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IBDvalueinvestin (99.68)

-65% drop in the DJIA needs to be achieved before we move higher.

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February 27, 2009 – Comments (3)

The over -6% GDP rate suggest we will go down -65% from DJIA high of 14,000

That -65% drop in the DJIA would match the drop of the 1929-1932 DJIA drop.

3 Comments – Post Your Own

#1) On February 27, 2009 at 10:29 AM, russiangambit (29.13) wrote:

How do you link 6% drop to 65% drop?

65% down from 14K is 4.9K, it is anothr 30% down from 7K.

Somehow, I don't think so.I could see it at unemployement of 20% and GDP drop of 20%.Even if it comes to pass  and we have a global meldown, it will not be for another 1-2 years. Not in the near term, no way.

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#2) On March 03, 2009 at 12:18 PM, IBDvalueinvestin (99.68) wrote:

Russian looks like we are headed to -65% drop from 14k just like I said. By the way how do you like the -80% drop in the Russian market from the top?

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#3) On March 03, 2009 at 1:21 PM, russiangambit (29.13) wrote:

Ah, 80% drop in Russian market. That was due to massive deleveraging by scared foreigners and forced sell off by our own oligarchs. Russian equities probably tripled in the 3 years prior. It was too fast. That reminds me real estate in Miami somewhat. I am wondering if Miami prices are also destined for 80% drop. 

I bought some more Gazprom.

You just need to know what to buy. Russian equities are very risky, of course.If something goes wrong, they collapse even before you hear a whisper of trouble. But they are a commodity play, in the end. Nothing more than that, a good hedge against inflation.

On the drop to Dow 4.9K. I still have hard time envisioning it. Honestly, it is easier for me to imagine martial law in the US than Dow below 5K. Most likely because they will (if that ever happens) come together. It will be full blown panic if it happens.

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