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Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: prediction Date:  9/14/2008  8:23 PM
Author:  DoctorOptimist Number:  251848 of 538872

So, despite my pessimism, my trading position is that the markets will remain fairly stable.

In a way, that's kind of like my cynical optimism. I've watched the market rally on stuff like this too many times before... call me jaded.

I actually have a real theory about making the opposite of whatever investment decision seems most comfortable. if selling seems most comfortable, then it means too many people have gotten too complacent about selling. and vice versa when it comes time to buy.

Sure, the news is horrible. It very well could be a defining moment of the next 20 years of our investment lives. But that doesn't mean the markets will crash. In fact, I almost don't believe it's possible.

CNBC is running a 2 hour special broadcast. Since when are you going to get that kind of advance notice to watch a financial collapse in real time? Too easy. Sorry I don't buy it. Anyone selling in the illiquid electronic market right now might be marking the low point.

Remember, if the markets open and function ok, this could be interpreted as a world-isn't-ending kind of signal. BOA is buying Merril Lynch.... not really a bearish kind of event if you think about buyouts and all that. It marks a price setting and a sign of optimism among companies, as companies don't do buyouts during uncertain times. Fed will accept more crap as collateral, probably will inject 20 or $50 billion into markets, and will likely cut rates. It really isn't hard to map out tomorrow.... panic low, then buying starts and we take off on a 500 point intraday price swing upward. Seen that playbook before? I have.
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