Why Only Fools Think the Bottom Is In

[grapejelly]

Re: Why Only Fools Think the Bottom Is In



Yep, just another blip.

[grapejelly]

Re: Why Only Fools Think the Bottom Is In



Yep, just another typical recession The bottom is in ;)

[nero3]

Re: Why Only Fools Think the Bottom Is In

Yep, just another blip.

Yes, certainly look like the 1975 correction. Back then it was also pretty ugly, but barely a blip here in Norway. Think if it was a stock, would you buy it or sell it?

[grapejelly]

Re: Why Only Fools Think the Bottom Is In

Yes, certainly look like the 1975 correction. Back then it was also pretty ugly, but barely a blip here in Norway. Think if it was a stock, would you buy it or sell it?

It isn't over yet. We shall see where it ends up. It looks like Enron stock at this point

[nero3]

Re: Why Only Fools Think the Bottom Is In

It isn't over yet. We shall see where it ends up. It looks like Enron stock at this point

Oh, you know what you would do if I had put a :eek: to your head, and asked, will you buy or sell this graph and hold on to it for 3 years, then sell it or buy it.

I think what's interesting is when the market starts to quantify the turn around, and price that into stocks. I think that started as early as November for most stocks and indexes. I assume on default, that it will look bad, when it's smart to buy stocks.

[ThePythonicCow]

Re: Why Only Fools Think the Bottom Is In

Disclosure: I am long regional farming, being the owner of a small hobby farm in Tennessee. ;)

Just be sure to run your own "stress test". Ask yourself if you're still ok if everything you have to purchase that is subject to global trading pressures (seed, petro, fertilizer, feed stock, equipment, debt) has its price double, relative to your income and liquid reserves.

When my local dairy farmer friend asks herself that, she soon lapses into gallows humour, speculating which of her milk cows she will butcher first for the meat, in order to lower both her cattle feed and human food costs and thereby stretch out another month or two how long she can hold out before the bank forecloses.

Hopefully your situation is less tenuous.

[ThePythonicCow]

Re: Why Only Fools Think the Bottom Is In

That's why you need to buy. If you want things to look good, the opportunity will be over. When the man on the street says, this is going to be great, then the buying opportunity is over. Of course when the last bear have bought, it's time for the next crash

Yes, it is a truism that in hindsight, the time to have bought will have been back earlier, when things were at their lowest.

However that truism provides no forward guidance. Looking at all available data (which is necessarily only -past- data) one can only determine if the present is low relative to some earlier point, not relative to some future point.

[nero3]

Re: Why Only Fools Think the Bottom Is In

Yes, it is a truism that in hindsight, the time to have bought will have been back earlier, when things were at their lowest.

However that truism provides no forward guidance. Looking at all available data (which is necessarily only -past- data) one can only determine if the present is low relative to some earlier point, not relative to some future point.

Whenever you look at the chart of wall mart, don't you agree that the chart of wall mart just make you scream, yes, yes, this is 1929?

http://finance.yahoo.com/echarts?s=W...urce=undefined

[BlackVoid]

Re: Why Only Fools Think the Bottom Is In

There will be no quick recovery. Maybe in the stock market, a long bounce is in the cards. The reason is VERY simple. The mining of resources (especially oil) cannot be increased exponentially anymore. In the case of oil it is stagnating since 2005. Any recovery will run into the concrete wall of resource constraints and falling net energy.

A DEPRESSION lasting several decades is the best case scenario.

Nero3: you are in Norway, take a look at your country's oil production. Not a new era you say? :confused:

[nero3]

Re: Why Only Fools Think the Bottom Is In

There will be no quick recovery. Maybe in the stock market, a long bounce is in the cards. The reason is VERY simple. The mining of resources (especially oil) cannot be increased exponentially anymore. In the case of oil it is stagnating since 2005. Any recovery will run into the concrete wall of resource constraints and falling net energy.

A DEPRESSION lasting several decades is the best case scenario.

Nero3: you are in Norway, take a look at your country's oil production. Not a new era you say? :confused:

The end of cheap oil, maybe that will be a new era. Certainly. We have to rethink the way we use energy.
It's down 50 % since the peak in around 2000, and it's declining at around 7-10 % a year I think. Most Opec countries peaked a little later, because they were not in the back pocket of the US (yes we hate you), and did not had to pump at full speed all the time, and that halted their production peak somewhat. What is needed is a green revolution. Depression? I don't know how the post peak oil world will be like. I suspect it will destroy urban life in the cities and cause world hunger. I don't know when peak oil will really hit us, and how it would look like. So far oil prices even at their peak, have not reflected anything called peak oil.

[jtabeb]

Re: Why Only Fools Think the Bottom Is In

That's why you need to buy. If you want things to look good, the opportunity will be over. When the man on the street says, this is going to be great, then the buying opportunity is over. Of course when the last bear have bought, it's time for the next crash

The only flaw in your logic is that the guy on the street thinks THE WORST IS OVER!!!

To catch or not catch the falling knife is the question I'd ask you.

