OT- new low touched in the market today.

[rickortreat]

Wall Street is suffering from the heebie jeebies these days, and if you still have money in the market, you better be careful to hedge your bet.

The interim low I'm referring to, took place last November, and the market has been above that point ever since, until today.  Usually when the price breaks through support like that, it portends further selling.  The market closed down today, but did close above the lows of the session and above that previous low.

IF we go down again tomorrow, sell and get out would be my advice.  The only things I trust now long term are Gold funds- DO NOT BUY THE ETF, GLD. (it appears to be fraud in as much as we can't figure out where they get their gold from if they have any.  It's clear they aren't getting it from the COMEX. And, I also like BEARX which goes up when the market goes down. If you're not a trader than that's the best I can advise you.

But if the market continues down, as I expect it will, I will be buying more put options.  The worlds markets are having a severe problem, and I think they gave lost their handle on finance as a whole.  The people I listen to and respect are saying THIS IS IT, and advising people to have enough cash on hand, in case their banks close their doors, and enough food and water to hold you over for a couple of months.  Even suggested purchasing a homestead away from a major population center, even though housing is far from a bottom.

Their motto is plan for the worst and hope it doesn't happen.  I for one, am not optimistic.

[Ted]

So should I sell now that my investments' value is half what it used to be so I can lock in at ONLY a 50% loss?

[SPURSX3]

So should I sell now that my investments' value is half what it used to be so I can lock in at ONLY a 50% loss?

ummm, no.   

[Lurker]

So should I sell now that my investments' value is half what it used to be so I can lock in at ONLY a 50% loss?

YES!

Then buy gold so that I can sell the gold I bought at a lower price.  Pump & Dump at its finest!

[rickortreat]

So should I sell now that my investments' value is half what it used to be so I can lock in at ONLY a 50% loss?

Without knowing your tax situation. I can't say for sure.  But if you sell, you do lock in that loss which you can declare on your taxes. 

Would you rather suffer a 60% or 70% loss on your investment instead?  The stock market is heading down now, it's as simple as that.  If and when it changes, I'll let you know.  The market has been going down for a while, but I didn't mention it, because it was uncertain whether the market would find support at this level or not.  It didn't, which means a 6-year low was broken and that means the market is going lower at an accelerating rate.

Gold meanwhile, is about to break out over $1000 again, it's back up to $995 today, a level it hasn't seen since last November.  Had you bought then you would have made over $300 an Oz. by now, and I expect the rise to continue. Any time you see ads on TV inviting you to send your gold in for cash, you should know it's a sucker deal. Why sell when it's going higher? The smart money is buying.

All I do is follow trends in the markets. They either go up, down or sideways, and when I see a significant move taking place I let people know.

The general market is currently heading lower, and gold is heading higher. Knowing that can enable you to make (or not loose money) it's as simple as that.

[westkoast]

Rick,

I built the bomb shelter, stocked up on food and toilet paper, and currently have run a CAT5 cable underground so I can continue to post on Phillyarena.  Let me know when I can come out. 

Hopefully this is not a trick like when Cartman made Butters sit in a bomb shelter so he could go to Casa Bonita (cheap South Park reference, I know)

[ziggy]

Thursday, February 19, 2009
Gold At Record High In Terms Of Most Currencies
The all time high for gold was reached on March 17, 2008, when it briefly traded as high as $1,030.80, right?

Well, yes and no. While gold has gradually recovered most of the losses it suffered in the ensuing sell-off, it is still at $975 below that peak in U.S. dollar terms. Note the emphasis on U.S. dollar. Because while gold is still somewhat below that March 17 peak in terms of U.S. dollars, as well as in terms of Chinese yuan and Japanese yen, it is in fact at record levels in terms of most currencies.

