LoyolaTrader

15 Notes on the Current Market

margin accounts are only treated differently insofar as margins are callable immediately upon the brokerage's request, including in the event of bankruptcy or the realization of it's inevitability. nonetheless, the assets themselves, less the margin borrowed, are backed first by the brokerages, who must maintain enough assets to pay client accounts out (as well as have rules against using client assets for their own business uses), then by the SPIC to the extent which the brokerage comes short. in any case, it is almost certain that any brokerage going under would sell its accounts to another brokerage before it came to the point where SPIC steps in.

Why I'm Not Worried About the Market

i do have a good understanding of our economic history (and please, don't compare the US economy to Japan's), i was using the whole, somehow we manage, as a way of avoiding writing a long paragraph. we aren't in wwI or II or the civil war either. i agree, hedging your "bets" is a good idea, its always a good idea to keep a diverse portfolio that will keep you afloat when the economy goes bad, and its no worse and idea to hedge against the greater risk here that the economy continues to plummet. but stocks are just a complex form of gambling, and here, i will take the bet that the market rebounds. yes, the U.S. dollar is getting weaker and weaker against international currency to the point that other countries are replacing the dollar as their reserve currency with the Euro or even gold. but anyone who has taken even a simple lecture on international financial economics knows that a country's currency's performance is not an indicator of the country's economic performance. the weakening dollar may or may not lead us into a greater depression, but i'd bet that it doesn't. certainly no one is dancing in the streets today ignoring the problem, and this post is not ignoring the problem either. I'm simply saying that my bet is that we rebound, and I'm playing my portfolio to my bet. When all is said and done, the U.S. economy is still the largest economy (by a long shot) in the world, and will be for the next 20-30 years barring phenomenon. just like every other crisis and bubble burst in the past haven't crippled us, neither will this. recovery is not a question, it's a definite. the question that people are betting on (or against) is "when do we recover, and how fast?" You could be right, it could be extremely devastating and take more than 5 years to fully recover from this, or i could be right, we could be on the path to recovery within the next 6-9 months. either way, when all is said and done we will still be the largest economy in the world.

Why I'm Not Worried About the Market

I agree with Gold being a great buy right now. I don't agree with the real estate market plummetting another 20%, nor do i agree that we have "long way to go before bottom". everytime a recession comes along, it takes years to repair because of this or that, and its much worse than the last recession or the last crisis. but somehow, we manage to survive, don't we?

Why I'm Not Worried About the Market

Everyone is going to be losing money in this market unless you are extremely lucky or liquiditated all your assets into cash before january. but instead of selling off my assets at a loss, i'm increasing my shares at lower prices. i know i'll feel good about my decision 6-9 months from now, even if i don't feel so good about losing money right now. not everything is about the short term.

Why I'm Not Worried About the Market

I actually agree, for the most part, with the article. Warren Buffett's best advice: "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful."
Everyone here sounds pretty fearful. I've increased my portfolio by 20% since this January. even if losses persist for the next 6-9 months before a turn-around, i'm getting a huge discount buying some solid performers in both domestic and international markets. Everyone loves to jump on the bandwagon as soon as the first person yells recession, and then goes on to yell about how its going to be the worst economic conditions since the great depression, but everyone forgets the self-actualization theory...the phoenix rises from its own ashes, and so often does the market. It's all about being able to determine at what prices do equities look so cheap that they actually become attractive to investors, and then everyone begins to rally behind the first wave of purchasers.