Blood in the Streets

[jq26]

The global markets are in freefall. It is absolutely amazing. The price of credit and the sell-off of equities is pricing in a global depression. Its complete fear. Asian markets are off 50-70% in one year.

The last time the VIX (volatility index) was this high was 25 years ago in the crash of 1987. Following the crash, the markets marched on higher than ever. http://stockcharts.com/charts/historical/djia1900.html

Let's put things in perspective here. Many non-financial stocks have been pounded based on non-fundamental factors. Primarily because of PE compression based on fear.

Ex: China has $0 toxic debt. And $1.2 trillion in valuable US treasuries which they now collect interest payments regularly from US gov't (ie taxpayers). And they run massive surpluses. And they are growing at a 9% clip with a currency that is strengthening against the dollar at a slow but steady pace. Why have their stocks been put in the waste basket? FEAR! I own stock in a Chinese healthcare company that has a current P/E of 5, $3/share in cash with no debt, and is growing by 50% year-over-year. I'm down 30%...others are down 50%. The Chinese consumers are not going to purchase less medication because Lehman brothers went under. There is 0 connection.

Someone once told me the best investments are made when everyone agrees that there is no money to be made in that investment. If you are a contrarian and patient, that time would be now.

[Goldbug]

I have a feeling we ain't seen nothing yet! US stock market tanked today as well. Buckle up Dorothy, we're not in KS anymore!

As a side note, I thought your thread title referred to this:

http://www.youtube.com/watch?v=HaG9d_4zij8

Goldbug

[jq26]

You bet it tanked. People are scared as hell.

But the VIX cannot keep this up. When this capitulation event plays itself out (its almost over), the rally will be impressive imo. Anytime the VIX has reached this level, there has been a HUGE bounce.

[Goldbug]

I hope you're correct about the bounce, time will tell!

Goldbug

[AboveAverage]

I can't get all fancy and technical with charts and such, but I can tell you all this:

Changing your stuff in your 401k, 403b, 457b, IRAs, now to something else (like say Stocks to bonds) would be bad...real bad.

Basically what ends up happening in times like this is that you lock into your losses when you make changes in your plan. I have an 100% aggressive growth plan. I looked at my YTD performance....I'm down 22%. I expect that I will see an upward of 30-40 percent, meaning I'll get my loss back plus the gain.

Because I'm 31, I expect that I'll see this type of thing at least 3-4 more times. On the last time I come back from a dip near my retirement, that's when I sell high and lock in some of my gains to bonds/conservative investments....while still having an exposure to stocks so I can beat inflation.

I don't have a Series 7, or claim to know the markets. Heck, I can barely spell derivatives, let alone tell you what they are.

Point is, keep funding your retirement in good mutual funds. Everything is down right now, so if you can buy more. You will have a sweet retirement when it's all over. I don't even want to go in my Vanguard account right now......you couldn't pay me to do that right now....lmao.

[matthewscott]

I can't get all fancy and technical with charts and such, but I can tell you all this:

Changing your stuff in your 401k, 403b, 457b, IRAs, now to something else (like say Stocks to bonds) would be bad...real bad.

Basically what ends up happening in times like this is that you lock into your losses when you make changes in your plan. I have an 100% aggressive growth plan. I looked at my YTD performance....I'm down 22%. I expect that I will see an upward of 30-40 percent, meaning I'll get my loss back plus the gain.

Because I'm 31, I expect that I'll see this type of thing at least 3-4 more times. On the last time I come back from a dip near my retirement, that's when I sell high and lock in some of my gains to bonds/conservative investments....while still having an exposure to stocks so I can beat inflation.

I don't have a Series 7, or claim to know the markets. Heck, I can barely spell derivatives, let alone tell you what they are.

Point is, keep funding your retirement in good mutual funds. Everything is down right now, so if you can buy more. You will have a sweet retirement when it's all over. I don't even want to go in my Vanguard account right now......you couldn't pay me to do that right now....lmao.

Yep, I agree. Just keep trucking with the timely and regular contributions and don't look at the account until things settle down. Just remember everything is in a cycle and hopefully we picked good things to be invested in.

Good luck to you all. I hope it gets better soon.

