jq26

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Either this is a big time bear rally (again) or we touched a bottom. I'm inclined to say the latter because the S&P500 put in a PERFECT double bottom yesterday after touching its November lows. Only time will tell....

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Looks like a bit of a sinker. Oh, well.

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Everyday is another roller coaster. Check out CF. Agrium made a hostile bid today. Took it right to the shareholders. I think this bodes well for MOS (I know you hold at least one share....) :)

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Good stuff! Here's a bit of speculative play for you: CSKI. Chinese healthcare company. I brought this up before, but right now its sitting at $11/share, $4/share in cash, NO DEBT (repeat that 3 times), and generates roughly $2.25/yr in post tax retained earnings, which is feeding a growing R&D portfolio. Oh and forgot to mention it is growing at 50% per year and gobbling up tiny undervalued companies.

Its volatile, but trending higher. It has to. Their balance sheet, income statement, statement of cashflow will force it higher even in this boogeyman economy! Could see $20 by the end of the year.

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jq:

Do you think Etrade stock will ever see the light of day? I bought several hundred shares when they were a dollar-something. Hey, better than buying lottery tickets, (which I don't do anyway) I figured. Better than wasting the money on something stupid.

Do you think I'll ever see green on that?

*I just sent you a PM, btw.

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I don't know about etrade. Don't really follow it....

I do think we're about the see a monster multi-week short covering rally. Get ready!!

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LOL. Thanks! I did think of that. FYI- I have a permit to carry (and no this is not a veiled threat of any kind). :)

The market looks set to rally, but the budget debacle announced yesterday along with the tax increases are absolutely market killers....we are going into deficit ultradrive. I don't get it. Within 12 twelve hours, the White House went from "we don't like deficits and big gov't" during the speech Wednesday night to a budget that creates BIGGER GOVERNMENT AND EYE-POPPING DEFICITS! certainly no market likes that. Ouch...

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yah...its way oversold by EVERY measure. :) Now my timeframe is short (bought my first share of stock in '04), but I have never EVER heard negativity from every corner like we have now. From stock pundits to government to retail investors, everyone is predicting total doom and collapse. From what I've read, this is usually indicative of the bottoming process. Its all sellers capitulating. Compare this to the recent top in the housing market. When houseflipping clubs started sprouting up in 2004-2005, and everyday folks who never swung a hammer discussed flipping projects around the water cooler, it was time to run like hell from the housing market. My mother, who is in her mid-50s and can't work a screwdriver, asked me to team-up with her and flip a property in 2005 (it never happened). My point? Extreme investor sediment is a strong contrarian indicator.

The flipside of this argument is that S&P 500 earnings are looking to be in the $35-$45 range for 2009. Put a 15 multiple on that # and we could see 600....:?. That's another 15% drop.

I'm a buyer here. Jacking up the 401k to +20% again. Non-retirement funds are going long. Looking for companies at or near book value with no debt.

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We just ramped up the 401K, too, but in our case it's just to get the full match and no more (that's all we can afford, and can't even really afford that but I can't pass up the opportunity - we had temporarily stopped contributing but not because we didn't think it was a good idea to invest, but because we wanted to throw that money at other investments, even knowing we were forgoing the match.) And the 401K contributions are all to FLSTX (or the 401K company's proprietary version of the same.)

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Wow. I like the top ten holdings of FLSTX, but its quite aggressive. Certainly taken a few licks lately! I'm also in value & growth, but 50% international. And not "leverage-focused".

Good luck. And keep getting that match!!!! That's literally free money.

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It didn't seem much like free money when the value of the account was going down each pay period by more than the amount of the free match! xdrinkndropX (just felt like using that icon)

Hopefully that will turn around sooner or later, though. Any day it chooses to turn around is a fierce turnaround. :D

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My wife was doom and glooming me the other day and I was telling her exactly what I was just reading in this thread. Times like this make people like us with a little expendable income wealth if we invest wisely. My job is in the oil and gas industry and is fairly secure. While there have been cut backs due to the dropping of oil prices, I don't fear for my job (famous last words).

Now, here is something I want to run by you guys. Keep in mind I have never bought any stock before in my life but I've always been interested in investing.

Fannie Mae and Freddie Mac... Bad idea? It closed at .38 today. Now I don't know much about balance sheets, and I did recently read that Fannie Mae is current in a negative equity situation financially, but I also don't think that the government would let Fannie Mae or Freddie Mac go under. It would be total disater to the liquidity of the mortgate market.

I also know that eventually this housing market is going to turn around, and when it does I would imagine the stocks would go up in tandem. I can buy over 12,000 shares for about $5000 and sit on it for a while. What if it makes it back to $5 a share one day?

Of course the world is full of what ifs....

Eddie

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China, China, it's all you ever talk about!
The Chinese market was up ANOTHER 6% last night. The difference between the Chinese (savers and investors) and US (consumers and borrowers) has never been this stark.

To Eddie, Fannie and Freddie are so insolvent that their equity should be 0. It will just take some time to get there. When liabilities exceed the asset values of the company, shareholder equity gets wiped out. I would say, at best, it is an extremely high risk venture to buy their shares now. If you need the money EVER, I wouldn't touch it with a 10 foot pole.

