US Economy

[25psi_Elise_Killer]

Originally Posted by rraicu

Hey 25,

Why are you short the broker dealers? What's the insight you have? What about exchanges like CME or ICE?

I'm just playing the subprime/prime/credit/liquidity meltdown theme and jumping on the bandwagon of all the funds investing in MBS's who got too greedy and are now paying the price. Plus, the financial sector is the biggest weight out of the 10 economic sectors in the S&P 500, so i'm sorta using it as a hedge on my long positions. I normally trade based on technical analysis.

As for the exchanges, i can't keep up with them because they are all getting bought out by each other.

[25psi_Elise_Killer]

watch symbol VMW toomorow morning. Should be interesting with a ton of volume...

[rraicu]

yeah i've known about VMWare since last year. Only wish I could have been a part of the initial placement. Nice 1st day gain.

[25psi_Elise_Killer]

Originally Posted by rraicu

yeah i've known about VMWare since last year. Only wish I could have been a part of the initial placement. Nice 1st day gain.

VMW is only +83% today. Not too shabby...

[25psi_Elise_Killer]

Put options rock!!!! I'm making money on other people's miseries

[smoseley]

Originally Posted by 25psi_Elise_Killer

Put options rock!!!! I'm making money on other people's miseries

Careful!

[rraicu]

Originally Posted by 25psi_Elise_Killer

Put options rock!!!! I'm making money on other people's miseries

hey it pays to know when to buy insurance.

[25psi_Elise_Killer]

Not insurace or a hedge on a covered position, just a Naked Put. Anyways, position closed out with small profit.

[rraicu]

this was your broker/dealer index trade?

[25psi_Elise_Killer]

Originally Posted by rraicu

this was your broker/dealer index trade?

Ya

[25psi_Elise_Killer]

Hmm...after this week, might have to hold off retirement for a little longer...

[dk10438]

personally I hate options. I've never made any substantial money off of them using various strategies. It's just too hard to predict both price movement and timing at the same time imo....

[bburgh]

I would like to see the report you mention

[IamBatman]

I like to hear the responses of the naysayers to recent news.

Not that I'm gloating, I never wanted this to happen and my portfolio is down significantly even with my best efforts to invest in places that I thought were safe.

[Lotus Fury]

Because the other 77% of the economy is still in good shape & any carry over from the housing bubble/credit crunch will take longer to affect those areas. That will hopefully be mitigated by the low dollar and the exports it helps product. Real Estate and Real Estate related account for 23% of the economy, that includes furniture, home improvements etc.

Please don't judge the overall economy by the stock market. That's a bad panic move that only serves to make people like 25psi_Elise_Killer money.

[IamBatman]

Lotus Fury, I really hope you are right, but didn't the great depression start with the stock market drop?

3 of the biggest source of wealth in the US is under extreme pressure right now: credit, real estate, and stocks. I don't even want to know how much wealth will disappear by the time this is all over.

[Ginetta]

You will see a relief bounce here before things get really bad.

Look for china and other emerging markets to breakdown before it gets really bad in the US. The economy is still very strong and people are already talking about the FED making an 'emergency rate cut'. The consensus never calls the top to markets, its when people are complacent and gung-ho when the bottom falls out.

True this is painful, but we arent anywhere near 1998 with the credit debacle and russian defaults.

[IamBatman]

Originally Posted by bburgh

I would like to see the report you mention

I believe this is the report Jordan is referring to. (Jordan, correct me if I'm wrong)
http://www.recharts.com/reports/CSHB...CSHB031207.pdf

this pretty much sums up how and why this is all happening. Many of the charts I posted were from this report.

[turbophil]

I manage a portfolio of about $350mm for a relatively small number of folks and work for a large Wall Street firm... Threads like this are always entertaining...