I could make the list almost endlessly long, but the below examples will be enough to illustrate how gold is at record highs against all currencies except the USD, the yuan, the yen and all currencies pegged to the USD. On March 17, the U.S. dollar was trading at:

US$1.5765/?
US$2.0008/?
C$0.9977/US$
US$0.9184/A$
US $0.799/NZ$
CHF 0.986/US$
SEK 6.0058/US$

Meaning that on March 17, 2008, the price of gold terms of these currencies was:
?653.9/ounce of gold
?515.2/ounce of gold
C$1033.2/ounce of gold
A$1122.4/ounce of gold
NZ$1290.1/ounce of gold
CHF1045.4/ounce of gold
SEK6190.8/ounce of gold

Today (February 19, 2009) these exchange rates are:
US$1.2705/?
US$1.43999/?
C$1.24896/US$
US$0.648315/A$
US$0.515352/NZ$
CHF1.1745/US$
SEK8.57828/US$

Meaning that given a USD gold price today of US$975/ounce, today's gold price in terms of these currencies is:

?767.4/ounce of gold
?677.1/ounce of gold
C$1217.7/ounce of gold
A$1503.9/ounce of gold
NZ$1891.9/ounce of gold
CHF1145.1/ounce of gold
SEK8358.5/ounce of gold

In terms of New Zealand dollars, gold is thus up more than 46% since the apparent March 17 peak. And in terms of all of these currencies, a buy and hold strategy for gold has been very profitable, especially considering the dismal performance of almost all alternatives.

[Derek Bodner]

I built the bomb shelter, stocked up on food and toilet paper, and currently have run a CAT5 cable underground so I can continue to post on Phillyarena.  Let me know when I can come out.

As someone with a little money in the stock market, I don't take this lightly.  I managed to sell at the right times in October and actually hardly lost any, but the last two days have been rough on my balance sheet.  I've lost a good 6% today.  I was considering selling on Wednesday too, which would have saved me a good chunk of change.

[westkoast]

I built the bomb shelter, stocked up on food and toilet paper, and currently have run a CAT5 cable underground so I can continue to post on Phillyarena.  Let me know when I can come out.

As someone with a little money in the stock market, I don't take this lightly.  I managed to sell at the right times in October and actually hardly lost any, but the last two days have been rough on my balance sheet.  I've lost a good 6% today.  I was considering selling on Wednesday too, which would have saved me a good chunk of change.

I understand how bad of shape things are in but end-of-the-world talk?  Had to poke fun at it.

[Skandery]

I was considering selling on Wednesday too, which would have saved me a good chunk of change.

Derek, aren't you like 28?

[rickortreat]

I built the bomb shelter, stocked up on food and toilet paper, and currently have run a CAT5 cable underground so I can continue to post on Phillyarena.  Let me know when I can come out.

As someone with a little money in the stock market, I don't take this lightly.  I managed to sell at the right times in October and actually hardly lost any, but the last two days have been rough on my balance sheet.  I've lost a good 6% today.  I was considering selling on Wednesday too, which would have saved me a good chunk of change.

I understand how bad of shape things are in but end-of-the-world talk?  Had to poke fun at it.

It's hard to have a sense of humor about it, but it's healthy if you can.  I have no idea if this is the end of the world, but it is the death throws of the current financial system.  A lot of people in a lot of countries are being put out of work, and that is going to put pressure on their governments to do SOMETHING!

Governments can do weird and stupid things at times like this, and there isn't much evidence at this point what they will do.  That is the cause of all the uncertainty, but the one thing that is certain is that all valuations are suspect, because the market is changing and the very basis of value, currency itself is very volatile.  How can anyone make an intelligent business decision under circumstances like this? This creates an opportunity to make money, speculating on the direction of various entities under these conditions.

That's all this is, in monetary and financial terms, but to the people in it, they are experiencing real loss and a lot of pain. Anyone owning a house or holding stocks is normally considered to be in good shape, but not at the moment! I could see this coming from a mile away, but like someone watching a stampede, there was nothing I could do but get out of the way.

The Sun will still shine, the world will keep spinning and crops will grow and birds will still be in the trees.  They can't take those things away, so nothing they do matters as long as they don't do anything majorly stupid.  But for each of us, the challenge is to deal with and if possible benefit from these conditions. We can't control what happens, only what we can do for ourselves and the people we care about.

