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Bottom to hit prediction?
Old 10-04-2008, 10:24 AM   #1
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Bottom to hit prediction?

In June, 2008, the Royal Bank of Scotland predicted that--with the global crash--the S&P would hit here at 1050. Well...looks like we are pretty darn close to their prediction.
The Voice of Freedom - Ambrose Evans-Pritchard: RBS issues global stock and credit crash alert!

With this new liquidity by the Feds, seems to me that there is a real fire sale going on in stocks for the next month or so. Am I wrong? :confused::confused::confused: (As in: if Dillard's marks their stuff off 50% or more, I'm down there looking around.) And when will this sale end I wonder:confused:
Is anyone buying now? Waiting a couple months? Or just hunkering down, sucking thumbs and praying? (Any of these answers are acceptable as it's all just a matter of style.)
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Old 10-04-2008, 10:42 AM   #2
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Sold the VFWIX i bought early this year on Friday. WooHoo! 31% loss to date! Figure i'll take the tax writeoff. Plan on buying VWO as a replacement on Monday. More entertainment being able to pick the moment of sale and not having to guess at how much the fund goes up and down in a day.
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Old 10-04-2008, 11:49 AM   #3
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After a few days spent in the fetal position and sucking my thumb, I am doing some buying right now, but I remain prudent and I am not ready to go all in. In the past week, and in addition to my regular DCA investing, I have:

1) sold a chunk of my Prudent Bear Fund position and reinvested part of the proceeds in VG total stock market. I will continue reinvesting the proceeds on dips.

2) bought more VG Wellington and VG Wellesley on Thursday and Friday. I feel really comfortable with that choice. I also bought small amounts of VG small cap index and VG REIT index.

3) harvested tax losses on VG Emerging markets and VG developed markets on Thursday.

I am adding very little money to international equities and bonds right now (because of the strengthening dollar).
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Old 10-04-2008, 12:55 PM   #4
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Dow 8000...probably early next year.

We haven't even BEGUN to see the earnings hits virtually all companies are going to be reporting over the next several qtrs. We get our first look here in the next couple of weeks - but these numbers include the stimulus checks and don't include the full impact of the meltdown(s) of the last month or so.

Its gonna be ugly for awhile - bailout or not.

My only question at this point is whether we are headed into a deflationary death spiral or an inflationary one. If I knew which one, then I'd know what to do with all the cash from my maturing CDs.

Damn scary times...
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Old 10-04-2008, 01:07 PM   #5
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DOW 6,000 by the end of the year. Eh why not? Doom and gloom all around us. Might as well jump on the band wagon.
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Old 10-04-2008, 01:11 PM   #6
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My guess is 8000
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Old 10-04-2008, 01:33 PM   #7
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Just to be clear, having the Royal Bank of Scotland make prediction of that sort are equivalent to what? BB&T predicting that the London housing market will be down by 30% by 2009.

The source. The source.

DOW at 9400 by mid 2009. New Fed chairman, new Treasury Sec will be in learning curve, layoffs at 8-9% will be slowing, inflation at 7.5% will stabilize for remainder of 2009, housing will begin recovery with new home starts increasing, credit card/auto&student loan defaults will be the new topic.

Expect a second act of stupidity. Another stimulus check.

And another bailout. Probably twice this bailout required in 2009.

Trans-Atlantic view. Do your math.
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Old 10-04-2008, 02:06 PM   #8
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Originally Posted by cyclone6 View Post
Dow 8000...probably early next year.

Damn scary times...
These are the times that try a man's investment philosophy.

I was about to post a negative technical analysis of the stock market - then thought it was too negative and would scare people.

We are in a bear market.
Remember it will end - in late 2009 or 2010 ?
Remember the stock market is usually turns up about 6 months prior to the economy - it looks forward.

Next 3 months
- negative focus
economy news
political talk
holiday sales
business profits reporting
heating costs
- positive
election ends - and the neg. news associated with it

Next year negatives 1st to 3rd qtr ?
issues in the USA spread to the rest of the world.
unemployment rises
business profits lower

4th qtr ?
USA was first in trouble - it will be the first out of the trouble and begins to improve.

+++++++
Let's see how dumb I am.
I was averaging into the market since May 2007 - I reduced the monthly amounts a couple of months ago. I stopped them at the end of Sept. I'm going to watch and wait for awhile.

