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goldminingXpert (29.46)

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May 17, 2009 – Comments (31)

*TMAP*d17v14 (read  the first comment to see why it is named as such. Though this is still part of The Market is About to Plunge series--specifically Day 17 and Volume 14--I don't want people thinking I'm a permabear when I'm not. at all. The future of America is perhaps not as bright as our past, but we aren't doomed either.

jstegma (99.81) wrote:

Keep up the good work GMX. 

If I had one recommended improvement it would be to put better titles on your recent blogs.  This isn't some technotrance bullsh*t.  It's good material.  I notice some people in the comments above seem to act as if you're a permabear gloom-and-doom ranter, and the only reason I can think of is that the title makes it sound like that.  (if you are one of these people, then go and look at some of the GMX picks and you'll see he wasn't some goofball calling for DOW 4000 or whatever)  There are some good green thumb picks in there.

GMX writes:

Duly noted. Also, thanks for the kind words; I'm not a permabear and my scoregraph and history of picking Citigroup to outperform frequently enough to become score leader on it helps prove that. I scored a ton of points in the two weeks after the March bottom as my score graph shows.

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JGus (99.10) wrote:

portefeuille and rofgile - The comparisons you are making is rediculous!!!  goldminingXpert's pick of WNR was in August of 2008! How many stocks have DOUBLED from then until now?!?! They could probably be counted on two hands!!! If you look at stocks that have rallied off the lows since the crash happened, there are some 15+ baggers out there. Unfortunately, ALL of those stocks are still down 30-90% from where they were in August of last year! If you're going to present an argument against someone, make sure it's not full of hot air!!!

GMX writes: 

Thank you.

---

Outoffocus kept things in focus writing:

Lets not forget the more recent [GMX's] Don't short the market just yet post.  It was quite timely and quite accurate.   This is why I don't bother to join in the bear/bull argument. Like I said before, if you are investing long term it shouldn't matter much, but if you are investing short term thinking you will make massive profits at DOW 10000, I got news for you. If the DOW makes 10k (which I doubt) anytime this year, that to me is the ultimate sell indicator.  Because if it makes it that high it will overcorrect to DOW 5000.

GMX writes:

This is true, if you are a long-term investor and you haven't already gotten scared out, you probably shouldn't be selling now--though lightening up a hair with the dow over 8k and reloading at 6,500 again would be nice.

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dwot (99.99) wrote:

I am still chuckling at the Coppex Indictor discussion in your smearblog link...

GMX writes:

It is funny. I agree.

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portefeuille (99.97) wrote:

(first, please do not take this personal again, I have not followed your multitude of posts, just the last few ones and I have nothing to say about them)

Why did your player gmxmkttiming (for gmx market timing I suppose) not do that well? I think its score line is tracking that of your other player goldminingxpert pretty closely. Maybe you could post a link to the graph comparing those two players (the one you see when you click here being logged in as goldminingxpert). Again, nothing personal ...

GMX writes: No offense taken. Gmxmkttiming made a bad sector call to short gold. That makes up the majority of the point losses. The account has been quite dormant recently as I was waiting for a clear top (that we finally got at 930) before firing all its barrels short.

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OleDrippy (88.01) wrote:

It is a tug of war and I'm not certain who will win, "The Man" vs. Nature.. My inclination is nature will emerge victorious, it's just a matter of WHEN.

GMX writes:

Agreed. Hopefully soon so my put contracts pay off and then I can buy stocks at reasonable prices.

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mistermiranga (91.39) wrote:

Anyone long for the past month has made good coin at the direct expensive of the short sellers. Markets are manipulated in a variety of ways.

The lesson is to trust no one with our hard earned money. Be diligent and protect yourself...no matter what your idealogy.

GMX writes:

You have no idea just how accurate your statement was. I want to rec your statement by itself.

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alstry (99.86) wrote:

Can't you see that HUGE convex reflector formation.

Nothing reverses Ghoser and the spector vectors like the luster effect of physical Gold....NOTHING!!!!!!!

GMX writes:

I have no idea what this means so I will ignore it.