[Lurker]

Actually I liquidated a lot of stock holdings (in retirement accts) over the summer.  I started at the end of Dec to systematically put money back into the market....I move between 5-8% of the total portfolio back every 3 weeks using Thursday as the buy day.  I also started in October to put new contributions mostly towards TIPS and cash.  Now I also have always had a widely diversified holdings that include real estate, guaranteed contracts, and bonds as well as stocks.  With this diversity my overall portfolio was down approx 17% last year.

My wiofe & I are both still contributing to retirement accounts.  Our employers also both contribute.  And since my kids are grown & self-sufficient we have started saving outside of retirement accts also.  I have talked to several financial planners that say many of their clients have not experienced 50% losses and that the media is feeding a panic frenzy because it sells papers.  Well balanced portfolios have been hit but not as hard as the media would like you to believe.  Also for most people they didn't lose true wealth...they lost paper wealth.  By this I mean that for example...our retirement accounts are less than they were at market highs but they still are larger than the amounts we have contributed.

[Derek Bodner]

I was considering selling on Wednesday too, which would have saved me a good chunk of change.

Derek, aren't you like 28?

27.

It's all money I can stand to lose, and I'm not too far off of what i've put in, but it's still lost money.

[Lurker]

I was considering selling on Wednesday too, which would have saved me a good chunk of change.

Derek, aren't you like 28?

27.

It's all money I can stand to lose, and I'm not too far off of what i've put in, but it's still lost money.

Until you take it out to use it; it ain't money.  It is paper gains that can disappear as paper losses just as quickly.  That is why good financial planners will assess your risk tolerance before suggesting any investment vehicles.  Investors who are absolutely 100% risk averse and sitting with all their money in treasuries didn't experience a 50% drop in value.

And while you are young and in the accumulation phase of your life it would be foolish to read too much into this correction.  It has happened before.  More savings & loans failed in the 80s than banks have in the past 12 months.  It is just that in the last 20-25 years (I know the majority of most board members here lives) people have come to expect that investments...no matter how risky...will always go up at higher than normal percentages.  There is a reason that the long term return on stocks is around 8-9%.

[westkoast]

I built the bomb shelter, stocked up on food and toilet paper, and currently have run a CAT5 cable underground so I can continue to post on Phillyarena.  Let me know when I can come out.

As someone with a little money in the stock market, I don't take this lightly.  I managed to sell at the right times in October and actually hardly lost any, but the last two days have been rough on my balance sheet.  I've lost a good 6% today.  I was considering selling on Wednesday too, which would have saved me a good chunk of change.

I understand how bad of shape things are in but end-of-the-world talk?  Had to poke fun at it.

It's hard to have a sense of humor about it, but it's healthy if you can.  I have no idea if this is the end of the world, but it is the death throws of the current financial system.  A lot of people in a lot of countries are being put out of work, and that is going to put pressure on their governments to do SOMETHING!

Governments can do weird and stupid things at times like this, and there isn't much evidence at this point what they will do.  That is the cause of all the uncertainty, but the one thing that is certain is that all valuations are suspect, because the market is changing and the very basis of value, currency itself is very volatile.  How can anyone make an intelligent business decision under circumstances like this? This creates an opportunity to make money, speculating on the direction of various entities under these conditions.

That's all this is, in monetary and financial terms, but to the people in it, they are experiencing real loss and a lot of pain. Anyone owning a house or holding stocks is normally considered to be in good shape, but not at the moment! I could see this coming from a mile away, but like someone watching a stampede, there was nothing I could do but get out of the way.

The Sun will still shine, the world will keep spinning and crops will grow and birds will still be in the trees.  They can't take those things away, so nothing they do matters as long as they don't do anything majorly stupid.  But for each of us, the challenge is to deal with and if possible benefit from these conditions. We can't control what happens, only what we can do for ourselves and the people we care about.

I understand all that but you are making it seem like it's on the level of a nuclear holocaust.  That is why I poked fun at it.

And can someone correct me if I am wrong but isn't it a lot of this 'OMG ITS DOOMSDAY' type thinking that has really spiked down the stock market?  I believe it was someone on this board who said that times are very rough but investors are being spooked by all this negative news which further pushes the stock market down when they start to sell in fear....