AIRLINE stocks SOAR ^^

[Liquidity]

well 15 minutes left looks like we're breaking lows on the close of the dow. not the intraday lows of 7700 or was it 7900 idont remember. i think those get broken this week aswell.

welcome back panic selling with the short this market will crash fast and hard now.

[rookieNYC]

I'M JUST PICKING YOUR BRAIN HERE....not trying to argue a point.

Good question and the last thing I take it as is sarcastic..Seriously..

I guess its simply hard for me to swallow..Watching Goldman trade at $55 a share and numerous others simply melting is tempting to me..I am a contrarian trader by nature..When the markets were in Bull mode I was very cautious and was happy with mediocre returns..I don"t mean to sound arrogant but I'm in the "stay rich" business not the "get rich" business...So for the simple fact that I evaded being decimated by this market it does tempt  me pair into these unreal prices..But at the same time I keep very tight stops and make sure that if I'm not right I take quick stops..At the same time I don't trade in my rearview mirror..I'm very well aware that just about everyone is getting out of this market either because of margin calls or just fear..These are the times when accumulation *should* start..But like I said I don't trade in the rearview mirror..Yeah it would be easy to say short this and that but when this market hits a bottom the rebound will be a rip your face off rally and I'm a bottom fiend..Mind you I'm not red on the year,up about %10.3 or so on my *ENTIRE* account so by no means am I hurting..Overall I've always felt that Buffet was right on one thing,his motto...Be fearful when others are greedy and greedy when others are fearful..Tough part is this time is much different..I've never been married to any stock,fund etc for very long..If I could get a %7 yield (with no volatility) or a CD I would never trade my account again..But we all know thats a pipe dream for the next few years..My main point is I guess I just feel this is overdone but we all know it's not at the moment..Do I know where it will end,no..Do I feel it will end soon,who the heck knows..I do know one thing,that Obama needs to announce a serious bailout package and if he announced he would delay those tax increases this market would bounce %25 fast..But I doubt he will do either one of those things..And not to sound political but I truly believe that a portion of these losses is because of his election win..hen he started to dominate the polls the markets started the black swan dive (no pun intended,its a technical charting term)..Other than that I simply have no where to park my money other than to actively look for scalps..I'm not getting short here..I'm not buying closed end funds because they are illiquid..I'm not buying Bond funds because of holding periods and I feel the defaults will continue but mostly because of the holding periods..My money market accounts pays me %2.93 which is pure dogsh*t..I won't buy some %4 CD and lock up my money for a year...I won't send my money offshore for obvious reason...I wont buy corporate notes..I wont buy callable CD's..I have to chase returns and thats my position right now on this mess...And yes I'm very tempted to become a dollar cost average long term investor but I can't swallow willing taking losses because of my nature as an active trader..I hope I wasn't too long winded for you...

[fdjake]

"Hope I wasn't too long winded."

No......those are some great insights!!!

Besides.....Long winded is MY specialty.

I wonder what this market will look like if things just follow the same order that every event in this bust has....

We get the initial drop.....A lot of genuinely smart people believe we've seen the worst of it.....Then it just keeps dropping.

Housing did this....

Investment Banks did this...

Commodities did this....

The Stock Market did this.....

Now it looks very likely that numerous Insurance Companies are about to get their heads handed to them in a MASSIVE Commercial Real Estate bust that could make the housing disaster seem small.

I had to laugh when the FED released their unemployment expectations today.........7.5%  PEAK 

Reversion to the mean Dow average for almost 80 years would have that index at 5000....

But who knows......we are in UNCHARTED WATERS without a compass.

[Liquidity]

tomorrow should be a very interesting day. I agree when we rally it will be a huge swing. With all the shorts in this current market I would be thinking it happens now but watching everything get creamed it seems like alot of money is waiting.  I think they're waiting for the shorts to cause hedge funds to throw in the towel, along with margin calls and then when the buyers come in those shorts will cover and the tidel wave gets moving fast.

I thought we'd see buyers come this week and cause us to go higher but from watching the volume and charts i believe their is a HUGE amount of shorts in the market now. I hope we see the same thing tomorrow early, I would take a jump in then.


anyone look at a chart of DRYS ?? i was up huge on it when we rallied, i kept it overnight and got stopped out the next day after throwing up almost all my profits. I thought we were getting a short squeeze with options expiration coming and from the volume the last 10 days it had alot of shorts on it. what really happened was those shorts covered when we rallied, then they re-opened their positions the next day. today it had over 16 mil volume its all time high. it moved straight down with little bumps. this stock was $115 + when the bdi 11,000 when china was buying up all kinds of commodities and commodities were sky high. now its 5.30  ish. the whole dry bulking sector is being destroyed. this stock could be a huge short squeeze opportunity very soon. i will be watching it like a hawk. If it doesnt get a squeeze i hope it gets shorted to the ground. i'd love to buy and hold that stock @$3 or less for a few years. they have an oil drillship business that they will spin-off as a dividend in the next months that i want. I think the stock will probably just keep killed along with the other shippers.

