though, if you have any comment on the claims made in this thread? Everything I see says a rally is here. But that RBS news started a cascade in the financials unlike any drop in that sector since 87. We all know the banks are lying.....the Fed sent us down the river, and that things are about ten times worse than they are telling us. I don't see how that sector can possibly do anything but end badly. It has been that way for the last year. IBM provided some after hours punch tonight. Barring any other gigantic bad news from the banking sector early in the morning, we should see a solid bounce tomorrow. Now what happens after that rally is yet to be determined. Obama coming out strong with some policy efforts might be the deciding factor. That 9k nut is going to be tough to crack without it. Oil was pretty weak today too. Only gold looked good. Link to comment Share on other sites More sharing options...
techboy Posted January 21, 2009 Share Posted January 21, 2009 Everything I see says a rally is here. Thanks for your latest attempt to predict the future movements of the stock market, but that wasn't really what I was getting at. But that RBS news started a cascade in the financials unlike any drop in that sector since 87. Is that an excuse? I thought the charts trumped all? Remember this? In reality, these events had little, if anything to do with the market going down today. In fact, even if none of those events had taken place, AND we had captured Bin Laden, the market was still going down 250 points or more today. Interesting. When you get lucky, the predictions were right, and no market forces could have changed that. When you're wrong, it was because other forces outside your control screwed it up. As a side note, though, which of the things you listed didn't you and Dr. McHugh know about? Surely it wasn't the weak financial sheets of the banks... And, as outrageous as this may sound, I have yet to see this particular gentleman ever wrong.....not on even one single prediction Well, here's one... In Thursday night's report....he once again painted the big picture, giving everyone the exact date the the next big market leg up would begin. Next Tuesday. He also says a "multi-week" rally begins Tuesday. And, saying the market would "close down" on Friday is two. In two days. You were so sure you even gloated... And if the market moves up 1,000 points starting on Tuesday....does everyone have their random theory excuses already prepared? But, that's exactly what it is. Random. Market timers, by dint of statistics, are going to be right a bunch. I'm sure that sooner or later, you'll get it right here too. Maybe even today. The problem is, though, that over the long haul, just as in Vegas, the "House" always wins. In this case, the "House" is higher costs, fees, and taxes, as well as the chance to royally screw up. It's not that market timing won't make money. It made around 8.4% per annum in the study I cited (that you ignored). It's that it loses out to Buy and Hold, which made 9.9%. For investors over that 30 year period, that was a difference of 9.5 trillion dollars. Not a trivial sum, I'm sure you'd agree. Link to comment Share on other sites More sharing options...
kubstix Posted January 21, 2009 Share Posted January 21, 2009 Obama is going to reverse the ban of funding stem cells today or tomorrow. Just reported on CNN and FoxNews. Are people still drinking the haterade now? Link to comment Share on other sites More sharing options...
PeterMP Posted January 21, 2009 Share Posted January 21, 2009 Obama is going to reverse the ban of funding stem cells today or tomorrow. Just reported on CNN and FoxNews. Are people still drinking the haterade now? Nobody ever said it wouldn't be lifted. I didn't even say that stem cell stocks wouldn't go up (especially short term). I just said that those companies weren't going to see a lot of money from the government even w/o the ban, and certainly not enough to make them more attractive investments over the long term. I'd guess long term some of them are likely to do well (some will also likely go bankrupt, and if you know now which ones (or happen to pick the right ones based on random chance) all the more power to you). What it does mean, as somebody that works in a non-profit and eligible for many of the grants awarded by the NIH, is that I should break out my stem cell research grant and get ready to submit it for the next grant cycle . Link to comment Share on other sites More sharing options...
jrfriedm Posted January 21, 2009 Share Posted January 21, 2009 http://en.wikipedia.org/wiki/Gold_as_an_investment I agree. The safest place to invest your money in times like these is in precious metals. While the return may not be high, it is a very safe way to go, as you are assured that you will get your money back + inflation. Link to comment Share on other sites More sharing options...
