# Finding a bottom -



## northdakotakid (May 12, 2004)

http://www.marketwatch.com/news/story/u ... _Mod_mktwN

Well, there is one thing that is certain... there is more pain to come.

*U.S. stocks spiral to fresh five-year lows at close
By Kate Gibson
Last update: 4:13 p.m. EDT Oct. 9, 2008

NEW YORK (MarketWatch) -- 
U.S. stock losses on Thursday accelerated sharply in the final 30 minutes of trade, pushing the Dow Jones Industrial Average under the 9,000 level for the first time since August 2003, as the globe's credit troubles continued to spark panic.

The Dow Jones Industrial Average ($INDUow Jones Industrial Average dropped 678.91 points to 8,579.19, leaving it nearly 40% lower than its year-ago high of 14,164.53. 

The S&P 500 declined 74.8 points to 910.14, and the Nasdaq Composite ( shed 95.21 points to 1,645.12*


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## USSapper (Sep 26, 2005)

perfect, everythings on sale.......Who wants to pick up Ford real cheap?? Thats dang near a for sure money maker there in the future


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## northdakotakid (May 12, 2004)

Wait and see how many retirees are back at work... luckily the government has a great tax program that incentivises them to do so and to rely less on social security... yeah right, just like every other social program there is no incentive to do it yourself.


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## R y a n (Apr 4, 2005)

Stocks close lower for the 7th straight day...

The question becomes whether 8500 will be the bottom...

Watching the ticker now.. DOW is down almost 700 again today, well below 10,000, heck even 9,000 would be welcome at this point.

They were saying that the DOW has lost over 7 % today, and that some folks are down more than 30% in the value of their investment portfolios over the last month...

GM is now trading at a level it hasn't since 1953 

I listened to an analyst today who said if this isn't a crash, it smells like a duck and quacks like a duck, what else could it be?

Scary stuff


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## MSG Rude (Oct 6, 2003)

R y a n said:


> I listened to an analyst today who said if this isn't a crash, it smells like a duck and quacks like a duck, what else could it be?


Don't look now but that 'duck stuff' is back.....

oke:


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## USSapper (Sep 26, 2005)

Wow, personally, I see nothing but opportunity knocking right now for me.......... I feel for the upcoming retirees......But maybe a recession is good for us....it keeps us in check. Am I correct here or out of line with that statement?


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## R y a n (Apr 4, 2005)

It's ironic that a year ago today, the DOW hit it's all time peak high..

It's scary to realize that half of the drop from the high... fully half... has happened since October 1st!

Here's the raw numbers that were accurate as of this posting:

*% Change in last 365 days*

Financials Down 56%
Telecoms Down 44%
Industrials Down 39%
Discretionary Down 38%
Info Tech Down 36%
Materials Down 35%
Energy Down 31%
Utilities Down 29%
Health Care Down 25%
Staples Down 12%

Consider these jaw dropping facts

Since October of 2007

*30% of S&P 500 is DOWN 50 %*

*Half of S&P 500 is DOWN 30%

Only 25 of the 500 are higher

75% of the Dow is DOWN 25%*

The Dow's 7.3% drop today is the biggest one day decline since October of 1987


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## R y a n (Apr 4, 2005)

MSG Rude said:


> R y a n said:
> 
> 
> > I listened to an analyst today who said if this isn't a crash, it smells like a duck and quacks like a duck, what else could it be?
> ...


:lol: good point.

I was so wrapped up in the amazing numbers that I was in shock ...

didn't even think about your fun quote


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## R y a n (Apr 4, 2005)

USSapper said:


> Wow, personally, I see nothing but opportunity knocking right now for me.......... I feel for the upcoming retirees......But maybe a recession is good for us....it keeps us in check. Am I correct here or out of line with that statement?


Nope for an investor like you this is a prime time to invest if you have liquid capital. It just becomes a matter of timing. You would be wise to wait a bit longer to see where the true floor will be set at.

For someone who currently is invested, unless you are withdrawing $$ for retirement in the next 3-5 years, you should remain put.

There simply isn't many viable alternatives right now, as the entire world is pulling back. Even the foreign markets are retracting and readjusting.


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## MSG Rude (Oct 6, 2003)

R y a n,

What you have stated and also that of Sapper I too feel is correct. Except for the point that I feel that the time for investment or re-investment is not yet at hand.

Here is the gambling part of the equation. One must personally assess the correct time to put one's funds back into the playing field from the 'liquid asset' field.

