Why it is too early to call a bull market?

老九

The GOVT said the free fall is stopped, many economist said the same thing and many of us believed it.  So, the worst is over, "officially".  The next question is are we still in a recession? My notion is 100%.  Being through a few recessions, this one looks different and feels different.  Initially, we are all afraid of a complete collapse and now many are talking about a V or U recovery.   So, what is driving all this assumption of recovery? Green shoots, money printing, and bear market rally? I want to point a few things out that almost no one will tell you.

History does not repeat itself exactly, but history can allow us to go back and draw similar conclusions.  The media and GOVT want you to know that this is not a repeat of the Great Depression.  During the 1930s, unemployment was 25% and now it is only 9.4%.  Fine, who can tell me what is the unemployment at the end of 1930?  It was 8.7%.  Yes,  8.7% and even in 1931, it was only 10+%.  Now, with all the federal stimulus and Big Ben's free money, we sure have avoided the fee fall.  It is unprecedented, I will give them that credit.  Interest at 0% from 3%.  Everything seems to be working to avoid a deflationary scenario.  To look at deflation, we want to look at CPI.  Any one can tell me the pecentage drop of CPI in June 1930 compared to the high before the crash? It was 2.9% and the current drop form the high is 3.1% (April 2009 vs July 2008).  You can see now why we need to pop up the oil price to make the CPI look better in the coming months.  There are other comparisons about the global economy with 1930s, eveything so far suggest the current downturn is worse than the Great Depression I.  Are we going to see a Great Drepression II?  Let's pray!

The why some of the current economy indicator is showing signs of "recovery"?  One thing everyone should know is these indicators fluctuate and cannot go all the way down.  If you research yourself, during there was a period that same thing which was confusing economy indicators fooled investors happened.  You guessed it right, the early part of 1930 where stock market recovered about 2/3 of its free fall in 1929.  Now, I here quote some one (I forgot where I saw it), "In 1929, the dumb investors lost money.  In 1930, the smart investors lost money and 1931, the smarter investors lost money.  In 1932, the smartest investors lost money."  

I remember one post in HT said, all the bulls lost money in 2008 and many bears lost money in 2009.  You should now, many bears are in general smarter than most of the bulls.  My investing and trading strategies now is hold most of your money in cash or gold.  Have money that will support you for 2 years without other income.  Invest or trade only 20% your money but don't do stupid things like all in or use margin.  You never know what tomorrow is.  So, I have turned into a bear since May 2008, remained a bear and will be a bear for the next few years unless something really convincing shows up.

happyface

thanks

soulvirus

靠，和偶一样是个长期大熊。但是现在没办法，不敢和政府对着干哈。顺势顺势

lanrain1012

顶一下

banker

Did you cover your shorts at 850 ?  

实践是检验真理的唯一标准。

Cobra

Did you cover your shorts at 850 ?  

实践是检验真理的唯一标准。
banker 发表于 2009-6-14 11:13

人家已经说了，most cash。

china_wei

你这是悲观论，有杞人忧天之嫌。我认为股市正在筑底，前面的一波上涨，有很多股票已经再也回不到那个低位了。当然，市场还会有更低，但是前低已经接近底部，未来要跌回6000-6500点，然后更大一波反弹就会出现。的确，1、2年后大盘还会创造更低的点位，但是经济已经软着陆了，根本谈不到大萧条。原因是，现在不是1930年，当今美国可以把资本主义危机转移给全球，由所有国家一起承担，现在做的就很好，小船易沉，航母不容易沉。印度和中国两大超级人口大国进入高速发展阶段，巨大的需求和与西方物质差距会产生巨大经济向上推力，因此世界经济总体不是倒退，而是上升。美国成功转嫁危机给全世界决定了美国经济很快软着陆。战略上应该是这样，战术上很快美国股市进入新一轮的大调整，但是也酝酿着一波更大 的反弹。

snowwolf229

as traders, dont approach the market with any bias

steven68

ding

Diver

Wow, interesting.

The unemployment at the end of 1930 was 8.7%.  And in 1931, it was only 10+%. During the 1930s, unemployment was 25%. In the early part of 1930, stock market recovered about 2/3 of its free fall in 1929. "In 1929, the dumb investors lost money.  In 1930, the smart investors lost money and 1931, the smarter investors lost money.  In 1932, the smartest investors lost money."

Now we saw the similarities in the movement on unemployment rates and CPI and interest rates to that period. The history is likely to repeat.

Why it is too early to call a bull market?

The GOVT said the free fall is stopped, many economist said the same thing and many of us believed it.  So, the worst is over, "officially".  The next question is are we still in a recession? My notion is 100%.  Being through a few recessions, this one looks different and feels different.  Initially, we are all afraid of a complete collapse and now many are talking about a V or U recovery.   So, what is driving all this assumption of recovery? Green shoots, money printing, and bear market rally? I want to point a few things out that almost no one will tell you.

