Is It Time to Sell the Rally?

We've seen the market zoom up from its lows in the 6,000s to around Dow 8,000 over the last month, largely on positive banking news including the unveiling of the Public-Private Investment Program and better-than-expected banking earnings from Wells Fargo (NYSE: WFC  ) and Goldman Sachs (NYSE: GS  ) .

Is this a bear market rally or the start of a sustained recovery? And if we are headed for a fall, which companies are overvalued? We asked our motley crew of analysts, writers, editors, and advisors.  

Alex Dumortier, Motley Fool Writer: This is almost certainly a bear market rally built on hope and dreams rather than an objective assessment of the present situation. Take Wells Fargo's buoyant earnings pre-release, which sparked a broad stock rally last Friday: It was pretty skimpy in terms of hard data, and there could well be an unpleasant underside to the lender's financial condition. What about the PPIP, which will allow banks to shed their toxic assets? As far as I'm concerned, it's more of a concept at this stage than a road-tested solution to the problem.

The credit crisis began over 18 months ago, but it's been barely six months since the S&P 500 fell below 1,000 -- a level at which it is significantly overvalued. Given that the fundamental issue of bank insolvency remains like a sword of Damocles, hanging over the economy and the market, I think we should expect other bottoms such as the ones that occurred last November and last month. Stocks that have enjoyed the large run-ups since March 9, such as Wells Fargo or Citigroup (NYSE: C  ) may be particularly vulnerable to a correction.

Robert Brokamp, Advisor, Rule Your Retirement: When it comes to investing, history is our best guide, imperfect as it is. As Rule Your Retirement contributor Doug Short demonstrated in our most recent issue, major bear markets end at lower market valuations than what we see today. Also, bear markets have a funny tendency to end in the second half of the year, for whatever that's worth. But, as Warren Buffett said, "If past history was all there was to the game, the richest people would be librarians" (something I'd fully support, since I'm married to one). Maybe history won't repeat itself. And as long as you're not investing money that you'll need in the next five to seven years, it may not matter.

Jim Mueller, Motley Fool Editor:  Rally or recovery? I think it's a rally, and we have at least one more market slump ahead of us before a true recovery. Obama reminded us yesterday not to get too enthusiastic from a relatively short period of better than expected news because we still have a long way to go. Yesterday's retail news, too, reminded us that, while there might be some glimmers of light, it is still very stormy. One company that I think has gotten ahead of itself is Netflix (Nasdaq: NFLX  ) . Yes, it probably grew subscribers better than expected thanks to the economy, but I don't think things will be as rosy as everyone may hope when it reports earnings next week. The price indicates to me expectations for a blowout quarter and raised guidance. I'd be surprised if both actually happened. Therefore, a significant correction from its recent run-up is definitely a possibility. Out on a limb with a short-term call, but there you are.

Morgan Housel, Motley Fool Writer: The economy seems to actually have a pulse again, and that's encouraging. When the government carpet bombs the economy with several trillion dollars over the span of a few months, things won't stay depressed for long, and stocks are sobering up to this reality. No one really has a clue, but the rally at least feels legitimate. 

Yet, for some companies, the intensity and justification of the rebound is frightening. Banks -- particularly Citigroup and Bank of America (NYSE: BAC  ) -- continue to perplex me. Investors have taken results from the two strongest banks and assumed it's transferable to the two weakest banks. That's an expectations disaster in the making.

These are two companies that would be six feet under without being tethered to Washington. Now they've quadrupled in value on no news going into a black hole of earnings announcements. If successful investing means "being fearful when others are greedy," investors should be scared witless of these two. 

Todd Wenning, Analyst for Motley Fool Pro: This rally has certainly provided investors with a glimmer of hope, but I think it's gotten a little ahead of itself as we've switched from pessimism to optimism in only a few weeks. The best thing investors can do right now is not panic buy, remain focused and patient, and make a list of companies they'd love to buy at lower prices. That way, if the market does sell off this rally, as I expect it will, you'll be ready to capture those values.

Matt Koppenheffer, Motley Fool Writer: Was there a green light on the market that I somehow missed? Since March 6th, Bank of America is up 221%, and Citigroup surged 289%. Why? Because Wells Fargo announced better than expected earnings? And here I thought we already knew that Wells Fargo was in a class above B of A and Citi.

