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dragonLZ (99.49)

We need more FEAR...

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17

August 26, 2009 – Comments (20)

YES, this market needs it.

So if you are a BULL (nice to meet you), please don’t post any of your nonsense about this market continuing to go up, this being a new bull market, about this being  the greatest opportunity in decades… Don’t even think about posting something showing ridiculously high returns you’ve had so far this year. Please, please, please don’t do it… 

Right now, we don’t need your stories about all that happy, good, bull stuff. Leave that for your relatives, your friends. They think you are nuts anyways…

Just keep it to yourself. Talk to your dog (squirrel in your backyard will do too). Please, just don’t post any of it here on the “internets” where everybody can see it…

I mean, it’s OK if you want to ruin your returns posting that happy sh$t, but please don’t do it to the rest of us. I mean, I have a wife (and you know that ain’t free), a child to feed… Hell, I also want a bigger house, a new car, longer vacations…, maybe even an early retirement… Be a friend. If you can’t write anything about the crash, the collapse, 1929, 1987, suicides…, then please don’t write nothing at all…

And if you a BEAR (congratulations on a great 2008 performance), please write and post as much as you can. All you alstries out there, we need you now more than ever (alstry, can I buy you a diamond necklace or something?).

Bears, If you are thinking it (and I know you are), tell us about it. Tell us how’s China gonna eat us for breakfast, tell us about our fate (hint: Roman Empire), about our debt and the falling dollar (please mention BLOOD whenever you can :)).

Please tell us why this is a junk rally, explain to us why this can’t continue, why we will fall off the cliff tomorrow (because we didn’t in April, May, June, July, when you predicted it)…

Use numbers. Yes, as many as you can. Numbers are always good: Unemployment, GDP, home prices, foreclosures,… Have a blast with it… Show charts that explain why S&P is gona be down to 666 (you like this number, don’t you :) by October, then down all the way to 200 by January…

I mean, I don’t have to tell you what to do, what to say… You know your stuff. Just do it. Write. Post. Blog. Think about the feeling of happiness and accomplishment that you will have knowing that you helped so many of us retire early… (note: you will still need to donate to charity if you want your tax break for this year).  JUST DO IT.

 

p.s.

Does anyone think the market will be up tomorrow...  was my post on July 17:

...after the 186 points drop for DOW today, NASDAQ losing 2.75%, and headlines like "DOW falls 186, economic fear hits hard (MSN), "Stocks have worst two-day drop of summer as selloff continues (Smartmoney)"?

I know I do...

And the market was up the following day...

#18) On August 19, 2009 at 12:39 PM, dragonLZ (98.30) wrote:

As China Stocks Retreat, Fears Grow About Economic Impact  Published: Wednesday, 19 Aug 2009 | 10:07 AM ET

Fear again. Nice. Very nice...

Market will continue to go up...

And market continued to go up...ever since...

20 Comments – Post Your Own

#1) On August 26, 2009 at 11:51 AM, urmoneyurlife (30.12) wrote:

Funny. I think I like you ;) You seem somehow familiar (remind me of myself?). Thanks for the chuckle while I'm roaming this foolish site because the crazy market is just too much for me today. All the best! ~urmoney

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#2) On August 26, 2009 at 12:30 PM, brickcityman (< 20) wrote:

You seem oddly tense...  why is that?

 

Shouldn't the market action standalone as a testament to the correctness of your thesis?

 

Are you concerned that "the bears" will somehow create a false correction based on fabricated or highly parsed information?

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#3) On August 26, 2009 at 12:39 PM, dragonLZ (99.49) wrote:

Am I really coming accross as tense?

No, I'm not tense at all. I'm just greedy, I guess... :)

p.s.

Of course, I'm sure market will prove me correct. And I'm not afraid about any of what you said about bears. I'm afraid they start saying: It's safe to start buying. You know very well that means "The party's over..." :)

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#4) On August 26, 2009 at 12:41 PM, madmoney151 (31.88) wrote:

You forgot to mention the fact that obama is a socialist and he is going to drive the american economy into the ground.