[rookieNYC]

I know it sounds odd but I dont feel that alot of hedge funds are net short this market now..This is pure unwinding of positions from every stage of investor..The right way to play this market is one of two ways..1) Go into an all cash position and come back in January after  BO takes over and take a crack (Thats what Steven Cohen owner of SAC Trading did with his entire staff !!!!)...2) Put a very small fraction weekly because this market isnt going to zero..6000 maybe but I doubt it..I think by 7000 some serious economic package will be in the works..But I could be wrong..I just dont feel its very professional to get bearish at 7997 on the Dow...The time to get bearish was 14000 Dow...7997 you start to hatch a plan to get into the market..There is $300 Billion in cash in money market funds and no one likes sh*tty rates...People will come back into this market when the smoke clears..Who knows when that will be...But you can bet the blood is pouring into the streets in a huge way..Barton Biggs was very bearish today on Bloomberg,and snappy to that Jeff Spicoli commentator they have on after 3pm..People are hitting the bid and looking for the door and people with boatloads of cash are salivating at the prices..And I'm one of them looking for a long play..One good day fully invested in this market can yield 40k-70k when things turn around..I'm keeping the powder dry because good times will be back after the markets flushes all these weak hands out..Then the mother of all short squeezes will start and that *should* gain traction into a nice follow through rally..But when that happens is anyones guess..

fdjake,
 And yes I did laugh when I heard Lyle Gramley start making predictions...Also did you see Dr.Doom on this morning?..Nouriel pegged it nicely on this one..but a broken clock is right twice a day..Nouriel has been bearish for years...Had you been net short on his views you would be broke years ago...

[propertymanager]

By my count, this is the 4th time we've tested the low.  I didn't see any panic selling -  this was an orderly decline on only moderate volume.  Certainly no capitulation that I can see.  On that basis, I think we go lower from here, probably to about 7,200 on the DOW.  What's more, the FED has basically admitted now that things will get worse through 2009.   Job losses haven't even started to appear and we still have credit card defaults; commercial real estate defaults; the auto bailout; airline bailout; etc to go.

I'm betting down!

Mike

[Liquidity]

It may not be hedge funds short be their is a lot of shorts out here. seems like everyone in the market is short at the moment.


here is something i think will be very helpful to investors.

If you're looking for a clear indication of a market bottom, just look for the BDI to start moving noticeably higher as it often predicts and moves in tandem with the equity markets," said Rodger Moore, head-strategy at DBM Capital Management.
The BDI offers a real time indication at global raw material and infrastructure demand. Unlike stock and commodity markets, it is totally devoid of speculative players. The BDI leaves no room for speculation, is not subject to revisions, and it can't be manipulated because it is not tradable.

[rookieNYC]

Interesting article with some very interesting charts..I follow David Fry, and not just because he is an avid surfer..Incredible technician..

http://www.etfdigest.com/davesDaily.php

[fdjake]

QQQQ puts on FIRE today.....Up OVER 100%....No story ....REAL MONEY.

Why fight this???

WE are headed into a DEPRESSION.....NOT RECESSION.....A DEPRESSION.

The text book definition of DEPRESSION is a 10% or greater drop in GDP...We WILL see that....

This market is STILL too high.....This is an economic event not seen since the 1920's.  Money has been thrown at this market like NEVER BEFORE IN HISTORY.........STILL NO EFFECT......That...is telling us something.

[jmd_forest]

So learned gentlemen.....I'm one of those who cashed out (6 figures) in mid September right after the first 900 point drop, and never cashed in (7 figures) when I sold my company 3 years ago. Both monies are currently in 2 different money market accounts. I am actually scared that this money could up and dissappear.

What would you suggest?

jmd_forest

[rookieNYC]

What would you suggest?

Whats your scenario?...age...income...risk tolerance etc..?

I know the bears are beating their end of the world drums and they may be right for a while..But...I do feel after the smoke clears possibly mid 2009 we will do what history suggests and rally hard..Excess is being flushed out of this market and value will return soon..I would not go short here,nor would I bet the farm on the long side..As for creating income from that 6 figure account there isnt much to be made unless your six figures is closer to 7 figures thanks to Bernanke..Sad isnt it?..Money markets pay squat...CD's pay beans..Corporate notes are scary..Callable CD's are the same..Bonds are getting the closest thing I think you could look into..But I honestly think its best if you simply tuck into a money market fund and forget about this market for a while..You dont sound like a trader and now is not the time to start..Infact never start..Don't believe the fables being spewed on this forum..It's very hard to make a buck in this market when you trade in realtime with real money..If you dont need the money spread it out in some CD's or just park in a money market fund and sit idle..My suggestion is to dollar cost average into index etfs after January 1st...Make sure to include Asia,Russia,India,Europe and America ofcourse...I dont think you can lose over the longterm..I dont believe this market goes to zero..But at the same time Im not a bottom caller...Id say put %1 in a week..Play it safe but dont avoid equities because of this..I've been in the pig real estate business and I can say once this smoke clears I would take the equities market over the pig RE business anyday..