So far we've been seeing some signs of "second derivative recovery" -- i.e., the speed of the decline is slowing. However, we still have a tremendous glut of housing inventory, and bank balance sheets are about as clear as mud. And that's just to name a couple of lowlights.

I don't expect that we'll be mired in this bear market forever, but the height of the market bounce over the past month makes me a bit nervous given economic realities. I wouldn't be surprised to see some of the really big gainers -- the two mentioned above, Barclay's and its triple, or AIG and its 300%-plus run -- give back some of the ground they gained over the past month.

Andy Cross, Advisor, Hidden Gems: I don't know if the storm has passed us or if we're just in the middle of the eye, waiting for the next wave. My feeling is that it will take some time for this global, leverage-fueled hangover to work its way out of our economic system. But because the stock market typically leads bullish economic numbers, we need to stay invested in the best companies. What's interesting is that I've heard cocktail stories about how so-and-so picked up shares of Bank of America at $3. It's now at $10. Or AIG below a buck. It's at $1.50. So, people are buying and selling stocks, but to me it seems more like speculating or trading rather than investing. Be careful if you're playing a dead-cat bounce in low-quality companies, because they can go down just as quickly as they can go up.

Anand Chokkavelu, Motley Fool Editor: I'm agreeing with the others that we could see Dow 6,000 before Dow 10,000, so I won't rehash. Two non-banks that could see better buying opportunities are Best Buy (NYSE: BBY  ) and Buffalo Wild Wings (Nasdaq: BWLD  ) . They've both had good run-ups on favorable earnings reports, but both are driven by fickle consumerism. Both of these companies are high on my watchlist, but I'm waiting for some bit of negative news to give us better prices to pick up shares.

This roundtable article was compiled by Anand Chokkavelu. Anand owns long-held shares of Citigroup. Buffalo Wild Wings is a Motley Fool Hidden Gems election. Best Buy is a Motley Fool Inside Value and a Motley Fool Stock Advisor selection. Netflix is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Best Buy and Buffalo Wild Wings. The Motley Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On April 15, 2009, at 5:08 PM, cdenny6 wrote:

    Good comments. However, too many of them were spent on regurgitating the banks. Other than 3 retail types - there was no reference to the "market" overall. Some of us are not into day trading bank stocks - but trying to manage a more balanced portfolio - but these comments lent little to the broader stock picture. FWIW. C. Denny

  • Report this Comment On April 15, 2009, at 5:30 PM, goldseth wrote:

    I cant's say that the rally is over...market fervor often overcomes reason and analysis. However, I don't like the long-term fundamentals of the market and technically speaking, I was disappointed at the S$P performance this week as it approached a longer term trend. (http://caps.fool.com/Blogs/ViewPost.aspx?bpid=180343&t=0...

    I think it would be wise to take some proits on speculative and voilatile positions...or selling out of the money calls on those positions you feel committed to.

    You never go broke taking profits, but there is nothing worse than watching a good trade slip away while you keep saying...its just a correction, it will rebound tomorrow....and so on.

  • Report this Comment On April 15, 2009, at 6:06 PM, TMFSpiffyPop wrote:

    I wasn't interviewed for this one and maybe there's good sense in that, because here's my answer:

    "I don't know.

    "I'm not good at timing the market. Fortunately, I don't base my investment approach on calling market moves. I still own mostly the same 25+ stocks I owned in October 2007, and in October 2004 before that, etc.

    "Oh, I do buy and sell stocks, so my portfolio changes over time. But not in response to expected market moves. Rather, I buy and sell stocks in response to my expectations of their fundamental long-term business and financial strength."

    Fool on,

    David

  • Report this Comment On April 15, 2009, at 6:14 PM, TMFSpiffyPop wrote:

    Incidentally, I'm not suggesting market-prediction articles are without merit -- I enjoyed reading it -- I'm just providing my own perspective. --David

  • Report this Comment On April 15, 2009, at 6:16 PM, jesse2159 wrote:

    Here's my prediction based upon 40 years of investing; Rapid decline in June, followed by rally in late September that will level off for the next four to six years. Then very slowly start to inch up in 2015. However, inflation (caused indirectly by banks needing stimulus funds to stay in business) will increase to 8-10% in the same period (devaluing investments) and and not get under control for at least two years. Hope no one plans on retiring in the next decade, all thanks to our benevolent banks. Heck of a job, bozos!

  • Report this Comment On April 15, 2009, at 6:18 PM, paultaut wrote:

    The longer the Markets resist succumbing to the Bears, the greater the prospects that the Bear has ended. There has only been one Bear rally longer than this one, Back in March,2008, but that was a rally of only 12%.

