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Old 02-12-2016, 08:37 AM   #41
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The real question is what is going to turn all the negative news around or where is the black swan to the upside? Saudi's cut production, China performs more financial slight of hands, european banks regain strength, Kim Jung Un gets kidnapped, etc.
That's the strange thing about the mood surrounding this correction . . . where's the bad news? I mean like new bad news. And especially, bad bad news. Like really bad. I don't entirely see it.

Yeah, China. Slow growth in Europe. Emerging markets. All the same story that we've been living with for more years than I can count.

Some are trying to spin oil-patch debt as the same thing that subprime was in 2008. Talk about flights of imagination.

But it gets even better (or is it worse, I'm not sure). Deutsche Bank is having some profitability issues and some question whether it will pay optional coupons on a class of debt designed to have optional coupons. Yawn, right?

No, everyone is losing there sh!t about it. How many articles have I read saying it could be the next big contagion because other banks issued contingent convertible debt too? The only teeny, tiny, problem with the story, though, is that there is no channel by which failure to pay CoCos results in a broader financial crisis. It's all pretty silly, actually.

Yes, economies are weak. Some EMs will have or are having a hard landing. But I think mostly this is a reaction to over valued markets colliding with overwrought comparisons to 2008.

When will it end? Once people learn that not everything is 2008. So soon enough I'd wager.
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Old 02-12-2016, 08:45 AM   #42
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That's the strange thing about the mood surrounding this correction . . . where's the bad news? I mean like new bad news. And especially, bad bad news. Like really bad. I don't really see it.

Yeah, China. Slow growth in Europe. Emerging markets. All the same story that we've been living with for more years than I can really count.
Diversification, while good, is not a panacea, as all boats will rise and fall with the same tide. Thats the problem we are in, although the US is still in reasonably good shape compared to the others, we are certainly not growing at a strong rate considering the unemployment rate. I am not sure what will happen if oil companies start to go bust, as that will effect bonds/stocks/banks, but its also interesting that the benefit of low oil prices is not very apparent in other sectors although the airlines have faired pretty well.
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Old 02-12-2016, 09:23 AM   #43
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I think it is largely mind-set. We've been hearing how everything is historically over-valued, and when that news has been heard long enough, and loudly enough, you get a piece of seemingly important news like "the Chinese economy is slowing down" followed by a knee jerk reaction of selling, which then convinces others that "this is it! The collapse is here" and it runs away with itself.
Steely nerved, long term investors (who don't know any better) like myself just figure it will turn around just like every time before, and if I maintain my composure, it'll all come back to me.
Or not. But I'm not smart enough to know when the bottom is, so I'll just hang on.

BTW, I do remember in "4 Pillars" Bernstein cautions against reallocating to often, because these trends tend to take a while to run out of gas, so I'm not in a big hurry to reset my AA. IF I miss the bottom it will be as if it never happened.
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Old 02-12-2016, 09:24 AM   #44
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Markets are up today. BUY!!!!!!!EVERYTHING!!!!!!!
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Old 02-12-2016, 10:30 AM   #45
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That's the strange thing about the mood surrounding this correction . . . where's the bad news? I mean like new bad news. And especially, bad bad news. Like really bad. I don't entirely see it.

Yeah, China. Slow growth in Europe. Emerging markets. All the same story that we've been living with for more years than I can count.

Some are trying to spin oil-patch debt as the same thing that subprime was in 2008. Talk about flights of imagination.

But it gets even better (or is it worse, I'm not sure). Deutsche Bank is having some profitability issues and some question whether it will pay optional coupons on a class of debt designed to have optional coupons. Yawn, right?

No, everyone is losing there sh!t about it. How many articles have I read saying it could be the next big contagion because other banks issued contingent convertible debt too? The only teeny, tiny, problem with the story, though, is that there is no channel by which failure to pay CoCos results in a broader financial crisis. It's all pretty silly, actually.

Yes, economies are weak. Some EMs will have or are having a hard landing. But I think mostly this is a reaction to over valued markets colliding with overwrought comparisons to 2008.

When will it end? Once people learn that not everything is 2008. So soon enough I'd wager.
+1 This is not 2008. And low oil prices are a boon to most European and Asian economies, and ours to a certain extent. Many lower income folks are seeing $50-70/mo savings on gas for their vehicles and this will start being spent in the retail markets. Transportation, agriculture, manufacturing are all helped by low oil prices and those saving will start to drop to the bottom line. And that could be the start of then next bull.
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Old 02-12-2016, 10:35 AM   #46
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S and P 500 up 30......Dead cat bounce?
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Old 02-14-2016, 06:47 AM   #47
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Yeah I think the broader market is nowhere near capitulation. I need to see way more articles about how the financial system as we know not may not exist tomorrow.