History does not repeat itself exactly, but history can allow us to go back and draw similar conclusions.  The media and GOVT want you to know that this is not a repeat of the Great Depression.  During the 1930s, unemployment was 25% and now it is only 9.4%.  Fine, who can tell me what is the unemployment at the end of 1930?  It was 8.7%.  Yes,  8.7% and even in 1931, it was only 10+%.  Now, with all the federal stimulus and Big Ben's free money, we sure have avoided the fee fall.  It is unprecedented, I will give them that credit.  Interest at 0% from 3%.  Everything seems to be working to avoid a deflationary scenario.  To look at deflation, we want to look at CPI.  Any one can tell me the pecentage drop of CPI in June 1930 compared to the high before the crash? It was 2.9% and the current drop form the high is 3.1% (April 2009 vs July 2008).  You can see now why we need to pop up the oil price to make the CPI look better in the coming months.  There are other comparisons about the global economy with 1930s, eveything so far suggest the current downturn is worse than the Great Depression I.  Are we going to see a Great Drepression II?  Let's pray!

The why some of the current economy indicator is showing signs of "recovery"?  One thing everyone should know is these indicators fluctuate and cannot go all the way down.  If you research yourself, during there was a period that same thing which was confusing economy indicators fooled investors happened.  You guessed it right, the early part of 1930 where stock market recovered about 2/3 of its free fall in 1929.  Now, I here quote some one (I forgot where I saw it), "In 1929, the dumb investors lost money.  In 1930, the smart investors lost money and 1931, the smarter investors lost money.  In 1932, the smartest investors lost money."  

I remember one post in HT said, all the bulls lost money in 2008 and many bears lost money in 2009.  You should now, many bears are in general smarter than most of the bulls.  My investing and trading strategies now is hold most of your money in cash or gold.  Have money that will support you for 2 years without other income.  Invest or trade only 20% your money but don't do stupid things like all in or use margin.  You never know what tomorrow is.  So, I have turned into a bear since May 2008, remained a bear and will be a bear for the next few years unless something really convincing shows up.

老九 发表于 2009-6-14 09:47

banker

The only call you made in HT  was to short  when SPX at 850, you never told us when to cover and when you bought the gold.    You are claiming you were smart, but your track records at HT did not support this kind of claims.   

The facts are very stubborn.

flyingdust

Ding.

sds

老九的悲观论调并不离谱，EWI以为这次熊市最后结果比１９２９ Great Depression还要糟，从EWI的长期波浪图上看，２０００年开始进入Grand Supercycle Wave IV，目标是DJI ４００以下（对，是Dow Jones Industrial Average ４００，不是４０００），Sounds Crazy。而２００３－２００７牛市只是Count-Trend Rally。１９２９－１９３２的熊市是Supercycle Wave 4级别，比现在的熊市低一个级别。

小亥

老九的悲观论调并不离谱，EWI以为这次熊市最后结果比１９２９ Great Depression还要糟，从EWI的长期波浪图上看，２０００年开始进入Grand Supercycle Wave IV，目标是DJI ４００以下（对，是Dow Jones Industrial Av ...
sds 发表于 2009-6-14 17:03

小亥

俺以为俺就挺胸的，嘛香岛还有老酒。还有更凶的嘛？

dividend_growth

老九的悲观论调并不离谱，EWI以为这次熊市最后结果比１９２９ Great Depression还要糟，从EWI的长期波浪图上看，２０００年开始进入Grand Supercycle Wave IV，目标是DJI ４００以下（对，是Dow Jones Industrial Av ...
sds 发表于 2009-6-14 17:03

俺是很烦这种唯恐天下不乱，内心阴暗之徒。

美国这样的人不少，而且比别的地方叫得都响。

这种美国人的基本特征是：白人男性，狂热宗教，爱好枪支，仇恨异族。

dividend_growth

华人们应该好好想想，世界上那一批势力对我们的生存最有威胁：

1. 白人种族主义者；这批人现在在俄国是主流势力，在美国是反政府的核心势力，在欧洲是强大的暗流势力；他们的目的很简单：奴役或消灭所有“下等人”。

2. 贪得无厌的犹太人；这批人现在控制着国际金融界，是推动全球化的主力。

3. 穆斯林狂徒；这批人现在力量薄弱，但玩起来不要命，跟吃猪肉的，喝白酒的，还有胡子长不长的是天敌。

老九

Hey guys,  no finger pointing here please.  Nobody wants to loose money.  I just speak what I am afraid of.  Many people here just simply follow what seasoned investors say and that is simply wrong.  Everyone should have a trading or investing plan for him/herself based on your appetite, financial strength and etc.  I only point out the things I find interesting and share with you guys.  Yes, I did close out all my long poistions when SPY was close to 900.  But I only added a few thousand shares of various short ETFs.  I will add more in the coming days as I see fit.  I never liked to put all of my money in one direction.  I did not stop this time because I firmly believe we will see a low soon.  How low?  God knows!  

One more thing everyone should know is that in early 1930, it was also declared that the worst is over and the panic has subsided.  The word depression was only used afterwards.  The recessions/stock market crashes were called panic then.  Sounds quite familiar right?  My take on all of the things I hear and read is to wait and see.

ggsddu

Such a nice post. Thank you.

wiggler

d