18 replies to this topic

[Cirrus]

With the current global monetary system everyone has to be a very LT bull. That is unless you believe the Central Banks have the cajones to call in this leverage a create a global depression...or at least a US depression.

If there are any depression candidates IMO, it's not U.S, but China, India and Brazil.

NAV...I disagree. Who has the cash? It's not the US. China has nearly $1.5 trillion in the bank and are accumulating tens of billions monthly. The US has trillions of IOUs and are exporting $70 billion more per month. I would strongly argue that the average Chinese consumer is substantially less leveraged than the average US consumer. Explain your reasoning given these facts as I see the US very vulnerable.

Also, their people are hard working, savers, well-educated and more family oriented than ours. In some cases they have substantially less obstacles to business than does the US. I will give you their current basic legal and banking systems are well behind ours and lacking. Overall they have some tremendous advantages and a couple of big disadvantages. However, when you look at each country like a corporation the US is FNM (if that good) and China is Exxon Mobile as far as balance sheet, income statement and cash flow statement.

[NAV]

With the current global monetary system everyone has to be a very LT bull. That is unless you believe the Central Banks have the cajones to call in this leverage a create a global depression...or at least a US depression.

If there are any depression candidates IMO, it's not U.S, but China, India and Brazil.

NAV...I disagree. Who has the cash? It's not the US. China has nearly $1.5 trillion in the bank and are accumulating tens of billions monthly. The US has trillions of IOUs and are exporting $70 billion more per month. I would strongly argue that the average Chinese consumer is substantially less leveraged than the average US consumer. Explain your reasoning given these facts as I see the US very vulnerable.

Also, their people are hard working, savers, well-educated and more family oriented than ours. In some cases they have substantially less obstacles to business than does the US. I will give you their current basic legal and banking systems are well behind ours and lacking. Overall they have some tremendous advantages and a couple of big disadvantages. However, when you look at each country like a corporation the US is FNM (if that good) and China is Exxon Mobile as far as balance sheet, income statement and cash flow statement.

I will post my reasoning after market close.

[PorkLoin]

Hey NAV,

I'm pretty much sitting tight, mainly because I'm lazy. Things started going downhill in May per the breadth and volume stuff I watch, and I should have learned not to trade or maintain positions against them. Well doggone it - I have learned, but my execution hasn't been worth a diddly.

Edit: (and I have to laugh - I posted then saw It is not the knowing that is difficult, but the doing at the bottom of your posts.)

I've been stopped out of a small amount of holdings, but not nearly enough for me to feel good. I messed up last year by not selling heavily in May and trying to buy back in June-July-August, and this is setting up to be the same way. Or, maybe there won't be the bounceback and continued big rally like we got into the recent high, which of course would be even more painful.

Wouldn't surprise me at all to see us go on down to SPX 1380 and Dow 12,500 or so, and if so I'd be looking around for things to buy. Did add some HTE on Tuesday since it had a pretty good plunge and was yielding over 15%. Even after yesterday it's above my buy point and I know the company, love the yield, and like it for a long term hold.

That's one small bright spot while I'm down probably 10% this week alone. I agree with Cirrus on the long term bull/inflationary environment deal. Don't think the central banks will opt for real deflation. I acknowledge the possibility of deflation and that in the US the Fed might not be able to stop it, and if I see real signs that the "liquidity boom" has ended then I'll have to change strategies. For now, I expect the trends of the last 4-5 years to continue.

I was late getting back into Bull mode in 2003/2004 too, after the plunge of 2000-2002.


Best,

Doug

Edited by PorkLoin, 27 July 2007 - 09:35 AM.

[NAV]

Hey NAV,

I agree with Cirrus on the long term bull/inflationary environment deal. Don't think the central banks will opt for real deflation. I acknowledge the possibility of deflation and that in the US the Fed might not be able to stop it, and if I see real signs that the "liquidity boom" has ended then I'll have to change strategies. For now, I expect the trends of the last 4-5 years to continue.

I was late getting back into Bull mode in 2003/2004 too, after the plunge of 2000-2002.