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#5) On August 26, 2009 at 1:10 PM, brickcityman (< 20) wrote:

Truthfully dragonLZ I hope you are right...  A new bull market would be infinitely better for all involved than the alternatives. 

 

I'd gladly see the portion of my portfolio geared towards negative movement go to 0 if it meant the rest was going to grow from a resurgent economy.

 

But the fundamental question is what is the catalyst for this new bull market?  Perhaps my thinking is out-of-whack but I don't yet see what there is to justify a bull-market at this point.  We're still "leveling out" and sniffing for signs of modest growth while figuring out ways to stem the bleeding... 

 

Normally this is where a bull market would be born, disguised by the ashes of yesterdays problems...  And Obviously by the time the writing is on the wall the party is usually half-over anyway but I don't even have an inkling of what that new catalyst is....  Can you elighten me?

 

At one point I had hoped it would be innovation in energy generation, transmission, and/or storage...  Perhaps it still will be...  Have I missed something major on that front?  Are there other fronts I am blind to?

 

I want to believe you,  I just need some help in getting to that point.

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#6) On August 26, 2009 at 1:26 PM, caterpillar10 wrote:

...i say push for socialism arrested by right wing junta...we go sideways for awile/ no real correction - nothing to correct / it's about right; guess  i'm a manbearpig:)

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#7) On August 26, 2009 at 1:38 PM, kaskoosek (97.72) wrote:

I like how all this is opinion backed by no facts.

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#8) On August 26, 2009 at 2:15 PM, dragonLZ (99.49) wrote:

brick, you asked about the catalyst for this new bull market.

 

Here are some of my thoughts on that (what majority thinks it's a bad thing, I see it as a good thing) I posted on some other blog:

 

#10) On August 19, 2009 at 8:40 PM, dragonLZ (98.16) wrote:

I have a question for people who compare US to Rome, and they do it as a proof (in history) that US, as an empire, must perish one day (and majority of them thinks it's gonna be this or next year)... 

Do you by the same token compare TV sets used in Roman Empire to the ones we use in US today? What do you mean they didn't have any? They at least had dish, if not cable...didn't they? NO? Are you trying to tell me I need to call Comcast and stop paying for something that will soon cease to exist...? What about my car? Same, you say. Need to get two horses to pull it...

On a more serious note:

In my opinion, emerging markets are a good thing for US and the rest of the World. The whole world is going to benefit from it. That notion is what's actually driving the stock market higher.

I know a lot of people hate to hear this, but the new bull market has started, and is fueled by the development of China, India, Brasil, etc. This is a start of a new, prosperous era for the whole world (and the stock market). Mark my words...

p.s.

After this prosperous era, there will be a bad one, then...

The cycle of life just continues...

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#9) On August 26, 2009 at 2:19 PM, dragonLZ (99.49) wrote:

And this one too:

 

#28) On August 20, 2009 at 7:24 PM, dragonLZ (98.16) wrote:

I wanted to explain something to somebody, but then I thought why bother? Why waste my time on pesimists, people with no sense of humor, people who have no imagination to read between the lines? I'll let the market tell us who's right and who's wrong... (remeber: I predicted we are entering a new, prosperous times for the whole world fueled by the development of emerging markets...)

However, let me say this: I lived in a few countries, and lived with people from a few different countries before I moved to US ten years ago. I know exactly what US means to the world, and I know for a fact that when US sneezes, the world catches cold. And I'm confident that's not going to change any time soon (if ever, but that's a subject for a different discussion).

Actually, I'm on a 2-weeks vacation in Sweden right now, and once again, I'm reminded what US and US economy means to the world...

Disclaimer: My vacation is paid in full by the US stock market, or more specifically to stocks/companies like LVS, BAC, CENX,... and my family would like to use this opportunity to thank these stocks for their nice performance at the beginning of this new bull market...

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#10) On August 26, 2009 at 2:47 PM, brickcityman (< 20) wrote:

alrighty now we're getting to the meat of it...