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ChrisGraley (99.58) wrote:

I'm sitting pretty today and so far I'm ranked higher than I've ever been. If everything sticks for the day I'll close the day with my first 99+ score.

GMX writes:

Congrats Mr. 99.58 man. Nice work. May the power of the bear elevate you farther!

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DanePymble (43.84) wrote:

I proclaim that people are not fearful enough in respect of what is yet to come. You should see what it is like here in Australia, we really don't get it, typical close minded view that whilst things are bad overseas they can't possibly get that bad here......

  Thanks for the link, very good read....

GMX writes:

I agree. People saw the first wave of the crisis pass, then the second wave and are now relaxed. Well, we survived Bear and Lehman so we must be alright. Well, no, not really. Actually, not at all. The whole banking system needs money as even the rigged stress tests show, the housing market is still collapsing and have you talked to anyone trying to find a job? Depressing--there's nothing at all, and I'm in Colorado where the unemployment rate isn't rising as fast as nationally.

crystlz (48.55) wrote:

gmx,

I've only been around for a while here but I've come to highly value your opinions. So how many points does the market have to correct here before we can all agree that you made another good call?

btw, where I live in Ozark, MO (pop. -10,000) 2 Chrysler related dealership closings announced today. I love my charts and company research but just driving by these 2 large local employers shuttered businesses is sobering. We were expecting a consolidation of the two dealerships and instead lost a lot of jobs. 

My point is that a jobless recovery at circa 9% unemployment (U3) is just not happening here. The corporate layoffs have produced some Q1 profits that were higher than I expected and the Banks proits on operating expenses are further squeezing depositors. E.G. My wife has a CD with BAC and had to take out a checking account in order to get a special rate. Now BAC is charging a $20/month service charge on a $100 checking account. I haven't read the small print so I don't know if after the $100 is gone if they start deducting interest from her CD. They also raised the interest rate on her credit card with no late payment. Even ignoring the massive load of toxic assets that BAC is carrying I suggest that this is not a sustainable business model. 1 rec from me.

peace, bro

GMX writes:

This makes me the sadest of all the comments. I totally empathize with the tragedies that Wall Street and a broken government have wrought on the real America. It's stunning that we've allowed a few MBAs and a few lying congressmen to destroy our economy. Your account jives with what I've heard from others around the country--there may be the illusion of recovery in some cities but in the real America, real Americans are really hurting and a pork-laden stimulus project isn't going to fix that.

----------------------------------------END OF COMMENTS-----------------------------------------

Check back for more analysis in the series tomorrow: At A Fork In The Chart--Retest or Breakdown arrives tomorrow morning.

 

 

 

 

31 Comments – Post Your Own

#1) On May 17, 2009 at 8:56 PM, soycapital (< 20) wrote:

GMX, copied and posted my question again for you on miners. I took such a bath in my portfolio on precious metals miners like AUY, GDX, etc. down like 50+ percent. Very gun shy about buying miners except bottom. Convince me to buy miners again! Thanks-Dave 

 

GMX, posted below on a different thread but stuck it here for you to see. My question is: how are these miners going to hold up in a bear market in your opinion since in they took such a tumble in the recent one? I rode them down and am still way under water on several. I am staying away from miners at this point in time. thanks-dave

 

bought around 20K dxd in RL for 51 today, haven't put on my CAPS yet, we go down more from here, haven't a guess how far short term but I am long term bear. GMX-took a 40% ride down on miners in 2008, are these miners going to hold up on the next ride down? I have not jumped in those but have CEF.

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#2) On May 17, 2009 at 10:15 PM, goldminingXpert (29.46) wrote:

Alright, I'll include an answer to your question in my post tomorrow morning. Sorry for the delay--I need to do a little research into the last batch of quarterly results for the pm miners before answering.

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#3) On May 17, 2009 at 11:09 PM, JGus (28.76) wrote:

You're welcome! I always appreciate your (in my opinion) unbiased approach. I remember on the way down to 666 that you bought some FAS around 14 or 15 because you knew that it would likely double once we hit the bottom. I think this is another proof that you are not a perma-bear. And, though you were early, buying FAS would have been a fantastic move if it had been a week or so later. It was more than a 5-bagger in the last 2 months! Anyway, keep up the good work!

