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Thursday, October 9, 2008

Where’s the Bottom?

posted by on October 9 at 12:15 PM


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Dan, I always figured you for the bottom.

Posted by seattle mike | October 9, 2008 12:18 PM

When the S&P hits 940, which it will do soon, we will have lost, in real terms, all of the growth in wealth since the start of the latest recovery in 2002.
If it hits 828, you would have done better with a CD as your investment over the entire period from just before the dot-com boom until today.
IOW we are very close to wiping out all of the gains from the start of the Clinton Administration to the present.

Posted by kinaidos | October 9, 2008 12:20 PM

Ugh, @2 don't remind me. My 401(K) has lost more than 25% in value in the past few weeks alone - and it wasn't doing all that well this year to begin with. I was actually pleasantly surprised when my savings account posted a tiny dividend last week.

At this rate, I'll be able to retire sometime in my early 100's.

Thanks world-wide economic crisis!

Posted by COMTE | October 9, 2008 12:28 PM

Didn't we dole out $850,000,000,000 to stop this? can we get our money back?

Posted by Little Red Ryan Hood | October 9, 2008 12:29 PM

The bailout wasn't supposed to fix the stock market. It is supposed to get credit flowing again so businesses can pay people.

Posted by Sir Learnsalot | October 9, 2008 12:33 PM

@2. 931 as we speak. Down 27% from 1/1/08.

Posted by Julie in Chicago | October 9, 2008 12:41 PM

What's the scouter say about the DJIA power level?

Posted by RL | October 9, 2008 12:42 PM

Sorry Dan, if you want a bottom check Neighbours, because the stock market isn't hitting one anytime soon.

Posted by happy renter | October 9, 2008 12:44 PM

Someone HAS to ask McCain about privatizing Social Security now!!! Right NOW!!!!

Posted by Cato the Younger Younger | October 9, 2008 12:46 PM

Uh, make that 919. Damn, that was fast.

Posted by Julie in Chicago | October 9, 2008 12:47 PM

Okay, the market has been in a freefall for the last half an hour. Seriously. The realtime graph looks like a vertical line from 3:30 EST onwards. Dow at 8,600. S&P at 909. I need to stop looking at it now...

Posted by Julie in Chicago | October 9, 2008 12:51 PM

closed - S&P at 917 The last six years didn't happen.

Posted by kinaidos | October 9, 2008 1:02 PM

SKF, SRS for the win. I'm up 28% on SRS since I bought in a few days ago. The 3 days have passed and I can at least lock in 25% with a stop order.

I'm telling you people, short ETFs are where you can at least hedge some of these losses, but it involves a little more time and effort on your part.

Posted by Bellevue Ave | October 9, 2008 1:05 PM

Holy fuck, this makes the post-9/11 market dive look like a little dimple.

Yeah, unregulated privatized everything is definitely The Way Forward.

Posted by Karlheinz Arschbomber | October 9, 2008 1:12 PM

7.3% down on news Paulson may do a hot sticky bank injection of debt-based capital. The coordinated global effort is selling well to investors, no? They're probably wondering which banks get Treasury's Reanimator treatment and which are released to float ablaze down the Ganges.

Repubs might as well go nap on the train tracks at this point.

Posted by tomasyalba | October 9, 2008 1:18 PM

I totes hit a bottom last night.

Posted by Jubilation T. Cornball | October 9, 2008 1:22 PM

Once again, I say welcome to GD2. Suzie Orman says it will dip to 8200-8000, I say somewhere around 6500-7000.

Posted by crazycatguy | October 9, 2008 1:28 PM

The Russell 2000 is down even more, 8.67%.

Posted by Fnarf | October 9, 2008 1:30 PM

Remind me why people who have nothing invested in the markets and only a couple of credit cards give a shit about this again?

Posted by The CHZA | October 9, 2008 1:42 PM

The CHZA, no rush. Just sit tight and you'll probably find out.

Posted by tomasyalba | October 9, 2008 2:09 PM

#19 - because if the market fails companies can't raise capital to buy, make or service things. I would suppose that you get money from somewhere and if you for a company that buys, makes, services, grows, educates or transports anything they will not be able to get the money to pay you. Then you won't be able to buy things causing other companies not to be able to pay their workers...and so on and so on and so on...we are screwed - all of us.

