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bucheon bum
Joined: 16 Jan 2003
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 Posted: Wed Mar 10, 2010 6:06 am Post subject: |
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| mises wrote: |
I was incorrect in that I assumed market fundamentals would guide the market. |
Yes, Jay, have you applied any market fundamentals to your investment strategy? It seems like your philosophy is, "Well heck, it's gotta turn around at some point since it has every other time since WW II!"
And Jay, if you're a history buff, I suggest you read up more on the period from 1929 to 1941. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Mar 10, 2010 6:09 am Post subject: |
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| Reggie wrote: |
| I'm not going to pretend to know much about the stock market, because I stay the Hell away from it since I don't understand it. I don't see how all stocks go down together one day and they all go up the next in unison. It seems like the stock prices are based mostly on emotion instead of balance sheet fundamentals. It's like the dot com bubble all over again. My amateur advice is to cash in your chips now and walk out of the casino while you're still ahead. Obama will wreck this economy just as efficiently as Bush did. |
Well Reggie:
1. The Dow is a very small portion of the stock market at large. And as mises notes, those on it change a lot.
2. While the S&P 500 is obviously larger, it still is a small portion of the economy at large. The # of publically traded stocks dwarfs the S&P 500.
3. If you were to track individual stocks, a fair number don't go step in step with those two indexes. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Mar 10, 2010 11:50 am Post subject: |
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| bucheon bum wrote: |
| jaykimf wrote: |
| mises wrote: |
The headline on Drudge was "Obama to the rescue!". At least in idiocy, they're consistent.
The market will lose these gains in short order. |
Great call.
"The S&P 500 index, the barometer favored by professional investors, rose 1.95, or 0.2 percent, to 1,140.45. The index is up 68.6 percent in the past year. Including dividends, it's up about 72 percent." http://news.yahoo.com/s/ap/20100309/ap_on_bi_st_ma_re/us_wall_street |
jay, your hard-on for mises is touching. And if the Dow is 11,000+ by years end I'll send you 50 bucks via paypal. promise. |
Thanks for the offer but I don't know how to use paypal. Anyway, 11,000 is only 4% away. I expect I'll be reminding you in January, even though you don't have to pay. Of course I could be wrong. Very easy for me to admit. I actually do like mises. I often disagree with him, but often what I find disagreeable is not so much what he says but the absolute certainty with which he says it. I like to remind him that he is not infallible.
"One of the most important things in life is what Judge Learned Hand described as 'that ever-gnawing inner doubt as to whether you're right.' If you don't have that, if you think you've got an inside track to absolute truth, you become doctrinaire, humorless and intellectually constipated."
http://www.youtube.com/watch?v=pLLoNi4qHPg |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Mar 10, 2010 11:55 am Post subject: |
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| bucheon bum wrote: |
| The Dow and the S&P this year have gained basically 0%. Woo hoo. |
Nobody in their right mind expects the market to move at a constant rate. There are always going to be pauses and pullbacks. To a long term investor, a 2 month pause is irrelevant. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Mar 10, 2010 12:16 pm Post subject: |
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I totally agree with you source, which doesn't believe the conspiracy theory and think that auditing the Fed would completely disprove it.
| mises wrote: |
I was incorrect in that I assumed market fundamentals would guide the market. Silly me. |
Yes silly you. Welcome to the real world. It's a shame that you have such wonderful theories about how the market should operate while the real world refuses to conform to your theories. If only there weren't people involved.
| mises wrote: |
Anyways, this guy likes to rail on my ramblings. That's ok. Hey, a 30 year 100k mortgage @6% pays 115k to the bank in interest in addition to principle. But think of all the money made on appreciation!
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It's true, I think you can do better than ramblings . You're better than that. Anyway we could have paid cash for the house and saved ourselves the 4.5% interest, but then we would have missed out on the 60% + we made in the market. You do remember all that stuff about opportunity cost and leverage or whatever, don't you? |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Mar 10, 2010 12:28 pm Post subject: |
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| bucheon bum wrote: |
| Reggie wrote: |
| I'm not going to pretend to know much about the stock market, because I stay the Hell away from it since I don't understand it. I don't see how all stocks go down together one day and they all go up the next in unison. It seems like the stock prices are based mostly on emotion instead of balance sheet fundamentals. It's like the dot com bubble all over again. My amateur advice is to cash in your chips now and walk out of the casino while you're still ahead. Obama will wreck this economy just as efficiently as Bush did. |
Well Reggie:
1. The Dow is a very small portion of the stock market at large. And as mises notes, those on it change a lot.
2. While the S&P 500 is obviously larger, it still is a small portion of the economy at large. The # of publically traded stocks dwarfs the S&P 500.
3. If you were to track individual stocks, a fair number don't go step in step with those two indexes. |
The S&P 500 represents about 75% of the total market in value. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Mar 10, 2010 1:06 pm Post subject: |
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| jaykimf wrote: |
The S&P 500 represents about 75% of the total market in value. |
Well you're close. According to two sources, it is 70%.
Source 1
Source 2 |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Wed Mar 10, 2010 2:08 pm Post subject: |
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| bucheon bum wrote: |
| jaykimf wrote: |
The S&P 500 represents about 75% of the total market in value. |
Well you're close. According to two sources, it is 70%.