 

So the theory goes that the US is bound for a new bull market because we're going to ride the backs of other developing nations out of this quagmire.

 

Ok, ok, I can sorta get onboard with that...  So lets examine a few elements of that, and more importantly why it has worked in the past.  As anyone who has ever read a financial statement knows...  Past performance is not a predictor of future results....

 

1.  The US was at one point a large provider of agricultural products to the rest of the world.  "Breadbasket of the world" so it was said.  Perhaps that still holds, but since we've started trying to figure out how to put corn into our gas-tanks does it hold as steadily as before?  Perhaps we still have an edge on agricultural and heavy machinery, but that doesn't seem like a deep moat to cross.

 

2. The US brought to bear some important technological advances in terms of computing and communications...  Perhaps we'll continue to make incremental advances, but since we now manufacture all that equipment in China why not cut out the middle-man?

 

3.  The US has been home to significant advances in medicine, but given that we're trying to get our own house in shape on that front I'd be a little concerned about that going forward.

 

4.  The US has at times been praised for advances in approaches to financial and wealth management services as well as overall corporate governance...  Not sure we outta be giving alot of advice on that front at the moment, or that many would be willing to listen.

 

You cite a credible, if time-tested, rationale for global resurgence but I would say our participation in it is hardly gauranteed. 

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#11) On August 26, 2009 at 3:04 PM, jason2713 (< 20) wrote:

I'll tell you why this market can't keep going (or at least shouldnt):

1) Unemployment is still rising, and we will still see it at very elevated levels through next year.  The single biggest employer in the USA is broke, real broke, like beyond broke...this being the gov't.  Massive cuts are coming, expect them to.

2) Home prices are still falling due to record foreclosures, which have been set consecutively the past few months.  Sure, home sales have gone up, but the inventory is still RISING, not falling.  Because of this, people's single biggest investment of their lives is losing massive amounts of value, and this will continue and will be a larger problem as time passes.  Personal wealth goes down = spending goes down.

3) This rally is fueled by govt stimulus, wall street and banks, all of which are in bed with each other.  The only way these banks are making profits is by fee gauging, no other way around the massive foreclosure issue and huge holes in their balance sheets that are filled by the huge bail outs given out.  Don't you love how these fools are making money with OUR money..and continue to stick it to you with record fee payments via over draft and huge rate increases?  Makes me feel warm and fuzzy inside.

4) The market is not in line with the true reality of what's going on.  China is creating another huge bubble, they are not growing. Their energy consumption numbers came out and they are declining, not increasing (contrary to their "growth" reported at 8%), and even if they are growing, they need at least 4-5% growth to keep up with the next wave of citizens coming of age and need jobs.

5) Comercial real estate is in a state of crisis that no one is talking about.  It's a huge problem, and banks like Wells Fargo (big BIG banks) are the ones greatly affected by this creating even more massive holes in their balance sheets.

I'm sitting on the side lines.  If I miss this rally, and it continues to go up, its a smarter INVESTMENT.  Right now, people are BETTING, which is not investing.  I might as well go to Vegas and ride my money on a game, at least I'll get a few rounds of drinks for free from a half naked woman :)

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#12) On August 26, 2009 at 3:37 PM, dragonLZ (99.49) wrote:

Nice post, jason (even though you din't mention Obama, but govt. counts too. Good use of percentages as well). 

Keep 'em coming... :)

p.s. Do you know anyone who made money trying to prove the market wrong? 

You are probably correct 100% about everything you said, but who cares if the market doesn't care. Are you in this game to be correct or to make money... Oh, I see, you are more interested in free drinks (mee too, but making money comes first)... :) Trend is your friend, my friend. This was true in 2008, why it shouldn't in 2009...

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#13) On August 27, 2009 at 2:06 PM, goldminingXpert (30.87) wrote:

The market is going up, forever. I'm long commerative products makers, because the market for Obama=Jesus coffee mugs is going to be sky high.