[jq26]

Just keep trucking with the timely and regular contributions and don't look at the account until things settle down.

Smart move. Its another bloodbath out there. Crude oil and gasoline are piling up as the world economy slows. There were huge weekly gains posted by the EIA at 10:30am this morning. Anything remotely related to oil is being thrown in the garbage pale.

This is a slow motion global version of 1987. Maybe worse since now the midle class is heavily invested in equities.

[Magdalen77]

Smart move. Its another bloodbath out there. Crude oil and gasoline are piling up as the world economy slows. There were huge weekly gains posted by the EIA at 10:30am this morning. Anything remotely related to oil is being thrown in the garbage pale.

This is a slow motion global version of 1987. Maybe worse since now the midle class is heavily invested in equities.

Ha!!! I made that comment on the other thread about "blood in the streets" even before I saw this thread. I wish I had mo' money to invest.

[tommy32]

The global markets are in freefall. It is absolutely amazing. The price of credit and the sell-off of equities is pricing in a global depression. Its complete fear. Asian markets are off 50-70% in one year.

The last time the VIX (volatility index) was this high was 25 years ago in the crash of 1987. Following the crash, the markets marched on higher than ever. http://stockcharts.com/charts/historical/djia1900.html

Let's put things in perspective here. Many non-financial stocks have been pounded based on non-fundamental factors. Primarily because of PE compression based on fear.

Ex: China has $0 toxic debt. And $1.2 trillion in valuable US treasuries which they now collect interest payments regularly from US gov't (ie taxpayers). And they run massive surpluses. And they are growing at a 9% clip with a currency that is strengthening against the dollar at a slow but steady pace. Why have their stocks been put in the waste basket? FEAR! I own stock in a Chinese healthcare company that has a current P/E of 5, $3/share in cash with no debt, and is growing by 50% year-over-year. I'm down 30%...others are down 50%. The Chinese consumers are not going to purchase less medication because Lehman brothers went under. There is 0 connection.

Someone once told me the best investments are made when everyone agrees that there is no money to be made in that investment. If you are a contrarian and patient, that time would be now.

I take it you either are very very savy in the stock market or are a broker/trader....or both LOL ....This is meant as a compliment not a smart azz remark....

[jq26]

Neither. Just trying to scrape together a decent retirement one day so I invest regularly and follow the markets.

...And the events of the past year are going to be something we tell our grandkids about 50 years from now. I just think we don't realize it because we are in the moment.

[AboveAverage]

Neither. Just trying to scrape together a decent retirement one day so I invest regularly and follow the markets.

...And the events of the past year are going to be something we tell our grandkids about 50 years from now. I just think we don't realize it because we are in the moment.

All the same, you do sound like someone who could pass a Series 7 exam. You are a bit more technical about finance than your average investor. Not a bad deal...but like Tommy, I was kinda thinking the same thing.

[Chester P. Dexter]

...And the events of the past year are going to be something we tell our grandkids about 50 years from now. I just think we don't realize it because we are in the moment.

Oh, I realize it, jq. I really realize it!

I've been beaten up and left for dead under circumstances that were of my own design, so I blame myself and learn from my lessons (don't really want to talk about the particulars.)

Like I said, I was left for dead but not dead. I may have lost more than the average person and also wish I had more to plow back in, but I've got 1. Some still in play, being beaten up in this storm, 2. some cash sitting safely inside from the storm, and 3. I will muster all I can scrape together soon enough and jump right back in when the time seems right. I wish I had enough to risk it by throwing it in there right now but I'm going to just watch what's already in there for right now.

The particulars of trading and investing I have learned over the past few days, weeks, and months, may just be worth the "tuition" I paid, involuntarily, to learn them. I hope so and I look toward the future optimistically once this mess is sorted out and a new market environment dawns.

[DHK]

All the same, you do sound like someone who could pass a Series 7 exam. You are a bit more technical about finance than your average investor. Not a bad deal...but like Tommy, I was kinda thinking the same thing.

No, I think he can do better than the Series 7. There are plenty of people who pass the 7 who still don't know what they heck they are talking about economically. That exam is all about regulations, municipal bonds and option strategies.

He could probably pass CFA (Chartered Financial Analyst) level 1 with a little study. (Something I might try to do in the future.)