07/27/07 Where is the market going now?

[DemonD]

Re: 07/27/07 Where is the market going now?

heh well don't thank me if the market has a 23% 1987 type correction.

I set my order at 59.61 (yes I am a complete and total cheap bastard) and it didn't get down that low yesterday. I set another one for tomorrow at that level, I doubt it will get there but we'll see.

I did buy some MO for my Roth IRA yesterday that did transact at 65.1001 (i got a $.009 discount on my limit order woohoo!) I have no idea how anyone feels about cigarettes and whatnot but the dividend and dividend growth alone makes MO a very compelling buy, as long as you a. don't have a problem investing in a tobacco company and b. don't foresee any future lawsuits or difficulties for big tobacco.

BTW jim if you are getting scared that i'm going stock buying knife-catching crazy, please be aware that I have significant cash and non-stock positions that I'm keeping on the sidelines for now (so that if indeed a 1987 type event does happen I will definitely bottom feed at that point).

[Jim Nickerson]

Re: 07/27/07 Where is the market going now?

heh well don't thank me if the market has a 23% 1987 type correction.

I set my order at 59.61 (yes I am a complete and total cheap bastard) and it didn't get down that low yesterday. I set another one for tomorrow at that level, I doubt it will get there but we'll see.

I did buy some MO for my Roth IRA yesterday that did transact at 65.1001 (i got a $.009 discount on my limit order woohoo!) I have no idea how anyone feels about cigarettes and whatnot but the dividend and dividend growth alone makes MO a very compelling buy, as long as you a. don't have a problem investing in a tobacco company and b. don't foresee any future lawsuits or difficulties for big tobacco.

BTW jim if you are getting scared that i'm going stock buying knife-catching crazy, please be aware that I have significant cash and non-stock positions that I'm keeping on the sidelines for now (so that if indeed a 1987 type event does happen I will definitely bottom feed at that point).

DemonD,

I personally hope what you are doing works out very well. I have concerns for my own money, but absolutely none for yours. I think it is good that people step up and post what they think and do in the investment arena, and you are good at this. My comment was only my observation.

If JNJ is a good buy here, why should a half a bonar make any difference over the long-term? rhetorical question.

Still, good luck to you.

[DemonD]

Re: 07/27/07 Where is the market going now?

Jim, that's a good question, and hard for me to quantify. When I identify how much I would pay for a stock after it drops into my buy zone, I stick to it. It keeps me disciplined. Earlier in the year I set an order for a junior mining company where I missed the purchase price by 5 cents. That stock is now up 55% from where I could have bought it at. I don't see it as a lost opportunity though, because that miss is now what I'm looking at to put into JNJ. And if I miss it? Oh well I'll keep collecting interest and will find some other stock that will drop into my buy zone. I waited 2 years for JNJ I can wait some more for it or another stock to drop into definite value range.

I personally keep flip-flopping on stocks as an overall investment in the current environment, and right now I'm liking what I see in terms of an inflation hedge. I saw recently where IBM had something like a 1/3rd increase in profit solely from currency effects from international sales. While the US economy may be headed for a recession, it appears (to me at least) that China and Brazil are at least partially decoupled from US domestic consumer spending. The modernization of the rest of the world seems to be continuing and even a significant credit hiccup doesn't look like it will derail them. I know credit and bubbles cause "malinvestment" but the macro fundamentals of Asia and South America and even the Middle East and Africa seem to be moving towards modernization which means more business for well run international companies.

One final thing: have you been on vacation recently? (Speaking to you Jim personally as well as anyone else reading this.) There are tons and tons of people from Europe, Asia, Australia, and South America in the US this summer on vacations. I have heard anecdotal evidence of strong tourism in many places, and personally from just spending a little time in Las Vegas, Grand Canyon, and Zion Canyon earlier in the month these places were PACKED with non-US tourists. I know this may be a symptom of a decaying currency, but I just can't help but see that there is a lot of real strength in many parts of the world outside of the whole mortgage/real estate/credit boondoggle.

