short or long correction going on

[Chuckanut]

This morning I spent an hour in intense concentration as I tried to read the minds of the Fed Chair and the Central Bankers in Europe. Nothing but blank thoughts. So, I brought out my Crystal Ball, but it is cracked and the magical 'ether' inside has escaped. Finally, I decided to play my trump card and fired up my Time Machine. Alas, it is broken and the part it needs won't be made until 2347. So, I can't help answer the question.

 

[Chuckanut]

Market dips=buying opportunity.

But low, sell high. What a novel concept!

 

[tulak]

I think I started a thread a few months ago about my first investment in bonds ever, and bonds crashed right after that. I bought my first home ever, a condo, in 2008, cash with no mortgage, at the very peak - still have not recovered from that. No more real estate for me.

And now this correction. This is yet again another piece of evidence that some of us, including myself, are just unlucky when it comes to investments, even if we don't try to time the market.

I bought at some of the highs before the crash in 2008. I was down over 37% in 2008 - more than the S&P500! - but I kept buying. I broke even sometime in 2010 and since then have done quite well. It's hard to see your principal take a hit, and of course there's no guarantee that it will come back, but historically it always has. I take comfort in that fact and my take is that if it doesn't come back, then sh*t's hit the fan and my portfolio value may not matter much.

Btw, if it's cheaper now, maybe it's a good time to buy more?

 

[F4mandolin]

I'm going to go see this guy today:

This guy just reminds me too much of Ming the Merciless, and you should know how that turned out.

http://static3.wikia.nocookie.net/__cb20140105200048/villains/images/8/81/2783051-middleton.jpg

 

[Lsbcal]

You have all your money riding on this board or that one?

Definitely on that one. Now I'm a bit confused.

 

[Lsbcal]

This morning I spent an hour in intense concentration as I tried to read the minds of the Fed Chair and the Central Bankers in Europe. Nothing but blank thoughts. So, I brought out my Crystal Ball, but it is cracked and the magical 'ether' inside has escaped. Finally, I decided to play my trump card and fired up my Time Machine. Alas, it is broken and the part it needs won't be made until 2347. So, I can't help answer the question.

You have missed your calling as a novelist. I'm now waiting for the next installment.

 

[easysurfer]

I live in the moment.

When in a bull market, I think about how much my net worth grows.

When in a bear market, I think about all the shares I'm getting.

I just DCA so no zig zagging around for me.

But I'll take the bait and look in my crystal ball and say since it's been about 5 years since the start of the great recession, we are due for a long correction, until the next election come around then it's go, go go

 

[dtbach]

just bought some more stocks on this dip. I'm calling it a short but tepid correction.

Aren't you glad I brought this all into discussion??

 

[gerntz]

Define long.

 

[Walt34]

I'm going to go see this guy today:

I DIY, I have my own crystal ball. And I'm keeping it to myself.

 

[robnplunder]

Last few days have been interesting in the market. Don't see the start of a Bear market but wondering if this might be a sharp but short correction or one of a longer deeper magnitude?

Short and shallow one. But if it turns out to be a longer and deeper one, I see it as an opportunity to re-balance.

 

[LakeTravis]

I asked my son for his opinion on the stock market:

Travis Stock Market Show

 

[Gumby]

I bought $175k of SDY at the open this morning, so that is my stake in the ground. We'll see how it goes.

 

[Turboslacker]

I bought $175k of SDY at the open this morning, so that is my stake in the ground. We'll see how it goes.

Thanks for the warning...what's your track record lol

 

[Turboslacker]

Short one
At least I got a 50-50 chance

See I was right. Market up today.

 

[Dash man]

Finally, I decided to play my trump card and fired up my Time Machine. Alas, it is broken and the part it needs won't be made until 2347. So, I can't help answer the question.

Have you checked eBay?

 

[Walt34]

Yup. It's right here: 60mm Stand Asian RARE Natural Quartz Clear Magic Crystal Healing Ball Sphere | eBay

 

[F4mandolin]

Yup. It's right here: 60mm Stand Asian RARE Natural Quartz Clear Magic Crystal Healing Ball Sphere | eBay

That's a hell-of-a-buy for $13. Might have to get me one.......

 

[aja8888]

Asian Rare Natural Quartz Clear Magic Crystal Healing Ball Sphere 40mm + Stand

Besides being able to see the future, this one will heal all hurts:

Asian RARE Natural Quartz Clear Magic Crystal Healing Ball Sphere 40mm Stand | eBay

Plus, it is RARE!

 

[Running_Man]

Most of these threads the responses are usually of the mocking variety because of the difficulty in determing what is actually going to happen. But I think it is pretty clear there is a much higher risk of a significant market correction first just because of the relief of the 5 year stock rise from 2009 and secondly because of the overinvolvement in the finances of the world by central banks everywhere in attempting to prop up prices. There is another year of million dollar Fed purchases in the US and another year of major stock advances, that eventually will be offset in some manner combining these two points makes for a much much higher risk of an event than a year ago.