If you are in the oil & gas industry, buy what you know! HTE looks interesting at this price level if you have a five year time horizon. Canadian Oil Trust. They pay monthly dividends as they pump out of their reserve in Western Canada. Note that Canada will withhold tax from the dividends before it gets deposited every month, but its fully refundable and credited as foreign tax paid on your tax return.

- let me add that holding divvy producing oil trusts in a Roth is a fantastic way to avoid paying tax on all future dividend income.

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I got rid of my Etrade and bought Sandridge Energy.

That was only $100 worth, so it's no big deal. My husband has $300 worth of Etrade, and I figured I could just unload that $100 worth of going-nowhere and buy something else beaten up and battered down for completely different reasons. This is in my Roth, and it was just some leftover odds-and-ends money that I didn't want to leave in cash. So we'll see if SD remains at $6 per share forever. If it goes lower, it's not like losing $30 or $70 is going to make or break me.

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This market is a real downer :(....but look on the brightside- if you are acquiring and don't have to liquidate any of these equities in the next few years to live off of (sorry retirees), you can acquire substantial holdings rather quickly.

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So what do you think, jq? Didn't you mention that you think the WCS (worst case scenario) would be another 15% shaved off the Essenpee? This was a few days ago, and obviously, huge percentages can be chopped from one day to the next. I think when you said this, things were essentially where they are right now, before the rally and then the rally-eraser.

The husband and I have twin Etrade accounts that we "started" in mid-October, after the Oct. 10 shakedown. They were started with the salvaged remains of other accounts. That's not important, though... I'm saying we started accounts and put some additional money into them along the way and withdrew small amounts too (in my case) and I stopped computing the cost basis a little while ago because it got too tedious and meaningless for me, a non-accountant (you'd be surprised what I can do with no training, though - just my brain and a pencil and calculator.)

While we did add to these accounts some, the bulk of the money was there from the get-go, in October. So I just computed and found that in grand total, his account is down 65% and mine, 63%.

He was just saying he didn't think we'd see much more than another 15% damage, each. I mean, that was according to his WCS estimate of an 80% loss for both of us. Granted, we don't pick average index stocks, so on bad days we tend to do twice as badly as the indexes.

Any predictions now? I'm so desensitized now that 80% or 90% down for me since October is like, "Hmm... will it be 70%? or 90%? What's for lunch, btw?" But even with the stocks I pick (no financials, I mean things I've mentioned before like SQM, MOS, and I admit, EWZ... aggressive and maybe un-smart picks but not weird penny stocks) any wild guesses on your part? I'm trying not to ask, "How low can all of this go???" You don't have to guess for me personally, but for the market, I mean. If you don't mind guessing! :)

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well, no one has a crystal ball. But fundamentally, you have to look at the S&P500 earnings. They are in the toilet. Probably between $35-$45 for '09. Stick a reasonable multiple on that (15x) and you have S&P at 600. In other bear markets, the S&P multiple shrunk to 10x. That would put S&P at 400. You'll have to do the math but that's like 40% down from here. I don't foresee that, but who knows? I would certainly welcome it as I am buying with both fists right now. And like most people, I like to buy at the lowest cost possible...

On the other hand, there is so much cash on the sideline that the treasury markets are making all-time highs. It is bubblicious to say the least. When that monster breaks, and it will, all that wealth goes somewhere. Some of it must flow into the underpriced public companies. We could see a monster bounce. Where we are five years from now, who knows. But I think we're setting up for one hell of a rally in the short-term- I'm going long into this market (mostly outside of US).

One other point- there are rumors that one way Geithner plans to save banks, er at least to assist banks, is to suspend mark-to-market accounting (which is causing them to price long-term assets close to zero). If this rule is suspended, we could see bank stocks double or triple overnight, and the entire market rise over 1000 points. That's another x factor out there right now. :wink:

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One other point- there are rumors that one way Geithner plans to save banks, er at least to assist banks, is to suspend mark-to-market accounting (which is causing them to price long-term assets close to zero). If this rule is suspended, we could see bank stocks double or triple overnight, and the entire market rise over 1000 points. That's another x factor out there right now.

I think Geithner will do this. But, if you believe in the Efficient Market (EMH), then you'd believe that Mr. Market already knows/expects this and that this information is already reflected in current market prices...

How about Citi Corp being treated like a penny stock, with ten times its average volume every single day. You either buy and triple your money or you lose it all. Buying Citi long is essentially the same risk as a derivative. Crazy..

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Its insanity buying C. They'll be diluted to infinity. And it'll take 'em 100 years to pay back the crushing debt to the point that they'll be shareholder equity again.

Efficient market theory? I believe markets are efficient, but over periods of time. In short-term situations, I don't think it holds water. Besides, if the market "priced in" a 10% chance of mark-to-market suspension, then if it happens it still has 90% to go. The info only creates a hedge until it occurs.

I think WFC may be a buy at this point. PNC too (maybe). But I'm not a gambler.

GE looks like its going to $0. That may put a real emotional toll on the markets. They are leveraged up to their eyeballs. If asset prices recover (& soon!), then it may be the buy of a lifetime. But again, that's like playing roulette.

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