    When Markets go up in spite of Bearish news, you know that the tide is coming in, not going out.

    UBS for instance. And if it was really a Trap, All of the worldwide markets would not be rallying at the same time. Nor would all sectors be participating.

    Its a Bull Market as far As Mobius is concerned. He has more experience than the rest of the Talkking Heads.

  • Report this Comment On April 15, 2009, at 6:38 PM, 7footmoose wrote:

    This article containing comments from many Fool Editors has made me wonder why I continue to frequent this site. There was not much new here and there was little if any insight. The constant drum beat for Wells is as tiring as the death knell for BofA. Neither is out of the woods. Wells has plenty of Wachovia poison to digest and BofA would be in the league of JPM if the Feds had not force fed them Merrill. The government is as culpable for the current state of affairs as are the greedy Wall Streeters and the conspicuously consuming American consumers. There are going to be survivors even among the banks. For now investors need to look to best in class companies who have little debt a mound of cash and preferably ongoing free cash flow. It would certainly be a benefit of the product or service of the target is a need rather than a want since consumer habits are likely to be forever altered by recent events.

  • Report this Comment On April 15, 2009, at 6:52 PM, NMPagan wrote:

    Right now, i am taking a buy and hold approach with well known dividend paying stocks outside the financial sector that are such a steal right now. By using dollar-cost averaging, I haven't done too poorly even when the market was at its worst, so for now, I am going to stick to this tried and true method and not worry about the ups and downs of the market.

  • Report this Comment On April 15, 2009, at 6:57 PM, c182av8r wrote:

    I am increasingly dismayed by the short-term, trader perspective that seems to be characterizing MF’s postings. I thought the credo was invest for 5 years or more and don’t try to time the markets (top or bottom).

  • Report this Comment On April 15, 2009, at 7:15 PM, TMFAleph1 wrote:

    7footmoose,

    You wrote:

    "There was not much new here and there was little if any insight. The constant drum beat for Wells is as tiring as the death knell for BofA. Neither is out of the woods. Wells has plenty of Wachovia poison to digest and BofA would be in the league of JPM if the Feds had not force fed them Merrill."

    Did you read the article and, specifically, my comments on Wells Fargo? I didn't think they're part of any 'drum beat for Wells'.

    Alex Dumortier (TMFMarathonMan)

  • Report this Comment On April 15, 2009, at 7:19 PM, TMFAleph1 wrote:

    7footmoose,

    Allow me to refer you to my article on Wells Fargo which ran today, 'Is Wells Fargo $50 Billion Short':

    http://www.fool.com/investing/dividends-income/2009/04/15/is...

    Alex Dumortier (TMFMarathonMan)

  • Report this Comment On April 15, 2009, at 7:43 PM, SRF4REAL wrote:

    Bulls relish the pain... I have been rejoicing since late November 2008 when stocks came down to a price that even I can afford to invest. I have been nothing but optimistic since, finding deals like Apple at $78, AgFeed at .94, Las Vegas Sands at $4... Citi at $1.5 yes I said Citi!

    Do some fools actually believe that everyone is going to take their marbles and go home at this point in the game? I have the utmost faith in good, old fashioned American greed to lift this market back to the moon again in my lifetime. AKA retirement ; )

  • Report this Comment On April 15, 2009, at 8:05 PM, TxTom wrote:

    Well folks, I own BAC, C, STT, FITB, and SIRI among others. I see a lot of contradictory comments regarding bank stocks. No one really knows the answers, but as long as investors continue to be enthusiastic about these, the share prices will rise.

    Having said that, I will constantly have a trailing stop-loss in place on all of these. I'll believe in momentum to a point, but I'm NOT going to get caught watching these stocks drop 20% or more. I'll be happy with the 200+% gain I have on these, and not worry about a slight haircut from this level. We need to live to fight another day, and giving back the house's money is not my idea of being prudent.

    Good luck everyone. We are a market environment that we have never seen before, and we may never have this (once in a lifetime?) opportunity again. Be vigilant but DON'T give back your gains. This is better than a hot streak in Vegas (I don't give it back there either). What a country!!