[jtabeb]

Re: Why Only Fools Think the Bottom Is In

I don't know how the post peak oil world will be like. I suspect it will destroy urban life in the cities and cause world hunger. I don't know when peak oil will really hit us, and how it would look like.

Ahh, we do agree on something.

I don't think a post peak oil world HAS to be that terrible, but it required immediate action about a decade ago. Now when we should be moving at the speed of light to counter this threat head-on, we are distracted by incomeptent, unworkable, morally bankrupt solutions to the economic crisis.

There is a saying in teaching Always use the POSTIVE learning model, because the negative learning model is not productive in a persons lifetime.

We are trying the negative learning model right now in the world economy (BTW negative learning model is where you learn what something IS by learning everything that it IS NOT). That is how we are trying to get ourselves out of this mess, by trying everything that WILL NOT WORK, and what we are left with, by default will be the stuff that works. The problem with this line of reasoning is that while we are failing things are getting worse at an exponential rate and the MOST MADDENING PART IS WE FREAKING KNOW WHAT WILL WORK, WHAT WILL ADRESS THESE ISSUES AND PUT THE GLOBAL ECONOMY SLOOOOOWLLLY BACK ON A FIRM FOOTING. But We don't do it. We have NO VISION AND OR NO LEADERSHIP.

(Either they are so ******* STUPID AS TO BELEIVE THAT THE SHIT THEY ARE TRYING WILL ACTUALLY WORK OR THEY DON'T WANT TO FIX ANYTHING OR ARE POLITICALLY UNABLE TO IMPLEMENT THE SOLUTIONS THAT ARE REQUIRED)

In any case (take you freaking pick) IT DOES NOT BODE WELL FOR THE FUTURE.

[Guest]

Re: Why Only Fools Think the Bottom Is In

These posts are a good example of the kind of stubbornly independent thinking that we should see *more of* rather than *less of* here at iTulip. How many people agreed with them (few)? How many people disagreed with them (very many)? How many newcomers here are inspired to quickly rush out to "back up the truck" to buy lots of gold, while concluding they should immediately sell any equities? IMO Nero3 and Stockman are sniffing out the next turns (2-4 years) closer than most of us. We'll see soon enough, won't we?

Notice how there is no reference to a spectacularly crashing US dollar? None of the "Peter Schiff Media Glam Superstar" extravagant scenarios? The crash is there, but all the other currencies remain tethered to the USD so any evidence of a crash there is muted - and the *real action* is what happens in the equities - maybe for a 2,3,4 year interval! Meanwhile everyone bunkered down with tons of gold waiting for armageddon experiences a heightened risk of getting flattened, as per Stockman's admonition. This can happen. Who ever claimed that the markets were fair, anyway?

__________________________

I agree that the market will head lower if we indeed are in a 1929-1932 type , or Japan post 1989, type crash scenario. But in those scenarios the market was more than twice the 2007 levels going into the bust. The market's now are as in 2003, just much lower in real terms. And I think the chance of a recovery now, is much better than they was in 2003. I remember, an article by one of the richest billionaires in Norway. It was a rather quick prediction on where the market's would go over the next years, and that was written in 2003. This guy is considered to be the best trader in norway. He was completely predicting the debt deflation scenario to play out, saying this is 1929. And that was just weeks before the market rallied in 2003 as that bubble got going. Now it have been the same thing. He have been all over the media, criticizing the sovereign wealth funds, talking about 1929, hinting that it will take 20-30 years to get even. To me it's just another indicator it's not going to play out.

In many ways, it's similar to 2002-2003, when there was a debate on deflation, and the liquidity trap. Some even brought it up in 1998, guys like Gary Schilling, only to bring it back onto the table now, I think his book in 98 was called deflation, it's a long time since I read it. Guys like Paul Krugman thought it would happen in the crash he saw coming after the dotcom bubble, in a book from 99 called the return of depression economics. I've followed Krugman the whole time, and read most of the articles in his archive. http://web.mit.edu/krugman/www/ Krugman is one of the few in the US, that early on was interested in the things happening in Japan, and understood it's significance to the US. Guys like Bernanke have been worried about this scenario (where nominal interest rates can't be set low enough) the whole time.

Now it's like a finale for those fears. And now it's like it's game over to many.

What really determines the game from here on is if they can stimulate the economy towards a sluggish recovery some time in late 2009, maybe early 2010, where lending and credit starts flowing again, or if it's sort of game over. I take the view that there is a way to get some sort of recovery, but probably more sluggish than the recovery from 2003. However, this correction happened very fast from after the bear sterns collapse, and I think many market's can rebound very quick, even if the real economy in the US will take some time to get up and running.

A company I like is Sony, and they have tracked many bubbles. It's a nice stock to own, just in case any bubbles should develop. Sony gained on the early seventies bubble in japan, that was similar to the shanghai now. It gained on the late seventies inflation fears in the US. It gained during the japanese bubble years, going high in 1989. They gained on the US 90-s boom.

In my opinion, it's now all deflated. By looking at enough individual companies, not the market as a whole, I think the picture will emerge that it's impossible for the market to go below the march lows.

