Voices » Conversation Starter » I Have Bottomed Out
11:01 AM Friday October 10, 2008
by Paul Michelman
Yesterday, at about 4:30pm EST, I bottomed out. It was Yom
Kippur, the holiest day of the year for Jews, and I shouldn't have been
checking the market at all. But, yes, I did sneak a peak once or twice
during the day -- and actually found it calming. It was up a little,
down a little, but things seemed to be settling down. Maybe, I thought,
those coordinated rate-cuts would finally do it; finally bring a bit of
sanity to the irrational, fear-driven behavior that had seized the
equities market.
The last time I had checked the Dow was a bit after the lunch hour. I
don't remember the number, but it was within 100 points of the opening.
But as the clock reached 4:20, I began to have that gnawing
sensation: They've been closed for 20 minutes.... The final number is
in... I just have to see it.... I'll just sneak a quick peek on my
BlackBerry. I actually thought it might be green.
"Jesus Christ!" I couldn't help but say it out loud. (Not a good thing for a Jew seeking atonement, by the way.)
678 points! Are you kidding me?! It had happened again, only
worse. Any shred of optimism; any hint of faith in the massive measures
being taken to address the financial crisis had been once again
outright rejected in those last moments of trading and a free-fall of
panic had set in. It's as if traders looked up, saw it was 3:30, heard
a Pavlovian bell only they could hear, and suddenly started screaming "Sell, sell, sell!"
I just sat there on my sofa, awash in a kind of nauseated, shaking,
stress that I'm guessing I don't have to describe in detail for many of
you to recognize. "What is happening here? Is there no hope for
capitalism? Should I be buying canned goods?"
My wife walked in the door a few moments later. "Did you see what happened?" I stammered.
"No, what?"
"The Dow dropped 700 points! It just totally crashed in the last 20 minutes. It was total panic!"
"So, what are you going to do about it?"
Now, that was an interesting question. One I immediately rejected.
"That's not the point. Do you have any idea how much it's down the last two weeks? We're headed for a total meltdown!"
"So what are you going to do about it?"
Again. She has a way of repeating things.
O.K., what am I going to do about it? Well, I could panic some more, but beyond that:
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Comments
We will see a stabalization in the markets, between now and mid-Dec. That should be sufficient time, for markets to react to the actions taken by regulators and calm media driven panic.
By the end of the first quarter, the financial sector should begin to report positively and there may even be a slight increase in interest rates by the Fed. This in turn, will encourage a recovery in the MBS, as liquidity will restore confidence.
The next few months, will be the greatest buying opportunity in over 20 years. Personally, I will begin building positions in some of the financial stocks.
- Posted by Richard Dollar
October 11, 2008 8:29 PM
Well Paul,........it is time to relax and ease out as markets seems to have bottomed out . You can easily and safely sneak a peek at the Dow Jones, where ever you are, be it celebrating the on coming christmas or planning for a vacation.But there is a caveat....though markets world wide seem to have bounced back with good upswing rallies, one aught to be discreet and prudent enough to decide about what to buy and at what tag price. it is time to have stacks of cash bundled up in your chest, keep your liquidity in good shape, and go for such stocks and shares which showed minimal fluctuations during this great turmoil. Infusion of liquidity and harbringing positive optimism could be an ephemeral sign, if the real GDP doesn't grow and new job opportunities not created to take back those lay offs, who lost their earnings.
With stabilization in the markets and regulators playing more vigilant and hawk eyed role of a "big brother" watching, we expect to weed out the recurrence of any more systemic failures ,or gross flouting of norms and procedurals.
Though I'm not a sofa sofist who would lounge myself with cosy comfort, sipping some beer and ale, and babbling about the fall of capitalism, rise of socialism, or quoting some Karl Marx theories . But for all those " prophets of gloom and doom" who thought that free market trade is becoming an extinct specie, rebouncing and restoration of investors confidence is a slam dung on their faces. I need not revile, criticize or censure the policies of state welfare and socialism, but it is FEbest time to enter the markets, build up your portfolio and watch your wealth multiplying.....let me end up with a positive note that this christmas there shall be more "merrying and less lynching".
Sandy Dheer
New Delhi, India
- Posted by sandy dheer
October 31, 2008 10:45 PM
I made a goofy stuff of myself, when I penned down my last comments and put them on the blog. I thought the markets have eased out and every one thought we were seeing the bottom out stage. It seems i was just kidding.....and in the process i drained out and spent much of my savings through some panic buyings. Every one thought, Dow Jones will see the higher of its high side, but what came out was even the lower of its hind side. With DOW falling below 9K mark ,and other stock market indexes yo yoing like a clock pendulum,the markets are witnessing everything except stability.To just give a sneak peek , the Obama factor has fazed off and fizzled out....the whole world thought Barrack Obama after winning the Presidential elections shall carry a magic wand and do some mumbo jumbo act of abracadabara in bringing back the
US economy with robustness and financial strength. Expectations are still running high, but retail investors are still apprehensive and very awry and pesky about positive sentiments.
Perhaps their financial losses and deep holes in their wallets, have grilled them like roasted peanuts in a frying pan. This is high time we should stop reacting with repulsion and angst. Just wait and watch.....and wait.....and watch till this turbulent scenario mellows down.
Sandy Dheer
New Delhi India
- Posted by sandy dheer
November 13, 2008 9:57 AM