[Jim Nickerson]

Re: 07/27/07 Where is the market going now?

Now it is 2:18AM EDT and the Asia markets are taking at least a baby-step toward hell in a handbasket. I import a list of Asian markets from the WSJ and Asia on average is down 2.53% a few minutes ago. Hong Kong over 3%, India over 3%, Taiwan was down 4.26%, Australia down 3%.

If one is of the opinion these markets need corrections, perhaps this is a first step.

The dollar/bonar index is up .18, gold is down 5.80, and the yen is up in value.

With the US markets really oversold, it will be interesting to see if they turn around--which they at least have the technical stage set to do so.

How am I betting? I don't have the foggiest idea as to how this will resolve.

[Jim Nickerson]

Re: 07/27/07 Where is the market going now?

8/1/07 1:15PM

It is refreshing to me to see some of the home-builder stocks getting what's left of their socks knocked further off.

BZH down >18%, LEV down >18%, WCI down >14%, CHCI down >13%, and HOV down >10%, and oh, did I forget to write TODAY.

The stock volumes traded for the past 7-10 have really been increased. I don't know what it means. Perhaps people aren't taking vacations.

Finally there is a drop in the ISE sentiment. Right up til today, there has been rather bullish sentiment in that indicator. http://www.ise.com/WebForm/viewPage....rue&link1=true

[zoog]

Re: 07/27/07 Where is the market going now?

It is refreshing to me to see some of the home-builder stocks getting what's left of their socks knocked further off.

BZH down >18%, LEV down >18%, WCI down >14%, CHCI down >13%, and HOV down >10%, and oh, did I forget to write TODAY.

About a month ago I bought into ProShares Ultrashort Real Estate (SRS). Up roughly 25% since then. I've had some trouble finding what exactly the underlying Dow index is comprised of, mostly REIT's, but I believe a couple homebuilders may be in there as well. Looking at RSI, SRS has been in overbought territory for the past week, so I don't expect the current gains to last, but, I suspect there will be more upside in the medium-term.

Rajiv posted an article in another thread yesterday:

Also a good article - Hold On to Your Seat: America and Its Debt Based Economy

One quote from that:

Almost unnoticed is the commercial real estate market that is badly overbuilt and is starting to show its weakness. Local banks, shut out of the mortgage market and not wanting to be left out, have lent heavily in the commercial real estate market, sometimes at a rate of four to five times their reserve requirements. And we thought the S&L scandal was bad.

[Jim Nickerson]

Re: 07/27/07 Where is the market going now?

About a month ago I bought into ProShares Ultrashort Real Estate (SRS). Up roughly 25% since then. I've had some trouble finding what exactly the underlying Dow index is comprised of, mostly REIT's, but I believe a couple homebuilders may be in there as well. Looking at RSI, SRS has been in overbought territory for the past week, so I don't expect the current gains to last, but, I suspect there will be more upside in the medium-term.

Until about a month ago it was easy to determine what were the components of the DJ indices upon which many, if not most, of the Proshares or Profunds are based, and then DJ started using passwords, etc, and I gave up looking.

The group of stock symbols that I follow that I have put in to the tracking list as home-builders are all down mightily from their highs. I guess as long as they keep going toward ZERO you should be able to make money in SRS--hopefully you will. I note that though $HBS and $HGX were both down over 1.5% today, SRS also ended down, so there must be significant components that are not just home-builders.

25% gain in a month is not bad for even two years.

[zoog]

Re: 07/27/07 Where is the market going now?

Until about a month ago it was easy to determine what were the components of the DJ indices upon which many, if not most, of the Proshares or Profunds are based, and then DJ started using passwords, etc, and I gave up looking.

Ah, so it's not just me being a neophyte.

...I note that though $HBS and $HGX were both down over 1.5% today, SRS also ended down, so there must be significant components that are not just home-builders.

25% gain in a month is not bad for even two years.