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#4) On May 17, 2009 at 11:45 PM, goldminingXpert (29.46) wrote:

Jgus: Thank you again. Yes, I bought FAS at 15 and got stopped in the 11s. It was a good trade idea but horrible timing. And yes, a permabear would never buy FAS, you are correct there.

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#5) On May 18, 2009 at 12:58 AM, portefeuille (99.60) wrote:

JGus (99.10) wrote:

portefeuille and rofgile - The comparisons you are making is rediculous!!!  goldminingXpert's pick of WNR was in August of 2008! How many stocks have DOUBLED from then until now?!?! They could probably be counted on two hands!!! If you look at stocks that have rallied off the lows since the crash happened, there are some 15+ baggers out there. Unfortunately, ALL of those stocks are still down 30-90% from where they were in August of last year! If you're going to present an argument against someone, make sure it's not full of hot air!!!

GMX writes:

Thank you.


--------------------------

This "issue" has been resolved (see comments #24,25 here):

--------------------------

#25) On May 15, 2009 at 9:01 PM, JGus (99.10) wrote:

I'm sorry, portefeuille, I misunderstood what you said. I had attributed the bank quote to you, not realizing that you were quoting someone else. I didn't bother to read the rest of it closely because I was assuming that it was just evidence to support your claim. Anyway, my apologies.

 

 

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#6) On May 18, 2009 at 9:09 AM, TigerPack1 (96.35) wrote:

Foreign stock markets are now generally above their 200-day moving averages, priced in local currencies!

With the upturn this week in the Asian markets, many of the economically-sensitive manufacturing based economies are starting to turn higher with the stock price increases and return of confidence about the future.

In fact, most of the U.S. stock market averages will get above their 200-day, long-term, moving averages of pricing activity with another 5% gain.

The Transportation stocks are coming back nicely, and the overall health of the global financial system is showing signs of healing DAILY now.

Those that disregard history and remain permanently bearish at this stage will not be happy with their bank accounts shortly.   Without doubt "the" bottom is already in.  The latest excuse to remain on the sidelines, praying for a decent sell-off to move money from cash earning nothing returns into stocks rising daily and weekly, is the "SELL in MAY and go away crowd." 

Honestly, I have done research on this subject the past three months, and found the BEST MAY-OCTOBER PERIODS usually follow multi-year bear markets.  There is always something to worry about in stock investing, but fear of a typically slow May and summer month trading pattern this year may prove very costly for those too scared to read the paper each morning. 

My market indicators remain mixed, but slanted toward higher prices through year end 2009.  The next 10% in the market may come on the upside, and surprise yet again.

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#7) On May 18, 2009 at 10:01 AM, DeerHunter73 (73.11) wrote:

#6) On May 18, 2009 at 9:09 AM, TigerPack (99.98) wrote: See above......................

Finally someone with common sence. Well said, rec is for you on this post!

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#8) On May 18, 2009 at 1:41 PM, rofgile (99.32) wrote:

I'm sure JGus has a point about timing - how this diffentiates WNR from bank picks such as RF, or construction picks such as MTW for multi-bag status eludes me.

GMX picked WNR in August 2008 and it has become a doublebagger to now.  RF picked at the period of February 2009 to now is a doublebagger.  If you looked at WNR back in 2007 to now it has lost 50% of its value, if you looked at RF from 2007 to now its down a bunch, if looked at WNR from 2007 to now its down a bunch.  You could start at 2006 if you want too, because WNR had a huge bubble at the end of 2007.  WNR would still be down from its price in 2006 where it was flat.  WNR would be down less %-wise than RF or many banks.  That was then however, and this is now.  Perhaps now some of these banks or construction (don't want to say housing) could be good investments.  If they survive they might be in a great position.

My point?  You can pick some arbitrary start date and stop date and get a multibagger, or get a dud.  It's important when you choose to start investing.  Not news here.