I personally believe that the time is closer then not but not yet there. I plan on moving a lot of my assets into the playing field also. I never had anything invested before this as my wife and I are 'self investors in self' and all of our investing assets are as liquid as water "buried in the back yard in an old coffee can".

Investing now means taking more of a loss before turn-around therefor taking longer to achieve a higher rate of return after re-couping loss.

Sapper, what I mean is I think you should hold your horses a bit yet before taking your cash and buying stuff.  Just fun'in with ya.


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## Chaws (Oct 12, 2007)

My thoughts would be that the US market will start to self right over the next couple trading days. As others have said, if you want to gamble hold off on buying up stocks and wait for the bottom... However, perhaps the bottom is only a couple more percent at max and the upswing of this could happen extremely fast.

I'm personally shifting money around and ready to throw some coin at the cause either tomorrow or Monday.


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## USSapper (Sep 26, 2005)

Chaws said:


> My thoughts would be that the US market will start to self right over the next couple trading days. As others have said, if you want to gamble hold off on buying up stocks and wait for the bottom... However, perhaps the bottom is only a couple more percent at max and the upswing of this could happen extremely fast.
> 
> I'm personally shifting money around and ready to throw some coin at the cause either tomorrow or Monday.


Exactly, you dont know what the floor is until your either mopping your face with it or its coming back up, which could easily happen faster than it went down, and a guy could easily miss the boat. (Rude: Miss out on the opportunity)

Ive got mind mind set on a quarter or two or three or four of land right now....then maxxing my ROTH IRA for the next 6 years


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## USSapper (Sep 26, 2005)

BTW Rude, thanks for putting it in Nasty Girl terms


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## taddy1340 (Dec 10, 2004)

Agreed Sapper...I got $10k waiting to be put somewhere. After 9/11 I bought a shiat ton and should have bought more. This is an opportunity for those who have more time left in the market compared to those in the 5-yr retirement window. Sucks to see my parents going through it...retirement is now even further down the road.

I moved all my TSP funds to the G fund several months ago after losing about $3k. I can't imagine what it'd be down now... :eyeroll:


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## the professor (Oct 13, 2006)

thank god im only 26....how many peaks and valleys do you think i will see before i retire!  things are definetely going to be interesting for the next couple of months. my 401k is doing surprising well considering the markets; i was one of only a handfull to have a positive quarter; everybody else was negative (we have a friendly quarterly contest to see who gets the highest return for the quarter...just to get discussion going on sound investment strategy)


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## northdakotakid (May 12, 2004)

Land... wait a year... there is a land bubble that will burst as commodity prices right themselves also...

AS far as a quick recovery... well if banks are not willing to lend to each other and the overnight rate is as high as anyone has ever seen... you will be looking at a 7-8% unemployment mark next year... Federal decifits that are mind boggling... plus the next president wants to raise taxes...

That being said, I am sure the recovery will be quick and painless... it is time for Americans to come to grips with their obsession with funding their living expenses with credit.

How do you think it would affect your spend patterns if you could not afford to carry a balance on your credit card for over 45 days because the interest was so steep... if you could have access to credit that is...

What if you could not get a loan for a boat or a 4 wheeler? Could you afford to pay cash for those items??

Anyone who thinks that this crisis will be quick... and the recovery will be quick needs to look at the fundementals of the problem. We survived on a consumer driven economy... actually we became dependant upon it. Business models were built off if it... and now we are in an economy where even the largest companies in the world can not get loans to fund their expenses....

A good question is... How long did it take for us to become a consumer driven economy?

A better question is... How long will it take for our economy to adjust to a sharp reduction in the ability for consumers to borrow in order to spend?

less credit = less buying power

less buying power = less sales

less sales = more inventory

more inventory = less work effort to meet reduced demand

less work effort to meet reduced demand = loss of jobs

loss of jobs = less buying power

less buying power = less sales

---- Round and Round and Round ----

It will take time for consumers to reestablish their equity positions to a point that they will again be credit worthy so they can again build "wealth"


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## USSapper (Sep 26, 2005)

NDK, I agree with most of what y ou said.......However, this is only my opinion, that land prices wont drop for the most part. You may see the land thats going for 3-4000 an acre not fetch that much anymore but the land that is going for 500-1000 an acre will stay steady an slowly keep going up. The best time to buy wouold be in about a month to the next 6 months......Most farmers know that itll be a tough few years...........


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## MSG Rude (Oct 6, 2003)

USSapper said:


> NDK, I agree with most of what y ou said.......However, this is only my opinion, that land prices wont drop for the most part. You may see the land thats going for 3-4000 an acre not fetch that much anymore but the land that is going for 500-1000 an acre will stay steady an slowly keep going up. The best time to buy wouold be in about a month to the next 6 months......Most farmers know that itll be a tough few years...........


