The Stock market 10/10/08 - Why 10 is a bad number

[DavidS]

The farther the stock market falls, the greater the expected future return.

The market is as cheap as it has been in decades.

Or since 2003.....

 

[editec]

No, I’m not that idiot. I’m one of the idiot’s who’s been adding value to his portfolio shorting quality equities that idiots like you have been buying and/or holding.

When the market says its hit bottom, I’ll be back on the other side of the trade. Until then, I’ll short every company I can at every opportunity I see and have no regrets about it.

Good luck with all your trades.

I was watching a video of some day trader who was trading on the DOW average based on some technical program which monitored trends the other day.

It was really fascinating. Not that I understood it, but that's what made it so interesting for me. It was completely over my head since I know nothing about day trading.

He'd make money on moves in the Dow that were lasting ten or fifteen seconds.

At any rate, he wasn't shorting any particular stock, he was playing (and always shorting) the entire market.

Gambling basically, I thought, but he doing so based on some computer driven market modeling program I knew nothing about.

In the two or three minutes he was active he made about $500 or so, according to him.

I have no idea how much he was risking to make that kind of return, of course, but it was definitely neat to watch.

 

[chloe]

for Christs sake not ALL companies are having trouble.
Anyone 45 or younger should be ecstatic right now. when in your life could you ever buy stocks in solid companies at such a bargain? If I was in my late twenties or early thirties, I would literally be sinking ALL my money into the market right now.

I don't have a big understanding of how the stock market works. I would probably fit into the poverty level class compared to my american peers. That said, the money I have put into the market is still there, so does that mean regardless of how bad things get my stocks won't become worthless? If so then why are other people selling theres off? I bet pharmaceutical companies are doing good since people like to drug themselves during a crisis.

 

[Toro]

Dr. Ernie Goss, director of dept of Economics, Creighton University,

"If you bought stocks today, and the market returns to it's peak in three years, your rate of return would be upwards 50%. If if falls another 1000 points tomorrow, and still rose back to year ago levels that rate of return would be upwards 60%...."

Now maybe it won't get back to 14,000 in three years, but even if it gets back 11,000 or so, that's a very nice rate of return that things like Gold and bonds simply have no hope of every equaling over that same time.

By the models I use, stocks should return 11%-12% per year over the next 20 years, the highest level of expected return in decades.