Markets might drop by 50%?

[SteadyMercury]

Myself, I will continue to hold out of the markets until a significant correction happens.

So what did you do exactly? Like at what point did you get out, and did you just park all your money in cash?

 

[Toro]

I am sitting mostly in cash. Markets have been behaving poorly for months. Nearly half of listed stocks in the US are down by more than 20% from their highs. The Russell 2000 looks like it is rolling over. Many energy stocks look like death. Volatility has picked up, particularly when it has looked like the market was going to have a positive intra-day reversal. So I'm cautious here.

 

[iamwhatiseem]

Myself, I will continue to hold out of the markets until a significant correction happens.

So what did you do exactly? Like at what point did you get out, and did you just park all your money in cash?

Unfortunately yes.
In a market like what we see now, unfortunately a good option is to sit on it.
Not doing so, IMO, is damn risky until this all washes out.
To answer your first question, I have been out since the end of May. I don't typically look for signs of a market about to fall..I look for a market that seems to be reaching it's summit.

 

[william the wie]

Relative value and degree of volatility are the only things that can be measured sufficiently well to give you an edge. If your strategy is not based on those two things generally you are screwed.

 

[JWBooth]

I dont know about 50%, but the market continues to slide. Last I looked it was down nearly 200 points on the day

 

[SteadyMercury]

When will you get back in?

 

[iamwhatiseem]

When will you get back in?

Tough question. I want to say when I see 13000...but even then I am afraid the next climb is not going to be a rocket ride like we saw after 2008. But then who knows.
I really don;t want to go in ever again, and I may not. There are other things you can do beside the Russian roulette of the markets. The stock market is not a place where you can "let it ride" any more.

 

[Moonglow]

But the greed/panic factor is riding high!

 

[Moonglow]

Now you see why Buffett sold off in July and August...

 

[HenryBHough]

Feels like time to get out of cash and into........stuff.

A non-profit I work with had a bunch of cash building up toward a new building. They had it in equities into which they had dollar cost averaged. About a year ago they drew it down and started the building even tho they knew they didn't have enough money to finish it. They did have enough to get the shell up and weather tight. That part is done and it sits empty. Since it reached that point the material in it has gone up in price by over 30% but it's theirs and it's secure. Had they sat on the cash and waited to have enough for the whole job they would have needed that 30% MORE in cash and that doesn't take into account the cost of labor. Now they're building up cash only to the point where they buy batches of the materials they will need for the interior and stashing it safely inside. It's better than "money" in the bank!

 

[Moonglow]

The airlines are taking a beating...

 

[Mac1958]

.

As I type this, the S&P is down about 7% since September 18.

Another 3% to 8% and we'll have the correction I've been hoping for, for a couple months now.

.

 

[william the wie]

This market make me happy that I have my XSP put.

 

[kaz]

What do you markets guys think of this story?

Price to earnings ratios suggest that stock markets are overvalued and in need of price adjustment, say GMO's Jeremy Grantham and James Montier.

I'm not big on the stock market. I feel I understand the FED's role in creating bubbles but past that I don't do anything in stocks.

I'm not ready for another recession =( If that's what happens...

Wow, no investor ever thought of checking a P/E ratio before investing. Obviously if they find out about this everyone will sell off their holdings.

 

[Toro]

There have been 12 bear markets since WWII. Eight of them presaged a recession within a year. Four bear markets - in 1962, 1966, 1987 and 1998 - did not.

 

[chikenwing]

European economies are slowing a bit as are others,its a bit more than just a value adjustment.

 

[HenryBHough]

A the current rate of decline I'd say the (downward) 16,000 barrier should be crawled under by weekend.

 

[william the wie]

Me, I've liquidated a position today at a loss I was using it as my hedge against the dollar sinking. Sort of like carrying parachute on a sub in this market.

 

[SteadyMercury]

The Fed-R did one single cut in stimulus spending and it was tiny... The whole stimulus thing should have ended by now according to the Fed-R's projection and claims yet here it is almost just as big as it has ever been. So you can pretend all day long that in a month or 2 the stimulus will end but if they were scared to tapper at 10 billion a month I doubt they will tapper 35 billion a month for 2 months or 70 billion in 1 month.

Well here we are at end of October, and the QE has wrapped up right on schedule.

Thanks for your input.

 

[konradv]

DOW almost at a new high.