Something to cheer the naysayers.. on the other hand they won't believe it

oldelkhunter · 10-10-2008, 08:47 AM

This sub prime mess is very over blown. $200 billion compared to a 12 - 15 Trillion dollar economy. Do the math, its a very small percentage. We will look back at this and reflect that opinion. Investors are making this mole hill into a huge mountain. Buyer physics are s driving this market down and the media is keeping it down. That is what can become dangerous and lead us to a slow down. Merrill Lynch is forecasting a -.5 GDP for the 4th quarter. They are the most negative Big Bank in this whole mess. What will they say when the 4th quarter comes out positive.

Alsatian · 10-10-2008, 08:58 AM

Oldelkhunter: Remember that stock market adage "buy low, sell high." An 8,000 DOW or a 7,000 DOW represents substantially more value for buyers than a 12,000 DOW, that is for sure.

People look at the market in a funny way. The DOW is at 14,000 and that is OK, that is real, that is a measure of the health of our companies. The DOW drops to 8,000 and that too is considered to be real, a measure of the sickness of our companies. No. That isn't it. At 14,000 the picture of business is wrong -- overly optimistic, overpriced. Similarly, at 8,000 (or at 7,000, or at 6,000, or at 5,000 -- where the bottom is) the picture of business is wrong -- overly pessimistic. Additionally, it isn't a picture of health of businesses today, it is a forwards looking speculation of where businesses will be in 3 to 6 months. It is fundamentally volatile and shifting and has many mirages that needed to be guarded against. Its why they tell you to diversify and to not invest money that you may need in the next 5 years.

oldelkhunter · 10-10-2008, 09:00 AM

Quote:

Additionally, it isn't a picture of health of businesses today, it is a forwards looking speculation of where businesses will be in 3 to 6 months. It is fundamentally volatile and shifting and has many mirages that needed to be guarded against. Its why they tell you to diversify and to not invest money that you may need in the next 5 years.

I mentioned that same thing in another post here and was told that wasn't possible . Thanks

bugsNbows · 10-10-2008, 09:39 AM

Oldelk, the Libs ain't gonna like this post. Way to go.

Alsatian · 10-10-2008, 12:28 PM

I think it is funny that the Italian prime minister was calling for government leaders around the world to close markets until some control plan is put in place. I'm glad Bush turned this suggestion down.

I think the US stock market is showing a considerable amount of panic right now. I think some people dispute this, and I acknowledge my view may be mistaken. I see panic because I don't see any rational reason for the staggering sell-off. Why now? Why not the middle of last week? Nevertheless, let the market do its job -- allow values to seek a level that is determined by the collective valuation of the people who count, investors. A stock is worth what someone will pay for it. Could the market take a beating? Yes. Could values drop below "their real value?" Sure, but that is an opportunity for someone to build wealth. Make no mistake, the dropping market is not just destruction for some; it is fabulous opportunity for others.

The question I would have, relative to the Italian Prime Minister's suggestion, is where does the US constitution grant the US president the power to shutdown the US stock exchange? Maybe he could do this by persuading the overseers of the stock exchange to take this action, but otherwise I don't see this in his ennumerated powers and the notion frankly spooks me. Let the markets do their job.