It’s 7:54am and I am telling you that today will end as one of the worst days ever in the history of the markets. The dow benig down 500 points is a conservative estimate. No matter how much I scream that things are bad, it is going to take days liek this until people actually ’see’ that things are bad.
As for the saving grace of a tax cut, too late and too small and too spread out. Economists love to talk about marginal utility, and for some reason everyone believes that the highest marginal utility comes from the middle and lower classes…wrong! The lowest class has as poor of a marginal utility as the highest class, while the rich save money and thus don’t get the fullest out of a dollar, the poor gamble and buy drugs, eom.
I don’t see a bottom forming today, I don’t think the market will ‘V’ bottom either, I DO think if you have a lot of money invested in this market (I am currently 100% cash), today is going to be a long and painful day for you. I’ll keep you updated as news rolls in.
January 22nd, 2008 at 8:22 am
WHOA!!! ALL BETS OFF THE TABLE!!
The FED just cut rates by 75 basis points, if you don’t know how big and unprecedented of a move this is, start learning. Economic Armageddon is upon us.
January 22nd, 2008 at 9:01 am
Things are not looking good. You are currently 100% cash? Was that a different case 2 weeks ago?
January 22nd, 2008 at 9:05 am
I have a small 401k with the firm I just started at in November, I have a 529 plan for my niece, other than that I am 100% cash. I just liquidated my previous 401k into cash about a week and a half ago, took the early penalty and all. No need to ride this thing down. It’s one thing to buy into a declining market, like with my new 401k. It’s another to buy into it AND let my principal run down with it. Still, I’ve got my eyes peeled for opporunities that will present themselves in the near future once all the dust settles.
January 22nd, 2008 at 9:12 am
If you are 100% cash, today will be a fantastic buy opportunity. I would not wait to call the complete bottom but I would definitely look to take some positions today. To me stocks that I liked previously just got a lot cheaper and if my original rational hasn’t changed I don’t see my self selling. I will be looking for value buys today.
I predict 300 points down today…..someone has to be optimistic.
January 22nd, 2008 at 9:17 am
I am torn. It seems like a great time to buy those stocks I have been speculating for a while at a bargain price. On the other hand, I am thinking I should hold off my 401k and IRA contributions for a while and just put that money in my MMA.
January 22nd, 2008 at 9:30 am
My own feeling is that you never attempt to catch a falling knife, you’re just going to cut yourself. The entire environment is changing and while we are definitely in a cyclical bear market, we are on the verge of a secular bear market. Most likely, we are witnessing a correction back towards the mean in profit margins and P/E ratios. It will be a slow slow process. My margin of safety is literally almost double now, my time horizon and stop loss is much tighter now, and I am skeptical. In a bull market, one false move can be immediately corrected by a blind pick. In a bear market, there are some important caveats to remember. First, winners are tougher to find, so one false move is much tougher to correct.
Second, and I put this off by itself to stress the point, is that the slope has changed. Lets say you jump in today at 3:59pm and buy ALPHA stock. Tommorrow the market jumps 4% and you’re up pretty good. By the end of this week you’re up 9% in ALPHA. You say, 10% and I am out of this puppy with my gain. On Monday the market pulls back 2%, no biggie right? Tuesday down 2%, now you’re “hooked”. Since the slope has changed, the market will undoubtedly make a new low and price will go below where you got in (most likely) and FREQUENTLY winners become losers. BE DISCIPLINED…
Market opens in one minute, this is EXCITING!
January 22nd, 2008 at 9:32 am
Warren Buffett said, “Be greedy when others are fearful and be fearful when others are greedy.”
Today will be a great day for buyers
January 22nd, 2008 at 9:34 am
Buying in this environment is definitely not easy; you have to know what you are doing. You need a process that can identify potential long term investments. I would add to my long term positions by the end of the day. I’m not looking to make a short term gain that could be the difference, I’m not day trading.
January 22nd, 2008 at 9:52 am
Folks, lets be honest, this market is not selling off because a bunch of mom n pops naive investors are selling, its the big boys dumping. The mutual funds, the institutions, the banks (whoa the banks). It would be silly to think that the group of us are smarter than the street. A lot of time and technology has been invested into making sure that selling today is a smart move. Reevaluate everything. Remember, the dollar was just devalued again today, and inflation was added to. REAL profit margins are shrinking. The fact that you are ALL bullish tells the contrarian we are not yet at the bottom. At the very least, i’d wait until the volume dies down.
January 22nd, 2008 at 10:09 am
There is no way institutions are selling off like this. It just wouldn’t make sense. We both know all large investors have trading programs in place that prevent them from dumping huge positions on the market. I think it’s the dumb panicky money that is getting out of the market. Institutions do not trade in the morning; they trade in the late afternoon. Although in principal I agree it’s not just the mom and pop shops who are selling but all the big boys are yet to come. You don’t think Warren Buffet is sitting on the sidelines right now and wondering what company to take out after this correction? Corrections happened and we need to take advantage of them. We can agree to disagree.
January 22nd, 2008 at 10:53 am
I know it seems like I am an eternal pessimist, but I assure you I am not, I am a realist. If you go to yahoo groups, type in GATAI in the search, you can read my posts from 2006, where I consistently was calling the market ‘the best story never told’ and saying that things were as rosy as they could get. A year and a half later, with subprime fallout and inflation, I am now just a big ole bear.
January 22nd, 2008 at 11:20 am
Well either way it looks like the fed bailed us out again, and the market is even.