Funds 38% (down 18% from purchase price ), Cash 62%
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Old 10-04-2008, 04:57 PM   #9
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From what I am gathering in the media, I'll stand with Dex' judgment here. Anyway, I'm in a search for good buys mood now. Guess I'm the only one who finds all this exciting....well, let's be honest, if the market just stayed static it wouldn't be so much fun, but that's just my opinion.
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Old 10-04-2008, 05:27 PM   #10
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Originally Posted by Dawg52 View Post
DOW 6,000 by the end of the year. Eh why not? Doom and gloom all around us. Might as well jump on the band wagon.
I'll join you and play a tune on my kazoo for entertainment.
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Old 10-04-2008, 08:02 PM   #11
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All I know it that the TSM is down ~30% from peak, International a bit more. I was buying then why would I not want to buy them now? Sure it could go lower (and likely will as I see nothing to refute Dex's predictions) but I will continue to accumulate at sale prices. 20-30 years from now (when I'm retired) 2008-2009 and maybe 2010 will have been a very good time to buy into the market.

The alternative is to sit on cash - and lose to inflation - and hope you time the market right before it takes off again.

DD
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Old 10-04-2008, 08:19 PM   #12
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I last rebalanced when stocks were about 15% off their highs. It's getting to be about time to do it again, but I'll probably wait for another 5% down or so before I pull the trigger.
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Old 10-04-2008, 08:35 PM   #13
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Quote:
Originally Posted by dex View Post
These are the times that try a man's investment philosophy.

I was about to post a negative technical analysis of the stock market - then thought it was too negative and would scare people.

We are in a bear market.
Remember it will end - in late 2009 or 2010 ?
Remember the stock market is usually turns up about 6 months prior to the economy - it looks forward.

Next 3 months
- negative focus
economy news
political talk
holiday sales
business profits reporting
heating costs
- positive
election ends - and the neg. news associated with it

Next year negatives 1st to 3rd qtr ?
issues in the USA spread to the rest of the world.
unemployment rises
business profits lower

4th qtr ?
USA was first in trouble - it will be the first out of the trouble and begins to improve.

+++++++
Let's see how dumb I am.
I was averaging into the market since May 2007 - I reduced the monthly amounts a couple of months ago. I stopped them at the end of Sept. I'm going to watch and wait for awhile.

Funds 38% (down 18% from purchase price ), Cash 62%
according to Bob Prechter of Elliot Wave we are at the peak of a cycle that started back in 1720 and the Dow can fall back to around 1000 or less.

i'm reading up on EW now and find it very interesting and it has decades of research behind it, but some predictions like this just make you want to think that people get so far into their work they can't see the real world
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Old 10-04-2008, 09:05 PM   #14
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...New Fed chairman...
Nope. Bernanke's term ends in 2010.
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50% principle
Old 10-05-2008, 06:56 AM   #15
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50% principle

Don't know what validity this has, but Richard Russell (Dow Theory Letters) has long talked about the "50% principle"--looking at the rise from the lows (2002--Dow 7286) to highs (2007), if the Dow falls to the half way point (10725) there's a risk the decline is all way back, i.e. 7286. As he points out in a recent letter, this has now happened.
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Old 10-05-2008, 07:28 AM   #16
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Nope. Bernanke's term ends in 2010.
If he lasts, he looks positively like a beaten man. Wouldn't be suprized if he is out the door.
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Old 10-05-2008, 11:02 AM   #17
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Don't know what validity this has, but Richard Russell (Dow Theory Letters) has long talked about the "50% principle"--looking at the rise from the lows (2002--Dow 7286) to highs (2007), if the Dow falls to the half way point (10725) there's a risk the decline is all way back, i.e. 7286. As he points out in a recent letter, this has now happened.
I don't look at the dow. but, technically there is a way of thinking that the s&p could go to 750 the last low
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Old 10-05-2008, 07:53 PM   #18
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If he lasts, he looks positively like a beaten man. Wouldn't be suprized if he is out the door.
I don't disagree. I just wanted to correct the apparent misperception that with a new president would automatically come a new Fed Chairman.
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Old 10-05-2008, 08:05 PM   #19
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Well now I certainly hope we don't have as much good clean fun as I experienced in the little 1966 - 1982 go round. That game ran a little long.

I even dabbled in rental RE toward the end of that one.

heh heh heh -
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Old 10-05-2008, 08:23 PM   #20
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I don't disagree. I just wanted to correct the apparent misperception that with a new president would automatically come a new Fed Chairman.
I think Obama will ask him to stay for the stability.
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