This looks like another good indicator of a bear market starting recently:
http://www.hamzeianalytics.net/2008/01/margin-data-suggest-prolonged-bear.html
-s
Thursday, January 24, 2008
Wednesday, January 23, 2008
Clueless Advisor
I have overheard several conversations of an advisor (a CFP, no less) in the last few days. This clueless advisor is telling clients that the market is doing what the market does and if they have cash free they should buy more. These conversations are not based around dollar cost averaging.
This advisor has absolutely no concept of economics, fundamental valuations, or technicals.
I feel bad for the clients, but the fact that many advisers have these views makes it easier for me to differentiate myself.
-s
Update 10/20/08: In light of what the markets have done this year, this is a very important post. I know that the advisor in question had clients "invest" in China etc. over the last two years.
This advisor has absolutely no concept of economics, fundamental valuations, or technicals.
I feel bad for the clients, but the fact that many advisers have these views makes it easier for me to differentiate myself.
-s
Update 10/20/08: In light of what the markets have done this year, this is a very important post. I know that the advisor in question had clients "invest" in China etc. over the last two years.
Crashes of the Past
I know, it seems like will will have a bear market and not a crash, but I think it's good to look at these crash charts via The Big Picture:
http://bigpicture.typepad.com/comments/2008/01/4-prior-market.html
-S
http://bigpicture.typepad.com/comments/2008/01/4-prior-market.html
-S
Bounce
Well it looks like a bounce. When will it fail? Maybe S&P 1380 to 1430 or so. It could go all the way up to ~1500 and then fail. We will just have to see.
OverHedged has a good post with comments on a NYTimes article today:
http://overhedged.blogspot.com/2008/01/seems.html
I thought the same thing when I read the Times this morning. The credit bubble is huge and the 75 basis point cut is a panic move by the Fed.
I'll try and post more soon.
OverHedged has a good post with comments on a NYTimes article today:
http://overhedged.blogspot.com/2008/01/seems.html
I thought the same thing when I read the Times this morning. The credit bubble is huge and the 75 basis point cut is a panic move by the Fed.
I'll try and post more soon.
Monday, January 21, 2008
No Bounce? Crash?
It seems as though we may not get a bounce and that the markets may, in fact, just crash and burn. The psychology may be that instead of waiting for a bounce, the big money chose to just sell (Panic) before others.
Most people were not expecting a crash so crash may well be what we get.
My guess is that most investors are, like dear in the headlights, frozen mentally while they watch their "investments" go down the toilet.
This is a beautiful process if you think about it. When the crowd gets it wrong they really get it wrong and there is a lot of money to be made from this.
-stealth
Most people were not expecting a crash so crash may well be what we get.
My guess is that most investors are, like dear in the headlights, frozen mentally while they watch their "investments" go down the toilet.
This is a beautiful process if you think about it. When the crowd gets it wrong they really get it wrong and there is a lot of money to be made from this.
-stealth
Friday, January 18, 2008
$107.8 Billion In Losses and Counting
http://bigpicture.typepad.com/comments/2008/01/wheeee.html
I've seen projections of losses up to $500 Billion. This does not include potential Credit Default Swap losses of ~$250 Billion or more. These projections also don't factor in a 30% decline, nationally, in housing.
Here's a quote from Bill Gross of PIMCO:
"The unfairly "Ben Stein pilloried" Jan Hatzius of Goldman Sachs estimates that mortgage related losses of $200-400 billion alone might lead to a pullback of $2 trillion of aggregate lending. Even if this occurs gradually, he writes, "The drag on economic activity could be substantial." Add to that my $250 billion loss estimate from CDS, as well as prospective losses in commercial real estate and credit cards in 2008 and you have a recipe for a contraction in credit leading to a recession."
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+January+2008.htm
-stealth
I've seen projections of losses up to $500 Billion. This does not include potential Credit Default Swap losses of ~$250 Billion or more. These projections also don't factor in a 30% decline, nationally, in housing.
Here's a quote from Bill Gross of PIMCO:
"The unfairly "Ben Stein pilloried" Jan Hatzius of Goldman Sachs estimates that mortgage related losses of $200-400 billion alone might lead to a pullback of $2 trillion of aggregate lending. Even if this occurs gradually, he writes, "The drag on economic activity could be substantial." Add to that my $250 billion loss estimate from CDS, as well as prospective losses in commercial real estate and credit cards in 2008 and you have a recipe for a contraction in credit leading to a recession."
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+January+2008.htm
-stealth
Bespoke Investment Group Re: Nasdaq
Bespoke Investment Group has this to say about the Nasdaq today:
"The Nasdaq is now down 18.37% from highs reached on 10/31/07. A bear market occurs when the price declines by 20% or more after previously rallying by 20% or more. While it's not yet a foregone conclusion that the Nasdaq will turn into a bear, it's getting very close, and investors should be prepared for what the typical bear looks like. Since the Nasdaq index was created back in 1971, it has suffered 13 bear markets. The average bear has been 216 days long for an average decline of 36.51%. Only 4 out of the 13 bears saw declines of less than 30%, and 4 bears saw losses of more than 40%." (Emphasis is mine)
http://bespokeinvest.typepad.com/bespoke/2008/01/nasdaq-historic.html
I think it's a little late to talk about preparing investors for a bear market. If your advisor has not warned you about this, he's an idiot.
-stealth
"The Nasdaq is now down 18.37% from highs reached on 10/31/07. A bear market occurs when the price declines by 20% or more after previously rallying by 20% or more. While it's not yet a foregone conclusion that the Nasdaq will turn into a bear, it's getting very close, and investors should be prepared for what the typical bear looks like. Since the Nasdaq index was created back in 1971, it has suffered 13 bear markets. The average bear has been 216 days long for an average decline of 36.51%. Only 4 out of the 13 bears saw declines of less than 30%, and 4 bears saw losses of more than 40%." (Emphasis is mine)
http://bespokeinvest.typepad.com/bespoke/2008/01/nasdaq-historic.html
I think it's a little late to talk about preparing investors for a bear market. If your advisor has not warned you about this, he's an idiot.
-stealth
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