  • Report this Comment On April 15, 2009, at 8:19 PM, stan8331 wrote:

    My problem with this article is that there are several folks suggesting the possibility we'll revisit recent lows, but not too much advice on the best way to invest given that possibility. Seems like just selling everything and waiting for another crash that might never come would be making an extremely risky bet, especially since it would also mean an investor might end up deciding to get back in BEFORE another crash occurs...

  • Report this Comment On April 15, 2009, at 8:42 PM, tonester2k wrote:

    Quite frankly, I believe if someone announced free shots of tequila at the local watering hole, the market would gain 10% at this point.

    Choosing a few "safe" equities (well run, capitalized, low debt, etc) for now is fine, but this market has many more ups and downs to come before we see 10,000 again. If it feels right, buy it, but don't expect the big payoff any time soon.

  • Report this Comment On April 15, 2009, at 9:03 PM, Mouse574 wrote:

    How everyone keeps painting Citigroup and Bank of America with the same brush is beyond me. They are two companies in two very different positions. I would expect more out of fellow fools.

  • Report this Comment On April 15, 2009, at 11:05 PM, sentinelbrit wrote:

    Let's be frank, the MF editorial staff has missed this rally big time. Not only have they missed the rally they missed some 2 and 3 baggers. At 670, we were within 10-20% of the bottom that the most bearish commentators were suggesting. Just as no one gets out exactly at the top, no one gets in exactly at the bottom. I think anyone who buys within 10-20% of the bottom (and I'm talking about a generational bottom) is doing incredibly well. If MF endorses a 5-7 year horizon for buying/holding stocks, then they should have been telling everyone to buy at 700.

    I don't know if we will revisit 670 on the S&P, but I think the odds are in favor of not revisiting it. Companies have been reporting better than expected results (BBBY, INTC, GS, WFC, AMR) largely because expectations were so low; but also because they underestimated the spread banks are making; the cost cutting of companies; and the competitive edge some companies have.

    We are seeing classic signs of a willingness to take more risk - companies, including REITS are raising capital, mergers are being announced, and investors are buying companies with a lot of debt.

    Technically, there is more breadth to the market. The one worry is that the rise in the market has been on low volume. But that is probably because there are still a lot of bears out there.

    Finally, there have been some incremental improvements in the economy.

    Given the market is up over 20% from its lows and some stocks are up 30-50%, it doesn't take a genius to say we're due for a pullback. However, to say that we will revisit the lows requires more reasoning than provided in the article. To my mind, a retest would imply the stimulus has failed, the banks are not going to recover and we really are headed into a depression. If that is the case, we'll all have a lot more time to read MF, get even more depressed and write blogs about it!

  • Report this Comment On April 15, 2009, at 11:31 PM, ChannelDunlap wrote:

    Let me preface by saying I started playing the market just about a year ago, lost about 25% of what I started with, left, and bought back in in December. So I'm not some weathered stock trader who's seen all this before (though, nobody else under the age of 90 probably has either).

    In my novice opinion, I think the market will at least sustain the levels it is currently at, possibly a little more run-up. I still think that stocks are primarily undervalued. Banks are probably about right, but I don't think the bank crisis warrants the overall drop we've seen. The later part of 07 saw the beginning of the drop, we caught what everyone calls a bear-market-rally in early 08, and then the rest of the drop through October. I really feel that the huge drops we saw leading up to the November bottom were primarily pessimism-induced (and this article isn't helping) and that stocks will return to the pre-October levels fairly quickly. I'm sure we'll see more dips between now and then, but I don't expect to see the November lows again. I think people recognized that pessimism was the driving force in November and started to look past it, which is why we saw good news ignored in November, and bad news ignored now.

    So, thats my contribution. Probably a deserved drop from Q4 07 to Q3 08, followed by a panic induced Q4 08, and we'll recover from that relatively quickly. I certainly think we could see the Dow at 10k by early next year, but it might be a while till 14k comes around again.

  • Report this Comment On April 15, 2009, at 11:32 PM, nemaline wrote:

    We were at the bottom. To get an entire group of Fools to issue caution and speculate we will see another downturn, well..... the contrarian in me says we can only go up! Call me an idiot, but whenever everyone says it is going down, well, it must be going the other way.

  • Report this Comment On April 15, 2009, at 11:37 PM, TMFBomb wrote:

    Good comments, all. A few points to answer questions that have been raised:

    1) Agreeing with David Gardner that no one knows where the market's headed...I certainly don't. This article/discussion was meant not as a market timing exercise but more a warning not to get carried away with the recent good news...just as we shouldn't get too carried away with the bad news. We also wanted to highlight a few stocks that we felt were irrationally exuberant. Regularly investing in the market and sticking to a well-thought out plan is the way to go...whether the Dow is at 6,000, 8,000, 10,000 or some other number entirely.