Benjamin Graham advocated making an estimation of whether a market is over or undervalued in allocating percentages of your portfolio to stocks and I agree with that process.

The last 5 years has seen the biggest experiment in Central Bank planning of world wide interest rates that has ever occured. I think if a bubble exists today it is clearly a bubble of Central Bank purchases of government debt everywhere as a means of maintaining stable demand. The misallocation of capital that occurs over such a prolonged period will inevitably have unintended consequenses.

A few signs of popping is occurring in the emerging markets, whether the central banks hold this together for a few more years is very possible, but at some point a crisis will hit where investors lose faith in the banks, this has occured since the dawn of banks and the globalization of this process increases the risk of a 90% wipeout of stocks worldwide. This is not to say I am predicting a 90% wipeout of stocks worldwide, that would be foolish to say with the bankers of the world all lined up to stop it, but the likelihood of that an evento of that magnitude occurring has probably never been higher in the history of finance. And I do not believe very many people are positioned to be able to withstand a 90% drop in stock prices.

Now before a response of if this happens we will all be having MRE's and shotguns, remember there are several total wipeouts of stock markets around the world where Jeremy Siegel and others are using of proof of the Triumph of Stocks over the long run, so a 90% decline is never the end of the world, merely a financial event that in the past has proven to be an excellent monment of opportunity for those positioned to do so, but so very few people are ever positioned to be able to take advantage of that point, because of the universal belief beforehand to hold such a belief is foolish.

 

[Dash man]

Now before a response of if this happens we will all be having MRE's and shotguns, remember there are several total wipeouts of stock markets around the world where Jeremy Siegel and others are using of proof of the Triumph of Stocks over the long run, so a 90% decline is never the end of the world, merely a financial event that in the past has proven to be an excellent monment of opportunity for those positioned to do so, but so very few people are ever positioned to be able to take advantage of that point, because of the universal belief beforehand to hold such a belief is foolish.

I agree we're not looking at the end of the world if the market crashes, but things could get nasty. If you look at Japan, their market never really rebounded and they've been battling deflation. They are now trying to induce inflation after two decades to try to get their economies engine started. I believe we're seeing the beginning of a possible currency war unfolding in Asia, that may spread our way. Here in the US, retirees on fixed income may be at risk because of the huge balance sheet the Fed has created and the possibility of inflation resulting from it. If buyers of our bonds stop buying, we'll see the government print more money in an effort to devalue the dollar. Unexpected consequences are what should concern us most since the Fed and the government don't have very good track records with them.

 

[Spanky]

I agree we're not looking at the end of the world if the market crashes, but things could get nasty. If you look at Japan, their market never really rebounded and they've been battling deflation. They are now trying to induce inflation after two decades to try to get their economies engine started. I believe we're seeing the beginning of a possible currency war unfolding in Asia, that may spread our way. Here in the US, retirees on fixed income may be at risk because of the huge balance sheet the Fed has created and the possibility of inflation resulting from it. If buyers of our bonds stop buying, we'll see the government print more money in an effort to devalue the dollar. Unexpected consequences are what should concern us most since the Fed and the government don't have very good track records with them.

Is this another gloom-and-doom outlook?

 

[Dash man]

Is this another gloom-and-doom outlook?

Gloom and doom? Well, I guess that depends on what you mean by gloom and doom. The Fed balance sheet is holding trillions of dollars while keeping interest rates artificially low. Sovereign debt around the globe is growing rapidly and faster than GDP growth as central banks print money and monetize the debt. Do you think things will continue moving along the same as they have been for the past four years?

The system is unstable. Eventually buyers of our debt will draw the line and stop. Inflation will rise as our government tries to devalue the dollar in an effort to increase exports to fight rising unemployment. Retirees living off of fixed income will be screwed. Or,If you look at what has happened in Japan, their economy has been deflationary or stagnant for two decades and their debt is up to 240% of their GDP. Their stock market has been flat. They are trying to increase inflation to get their economy moving again and other Asian countries are concerned about their devaluing the Yen. Because of their aging population, they can't grow their workforce to grow the economy unless they find huge productivity increases in other ways.

So if by doom and gloom you're expecting zombies, no, there's no worry for that. No civil war or apocalypse. But there will be some hard times for many.

But you can brush this off as just another gloom and doom story if you want and I hope you're right. But I'm staying out of bonds and keeping a lot of cash to be able to ride out any volatility. My stock picks will be strong companies that will keep customers regardless of a financial crisis and will be able to increase prices when inflation,Ickes in. Nothing may happen, or nothing may happen for ten years, but I bet something will.

 

[ripper1]

Is this another gloom-and-doom outlook?

Stick to your plan, Spanky, because nobody knows nothing.

 

[Spanky]

Stick to your plan, Spanky, because nobody knows nothing.

That sounds like a reasonable approach.