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#14) On August 27, 2009 at 2:23 PM, jason2713 (< 20) wrote:

DragonLZ

Oh don't get me wrong, I am in this to make money too, my friend, but honestly, for the first time, I have no clue where this market is going.  It's simply getting too good, too fast for my liking.

When is the last time you've seen the market go green so many consecutive days in a row, without any pull backs of any significance.  Furthermore, how many times have we seen a pull back of some significance and it ends up in the green by days end.  This signals to me something fishy is going on.  I've made 50% on my money this year since march and cashed out 2 weeks ago.  I've lost out on maybe maybe 5-7% so far in this most recent of rallies -> BFD (Big F*cking Deal) 

My gut says this is a fools rally starting in July, which I rode until 2nd week of August.  When that 186 pt drop hit, I was already out, and thought I timed it perfectly, not so much.

I still think the fundamentals aren't there, and haven't been probably since the market stalled at 8100 in June.  I think the market at 8500 is a good valued market.  This recent market is extremely over valued, and is continued to be propped up by market manipulators.  And i'm not even into conspiracy theories, but the more research I do on how gov't money is moving, the more I'm convinced.  

Or maybe this is just the precursor to hyper inflation soon to come, who knows.  I'll let the bulls run the show and watch and laugh from the side lines.  When i see the dow at 10,000...I'll laugh even more..and the way things are going, 10,000 is coming.

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#15) On August 27, 2009 at 2:37 PM, dragonLZ (99.49) wrote:

Glad you are back, GMX. Haven't heard from you in a while...

p.s. How does it feel to short a stock just to see it jump 20% two days later (OSK)? Once again: DO NOT, I repeat, DO NOT short stocks during bull markets (especially not the ones that started going up as soon as the market took off...).

Just trying to help... :) 

 

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#16) On August 27, 2009 at 2:43 PM, wuff3t (98.12) wrote:

"But the fundamental question is what is the catalyst for this new bull market?  Perhaps my thinking is out-of-whack but I don't yet see what there is to justify a bull-market at this point..."

brickcityman,

You could be right, but it depends on what you thought the value of the market was before the crash. Was it massively over-valued? In which case the correction was fair and the recent surge is a false bull - but if you think the 40% drop prior to the recent rally was overdone (I do, but hey, I'm no expert) then you might only have a fairly valued market now, rather than a bull market (let's leave aside the technical definitions of 20% etc for a moment).

I guess you have to fall back on looking at individual stocks and their individual valuations and prospects. People hate that, because it's difficult, but in any market (in any market - even the Great Depression - there were still companies making money) that's what it boils down to.

I wish you the best,

Phil

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#17) On August 27, 2009 at 3:32 PM, dragonLZ (99.49) wrote:

Or maybe this will help:

Here is my answer (on another post) to a guy who was wondering what is the justification for FNM and AIG going up:

 

#14) On August 25, 2009 at 9:32 AM, dragonLZ (98.34) wrote:

You just need to understand one thing: During a bull market, any news (or number: GDP, unemployment, house sales, etc.) is a good news (market just looks for an "excuse" to go up higher), and even the stocks of the companies that make hairspray for frogs go up...

By the same token, during the bear markets, any news is viewed as bad news, and even the stocks from the sexiest companies go down... 

Yes, it really is that simple... :)

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#18) On August 27, 2009 at 3:40 PM, jason2713 (< 20) wrote:

@dragonLZ

you hit the nail on the head.  This is a "glass half full" market, everything is viewed in a positive light.

I posted my "Today's Headlines" blog earlier:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=249681&t=01005365510354966440

This is just a demonstration of what exactly you're talking about, and I think you got it right.

 

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#19) On September 01, 2009 at 6:11 PM, checklist34 (99.80) wrote:

yeah, fear is definitely what makes us rich in the long run by creating buying opportunites, stretching a spring that can later expand (the stretching caused by short selling, money leaving, more short selling, only to lead to a squeeze and a later run back in).

 

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#20) On October 16, 2009 at 9:41 AM, LifeForceDance (22.22) wrote:

Why not play the market as it continues to go up and then bail out when it looks like it is going down?

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