    2) We did tend to focus on the banking sector because it is having an inordinate amount of influence on the market/economy as a whole.

  • Report this Comment On April 16, 2009, at 12:02 AM, antipkin wrote:

    I think the point of the article was that many think that this rally is premature and "too far, too fast", which I agree with. We're due for a correction at least and yes, it is still possible that we're to re-test the lows.

    To all the people that made bullish comments - a few more "minor details" not even mentioned here: unemployment is still supposed to hit double-digits, real estate prices are still declining... And the S&P500 was up 29% (was it that much, not sure)??? Yes, I've heard - the stock market usually starts recovering before the economy bottoms out, but is our economy going to start recovering six month or less from now?

  • Report this Comment On April 16, 2009, at 12:10 AM, hlswei wrote:

    I could not understand why you like CHK.

    Its CEO seems to be a reckless speculator,

    he bought great number of CHK shares on margin

    and lost a lot of money. Can you trust his mangement ability?

  • Report this Comment On April 16, 2009, at 12:28 AM, paultaut wrote:

    TMFBomb: Are you saying you have a greater understanding of the Markets than Mobius?

    You have more experience?

    Stan8331: Invest 10% of the value of your Portfolio in SDS as insurance on the overall market. Or if you think the Banks will lead the way to the Downside, go with FAZ.

    I bought FAS a week ago Monday and am up 33%,I will sell when I'm up 100% later this month. $6.70 AKA Conan.

  • Report this Comment On April 16, 2009, at 12:56 AM, dlcapo wrote:

    BWLD is a nice co. but I took profit @38. I kept a small possition encase it keeps going up. I'll buy back in on the next dip to say $27. down.

    In the long run this one will be there with the best of them......Am I nuts ?????

  • Report this Comment On April 16, 2009, at 2:11 AM, BellasPosting wrote:

    What the experts here fail to realize is that Citi and BOA's earnings (or lack thereof) are already priced into their stocks. Everyone expects their numbers to be lousy. Is there anyone out there who thinks otherwise? I doubt it. But ANY glimmer of hope in their earnings reports will send the stocks much higher. That is why so many are buying up Citi and BOA. I believe it is much riskier to short these two stocks right now than to buy and hold them. And nothing would please me more than to see all the shorts take a beating on these puppies. Go Citi and BOA!

  • Report this Comment On April 16, 2009, at 2:23 AM, SonicFoolAz wrote:

    The market has definitly gotten ahead of itself. Amex over $20 is a great example of the insanity. Long term many of these will be great companies, but, there is more rough times ahead as they still have yet to make forward progress on the fundamental problems that took them down in the first place. Consumer spending, defaults, job loss, bankruptsy, and foreclosures are going to continue through the year. One doesn't recover instantly from these sorts of things.

  • Report this Comment On April 16, 2009, at 2:27 AM, BellasPosting wrote:

    One more note. Don't bet on a huge drop in the market based on unemployment and housing issues. Remember, over 90% of Americans are gainfully employed and not risking forclosure on their properties. And probably 95% of Americans are not even planning on buying or selling a home in the near future, so the housing market means nothing to them.

    I know times are tough, but many people are doing quite well. Gas and heating oil prices are less than half of what they were last year and there is ZERO inflation right now. If you are employed, you are doing much better now than you were last year. Take that into account before you bet the farm on shorting stocks. You may be in for a big loss right around the corner...

  • Report this Comment On April 16, 2009, at 2:40 AM, awallejr wrote:

    I wouldn't get too caught up in the percentage gain game. Yeah C is now a 2-3 bagger from its $1 low, nevertheless it is down almost FORTY SEVEN dollars from its highs. Unless you truly believe armageddon is approaching like some on CAPS over blog about, the upside potential over the years is now far greater than the downside.

  • Report this Comment On April 16, 2009, at 9:00 AM, maxhoffa wrote:

    unless a depression is in our future, the market was flat out grossly oversold a month ago. those were not recession-prices i was buying at in february, those were near-end-of-business-as-we-know-it prices.

    this run-up has been steep and fast, but IMO it was not so steep as to take prices to the heavy side. i still see undervalued stocks, but it's not nearly as easy to commit to buys now as it was a few weeks back.

    historically, after the market falls 20% or more, the following year is a big gain . . .