This is what I suspected going in, but my guess is commercial real estate ventures or anything else conceivably real-estate-related will continue to take a hit along with residential, though probably not as much.

My investment horizon is always at least a year if not more, unless there is significant downside before then. I do not feel nimble enough to trade in and out of things more quickly than that, as I've probably said before. At any rate, of course I expect some down days along the way. Even a 25% annual return would make me happy.

[friendly_jacek]

Re: 07/27/07 Where is the market going now?

About a month ago I bought into ProShares Ultrashort Real Estate (SRS). Up roughly 25% since then. I've had some trouble finding what exactly the underlying Dow index is comprised of, mostly REIT's, but I believe a couple homebuilders may be in there as well. Looking at RSI, SRS has been in overbought territory for the past week, so I don't expect the current gains to last, but, I suspect there will be more upside in the medium-term.

Rajiv posted an article in another thread yesterday:


One quote from that:

Congrats on the REIT shorting. Very smart. I used to have a nice sizable short position in REIT but covered that months ago, in part based on fellow Itulipers advice:
http://www.itulip.com/forums/showthread.php?t=1136

Fortunately, I rode SDD (ultrashort SP600) through the last decline netting 15% or so. I sold that though expecting a short term rebound and bought more commodities (there was a great sale on natural gas: UNG). Boy, if I only knew what to do with my 403 plan currently parked in global equities!

[zoog]

Re: 07/27/07 Where is the market going now?

Until about a month ago it was easy to determine what were the components of the DJ indices upon which many, if not most, of the Proshares or Profunds are based, and then DJ started using passwords, etc, and I gave up looking.

For anyone interested, I've found what looks like a list of the components in $DJUSRE (of which SRS returns twice the inverse) from 6/8/07. I don't know how often they change the components, so I'm not sure how timely the information is, but I figure it is still mostly correct. As expected, it is primarily commercial REIT's.

http://www.masterdata.com/Preview/Reports/$DJUSRE.htm

Checking a few, most of these appear to be up today with the general market, enough to overcome AHM's 36% drop (ouch). The others that jump out at me as mortgage lenders are NFI, SFI, IMH, and TMA. It's possible Dow Jones may have jettisoned these already.

[Jim Nickerson]

Re: 07/27/07 Where is the market going now?

Where's the market going now? 8/22/07

Looking at today's action, I use online.wsj.com, all of Europe was up, and all the Americas were up except Venezuela, Israel, Egypt, and South Africa were up, and for tomorrow, Thursday, all of Asia are up at 00:33 EDT.

It's been hard for me to find anything other than bearishly oriented articles in the past week.

There certainly seems to have been an abundance of bears.

If there is anything to contrary indications, and I believe there is, then I think the markets are in a good position to rally for a while.

[friendly_jacek]

Re: 07/27/07 Where is the market going now?

Where's the market going now? 8/22/07

Looking at today's action, I use online.wsj.com, all of Europe was up, and all the Americas were up except Venezuela, Israel, Egypt, and South Africa were up, and for tomorrow, Thursday, all of Asia is up at 00:33 EDT.

It's been hard for me to find anything other than bearishly oriented articles in the past week.

There certainly seems to have been an abundance of bears.

If there is anything to contrary indications, and I believe there is, then I think the markets are in a good position to rally for a while.

Yap, this is how the Street makes money. Use an opportunity of financial turmoil to declare a big crisis, produce a nice drop in the markets and then scoop cheap assets from the hands of dumb investors. Then produce a rally by synchronized buying, pull in dumb money again and quietly exit near the top. The cycle repeats and works well in either bull or bear market.
Cramer and similar media people are paid to cyclically spread either fear or greed. Cramer is certainly very good at that. The best one can do is to gain insight and play with the smart money. 8/16/07 was a great buying opportunity. Assets I purchased on that date (by dumb luck I should say) are up 20%.
This reminds me 1998, when I was able to put some decent money in the markets during the Asian/Russian crisis. That investment gave me a sizable down payment on my dream house in 2000.