SONY CHART

__________________________

I think you have filled your head with so much faulty information from "professors" living in an academic world, that it would take several hours to convince you. I am sure I could achieve it, but I'm afraid I don't have the time. Think of these professors as music critics or music historians, not musical people, or gifted musicians, you could put guys like Warren Buffet into that category.

Here is a graph for you:

http://finance.yahoo.com/echarts?s=U...l=UNP;range=my

The development in the railroad share from 2000-2008 is the real inflation rate, as railroads tend to track inflation. Here you also have the real inflation:



The same does emerging market shares. Strength in these market's tend to show the devaluation of the dollar. The same is the case with gold.
House prices barely tracked that, and then corrected. House prices are a hard asset. Just like commodities. I should add that I know real estate, as I own a lot of real estate. It's not a bubble the way some guys such as Robert Shilling suggest. It was a bubble for sure, but the stupid CPI blows it way out of proportion. The 100 year old data series brings no meaning with the adjustments done to the CPI after 1980. This is why professors don't tend to be investing geniuses, or rich.

This is from the UK, but paints the same picture as the railroad shares, or the shadowstats CPI:



I espect the houseprice correction to stop where it is now on a nominal basis. The built in inflation pressures are much higher now than in the 1990-s. Due to that, house prices will level off much faster than in the 1990-s, as there now is a pent up stagflation problem coming, causing a nominal prise rise / real price decline, while the RMB appriciate, yields rise, and the stock market in general recover as after 1975.


Here are one of the better blogs:

http://www.noisefreeinvesting.com/blog/

Go back in the archives to you get to railroad shares, look at the salary vs expense ratio, and you will understand that you have very high inflation and a squeeze of worker salaries. In the glass house world of professors like krugman, they sure don't notice this. A lot of real estate have not increased more in price, than the increase in cost of various expenses related to getting rid of garbage, paying for heating oil, etc.

This trash driver company, is an example of a stock that are able to pass on inflation. That's why they rise. Inflation that's not measured by the CPI.

http://finance.yahoo.com/echarts?s=R...l=RSG;range=my

House prices are much, much cheaper than you think.

____________________________

For GOLD bulls there is more at stake than 'just missing' a rally if the nominal lows hold (in stocks) and all this money printing begins to accomplish Irving's Fisher's objective.

Just saying you should TRY to consider both sides, don't be blind to the risk of being WRONG and being caught wih too many chips on the wrong side of the table.



Even a 'bear market' rally such as that little 1975 rally could be damaging to your p&l if too heavily weighted to gold and avoiding all stock exposure (much less short equities- yikes).

[metalman]

Re: Why Only Fools Think the Bottom Is In

Oh, shut up, it's going to bounce back. The US just need to print more dollar so the rest of the world can get along, and the us will be dragged along in a sluggish recovery. And if: no more mortage backed securities to china, no more treasuries to china, well then yields will head up, creating a very steep yield curve. That's inflationary and promote recovery.

'Oh, shut up'

you're funny!

' The US just need to print more dollar so the rest of the world can get along' :confused:

the chinese have other ideas.

'yields will head up, creating a very steep yield curve, that's inflationary and promote recovery' :confused::confused::confused:

seriously, look at ka-poom theory. if yields rise in the usa a vicious cycle starts that does not promote recovery... yields rise, mortgage rates rise, real estate prices crash even faster.... for an economy that depends on asset prices that is armagedon. why do you think the fed is taking the highly extraodinary step of buying 10 yr t bonds? any other gov'ts doing that? anything to keep yields down.

[metalman]

Re: Why Only Fools Think the Bottom Is In

let us review starting from 2006...

- the usa and global economy are based on ponzi finance capitalism that will not get fixed until the system crashes.
- the usa is a finance-based economy that ran on ever-expanding debt created by unregulated financial institutions and guaranteed by corrupt central banks.
- the global financial system that created the ever-expanding debt blew up in 2007 starting the debt deflation and completely disintegrating in Q4 2008 and the economy then entered into a transformational depression. in other words, the financial crash that itulip forecast happened and just when ej said it would. at the time, in 2006, all was rosy and good and ej caught endless shit for his forecasts.
- then trillions in fraudulent bailouts of fire economy oligarchs
- now we’re in a government-dependent financial system
- a bounce makes sense, tho...

now, after all this, we're supposed to buy the idea that all's cool again and we're sitting pretty for a prolonged recovery? who could have followed the foregoing all along and then come to that conclusion?

now, the bullhorn says... forget what you know. forget what you know. forget what you know. forget what you know. forget what you know. forget what you know. forget jon stewart and jim cramer. forget volcker. forget soros. forget simon johnson. forget william black. buy the product. buy the product. buy the product. buy the product. buy the product. buy the product. stocks and real estate. stocks and real estate. stocks and real estate. stocks and real estate. stocks and real estate. stocks and real estate. stocks and real estate.

enter caveman nero3, who has not been following along since 2006... never mind since 1998... and has no interest in catching up. no, he wants to 'learn' me a few things. good friggin luck.