How low can it go?

[OAG]

They must be headed in the wrong direction, the cavalry that is!

 

[haha]

Yesterday I went to the library with a list of every stock I own, and every stock that I might be interested in buying in the near future.

I used the handy Value-Line Charts to see what happened to my stocks during the last recession. The chart doesn't go back far enough to see the early 90s recession, but I'll soon go back to look that up in the micro-fiche archives.

In many cases, my stocks sailed right through in terms of price, with very little change. None of them cut dividends, though earnings and cash flow in some cases dropped.

Nothing says that this recession, if one comes, has to be like the last one, but it does show that recession doesn't automatically mean all stocks are decimated. Values count too; and some values appear pretty good right now, as I view it.

Not to mention that the USD is hardly an attractive holding pen. I've been observing the economy for a long time, and all I have ever seen is inflation. I don’t expect that to change much.

For my part, if I find an apparently prosperous company, shrinking its capitalization, with meaningful insider buying, I will look closely and maybe buy it at the right price.

A year ago many of us would have been happy to buy some of the financial stocks, in fact did buy them and also advise others to do so by buying into index funds which are often heavily into financials. Insiders weren't buying then, but many are today.

Ha

 

[FinallyRetired]

I see anything above 11000 as froth on the latte. Honestly, I don't see this as a "down" market.

You know, I have to agree. If someone had told me that in Jan 2008 everyone would be panicking because the Dow was getting close to 12,000 I would have said they're nuts. And they are. I just wonder if we'll have yet another one of those Dow 10,000 parties that CNBC is so well known for.

 

[audreyh1]

At least it's happening nice and fast. I'd much rather fast then a slow drip, drip, drip....

I fully expect to see the DOW back in the 11000s, but have no idea how far down.

Audrey

 

[dumpster56]

We don't build anything anymore. We don't have an infrastructure thats is any good anymore. We have a fed chairman that basically wants the government to get something like 250 dollars into the hands of every worker so that worker goes out and spends it on more stuff we don't need.

How about rebuilding the american railroads!? Put people back to work real work, how about rebuilding the bridges and highways that are falling apart?

Nah just tell the american consumer to take out more home equity and spend spend spend!

We could see 8000 and then stay there for a whole lot of years. Think Japan of the Late 80s early 90s. a good 10+ years of weak growth. They did however still make good high quality autos and electronics.

 

[CybrMike]

I predict it will be back to 14,000 within 6 months.

 

[martyb]

I predict it will be back to 14,000 within 6 months.

I vote for CybrMike!

 

[megacorp-firee]

We could all be working for them.

I think we already are.

 

[mountaintosea]

I vote for Cybrmike also. However I tend to agree with newguy888. I'm really curious about this so called package Mr. B and the rest are purposing? I heard more dollars in the hands of the middle class? Ok what does that do after the money is spent? They are the so called experts! Pardon me if I look at them with a little jaundiced eye! And why is the news media (that I have heard) talking about the cost of social programs and not the cost of this damn war?

 

[Razor]

I predict it will be back to 14,000 within 6 months.

I will bet a buck it won't. If I have a buck left by then.

 

[W2R]

I vote for CybrMike!

CybrMike for President!!

 

[twaddle]

I will bet a buck it won't. If I have a buck left by then.

The bet will cost you $1.21. That's the price of June-140 DIA calls. Anybody can place whatever bets they like.

 

[Purron]

Here is my "crystal ball" prediction. I think the Dow will continue this up and down trend, mainly down, until we find the bottom of the sub prime/real estate market mess and will end up around the 11,000 mark. In the meantime, rates on bank insured savings accounts are likely to decline due to the "flight to quality" as people leave the market. Investors will see the opportunity to buy near the bottom and the market will start a generally upward trend by this summer. This will, in part, be sparked by investors understanding the depth and breadth of the damage done by the sub prime lending debacle and a modest resurgence in home sales coming from low rates and pent up demand for housing.

 

[mathjak107]

the good news is "WE CAN ONLY GO TO ZERO"

 

[ikubak]

I don't know how low it is going, or how long it will be there, but I do feel for the people that are already ER'd. I am sure it is more difficult to watch stock prices go lower once you are retired. With that said, if this market is going down more, we have a recession, and it takes a few years to work out of it, then I see this as my last big market downturn before I retire. I told DW last fall that what we really needed was one good market swoon while we are maxing out savings and that could set us up for ER. So if the market stinks for 12-18 months, it works for me, but I am sure I would be singing a different tune once I ER.

 

[Dawg52]

You all probably know about this already, so I'm not going to start a new thread. But,

Bernanke Backs Stimulus Effort
WASHINGTON -- Federal Reserve Chairman Ben Bernanke endorsed a "quickly" implemented fiscal stimulus package, saying it would complement the Fed's efforts to provide monetary-policy insurance against an economic downturn.
The remarks came shortly after the White House said President Bush has decided that an economic stimulus package is needed to help the sagging economy. Mr. Bush has also agreed to delay his campaign to extend his signature tax cuts until after he and Congress negotiate an emergency package to jump-start the economy, according to a Republican familiar with internal White House deliberations. Mr. Bush will outline some of his plans Friday morning.

This is from Bernanke Backs Stimulus Effort - WSJ.com

Sounds like the cavalry is on the way!

But why would the democrats vote for this? They want to raise taxes. Wouldn't a short term stimulus package be counter productive if you want to raise taxes? I'm sure I'm missing something.

 

[jazz4cash]

I watched Bernanke and all the Pols making points for the cameras. They wanted him to endorse an undefined fiscal stimulus package, so they send everyone 100 bucks and say The Fed told us it was a good idea. They questioned how this could work for folks that don't file taxes.......I thought the helicopter joke was comming again. Noone ever said anything about reduced spending or any long term solution to offset programs like stimulus packages or tax cuts or whatever. The whole time they're talking, the market is nosediving.

 

[Retire Soon]

The Russell 2000 is now down more than 20% from its July high making it a bear mark
market in small stocks.


Today's Markets - WSJ.com