    <i>Ex-Depression, after 20%+ down years the average DJIA gain in the subsequent year was 25.3% across 7 episodes. The worst year was 1894’s 0.6% loss following 1893’s 24.6% loss. Every other subsequent year was positive, with only 2 being in the teens and 4 seeing big gains over 28%. So unless you are betting on a neo-Great Depression, you are fighting history if you expect 2009 to be down. 123 years of history suggests it will be up big, at least the 25% average of all such years outside of the early 1930s.</i>

    2009 could be more pain. but early results, and history (6 out of 7 times), point to much rosier prospects.

  • Report this Comment On April 16, 2009, at 9:13 AM, maxhoffa wrote:

    and i agree . . . you cannot lump BAC in with C . . . why do people insist on doing this?

    C will come out of this mess weaker. BAC will come out stronger, if for no other reason than by virtue of increased market share and two major new revenue streams (Merrill and Countrywide).

    apples and oranges.

  • Report this Comment On April 16, 2009, at 10:29 AM, TMFSpiffyPop wrote:

    Reading through the above, I see some people convinced the market is going up from here, and some people convinced it is going down. My only reflection is that I hope you have "Backed it up." By that, I mean that I hope you are documenting your own calls on Motley Fool CAPS and contributing to the community intelligence. Those who are right will be rewarded, those who are wrong will be penalized, and we'll all benefit from this transparency and accountability. So if you have a strong opinion: "Back it up." (I do.) Fool on. --David

  • Report this Comment On April 16, 2009, at 10:51 AM, TMFBomb wrote:

    As much as it pains me (since I like the companies long term), I just gave the thumbs down to BBY and BWLD in CAPS...hoping for better prices.

    -Anand

  • Report this Comment On April 16, 2009, at 1:28 PM, Ibeatmykids wrote:

    I think alot of these articles are attepts at trying to manipulate the market. Alot of people missed the bottom at 600 and now big whigs are trying to manipulate the market lower so they can have a second chance at the rock bottom prices.

    At 8000 the market is still at an incredible entry point no matter if it goes down or up from here. If it goes down to 6000 I will invest more money and if it continues to go up i will continue invest more money. Timing the market will end up biting you in the butt before it makes you gains.

    Buy low sell high, i like to keep it simple.

  • Report this Comment On April 16, 2009, at 3:15 PM, maxhoffa wrote:

    dave: CAPS is a funny thing though . . . i let my BAC bear pitch go on for at least a full month after i bought into BAC with real world dollars just on account of my bear pitch being so awesome! you should have seen it man, it was art.

    i only buy a fraction of what i rec in CAPS, and only CAP about half of what i actually buy for one reason or another. primarily outright laziness.

    the blog and article comments are a better forum for 'backing it up' anyway . . . most people are pretty decent at being up front with their picks and owning up to the misses.

    CAPS is just CAPS . . . the 'comment' section is where the action always is.

  • Report this Comment On April 16, 2009, at 3:32 PM, Buffetsbrain wrote:

    Market appears to be consolidating at these levels. I don't see a big pullback from here; if anything, a springboard to the updside. Time to tap into the margin boys...

  • Report this Comment On April 17, 2009, at 2:56 AM, casalotta wrote:

    This is my question regarding C, my son is a Federal Employee and for years was given a government credit card issued by BOA, 2 months ago, the government pulled all Federal Workers BOA cards and reissued with Citi. How many Federal and DOD employees are there out there?!? This must be good for Citi because these cards will be paid by the feds as company expense cards for deployments, TDY and all other official government business. This should be billions in guaranteed credit card payments and revenue and a big loss for BofA

  • Report this Comment On April 17, 2009, at 12:16 PM, stmmmd99 wrote:

    I'm also with the group who believes this is just a bear market rally. I believe in long term investing, so I haven't touched my portfolio (which I believe is sound) and have also added to my positions.

    Still, I have also set aside some cash for some short term trading. Who am I to turn down some quick profits?

  • Report this Comment On April 17, 2009, at 1:01 PM, mikecart1 wrote:

    After all this 1st quarter earnings reports people will do the following:

    1) Sell creating pullback

    2) Forget about last week and remember the economy this week creating sell off

    3) Will start saying 2nd quarter won't be as good as first creating pullback

    Nothing has changed except these 'reports' that seem very suspect.

