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Some Thoughts on Wall Street Panic 2011 (Update)

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coaster
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Update:

Well, this thing is taking a whole lot longer to work itself out than I first figured. I think that probably means there's a whole lot more that needed working out. None of this continued selling changes any of my fundamental premises, it just changes the time frames. The pain is lasting longer and hurting worse; meaning that the first pain wasn't enough to correct the imbalances. And my guess is that somewhere down the road we're going to find out that these swings, and especially the swings to the downside, have been exacerbated by excess speculation. See the posts I've made before on "flash trading" (also called by other terms).

I think what needs to happen, and that what will happen when the speculative excesses get washed out, is that investing will re-assert itself and the normal market activity that's due to investing activities rather than speculating activities will also re-assert itself.

So, what to do now? Well, seeing as it's WAY too late to sell; I think that if you've got the funds available, and if you find something that's a good value; anytime now is a good time to buy. Because you can never call the bottom, and if it's a good value now, it's going to be recognized sooner or later, and when it gets recognized, it's going to get bought, and then you're going to have to buy it at a higher price.

What makes a good value? Well, how about the numerous Blue-Chip American companies that now have yields twice the yield on the U.S. Treasury note. Which would you rather own? A U.S Treasury note that you have to buy at a 30% premium over par and yields under two percent? Or a piece of going world-class business that's selling for well under its historical average and is yielding four percent? (Plus with a history of increasing dividends, your yield on your cost basis will go up ... and up ... and up.)

Think about it.

Panic? Or opportunity?

~Tim~
Post Tue Oct 04, 2011 5:55 am
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globaldoc2001
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I guess I can not blame this happening. It is really scary as so much is at stake. The economy of the entire country and nation is really on the line. I just guess panic might be the natural reaction. However, I remain to be very optimistic of the situation. For one, the USA will never be like Zimbabwe or Vietnam, or the likes. Sooner or later, the USA will rise again. It is just a matter of time, and it is not far.

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Post Tue Oct 04, 2011 12:47 pm
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Offshore-Wealth.com
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STOCK MARKET INVESTING Is NOT For NEWBIES  Reply with quote  

With the crazy economic collapse we see worldwide, no way would I leave any money in the stock market at this point in time. With several hundred point variation swings every other day, you never know which side of the trade you should be on, but I will say this, I played short on Bank of America and it paid off big time just when everyone thought the Greece bailout by Germany was going to happen, and it didn't, wham, banking stocks got hit again in this yo yo period.

Success to all,

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Post Tue Oct 04, 2011 6:05 pm
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coaster
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Re: STOCK MARKET INVESTING Is NOT For NEWBIES  Reply with quote  

quote:
Originally posted by Offshore-Wealth.com
With several hundred point variation swings every other day, you never know which side of the trade you should be on,

If you're a TRADER that may be sound advice.

If you're an INVESTOR it's not appropriate because for an investor, there's only one side to be on.

~Tim~
Post Tue Oct 04, 2011 9:02 pm
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3door
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Hey Tim,

Do you mind explaining to novice investors like me? Without trading, how does one build wealth without relying completely on funds, dividends, reinvestments, etc? I mean growth on paper is all well and good, but until you act it's all on paper.

quote:
If you're a TRADER that may be sound advice.

If you're an INVESTOR it's not appropriate because for an investor, there's only one side to be on.

Post Sun Oct 30, 2011 11:58 pm
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coaster
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Thanks for asking 3door, I've done that multiple times; I suggest you use the search function and search on the keywords "trading" "investing" and my userrname.

~Tim~
Post Mon Oct 31, 2011 5:48 am
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CommodityCall
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Intraday Commodity Trading Tips  Reply with quote  

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Post Fri Mar 27, 2015 7:52 am
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