techboy Posted January 21, 2009 Share Posted January 21, 2009 Obama is going to reverse the ban of funding stem cells today or tomorrow. Just reported on CNN and FoxNews. Are people still drinking the haterade now? Yes, I am drinking the haterade. It is tasty. Look, PeterMP is right, but even if he's not, there's a larger point you're missing. Let us assume for a second that you are correct, and that Obama will eliminate the ban (I agree, very likely), and that this will add significant value to the companies working on stem cells (as PeterMP says, a bit more problematic, but let's grant it). The problem is that if you know this, so did the entire Street. And, assuming that value really would be added, they'd no that too, and that this would drive up the longterm stock price, which is largely based on a company's expected future earnings. But really, do you expect all the institutional investors on Wall Street to sit around on such information? Of course they won't. The second they think it's possible, they buy the stock. Any rise has already happened. The information is already included in the price. The only way you could possibly have made money on this information is for you to have known in advance before anyone else, which is insider trading, and is illegal. From this point on, the only way to make money would be to get lucky and to happen to purchase the stock of a company that makes a big breakthrough, and unless you have insider information, that's basically just luck, and could happen with any company, so there's no reason to focus on biotechs specifically. It could just as easily be a boutique drug company (the next Pfizer) or a software company (the next Microsoft), or whatever. While the return may not be high, it is a very safe way to go, as you are assured that you will get your money back + inflation. But you have to pay the costs of storage, and if you own it in a fund or ETF, there are also management costs. After costs, as I have said, the real returns are negative. Losing money doesn't seem all that safe to me. Link to comment Share on other sites More sharing options...
McD5 Posted January 21, 2009 Share Posted January 21, 2009 Nice rebound today, after people freaked out yesterday. For lunar watchers....full moon is Monday, which would dictate selling stocks tomorrow, for a drop into the new moon. Will be interesting to see what McHugh says. Link to comment Share on other sites More sharing options...
jrfriedm Posted January 21, 2009 Share Posted January 21, 2009 But you have to pay the costs of storage, and if you own it in a fund or ETF, there are also management costs. After costs, as I have said, the real returns are negative.Losing money doesn't seem all that safe to me. Yes, you have to pay for storage, however; this does not mean that the returns will be negative. There are several places to store your gold that are safe and secure, but at the same time inexpensive. In addition, the demand for gold will never go away while the amount of gold in finite. Link to comment Share on other sites More sharing options...
TheGoodBits Posted January 21, 2009 Share Posted January 21, 2009 Yes, you have to pay for storage, however; this does not mean that the returns will be negative. There are several places to store your gold that are safe and secure, but at the same time inexpensive. In addition, the demand for gold will never go away while the amount of gold in finite. The demand for gold will certainly fluctuate based on market conditions however. It's hit or miss when you invest in gold, and it's never something you want to hold onto for extended periods of time. There are reasons why successful investor like Warren Buffet never invest in gold. Link to comment Share on other sites More sharing options...
techboy Posted January 21, 2009 Share Posted January 21, 2009 Nice rebound today, after people freaked out yesterday. And yet, it still didn't make it back even to where the market was before Tuesday, when the rally was supposed to start. The only way you're going to salvage this prediction is by stretching it so far out of shape that it becomes a horoscope. Of course, that's what market forecasts are, anyway, really. Yes, you have to pay for storage, however; this does not mean that the returns will be negative. There are several places to store your gold that are safe and secure, but at the same time inexpensive. In addition, the demand for gold will never go away while the amount of gold in finite. Yes, it will be negative, in real terms. In the very long term, gold only keeps up with inflation. That's the quality you were just hyping. In real terms (which is subtracting inflation), that's a zero return. Add in costs, no matter how small you think they are, and we're in negative real return territory. It might not be very much negative, but it is still negative. Link to comment Share on other sites More sharing options...
