Was That Finally the Bottom?

• Report this Comment On November 14, 2008, at 8:26 PM, titanicdwn wrote:

  I project another crash between January and March 2009. Companies will delay as long as possible revealing the real impact of Christmas sales for 2008. Many stores rely on Christmas for a portion of their yearly budget. Many higher class malls and companies like Sears are already walking a tight rope. Sears has become heavily reliant not on its products, but credit card purchases and interest on those products. Company failures like Sears will hit many employees on the lower wage scale already close to or under the poverty line. Sales of technology products like computers and HD TVs will give way to higher priority products and services like food and rent. This will in return hit the untouchable and well educated makers of those products. Major layoffs and failed companies will have a domino effect. Obama's policies will have no, or even a negative effect causing further loss of confidence for upcoming Christmas 2009. A major worldwide economic collapse similar in scale to 1929 should come around the first half of 2010. The main difference between 1929 and 2010 will be a much increased negative world wide reaction to the economic chaos. The consequences of the human reaction will be equally great.

• Report this Comment On November 14, 2008, at 10:30 PM, courtneTHEgreat wrote:

  Wow... Did you read the previous comment? Well said. I will add that there will be another bottom hit after Black Friday and another in December. Think about it: We painted a picture that is not true. And now we need to get things right or walk a false rope.... MAJOR fall to come and it will pass 7200 on the DOW.

• Report this Comment On November 14, 2008, at 11:23 PM, candersoh1208 wrote:

  how could we have hit the bottom? technicals don't tell the whole story. looking at charts and technicals has nothing to do with the hurt we'll continue to feel in this economy. the worst is not behind us. last time i checked, jobless claims not just increased, but soared, we have massive contraction of credit (the consumer based economy has nothing left to borrow against), contracting gdp, and valuations that no one can make sense of for now. good deals only look like good deals looking backward. forward guidance continues to be trimmed and companies are pulling in less revenue.

• Report this Comment On November 15, 2008, at 2:48 AM, foolmenottwice wrote:

  You are looking at the current situation. The stock market historically looks ahead. When there isn't fear driving it, the market looks many months ahead. The more people buying the more people are looking ahead. I bought a couple of hundred shares of a couple of stocks today. Fear drives prices low so it was like a candy store sale That is what we have right now.

• Report this Comment On November 15, 2008, at 3:36 AM, intersub wrote:

  Buy low.

  Sell high.

  Perhaps we haven't learned anything in the last 79 years, but I doubt it.

• Report this Comment On November 15, 2008, at 8:28 AM, titanicdwn wrote:

  That's funny. I thought the stock market WAS looking ahead just prior to the last crash. People were looking ahead in 1929 too. As for new government regulations... You can not force people to spend money they either do not have, or are tightly holding on to. Federal bailouts will start to look like band aids over massive hemoraging. Sorry. Staying positive during a level 10 earthquake is so not realistic.

• Report this Comment On November 16, 2008, at 2:48 AM, candaddio wrote:

  The most insightful comment I've seen thus far on these boards was quite simply "Cash is King." I'd invested considerable sums following the first "crash" and was feeling quite good about the rebound, when the market turned again on bad news, and I saw the potential for further pain. I believe strongly in a buy and hold strategy, but only an idealist would ignore the potential for another 20 percent drop in their stocks. After being reminded of these sage words (cash is King) I sold everything, atributing more weight to the pessimism in the market at this time, rather than the hope. I saved a fifteen percent drop in the market. I bought again at lower prices. Another rise, and more bad news. I sold on the fear and saved myself more pain. This has been the case now on three occasions. I'm optimistic in the long term, but bad news has a way of driving this market far beyond what's normal. The latest retail sales decline of 2.8 percent suggests a recession twice as long as has been predicted thus far. If the bottom was shy 8,000 with a one year recession, what is it if the recession is two years or more? I'll be back in the market soon, but I'll probably be back out again quickly as well. Unless there's some VERY significant positive news, I can easily see a drop to 7000, or even 6. I understand the average PE of the market following the great depression was somewhere around 3, and in a serious recession somewhere around 5. At present the markets average PE is still significantly above that...8-9? I'm a novice investor, and just pass on what I've been reading. Firm numbers and guidance would definitely be appreciated.

  For now, I continue to live by the adage "In a world swimming in debt, Cash is King."

• Report this Comment On November 17, 2008, at 12:05 PM, titanicdwn wrote:

  Many times, it is investors who are so shortsighted. Crashes do not come without warning and I was not at all surprised by the last one. It is said the average income is around $40,000 a year. I make a little over $12,000. I actually know very few people making that average income. Further, more and more people will continue to join my income range rather than the average. Simply put, no more than a couple of bulk halls can be flooded and the Titanic stay afloat. Put another way, a rather convincing 75% of the population needs to be at that average income level. Many average investors think in terms that the lower incomes just never made the cut. The investors feel they can rise above that and make money. They forget we are on the same ship. This country can never survive on my wage level. In simple mathematical terms, solid granite rock will not float. Depending on how well Washington and economists can keep playing with numbers, most people will never be aware of what is approaching. I happen to have a very optimistic friend who believes he is a salesperson. He makes less money than I do. He is always looking for opportunities(hardly every holds down a job), has an insurance license, a stock brokers license, a bachelors degree, etc.. Claims to know way more about the stock market than myself. Guess whose predictions are usually bang-on. Try visiting my neck of the woods. Check out the local public schools like the very good school I went, and it was better in those days. I hear even Hollywood has lost some shine lately. If Christmas 2008 drops below what retailers need for their yearly budget, and Christmas 2009 is a total bust. You can believe Christmas 2010 will be a total none issue as it completely drops from the priority list as it has from mine. First class cabins on the Titanic should start getting a little damp soon.

• Report this Comment On December 03, 2008, at 8:55 PM, Clint35 wrote:

  So much doom and gloom. What's wrong with all of you? You sound like your portfolios have been cut in half. So have mine, but you don't hear me talking about the Titanic. Unlike the Titanic, stocks will recover. Look at it this way, no matter how bad stocks get losing money won't kill us. The poor people on the real Titanic weren't so lucky. So if you can't handle taking on a little water maybe you should abandon ship now; before things get bad.

• Report this Comment On December 03, 2008, at 9:19 PM, GroundedinGraham wrote:

  There are so many problems out there today that it's become an act of suicide-inducing pessimism to attempt to categorize them. The broadest problem however is that our leadership, Republican as well as Democrat, apparently continues to believe that the magic bullet is "getting the credit markets moving again" -- which unfortunately seems to be coded language for transparent efforts to get the credit bubble re-inflated. Putting aside $200 billion for credit card lenders isn't a solution, it's another attempt to pump up underpaid consumers. The current nutty discussion of creating some kind of 4.5% mortgage subsidies is even worse. Instead of allowing homeowners to take the medicine of declining house prices, this is just another attempt to get people who can't afford houses to buy them from people who can't afford to live in them. The political-economic vision seems to be that since financial firms are swimming in garbage paper, let's flood the country with it so that it will be impossible to tell the counterfeit from the real. So what does this mean for the markets? Much more lingering pain, the prospect of inflation crowding out deflation as our next big challenge, and a prolonged period of economic stagnation. Besides, as we all know, the vast majority of the market remains profoundly overvalued by any measures that have historically meant anything. That doesn't mean we shouldn't be looking, and buying. But we should look carefully, and never push the "buy" button without weeks of reflection. Only intrinsic value means anything today. And the credit excesses of the last two decades have been a profound cancer on the balance sheets of many of what were once considered blue chip companies. There's not a lot of intrinsic value sitting out there right now.

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