Its great to get a multi-bagging stock, all I was saying was that if you started going long this spring when things looked the bleakest, many stocks would have given you that.  I don't find any multi-bagger pick would make me an expert, nor GMX.  I don't think we should claim it does.

My perspective has been that the market is oversold in the fall from 2007 fall to now, and many companies have terrible earnings now - but that is not indicative of where they will be in 1 year, or 2 years from now.  From this stand point, P/E ratios of the market are misleading now and overestimated.   I would beleive that many companies are great investments at great prices right now (I was more confident a couple of months ago, and am holding on before buying in more).  Currently I am waiting for another dip before I buy more long - which in the current knocked down state could definitely result in some nice multibaggers.  

From the flip side - going short looks dangerous to me from this same standpoint.

 -Rof 

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#9) On May 18, 2009 at 1:44 PM, rofgile (99.32) wrote:

Anyways, I'll give a rec for the blog - I think this series is bringing up good discussion.

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#10) On May 18, 2009 at 1:59 PM, goldminingXpert (29.46) wrote:

Rofgile: How many stocks doubled from August 08 to today? Answer, not many. How many stocks did I write more than half a dozen bullish blog posts about? One.

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#11) On May 18, 2009 at 4:27 PM, outoffocus (23.09) wrote:

alstry (99.86) wrote:

Can't you see that HUGE convex reflector formation.

Nothing reverses Ghoser and the spector vectors like the luster effect of physical Gold....NOTHING!!!!!!!

GMX writes:

I have no idea what this means so I will ignore it.

------------------------------------------------------------------------------

That made me laugh so hard my coworkers were wondering what was wrong.  

 

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#12) On May 18, 2009 at 5:07 PM, DeerHunter73 (73.11) wrote:

666 S&P WHERE!!!!!!

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#13) On May 19, 2009 at 2:17 AM, williamsullivan8 (83.91) wrote:

Question for the community:

I red thumb a stock.  Stock rises 2%, S&P500 rises 2%, shouldn't my score decrease by 4 points because I underperformed the index by 4%?  Under the current system my score would remain unchanged in this instance.  What do you all think?

My line of thinking:

A big part of the Fool approach is to invest long term in an index fund.  Well, following that line of thinking, the benchmark is someone who is long the S&P 500.

Well, scoring works great when I green thumb a stock.  Stock rises 5%, S&P 500 rises 3%, then horray I beat the index/benchmark by 2%, so my score goes up 2 points.  However, it doesn't work that way when I short.  I red thumb a stock.  Stock rises 2%, S&P500 rises 2%, then oh no I underperformed the index/benchmark by 4% (I lost 2% trying to short the stock while index rose 2% in the meantime).  In this case, my score should have gone down 4 points, but instead under the current system it would remain unchanged.  My score shouldn't remain unchanged because because when I'm red thumbing the stock, my benchmark shouldn't suddenly change to become shorting the index.  The person long the index--aka my benchmark--isn't going to suddenly short the index when I short a stock.  It makes no sense.  Again, the benchmark is someone who is long the index.  When while I short a stock, the benchmark should still be someone who is long the index.  That's would make sense, and that would also be in agreement with the Fool approach.  Do you follow?  Similar error with one or two other combinations, but I wanted to use only one example to avoid confusion.

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#14) On May 19, 2009 at 2:38 AM, portefeuille (99.60) wrote:

A "underperforms"/"outperforms" B (the "benchmark", in the "caps" game that would be the S&P 500 index) means that the return (the relative change in the price) of a is smaller/greater than that of B. And that is just what is measured in the "caps" game. If you want an "investment analogy" than it would be going short/long A and "hedging" that position by going long/short B.

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#15) On May 19, 2009 at 11:13 AM, vmh104 (< 20) wrote:

Where is that darn bear?? Please tell me what's going on. I followed the analysis it makes sense... I see the bad news... the positive spin on the bad news... and today worse news with no positive spin (housing starts)... the market finally dips but then shoots back up.... who the heck is doing all the buying? and why?? and when will they stop???