It's partly interesting because in general my wealthier clients are calm and cool during these times even though they lose more money (on an absolute basis) than my less wealthy clients. THe smaller clients (Less than 1 million invested in marketable securities, so Ex house, art, cars, etc...) are often trying to find ways to take on more risk with their portfolios to try and "make it big" or take advantage of what they perceive as an opportunity. My wealthier clients rely on their income and career creativity to truly create wealth and rely on me and my team to preserve their wealth and legacy... Furthermore, the wealthier clients do LESS trading, LESS thinking about their stock market investments and consequently have BETTER performance... I guess they learned to focus their minds on the things they know best (their business) and find good folks to handle things they know less about...

In any event, a couple tidbits...
1) You're best off creating an investment policy for yourself and sticking with it for 12-18 months, no less. Yip, throw away your e-trade login A solid investment "mix" will liekly work for 18 months without touching it.

2) Don't "short." That's like betting against the house. Therefore it works far less than being long. "Long" investors win over "shorts" -most- of the time. THe worst thing that can happen to a "short" trader is being right on his/her first time or two trying it. All of a sudden a trader will confuse Luck with Tallent. Going to cash is almost as bad as shorting.... Remember that money is made by time in the market, NOT timing of the market...

3) Stay balanced. For goodness sake, own some friggin bonds. Bond funds, CDs, individual bonds, something. If you have less than 20% of your portfolio in bonds, you're not investing wisely, regardless of where we are in the investment cycle or your age.

4) Find someone good for investment advice and spend your brain power on something that you have more control over, like your career, the business you're running, family, etc... Making it big in the stock market is about like getting rich as pro athelete. It doesn't happen to many people. Wealthy people got wealthy the hard way. They spent long hours each and everyday honing their skills, their careers, or their businesses. Then they saved when they could... Do likewise

Just a couple pennies for the jar...

Best,

Phil

[25psi_Elise_Killer]

Originally Posted by turbophil

I manage a portfolio of about $350mm for a relatively small number of folks and work for a large Wall Street firm... Threads like this are always entertaining...

It's partly interesting because in general my wealthier clients are calm and cool during these times even though they lose more money (on an absolute basis) than my less wealthy clients. THe smaller clients (Less than 1 million invested in marketable securities, so Ex house, art, cars, etc...) are often trying to find ways to take on more risk with their portfolios to try and "make it big" or take advantage of what they perceive as an opportunity. My wealthier clients rely on their income and career creativity to truly create wealth and rely on me and my team to preserve their wealth and legacy... Furthermore, the wealthier clients do LESS trading, LESS thinking about their stock market investments and consequently have BETTER performance... I guess they learned to focus their minds on the things they know best (their business) and find good folks to handle things they know less about...

In any event, a couple tidbits...
1) You're best off creating an investment policy for yourself and sticking with it for 12-18 months, no less. Yip, throw away your e-trade login A solid investment "mix" will liekly work for 18 months without touching it.

2) Don't "short." That's like betting against the house. Therefore it works far less than being long. "Long" investors win over "shorts" -most- of the time. THe worst thing that can happen to a "short" trader is being right on his/her first time or two trying it. All of a sudden a trader will confuse Luck with Tallent. Going to cash is almost as bad as shorting.... Remember that money is made by time in the market, NOT timing of the market...

3) Stay balanced. For goodness sake, own some friggin bonds. Bond funds, CDs, individual bonds, something. If you have less than 20% of your portfolio in bonds, you're not investing wisely, regardless of where we are in the investment cycle or your age.

4) Find someone good for investment advice and spend your brain power on something that you have more control over, like your career, the business you're running, family, etc... Making it big in the stock market is about like getting rich as pro athelete. It doesn't happen to many people. Wealthy people got wealthy the hard way. They spent long hours each and everyday honing their skills, their careers, or their businesses. Then they saved when they could... Do likewise

Just a couple pennies for the jar...

Best,

Phil

Are you guys in the market for hiring a trader by any chance? I'm in the jobmarket right now and i'm pretty handy using Bloomberg and API.