Source 1
Source 2 |
According to Standard and Poor's its about 75%. http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-usduf--p-us-l-- but of course that figure is going to vary as small and large stocks move in and out of favor. Anyway, the s&p 500 may be dwarfed by the number of stocks, but in terms of value it is clearly the largest part of the market. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Mar 11, 2010 8:33 pm Post subject: |
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| The only possible explanation for the market as it is, is government (or government coordinated) intervention. Even Goldman's algos can't create this much after-hours action. I do not know a single individual in the industry who sees fundamentals as driving this market. The plunge protection team is the most plausible source. |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Thu Mar 11, 2010 9:10 pm Post subject: |
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I do not know a single person in the industry who believes the plunge protection team is responsible.
| Quote: |
Market analysts, however, were quick to debunk the theory. Yes, the government had a heavy hand in rescuing the financial system and the economy as the system started collapsing in late 2008 and throughout 2009. But the huge boosts of liquidity through the system found their way to stocks by the usual means, they said.
"The idea that this is magic is nonsense," said Barry Ritholtz, market strategist at Fusion IQ and a market veteran. "This was a normal behavior in a recessionary bear market. We saw the Dow plunge 5,000 points in 6 months, which had never happened before and created a dramatically oversold market."
Yes, the Federal Reserve slashed interest rates to near zero and Congress allowed banks to keep their bad loans off their books, allowing them to pretend they were solvent, he said.
But "you can't short stocks when the Fed is at zero," Ritholtz said. "Our own institutional clients came on board" as did other big institutional investors, he said. |
http://www.marketwatch.com/story/fund-flows-firm-suggests-government-bought-stocks-2010-01-05 |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Mar 11, 2010 9:40 pm Post subject: |
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Then you don't know anybody in the industry. Right? Do you watch the markets? It's the same thing everyday. No volume till afternoon, a quick pump and dump and rolling top. Then, after-hours stimulant. Have you seen the insider selling data this year? It's incredible.
Even without the PPT, the 0% rates and FASB/SEC enforced fraud will account for a nice chunk. But not all. Nor will Goldman's algos. For months on end all gains were after-market S&P futures purchases of massive quantities. Among the most heavily trades stocks in 2009 were C, CIT, BAC, AIG and the Twins. All government wards. All insolvent. All dead. All trading.
Hey, look at how clean these firms are! The regulatory environment ensures, Jay, that your investments are sound and exist in a transparent market:
http://www.nakedcapitalism.com/2010/03/ny-fed-under-geithner-implicated-in-lehman-accounting-fraud.html
No. This is a gamed market that is completely separated from reality. Themis Trading describes it as a "Jason Bourne" market as all are constantly looking for the exists.
The smart play in this market is to only participate in high risk derivatives trades with capital you're willing to lose (ie iron condor and similar). This is a casino.
Last edited by mises on Thu Mar 11, 2010 9:42 pm; edited 1 time in total |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Thu Mar 11, 2010 9:41 pm Post subject: |
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And this from Fox:
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| While some traders seemed willing to at least consider such a conspiracy theory, market strategists, academics and former government officials quickly debunked it as illegal, preposterous and, well, downright laughable. |
| Quote: |
| "I think it�s a silly conspiracy theory,� said Art Hogan, chief market strategist at Jefferies & Co. �Do you think the government has nothing better to do than prop up the stock market? |
| Quote: |
So what�s a better explanation for the surge in stock prices? For one, the fears of a second Great Depression that sent the S&P 500 to a 12 1/2-year low nearly a year ago have all but evaporated. Banks have repaid their TARP loans, manufacturing activity has resumed growth and home sales have improved.
�It is more logical to think that the $6 trillion market gain in the last 10 months is a result of improved economic prospects, a Fed commitment to keep rates low for an extended period of time, and greatly reduced risk premiums,� said Campbell Harvey, a business professor at Duke University. �You don't need a conspiracy theory of market manipulation to explain the market appreciation.� |
http://www.foxbusiness.com/story/markets/economy/debunking-plunge-protection-conspiracy/ |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Mar 11, 2010 9:46 pm Post subject: |
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| Yes. The mainstream media will say that. Do you know why? You are the target. Sad to say, but it's true. The insiders are selling like mad, the institutions are trading momentum (and have a red phone to the Fed for when to get out). Do you have a direct line to the Fed? |
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Reggie
Joined: 21 Sep 2009
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| Posted: Fri Mar 12, 2010 9:01 am Post subject: |
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| bucheon bum wrote: |
Well Reggie:
1. The Dow is a very small portion of the stock market at large. And as mises notes, those on it change a lot.
2. While the S&P 500 is obviously larger, it still is a small portion of the economy at large. The # of publically traded stocks dwarfs the S&P 500.
3. If you were to track individual stocks, a fair number don't go step in step with those two indexes. |
1. That has nothing to do with what I said.
2. Neither does that.
3. There are some days when the vast majority goes up and some days when the vast majority goes down. I'm not saying it happens every day or most days. But it does happen. It just goes to show how much the stock trading is based on raw emotion or sentiment instead of the fundamentals of each individual corporation. The stock market is influenced more by the herd mentality than people evaluating the fundamentals of each individual company they trade. The Dot Com Bubble was a perfect example. The herd bought hand over fist based upon emotion instead of fundamentals. There are some people who do research what they buy, but for the most part the stock market has turned into a casino full of compulsive gamblers. |
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itaewonguy
Joined: 25 Mar 2003
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| Posted: Fri Mar 12, 2010 4:20 pm Post subject: |
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when trading stocks, the biggest herdle of them all is psychological emotion.
you are your own worst enemy! |
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