The ONLY place this seems close is in oil where people are just all over the place with predictions. Oil is in a state not seen in over 80 years and no one really knows where the situation is headed. Be happy if you don't live in an non diverse oil country like Russia. The cheap gas doesn't help their economy very much.

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Old 02-18-2016, 02:08 PM   #48
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May not have had THE capitulation, but the last few days have been nice. . . .
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Old 02-18-2016, 02:48 PM   #49
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May not have had THE capitulation, but the last few days have been nice. . . .
X2, nice days to be invested and ride the wave up rather than down.
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Old 02-18-2016, 02:51 PM   #50
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Perhaps investors realize there's nothing to capitulate to. It may be just a correction and nothing more, as we are not in a recession.
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Old 02-21-2016, 01:51 AM   #51
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I had a coworker ask me how to open a brokerage account. He said he got a hot stock tip from a friend who has an Edward Jones guy. The hot stock tip was FAZ. Then he asked me what business FAZ was!

This coworker is the sky is falling kind of guy, always telling people to get out of the stock market because the economy is collapsing and here he is excited to buy a "stock". He should be the poster child for pensions.


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Old 02-21-2016, 08:07 AM   #52
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I had a coworker ask me how to open a brokerage account. He said he got a hot stock tip from a friend who has an Edward Jones guy. The hot stock tip was FAZ. Then he asked me what business FAZ was!
I confess I had to look it up, but it's a leveraged ETF. Umm, OK.

PT Barnum was right.
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Old 02-21-2016, 08:35 AM   #53
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The "noise" in a nutshell:
The market is dropping; RUN AWAY!!! YOU'LL LOSE EVERYTHING!!!

The market is on a high; RUN AWAY!!!! EVERYTHING IS OVERVALUED!! YOU'LL LOSE EVERYTHING!!!
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Old 02-21-2016, 09:34 AM   #54
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My prediction is that, although it may happen in a sawtooth pattern, we're in for 3 years of strife. From another thread:
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Although I made an off the cuff and wildly optimistic prediction in another thread a while back, it looks like we're headed for S&P 1200 before it starts back to the 2000 range. It will probably take 3 years before it really finds the bottom, and take another 4 to break it's nominal May 2015 level. Maybe I'm nutz. I hope so.
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Old 02-21-2016, 10:07 PM   #55
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So far I'm still right since my Feb. 11 post. Feb. 15 - 19 has been a great week. Bloomberg futures tonite show we are still going up tomorrow.

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Yellen's done talking and did not rule out negative interest rates, so it's anybody's guess. Capitulation possibly ended today when Dow went down by -400 points - many sold a lot. Then went up to -234 at close. Dow futures now +63. Oil recovered from $26.50 to $27.68 (now). This is not 2008, but more like 2011.

If I'm wrong about today, then Capitulation ends near summer time when the demand for oil goes up as everyone takes their car on a road trip with cheap gas prices, and all equities goes up as oil prices going up.
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Old 03-03-2016, 04:35 PM   #56
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My crystal ball says: the S&P will hit 2100 before it hits 1800.
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Wow! This prediction couldn't have been made today.

All I have to say is, "drugs are bad".
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Ooooo - I'll take the other side of that! We got very close this morning - got down to 1810, a new 12 month low.
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Old 04-19-2016, 09:06 AM   #57
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Old 04-19-2016, 09:43 AM   #58
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PM me if you'd like to subscribe to my investing newsletter.

Very nice call!
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Old 04-19-2016, 09:49 AM   #59
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PM me if you'd like to subscribe to my investing newsletter.

Glad your prediction came to fruition. Now, please tell us where the S&P will be at end of year, and what will the low be between now and then
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Old 04-19-2016, 11:17 AM   #60
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I did really well on this little swing. Last year in October I diversified by selling off half of my largest equity holding and buying a bunch of other stocks. This resulted in a $50,000 capitol gain which my FA neutralized by selling a bunch of other stuff at a loss to zero it out right before year end. Then he said that he would buy them all back but he had to wait 30 days to avoid a "wash sale"

Well all that happened during this little "dip and rise" and I'm now up an eighth mill.

Sweet!
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