Posted by yougottabkidding | October 9, 2008 2:11 PM

Because they won't have a job, either.

Posted by crazycatguy | October 9, 2008 2:11 PM

@19, in other words, it won't affect you one bit.

Posted by jrrrl | October 9, 2008 2:21 PM

Just sit back, and relax. It won't affect you at all. Really. No, I mean it. Serious.

Posted by Pndscm | October 9, 2008 2:25 PM

I'm right here Dan! I'm right here!

Posted by PussayDunkinHines | October 9, 2008 2:27 PM

I remember sitting and watching the stock market ticker @1992 while being bored at a job, back when it was 4,300 or so. I bet we hit that in no time.

Posted by Colton | October 9, 2008 2:54 PM

This may not be the best place to ask financial advice, but what the hell? I never enrolled in my 401k at my current job because I was struggling to pay off my burgeoning debt. My debt is now paid off? I'm wondering if this is actually a GOOD time to start up my 401k -- the theory being that with everything tanking, my dollars will buy more and have a higher room to grow? Thoughts?

Posted by RS | October 9, 2008 3:02 PM

I wish I'd listened to Suze Orman a few months ago. (Instead of my x, who thought he was such a financial wizard.)

But I did take her advice before the really huge losses and got my remaining money somewhere safe. Safe as long as the US government lasts...

I really hope my x did NOT. He'll still have a hell of a lot more than I do. But, no doubt, he's lost as much as I *have*.

Proves that if you look hard enough, you can find a bright side to anything.

Posted by Ayden/VA | October 9, 2008 3:09 PM

There has to be a good joke here somewhere. 8 is close...

Posted by Mike in MO | October 9, 2008 3:10 PM

yeah ayden, spiteful people are a delightful bunch.

Posted by Bellevue Ave | October 9, 2008 3:11 PM


Yes, assuming that your job doesn't evaporate.

Posted by keshmeshi | October 9, 2008 3:37 PM

RS- in my unprofessional advice, you should save, but stay out of the market for now. Choose something safe like CDs or Treasuries until we find a bottom. The signal I use is the 20/50w cross as described by Karl:

When that signal occurs, dump everything into something like SPY, VFINX, or VTSMX

my 2 cents/imho/ymmv...

Posted by happy renter | October 9, 2008 4:04 PM

Make sure you have six months of expenses set aside in a liquid account (money market) first, in case you lose your job. Then dollar-cost average (invest a little each month) into your 401K. If you company offers a Roth 401k - choose that.

Posted by crazycatguy | October 9, 2008 4:06 PM

I'd be putting aside money in a money market and paying off debts. In a deflationary cycle debt sucks big time.

Posted by Bellevue Ave | October 9, 2008 4:17 PM

@33: DCA is a joke. Why waste commissions while *not* reducing risk when you have proven signals like the one I posted in 32?

Posted by happy renter | October 9, 2008 4:20 PM

I had guessed that the bottom was 9,500, and on Monday, when it veered north after hitting that, I felt pretty smart. Now, I'm just glad I'm not yet 30, because it means lots of time left to recover before retirement.

Posted by Gitai | October 9, 2008 4:27 PM

I strongly disagree with the advice to attempt any sort of market timing. In fact, the specific system proposed by Karl would have you buying stocks only has they got more expensive, which is contrary to common sense (it's better to buy things when they're cheap). A smarter strategy is to dollar-cost into the market at all times, with an annual re-allocation of your asset mix (based on your age) once a year. Also, it's important to realize that when he talks about beating a comparable index, he's not including trading fees or capital gains taxes. I think if those were factored in, his system would not perform any better than a diversified index fund. Besides, who wants to look at this stuff every week?

Posted by crazycatguy | October 9, 2008 4:33 PM

Karls strategy is full of shit. IT would have lost money if you had started 1,2,5 years ago and only made money 3 and 4 years ago.

at that, it still would have only made less than 2% - 4% at 10000 dollars.

Using a bollinger crossover strategy ealized a profit at any year of at least 10%.

Posted by Bellevue Ave | October 9, 2008 4:56 PM

except year 1 and 5, those were merely 6 and 7 %

Posted by Bellevue Ave | October 9, 2008 4:58 PM

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