[jmd_forest]

Rookie,

Thanks for the reply

Age=50 (retired early after sale of company) , income=$15k/year from rentals + around $70K wife salary, + ($40K  to $60K double tax free )Money Market returns. Wife wants to retire in couple years, Risk Tolerance = low. I talked to 5 financial managers after selling my company 3 years ago and just couldn't stomach the possibility of significant loss in the srock market for that nest egg so I stuck the entire thing (close to $3M) in a double tax free MM.. I lost about $75K this year in our IRAs before I transfered out of funds into a MM in September (balance around $300k) after that first big 900 point drop. I just don't see a stock market rebound in the next couple years. In my opinion, formed from a observation of general economic conditions, we're in for a protracted downturn and flat bottom before the next bull market.

I'm glad to see my current strategy of "tucked into a money market" is at least reasonable in someone else's opinion besides mine. I figured the IRAs would be my exposure to the market but I plan to wait until there is a clear indication that we are out of the death spiral we're in now. If I miss the first 20% or so of the next bull market....so be it.

I'm planning to purchase several more rentals over the next few years, but I'm kind of picky and conservative in my selection so it's been tough finding deals to cash flow in my  target areas which admittedly is reasonably small (just a few towns where I thoroughly understand the rental and sales markets). My buying criteria is 10% cash on cash return + 30% equity but I consider properties that come reasonably close.

I'd like to shop the Money Markets for the best returns but don't want to jeopardize the federal guarantee of MMAs on the balance in the accounts before 9/19/2008. I am seriously concerned the money markets could see serious losses.

jmd_forest

[propertymanager]

jmd_forest,

Congratulations!  It sounds to me like you're doing great so far!  You've probably already beaten 99% of all the investors in the market by just keeping your money safe.  I'd say that was very smart!

Mike 

[rookieNYC]

jmd,
 Ok I have considered a few different options for you..It seems you and I are the same boat but a little different..Cash flow positive properties are decent but if you are talking that kind of cash I'm puzzled why you would even bother with RE...I HATE REAL ESTATE...Property managers are the worst part about the business..And for the money you make I wouldn't even bother..I make a little more than you in RE business and I can't stand to be bothered by water bills,tenants,maintenance etc...But it's your money and time..

Consider Municipal Bond funds...FLTMX...FTFMX (example ONLY****)

For the next few years people like us have very few income choices..We either accept *some* and I mean very little risk to make any kkind of returns or we are relegated to money market funds...I understand you are paralyzed by fear but there are some decent Municipal funds that have faired decently considering the slaughter we have experienced in the markets this year..This won't go on forever but let's assume it does,even these funds have broke even for this year which says alot come 2009 and beyond..

Also consider as lame as it sounds building CD ladder..I'm sure you know what that is and if you aren't familiar go bankrate.com and they have a great CD ladder calculator to get started...Most brokerage houses have become well versed in this method because NO one wants stocks anymore..At least every 3 months some of your cash gets freed up so you are not completely cashless for any prolonged period of time..

Also consider a company like CW Henderson..They cater to high net worth individuals who want very low to no risk and make more than a money market fund..Just google them and you can get in contact with them and speak to someone..This year they were flat which is incredible to say the least...They use a mixture of short and longterm TIPS,Bonds,Govt issues etc...Worth a look...

Also look into callable CD's and you can use the ladder system also.This site is very good and worth a look...I'm sure you will but please naturally do extensive research before buying anything...  http://www.fisn.com/rates.htm

Other than that I don't have that much to offer..Stay away from zero coupon bonds,high yield junk etc..It seems you have little tolerance for risk and rightfully so..CW Henderson is in the stay rich business and some very bright people run it..If I can answer anything else please just ask..

[jmd_forest]

Rookie and Mike,

Thanks for the replies. I'd like to think I'm not "paralyzed with fear", but am prudently fearful. I hope I have 40 more years left and I don't want to go back to work because my nest egg took a dive. When you look at a 40 year time frame, my nest egg doesn't seem very big.  I'm still driving the 10 yr old, 190k mile car I had when I sold out  a few years ago

Most of my nest egg is from the sale of a business I built over 12 years of  very hard work and long hours before selling out to a Fortune 500 Co.  I like RE because I can control it more than most other investments and, at least currently, it doesn't take much time maintaining my rentals (although the rehabbing can be a full time job when I have a project property) . I buy and rent in a "somewhat" affluent area, averaging around $1500/month per unit.  I also like the craftsmanship of turning a run down property into a gem and making a profit on it. I usually buy beat up and financially distressed properties, put my own sweat equity/craftsmanship into the property and either sell or rent out at the improved market value. I'm not afraid of hard work, Ive done it all my life, its just that previously it was hard mental work as opposed to the physical rehabbing.

I've looked at Municipal Bond funds previously and will look again. I'm also considering the CD ladder option (5 years out max) since I think it will be at least that long for a  real recovery to start and Money markets will return crap during that time. I'll also investigate CW Henderson to see what they're all about although I'm leery of financial advisers since if I'd followed their advice 3 years ago I'd be down 1/3 at this point.

Again, thanks for the tips. What are your thoughts on the short/medium/long term safety of money markets and other cash instruments? if we see a REAL depression, can/will the government really cover their insurance liability on these items?

jmd_forest