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#16) On May 19, 2009 at 12:24 PM, DeerHunter73 (73.11) wrote:

No one wants the buying to stop. Buying stops you loose money unless you short. You want the market higher, you want buyers regardless of the news.

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#17) On May 19, 2009 at 2:31 PM, vmh104 (< 20) wrote:

Gee thanks. I'd rather the market have some relationship with the fundamentals rather than idiotically charging around all over the place like this. So yes I want the correction to happen. I've reduced my holdings and balanced the rest with some shorts. Planning to buy back in when it's 15% lower or so. I really dislike trying to time market swings... and I'm apparently not good at it... The current state of affairs simply means we're going to fall even harder when we do. Which I suppose means more opportunity for me. Unless my timing is bad or I'm just completely wrong. If anyone understands who is buying and why please explain...

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#18) On May 19, 2009 at 3:33 PM, StevesStox (62.12) wrote:

GMXpert have you discontinued the "Market is about to plunge" series?

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#19) On May 19, 2009 at 4:16 PM, DeerHunter73 (73.11) wrote:

 

 #18 steve

No im sure he will come out with one, when the market has a sell off week so he can claim he said it would happen.

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#20) On May 19, 2009 at 4:29 PM, bigpeach (28.49) wrote:

If anyone understands who is buying and why please explain...

Why are you selling?

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#21) On May 19, 2009 at 5:27 PM, vmh104 (< 20) wrote:

I'd invite you to read the blog series you posted this in... GMX is more knowledgable and articulate... but in a nutshell: because nothing much has changed since early March regarding the fundamentals. We were probably oversold in March but not by as much as the market has gone up since. All we had since then is smoke and mirrors. The data has really not been good, jobless rates, overly lax stress tests, earnings, housing starts, foreclosures, credit card debt etc. All the data is horrendous, some of it's not as bad as the predictions and some of it's worse. The market is pretending like we're all poised to go back to work and spend money we don't have within a few months... I really just don't get it... I can understand people buying in Feb & March & April... but how can anyone in their right mind be buying now? ...yet everyone is... go figure

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#22) On May 19, 2009 at 6:09 PM, DeerHunter73 (73.11) wrote:

Easy pick a stock buy it, its not hard to do. Since your comparing March till now, then ill compare oct of 2007 till now and were still down 45%. Word of advice my friend, stop looking for a sell off and buy while its still low. Several analysts have said the s&p could reach 1100 this year if not higher. Yet some on FOOLS think its going back to 666. Ill take my chances on the guys who make millions doing this for a living.

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#23) On May 19, 2009 at 6:37 PM, vmh104 (< 20) wrote:

Oh sure I agree it will get to 1100, maybe even this year, but not without some real improvement in the fundamentals of the economy. The herd can self fulfill their profecies for a while but they are not immune to reality. I went all out and even borrowed money to buy into what I though was the bottom late-feb. But after an 8 week ralley of historic dimensions based on bad news and hot air I do not consider the stocks 'low' anymore. Hence again; why buy now?

See what I don't get is this: if we were so oversold in March why are we still buying in May ...after 2 months of bad news no less? The prospects of a speedy recovery and continued increases look worse now not better than in March...

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#24) On May 19, 2009 at 9:02 PM, TigerPack1 (96.35) wrote:

Perhaps all the posters who have never invested money during a major stock market bottom should consult a basic college economics textbook and read the chapters on cycles.

Better questions to ask are: Why were the large hedge funds and short sellers dumping stock in 2007 when all the news in the mainstream press about the economy and stock market was GOOD, and Why are all the short sellers and hedge funds big buyers of stock this spring when all the news reporting on television is BAD?

I have the answers, but if you are a forward thinker you can figure out the answers for YOURSELF.

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#25) On May 19, 2009 at 11:14 PM, bigpeach (28.49) wrote:

We were probably oversold in March but not by as much as the market has gone up since.

Oh sure I agree it will get to 1100, maybe even this year, but not without some real improvement in the fundamentals of the economy.