techboy Posted January 24, 2009 Share Posted January 24, 2009 I bought 2x mkt related etfs--whatever the mkt does, they do twice as much, and added to my gold position, already up 35% in the last four days. A little warning for those uninitiated readers that might be getting ideas about holding such leveraged funds: Warning: Leveraged and Inverse ETFs Kill Portfolios. If you've ever purchased an ETF labeled as Ultra, 2X, Double Long, or Inverse, please read this article. It will take only a few minutes of your time, and it just might save your retirement.I recently returned from the 'Inside ETFs' conference, which is widely attended by ETF industry insiders and financial advisors, and I was shocked to learn how many people have a misconception as to how these funds work. And this sampling was not of novice day traders--these are professionals and financial advisors. They research a product before they dispense advice or buy something. If you think 'Morningstar is just too conservative,' then please read any one of these articles from other sources here, here, and here. My intent is not to scare you away from pursuing an actionable investment idea. If you're hell-bent on using leverage for any period of time longer than a day, you'd be better off using a margin account in almost any real-world scenario. This is not an opinion--it's a highly likely statistical probability. And interestingly enough, each successive time you bet against the odds, probabilities tend to become mathematical facts. It is my fiduciary duty to inform you as to why these products do not work exactly like their names imply, and I urge everyone in the ETF industry to embark on a similar public awareness campaign. Today, there are more than 845 ETFs on the market. Some are great products that have greatly enhanced the investor experience. Others are betting mechanisms that can scorch your portfolio in just a few days. When we put together an ETF research report, and we currently cover more than 300 ETFs that represent over 94% of the market's total assets, our intent is to let you know how to use these products properly. We start with a suitability assessment, or our view as to which type of investor should use each specific product and how. With virtually every leveraged and inverse fund, I can tell you that they are appropriate only for less than 1% of the investing community. Considering that these funds have attracted billions of dollars over the past year alone, it's pretty obvious that too many people are using these incorrectly. Check Out these Returns (or Lack Thereof) Pointing out that leveraged ETFs are working as they were intended would hardly be shocking news if the returns these funds were producing were not so, well, shocking. Here are three funds that track the same MSCI Emerging Markets Index: Vanguard Emerging Markets Stock ETF )VWO), Short MSCI Emerging Markets ProShares (EUM) and UltraShort MSCI Emerging Markets ProShares (EEV). To summarize, one fund tracks the index and lost 52% last year, one aims to deliver the inverse of the index and gained 20%, and the last aims to deliver twice the inverse of the index and lost 25%. Did you follow me there? While the fund that held the stocks lost 52%, the one that aimed to deliver twice the inverse also lost a substantial 25%. And the funds worked like they were supposed to. And this was one of the better performing examples. At least the inverse fund, which is meant to be used only for a single day, produced a positive return, as expected. Check out this next example. If you were prescient enough to predict the collapse of real estate last year, you could have earned a savory 40% return by shorting iShares Dow Jones US Real Estate (IYR). So logic would hold that owning UltraShort Real Estate ProShares (SRS) would have produced a positive 80% return, right? Absolutely wrong. I say absolutely because, in absolute terms, you would have lost even more money using the double-short fund—which is supposed to go up when the index goes down. The disappointing truth: the funds worked like they were supposed to. Before you declare my last statement as blasphemous, the fund did indeed perform as the prospectus declared it would. It is the investor that held the leveraged or inverse fund for more than a single day that erred in practice. Buying the double-short fund would have produced the most negative of investing emotions: right thesis, wrong execution. The ETFs are really only designed to be held for one day (as you might do, you weren't clear): Here's an example of who could potentially use these funds. Let's say that you're a diversified large-cap mutual fund manager that is facing redemptions. You're going to have to liquidate several holdings, but you don't want to lose your exposure to the market. You could purchase a slug of these leveraged funds in the morning, sell three times that amount of your other holdings to raise cash, and then sell the leveraged fund at the market's close. You would have maintained your market exposure for the day without having to rush at the market's close to dump some holdings.Another use for these funds is for short-term speculation. If you're inclined to bet--not invest, I said bet--as to what a sector or index is going to do over the course of a day or two, go ahead and use these funds. Good luck. I've never met an investor who can consistently execute this strategy (though I've met plenty who claim they can). The emphasis is mine, because I couldn't help throwing that part in. Those leveraged ETFs are really for big institutions and bettors, not investors. Link to comment Share on other sites More sharing options...
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