Best,

Doug

The agree with both you and cirrus that the inflationary run will continue into 2009-2010. That's what the LT wave patterns are saying. TWT

[PorkLoin]

Esther: I have a long term account that gets long and stays long till I get a bear signal. So, I'll give a ton back when it hits. I already know that. The long term accounts are made up of IRAs and 401Ks and I add to them monthly and buy monthly - no matter what the market is doing. I own mutual funds in them. Rarely do I even shift that money around to others funds. Maybe once a year. Often longer.

Good point, Esther, and same for me in substantial measure. Mostly energy stuff for me, as well as international funds. All my new contributions go overseas or at least to Canada, and I think the US will continue to underperform. Long term holding has been great since 2003, and for many energy issues since 2000/2001... and of course one day the party will be over.


Best,

Doug

NAV:The agree with both you and cirrus that the inflationary run will continue into 2009-2010. That's what the LT wave patterns are saying. TWT

I used to be big on Eliott Wave, but lately it seems harder - if nothing else just a subjective feeling I have. Corrections don't go as deep or make the structures they "should." This month's decline could be better in that respect though. Long-term I have no idea on the wave patterns, and my opinion (at least for my current trading temperament) is that intermediate momentum, breadth and volume considerations should trump one's chosen count.

The market, being the beast it is, just might throw us enough of a decline to make a lot more people doubt the "long-term Bull" approach, even while it remains entirely valid.


Doug

[CNSZ]

With the current global monetary system everyone has to be a very LT bull. That is unless you believe the Central Banks have the cajones to call in this leverage a create a global depression...or at least a US depression.

If there are any depression candidates IMO, it's not U.S, but China, India and Brazil.

believe or not, China is not going into a great depression even when they should be by western standard. if EVERYONE in China lose their job, most of them can still live by their current life style for another 5 to 10 years supported by their savings. The problem China is facing is how to make people spend the money they have saved, if 1/2 people in China spend money like what we do there, China will have nothing left to export. This is the biggest difference between US and China.

You may not believe what % of their income Chinese are putting into their savings. One oil company decide to not fill a commercial airplane because the company who owns the airplane did not pay oil company on time last month, the captain and fly attendants offered oil company cash on the spot in order for the oil company to fill up the airplane, so they can fly back home. They get US$12,000+ cash from their personal bank account. And remember that those fly attendants only make less then US$6000 a year.

[wyocowboy]

Good question to start this post Nav. Since I am a shift worker just coming off a 15 hour stint, I am more or less forced to take a longer term view - although on my days off I love to watch - and sometimes trade - the market. I am already stopped out of over half - well, actually it looks like 65% of my positions now. My stops are at 8% for individual equities. Why eight percent? Because 5 is too close and 10 too far - if you lose 10% you have to make over 11 back to break even. For mutual funds that I have (which are about all that is left), I use a simple trendline on a weekly chart. Shift workers tend to not sleep all that great, and lack of sleep means you are rarely in a sharp analytical mode to capture some of the fine nuances of trading. So the key rule is - Keep it Simple. Trendlines, Sentiment, Interest Rates, and Breadth are about all I can handle with my feeble mind. The market is starting to hit some extremes in new lows, MCO, odd lot shorts, etc. But until junk bonds stabilize, any rally is likely to be fleeting. But the lower it goes, the cheaper it gets - especially since it was not overpriced to start with. A panic presents a good opportunity to make far larger gains than normal.

[VolPivots]

Are you guys still long and strong and sitting tight?

Yep

Have you been stopped out ?

Nope, haven't lost a dime due to hedging and scalp trades.

Are you adding to your existing positions ?

Not yet, but definitely will be once the uncertainty settles....market can tolerate risk, but it hates uncertainty. If it goes to 1400 / 1360 or lower, even better.

The reason i am asking this is not to mock at anyone. But it becomes awfully quiet when this kind of a scary correction comes. When the market reaches new highs, we start seeing posts like "Ain't sold a dime yet" and other in-the-face remarks towards bears. What better point than now to understand what you guys are doing, so that we all can learn how you handle this kind of drawdowns and what your strategy at this point is ? I am sure anyone holding real money long positions will have some self-doubts at this point. Now here's your chance to come forward and explain your strategy.

Strategy: Manage money like a power plant manager...maintain the fixed asset (the core long-term long positions) and attempt to optimize it by trading around it. Near-term...listen, wait and pull the trigger when the opportunity seems ripe. And I always have doubts, long or short, VST, ST and LT

[NAV]

Thanks for all the responses guys.