    Look for DOW to return to the 7000's in the next couple of weeks!

  • Report this Comment On April 17, 2009, at 1:24 PM, gayledon wrote:

    with everyone singing the same tune, i sure wouldn't wnt to have a major short position right now

  • Report this Comment On April 17, 2009, at 1:32 PM, automaticaev wrote:

    Well its time to sell profits all. You guys havent sold yet?????????

  • Report this Comment On April 17, 2009, at 1:33 PM, automaticaev wrote:

    take the money.

  • Report this Comment On April 17, 2009, at 2:38 PM, surgcare2169 wrote:

    I believe the most important way to interpret the longer term trend of the market is the realization that the "CONSUMER" economy is dead and gone . If I am wrong and the american people go back to spending money they don't have , then we will have another debt crisis or bubble burst in the not so distant future and hence another market collapse .Either way the economy and the market are longer term bearish and destined to make new lows .

  • Report this Comment On April 17, 2009, at 4:47 PM, ezmoney62 wrote:

    I don't really know what to think about MF's recent advice about selling railstocks. Six weeks ago on your advice, I bought CNI in the low 30's. You couldn't say enough good things about it. I just read your article suggesting the opposite and that the entire group of rail stocks is doomed! Which is it?

    I'm not in things for the short run. It would seem to me it might be best to get a concensus and state your position so a fool like me wouldn't get so confused.

  • Report this Comment On April 17, 2009, at 5:51 PM, motorist12345 wrote:

    Guys, don't panic and just put stop orders on your already purchased stocks. Yes, definitely the stock market will go up and down tons of times, and we will see corrections in the prices but the economy will recover. It may be a very long process but at the same time it could be a fast enough process (a year or so).

    I just purchased FAZ index because I think that the bank and financial stocks are still very weak and they will see a big downturn soon.

  • Report this Comment On April 17, 2009, at 7:38 PM, stan8331 wrote:

    I probably will put in stop orders on some of my stocks that have had a big run up. I'm not really comfortable with the idea of buying bear ETF's as a hedge - they're certain to lose value over an extended period of time so you'd have to approach it as a trade, and if you don't time your buys and sells just right, you could end up in a losing position even when the market does fall...

  • Report this Comment On April 17, 2009, at 8:50 PM, automaticaev wrote:

    Sell the rally?? Is this a joke?? The global economic recovery gets you a ton of money in a few months. BUY MORE!!!

  • Report this Comment On April 17, 2009, at 8:52 PM, automaticaev wrote:

    the global economic recovery gets you fast money and makes millionares out of minimum wage farm workers overnight. Buy buy buy buy buy buy buy!!

  • Report this Comment On April 17, 2009, at 9:34 PM, RareFruit wrote:

    To Jim Mueller and his comments about Netflix, from the local perspective, an Insider Trading column tracks insider trades. For the past months, every, I repeat, every single Director and Officer (D & O) of Netflix that has exercised Stock Options, has sold them immediately. No purchases of stock by said D & Os, either. They don't seem to believe in the future price of their stock. I'll keep watching, no buying.

  • Report this Comment On April 18, 2009, at 12:06 AM, Barrac wrote:

    I've never been sad about taking profits.

    There is resistance at these levels. AND Fast run ups guarantee a pull back.

    I don't believe it will be new lows, but a loss of 500 points on the DOW is very likely.

    Will we run for a few more days?... Quite possible. The suckers are always last to buy in.

  • Report this Comment On April 18, 2009, at 4:13 AM, starbucks4ever wrote:

    The simple truth is that nobody knows what will happen, and all the previous 50 comments can do nothing to get around this fundamental fact.

  • Report this Comment On April 19, 2009, at 2:21 AM, automaticaev wrote:

    Thats not really true. If everyone was planning to sell or buy its possible to know.

  • Report this Comment On April 20, 2009, at 11:24 AM, TMFGebinr wrote:

    RareFruit,

    Looking at just Reed Hastings (CEO, Netflix), for quite a long while, he's been exercising 4,500 options and selling them and selling 5,500 shares held by his family's trust account on a regular basis. Go back a year, and it's 2,500 options and 7,500 shares. This has been going on for at least 2 years (as far back as I looked). http://idea.sec.gov/cgi-bin/browse-idea?action=getcompany&am...

    He seems to be treating his options as part of his compensation. With the trust account, I don't know why he's doing that. But, as of the last transaction, that account still held over 1.9 million shares.