I have to agree with you one this one Sap. Land = Not making any more of it.

I am eyeing a piece of land next to mine at the lake I am on. 5 acre parcel with 250+ frontage going for less then I paid for my piece right next to it.


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## omegax (Oct 25, 2006)

Oh, land's going to drop too when nobody can get a loan to buy it. There's just going to be a lot of it on the market...

Hold on tight! I'm concerned about a lot of jobs, actually. There are going to be firms that need short term loans to make payroll that can't get them, and have to lay people off. Manufacturing is going to get hammered... think about it: They need to keep producing stuff for people to buy to stay in business, but until the stuff is sold, they need loans to make payroll. They'll cut payroll long before they start to worry about the checks bouncing. The ones who are going to be really hard hit are going to be big-ticket items that people usually buy with loans, like cars or machinery, or ESPECIALLY recreational stuff. I would not want to be an employee for somebody who makes big-ticket recreational items like RVs, boats, ATVs, motorcycles, snowmobiles, etc. right now.


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## northdakotakid (May 12, 2004)

Well, I agree that they are not making anymore of it... that is for sure but I think that there are few other variables that are present that will put downward pressure on prices.

Commodity Inflation & A Strong Dollar

Just like there were large speculative pressures in the Crude Oil Markets there was also a large amount of speculation in other commodity markets. As we saw several of the larger instituional traders had to meet their margin requirements so they had to create markets at higher trading ranges (to widen margins). In doing so prices in commodities were pushed higher and these large institutional traders straddled the price and made their margin on the spread.

This "false" price increase in commodities caused several cost inputs to increase because the price increase created stronger demand for access to farm land along with a short term increase in income.

Farmers have priced in these raises in commodity prices to their total acreage and have increased their expenses by buying new equipment, new land tracts, increase in seed prices, increase in fertilizer, increase in fuel....

.... but what happens when corn prices fall out because ethanol plants can no longer compete with $80 barrel of oil?

... what happens when farmers have locked in fixed costs and now their margin is narrowed because of commodity prices "correct"?

Then you throw in the credit crisis... one largely untalked about aspect of the recovery is a Strong Dollar. Because deflation is now becoming a concern, which happens in a recession, the dollar will strengthen and stave off foreign investment. This foreign investment includes shiploads of wheat, corn, soybeans... every export because fireign currencies are no longer creating a competitive advantage for foreign governments to buy American Goods.

On top of that there has been a 40-50% reduction in the price of the three largest shipping fleets in the world which means there has been a global slow down in the consumption of goods and thus demand for shipping.

Again, hold on to your hats... our world is about to step back into the 70's... were it was a cash and carry economy. But I have no doubt we will make it through this... but both us as the consumer and the market will not be the same. It is going to take years to get back to the 14000 mark on the DOW... because we have lost the leverage that provided an accelerated growth in our economy.


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## northdakotakid (May 12, 2004)

To your point Omegax... you will see a lot of manufacturers that will reduce their plant capacity to a very low rate... especially durable goods.

Which again means large layoffs...

But just like my dad did when the recession hit in the 80's ... you work whereever you can to make ends meet. This is just a reality that the American people must come to... and the earlier you do this the better off you will be.


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## Gildog (Jan 30, 2007)

Farmers have priced in these raises in commodity prices to their total acreage and have increased their expenses by buying new equipment, new land tracts, increase in seed prices, increase in fertilizer, increase in fuel.... 
==========
thus the adage...if you're going to grow $9 wheat, or $13 beans, or $7 corn...you better sell much of your production at those prices.

It's not easy to pull the trigger and make futures sales a year or two out. It's not easy seeing that money go for margin calls (it's helped to see much of it come back recently though!)

But it's much harder to spend the money and upgrade, only to see the price justification disappear!


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## duckp (Mar 13, 2008)

Oh yeh,pay down your credit,bury some cash,immediately lower your spending-especially recreational spending,and be prepared for some very tough years ahead.


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## USSapper (Sep 26, 2005)

I knew I shoulda bought in on friday. We gained back over 10% today


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## taddy1340 (Dec 10, 2004)

USSapper said:


> I knew I shoulda bought in on friday. We gained back over 10% today


I wanted to this morning as well, but I was out duck hunting! Will do in the morning...


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## duckp (Mar 13, 2008)

Or an opp to get out 11% higher????
Magic wands don't exist.


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## Gildog (Jan 30, 2007)

duckp said:


> Magic wands don't exist.


that's what she said


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