Muzie

Great Depression Not Imminent, But Inevitable

From Boubou:

"One reason many of us have lost so much money is the reluctance on the part of government and finance spokesmen to tell the truth in bad times."

Right. I'm sure you would have lost a whole lot less money if the government had come up one day and said "ok, things are bad, you all should sell now before things get worse.".

Great Depression Not Imminent, But Inevitable

From Boubou:

"One reason many of us have lost so much money is the reluctance on the part of government and finance spokesmen to tell the truth in bad times."

Right. I'm sure you would have lost a whole lot less money if the government had come up one day and said "ok, things are bad, you all should sell now before things get worse.".

Give Me Three Reasons to Stay in This Market

Question: How many whipsaws does it take for an 8% stop loss to equal a 40% loss YTD performance (aka the market performance)?

Answer: Six.

Question: How many weeks in the last two months alone did the S&P's low to high range exceed 8%?

Answer: Eight, with several of the weeks actually walking the most of the range more than once in that week.

Too Early to Call a Bottom - Buying Anyway

Ahem... "steady" until blind luck and a bit of lucky market timing throws that part out.

John Hussman: Depression Fear Mongering 'Ridiculous'

SpazNetz: Whaaaat? Then why the hell are you commenting on an INVESTING website?

Such hypocrites.

Relief Rally Likely in Wake of Bailout Legislation

N.B. I meant 4000$ per citizen.

Relief Rally Likely in Wake of Bailout Legislation

"$1.1 Trillion in lost market cap today .. so the arguing over a $700 billion package /loan cost the country an extra $400 billion on top of the $700 billion we needed . "

What a bullshit argument.

So if the market climbs back up 8% next week did the 1.1T$ "reappear" out of thin air? And the next week it goes down, it's gone again? And so forth? Look at how well the SEC added trillions to our nation's "wealth" when it banned the shorts - does that count too?

Anyone basing daily market gyrations has arguments for the bailout is a moron. If the bailout package is signed this is 4000$ REAL MONEY, taxed now or in the future. Not some bullshit spinning of electronic stock tickers based on skittish traders throwing their fists on the eject button.

The Value of Long-Term Investing: A $370K Chart

I've found JasonC's comment actually much more deep in insight than the actual article.

The Last Days of the Long Investor?

Pangaea, you completely missed the point.

You said "The market is based in large part on emotion." The article states the complete OPPOSITE. If program trading becomes dominant, "emotion" has nothing to do with it, merely prices become a feedback loop as programs cause other programs to buy.

I'm not entirely sure if it means more volatility- if every program is trend-based (and I'm sure many of them are) then that would translate into more volatility.

It means technicals now mean more than anything else for the moment, as only technicals can be reliably be mapped to computer programs. Thus, news apparently have no effect on prices in the short-term.

Do You Have the Guts to Buy?

Let's see if people here think this is still great advice if the market tanks another 20%, at which point it will take, on average, 7 years just to break even.

"Stocks appear to be on sale".

Everything is relative. Houses appear to be on sale too, yet they're still 80% more expensive than five years ago in many locations. Oil appears to be on sale these past few weeks too, but it's five times what it was years ago.

And stocks, being "on sale" are still at high P/Es historically speaking.

I agree it's better to buy in bear markets than in bull markets, but this article is making gross oversimplifications.

Ten Bear Market Phases, Current Edition

Sunburned: "They presumeably still have the money/credit and have the ability to do something stimulative with it. You know the old velocity of money trick."

That's a weak argument. The previous sellers will need a place to stay as well, as you said, and in most cases they will have put down gains in an upgraded home, which today translates into a greater monetary loss. Aka let's say your house is worth 100k and doubles. You sell it for 200k and decide to move in a 300k house, keeping your mortgage the same. Then housing crashes 30%, say, so the house is worth 240k. In this case you now owe 240k instead of 100k. No wealth was created, you just owe way more on the mortgage, which actually makes it less likely you'll spend on other sectors of the economy.

Saying rents must put a bottom to housing prices doesn't hold water either because rents have long decoupled from housing prices during the housing bubble in many areas. In large cities prices have come up so much that even a 50% drop will not make the properties cash flow positive.

Credit checks are mandatory from most landlords - and foreclosure wrecks credit. People in foreclosure will have more difficulty finding good rentals as most landlords will be weary of renting to them. They've already renegued on their agreement with the bank - why wouldn't they do the same with their landowner? Most people in this situation will have to cut back on their lifestyle and rent lower-quality housing stock as a result. There may be upward pressure on cheaper rentals but the housing prices are certainly not based on a meaningful ratio with respect to cheap rentals right now.