Mr. Boater

When Will the Dow Jones Reach a Bottom?

A "temporary" bottom may be found for a short while before continuing to the bottom of 4000-5000.

The next downdraft--I call it Real Estate Crash 2, will start slowly in May 2009 and continue till mid year 2012. Possible the markets will try for a bottom early 2012 in anticipation of the end of the RE collapse.

The subprime mess was caused by 615 billion in loans buried in derivatives--I am guessing about 20-25% of those loans went bad. Many of those people are trying desperately to keep their homes.

The next session will incorporate 1.1 trillion of option and interest only ARMS held by thinly capitalized speculators who got in too late and got trapped in upside down loans. They are screwed. I think over 50% of these loans and their derivatives will go bad--2009-2011 will be very bad years for the housing market, labor, and the consumer. I see gold and the Dow meeting at 4000-5000, Bonds will be crushed.

'Buy and Hold' Is Alive and Well

Your subject is foolish and naive.

"Buy and hold" was never heard of until the late 70's when the Wall Street Sharks got with the large corporations and discussed a new way to gain control of pension money in order to churjn and burn and otherwise bilk the unsuspecting little guy who had not the slightest idea how to manage his pension money.

Using the Ibbotsen and Sinquefeld study of the late 70's that found the"long term" return of the market to be close to 10%.

Armed with this piece of biased information--nobody was told at the time most of the returns were based on dividends--the corporations saw a way to get out of managing defined benefit plans,

Wall Street licked its lips, and they went and lobbied a bunch of stupid congressmen-[are there any other kind?] to pass laws defining IRA's and 401k's, sending innocent workers futures to the blood suckers. "Retire a millionaire" that was a big one I heard on a Wall Street firm's TV ad. Remember that one?

Thus "Buy and Hold" was born. If one buys and holds, how does one buy low and sell high? Money is made in the mid-term--and don't you all forget it. The wisdom of the old codgers is called Wisdom for one reason --IT WORKS--MOVE TO THE SIDELINES------