These statements lead me to believe you think the market is currently overvalued. Okay, fair enough, that's a good reason to sell. The answer to your question is a simple one. There are buyers out there who don't agree, and see stocks they want to buy at current valuations.

I never really get these "why is the market doing what it's doing" comments. Rather than sit there, believing with certainty that you are correct and watching the market move in the opposite direction, you should really be questioning your thesis. What makes you so sure stocks should be going down? I trust it's not based solely on the opinions of an internet blogger. It's always possible that you could be wrong.

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#26) On May 20, 2009 at 1:59 AM, vmh104 (< 20) wrote:

Rather than sit there, believing with certainty that you are correct and watching the market move in the opposite direction, you should really be questioning your thesis.

...that's exactly what I'm trying to do...

It's always possible that you could be wrong.

...yeah that kinda had occured to me...

There are buyers out there who don't agree, and see stocks they want to buy at current valuations.

Obviously, I was just curious if anyone had an explantion (other than 'because they are buying' or 'go figure it out')? Whence the hope after 8 weeks of amazing gains ontop of 8 weeks of lowsy news? Surely the 2007 valuations are completely unrealistic in the current economic situation for years to come

Anyway not learning much of anything from these boards. I guess I'll just wait and see how the market develops.

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#27) On May 20, 2009 at 11:19 AM, DeerHunter73 (73.11) wrote:

Gmx you posted a comment last week how you made 7% gain in your caps score in one sell off day. Yet from what i can see since that post you made your caps score is down more then 10% now. Care to explain how that happened?

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#28) On May 20, 2009 at 5:13 PM, vmh104 (< 20) wrote:

The bear is running a little late is all.

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#29) On May 20, 2009 at 7:31 PM, ChannelDunlap (< 20) wrote:

Wow I feel like I'm amongst the big guys here, being the 2nd < 20 poster so far.  VMH, I can only tell you my reasons for buying right now... because stuff is cheap.  Granted I have about 40 years before I'll need this money, but even if I had less i'd be buying right now.  Maybe certain parts of this rally are unfounded, such as financials, but it's hard to look at GE around $12 and expect to ever see that price again.  Sure I took a gamble buying Citi, but other than that my portfolio is full of bargains, imho.

What confuses me right now is that everyone is trying to time this market.  For all the critisism of market timing around here, I'm confused as to why everyone is so concerned with a coming pullback.  I bought in in December, fully aware that the bottom probably wasn't in, and that I wouldn't see green for some time, but willing to take the hit in order to catch the rally when it happened (and boy did it!) How many people are actually expecting us to go lower than we were in March?  I certainly don't.  But then, maybe that's why I'm <20 :)

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#30) On May 20, 2009 at 7:34 PM, goldminingXpert (29.46) wrote:

How many people are actually expecting us to go lower than we were in March?

Count me as one.

but it's hard to look at GE around $12 and expect to ever see that price again.

PEG is 1.8, Forward P/E is 14 and the company has an absolutely ludicrious amount of debt. I can say that it isn't exactly expensive, but you aren't getting a fire sale either.

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#31) On May 20, 2009 at 8:22 PM, vmh104 (< 20) wrote:

What confuses me right now is that everyone is trying to time this market.  For all the critisism of market timing around here, I'm confused as to why everyone is so concerned with a coming pullback.

A fair point. I think the timing of the market contains a lot of guess work... with which  am uncomforatable. And I believe the statistics that many people who do this do worse than the people that hold. But the bottom line is the market fluctuates too much to just let it sit. 10 years ago people would say things like; as long as you can hold it for 5 years you'll be OK. That's not true now if you held 10 years. I probably won't be in this game in 40. So I plan to time the larger trends. I'm still very interested in going long but I'm changing how I balance it based on larger market trends. I want to own more of my long stocks than I can afford. So I sell off some when the market is high so I can buy more when it's low. I keep careful track of how well my portfolio is doing if I had just left it alone. I will take stock after a few and see how much time and money I've wasted... but I expect not. See the thing is the market has spent a long time just being over inflated. There is too much speculation pressure. Way too much money chasing these companies. But now it's see sawing. People overbuy but then oversell then they overbuy again...

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