    Because of the clockwork like regularity, I would not read anything into it, especially along the lines of "don't seem to believe in the future price of their stock." Note, though, I haven't looked at the transactions of any of the other officers or directors.

    Cheers,

    Jim

  • Report this Comment On April 20, 2009, at 8:06 PM, stanr85 wrote:

    I've been reading these articles for a while now, but I'm a novice to buying stocks, though I believe they have the best potential for higher profits. I bought into Citigroup at $2.93 today. Not sure if this was wise, given my luck it will go lower, but who knows how low. I also bought into GM when it was $2.00, wish I would have waited, but I am still optimistic that it will pull out without having to file bancruptcy. I don't have alot of funds, so I have been eyeing stocks that are under $3 a share. I was just wanting some advice from some of you that are more experienced than I am at this. I also bought some shares of DRAD @ $1.20 and bought into AEZ at $.55. I've done good on the last two, but not so sure about GM and C. You guys or gals seem to buy and sell all the time, and after watching the market for the last year, I can see where there is money to be made. I'd appreciate any advice.

  • Report this Comment On April 21, 2009, at 1:33 AM, automaticaev wrote:

    i dunno man mabe gm will be 70$ a share next year or mabe it wont even be listed anymore its so worthless. Idk. I saw stock at like 2-3$ before that i sold because i let my emotions chose my actions and later they were worth 10x as much. Dont use your emotions is probably the best advice.

  • Report this Comment On April 21, 2009, at 1:41 AM, automaticaev wrote:

    if your looking under 3$ a share you shouldve bought all the gmo when it was 50 cent a share then you would practically own it. then drive there and find out why they arent miening moly yet!! Also you dont have much money? Check out something called a margin. They let you buy a lot more with invisible made up money that dosnt exist. Then other people invest on your non existent money look just apply for a margin if you dont have money.

  • Report this Comment On April 21, 2009, at 1:44 AM, automaticaev wrote:

    and if you dont know what your doing just use triple leveraged reverse etfs.

  • Report this Comment On April 22, 2009, at 6:35 PM, fortgreeley wrote:

    To Stanr85: don't invest in stocks if you can only afford penny stocks. You need someone else to invest for you. A couple of good closed end funds with nice dividends (be sure to register them as DRIPs so that the dividends get reinvested): CSQ and JQC with dividends of 14-15%. Currently trade at about $6 and $4 respectively.

  • Report this Comment On April 24, 2009, at 8:34 PM, connoisseur1030 wrote:

    In reviewing comments about how the dow is up so dramatically;ie, 6,000 to 8000 in such a short period of time, I am tempted to look at the charts. The Dow hit in the 6500 range for how many days, just check it out; there was a short, very short period where it traded in months past near 7000. Financial news isnt stellar, but if you believe the doomsayers, wait a bit and you can buy fortune 500 companies for pennies. My job requires that I speak with people throughout the country daily; business conditions in a great many areas are improving. The reality is that the banks are going to muddle through this, on the Auto front, Ford's got it figured out and I see no way that GM won't be a viable company again, perhaps not next month, but in the near term. I presume that the author of the article is shorting stocks - add to the doom. I know there's more bad news to come, I've heard how bad it is in Vegas, but when I talk to those who have just spent the weekend there, Im told its packed. I'm inclined to believe the people I know who have observed first hand. Sure Nevada's got some problems, high foreclosure rate, but that doesnt mean the properties will all be vacated and sit empty; buyers who smell a bargain will come in. Im long on a few stocks that were so beaten down that if they had continued I could have picked the companies up for not pennies a share, but just over $1.00. Its said there's a new America where spending habits, credit habits will change; perhaps, but I believe that's short term only - Americans love to spend, enjoy, travel, and they will continue to do so. There will be some changes, but the pocketbooks of Americans will open again, and the surviving stores will florish. Actually, looking at the stores that closed, I'm happy the junk got flushed out. Circuit City, who shopped there. It's best if we all started looking at the glass as if it was half full instead of half empty. But there have always been two types of people.

  • Report this Comment On April 26, 2009, at 6:12 AM, automaticaev wrote:

    Dont encourage him to hire a broker fortgreely. If he can only afford cheap stocks then why could he aford insaine brokrage fees? Dont discourage him he said he wants to learn. The first thing is to go lose 5-10 k or earn that much so you will learn that it takes a little while to make or lose that much money. Not 3 months.

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