Two friends of mine last night told me of their investments. The
first just sold out of a muni bond fund that was down 30 % from
where I mentioned to him that he might want to sell a year ago. ( I
sold mine for a small loss a year ago ) With the rest of his
protfolio he is still holding because " his guy " never sells. He
is down almost 50 % but is satisfied with " his guy "because he is
down less than the market is down. The other friend wanted to know
what to do with his citicorp stock. oh boy. The point is that most
people are oblivious to any rational thought on their investments
as long as their " expert " tells them everything will be all right
if you just stay in the market. I do not think these people will
sell until they are almost entirely wiped out. There is no
capitulation for these people until there is account is down 80 -
90 %.
randy - I think you're right. My mother-in-law is down
40%-50% and now is asking me what to do -- her investment advisor
tells her to hold, of course. I actually don't know what to
tell her. Sell it all right now? Average out?
Wait for the next big rally retracement?
ravun -- I don't know. From the chart you posted, does
that mean that this is the bottom? I don't think it is.
I mean, I have many friends who still think housing is going to
turn around in the spring. Or that the economy will start
recovering in the second half of the year. That's not
despair. To me, that's people set up for a big sucker rally
that will draw people back in and set them up for the despair to
follow.
go in cycles, so end of the year would have us in a 2 year bear,
things will probably turn around, when?..well your guess is as good
as mine.
Despair is when people starting asking for advice AFTER the
horse has bolted.
Too many perma bears here now, same as perma bulls when times
are good. This is the one reason I trade only my system, my TA is
good enough to trade off, but am way past caring what happens as
long as I keep on getting a blue and red line meeting every now and
then and departing, just to meet down the road...ad infintum
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Making of a bubble
Posted by ravun on 12th of Mar 2009 at 10:05 am
Perfectly described!
Posted by junkmaylbox on 12th of Mar 2009 at 10:22 am
Perfectly described!
and where do you think
Posted by cwa82675 on 12th of Mar 2009 at 10:21 am
and where do you think we are in this phase? I think we had fear last week and will be starting capitulation in a week or so.
Personally
Posted by ravun on 12th of Mar 2009 at 10:30 am
I think we are in the "despair" phase...fwiw, although many will disagree
This recession/depression is 15 months + old
Two friends of mine last
Posted by randy on 12th of Mar 2009 at 10:48 am
Two friends of mine last night told me of their investments. The first just sold out of a muni bond fund that was down 30 % from where I mentioned to him that he might want to sell a year ago. ( I sold mine for a small loss a year ago ) With the rest of his protfolio he is still holding because " his guy " never sells. He is down almost 50 % but is satisfied with " his guy "because he is down less than the market is down. The other friend wanted to know what to do with his citicorp stock. oh boy. The point is that most people are oblivious to any rational thought on their investments as long as their " expert " tells them everything will be all right if you just stay in the market. I do not think these people will sell until they are almost entirely wiped out. There is no capitulation for these people until there is account is down 80 - 90 %.
randy - I think you're
Posted by Michael on 12th of Mar 2009 at 10:55 am
randy - I think you're right. My mother-in-law is down 40%-50% and now is asking me what to do -- her investment advisor tells her to hold, of course. I actually don't know what to tell her. Sell it all right now? Average out? Wait for the next big rally retracement?
Well
Posted by ravun on 12th of Mar 2009 at 10:59 am
isn't that "despair"?...
ravun -- I don't know.
Posted by Michael on 12th of Mar 2009 at 11:13 am
ravun -- I don't know. From the chart you posted, does that mean that this is the bottom? I don't think it is. I mean, I have many friends who still think housing is going to turn around in the spring. Or that the economy will start recovering in the second half of the year. That's not despair. To me, that's people set up for a big sucker rally that will draw people back in and set them up for the despair to follow.
Things
Posted by ravun on 12th of Mar 2009 at 11:27 am
go in cycles, so end of the year would have us in a 2 year bear, things will probably turn around, when?..well your guess is as good as mine.
Despair is when people starting asking for advice AFTER the horse has bolted.
Too many perma bears here now, same as perma bulls when times are good. This is the one reason I trade only my system, my TA is good enough to trade off, but am way past caring what happens as long as I keep on getting a blue and red line meeting every now and then and departing, just to meet down the road...ad infintum