Comments on: World Markets Plunge http://www.chrisperruna.com/2008/01/22/world-markets-plunge/ Tue, 17 Aug 2010 02:24:01 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Kevin Pickell http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16170 Kevin Pickell Wed, 23 Jan 2008 03:17:38 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16170 Just look at the markets falling. Oh what an advantage it is to be in cash, ready to buy... pounce into a well liquidated stock market. It is not important to know what will happen. I do not know what will hapeen. I do not know if we will have a severe recession. What is important is that you have cash ready to go. What is important is that you don't lose your cash on the way down. As Warren Buffet has been saying for years....it is more important to outperform a falling market than to outperform a rising market. If you are in cash now, you are far and away outperforming the falling markets just by sitting tight. Pessimism is the friend of the rational buyer. Just sit tight and wait. Such an attitude means that you are geared for tough times like these. You have a huge advantage over the speculator who just this morning was desparately trying to get his broker on the phone at 9:30am praying, begging, pleading to get out of this market before the collapse. I heard that Ameritrade online accounts froze up today. Oh what a desperate situation to be in...trying to get out fast and your brokers site goes down. I use Ameritrade and didn't even bother logging on. No, I slept like a baby last nite. Just look at the markets falling. Oh what an advantage it is to be in cash, ready to buy… pounce into a well liquidated stock market. It is not important to know what will happen. I do not know what will hapeen. I do not know if we will have a severe recession. What is important is that you have cash ready to go. What is important is that you don’t lose your cash on the way down. As Warren Buffet has been saying for years….it is more important to outperform a falling market than to outperform a rising market. If you are in cash now, you are far and away outperforming the falling markets just by sitting tight. Pessimism is the friend of the rational buyer. Just sit tight and wait. Such an attitude means that you are geared for tough times like these. You have a huge advantage over the speculator who just this morning was desparately trying to get his broker on the phone at 9:30am praying, begging, pleading to get out of this market before the collapse. I heard that Ameritrade online accounts froze up today. Oh what a desperate situation to be in…trying to get out fast and your brokers site goes down. I use Ameritrade and didn’t even bother logging on. No, I slept like a baby last nite.

]]> By: Chris http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16169 Chris Wed, 23 Jan 2008 02:33:43 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16169 J. Connor, I had several longs and a couple shorts heading into today’s opening. YGE is one of the longs and I just sat patiently at the opening. It dropped about 15% but finished the day on the plus side. As many of you know, I don’t hold stocks with hard stops due to mornings like this. It did violate the $22.50 level so I am concerned but still holding (with a small profit). I will monitor my longs very closely as the market looks to be weak heading into the next couple of weeks (and possible months). I won’t predict where it will go but I see weakness on my charts. What do I do in this type of market? I look for the highest rated stocks with the best relative strength ratings that hold their major trend-lines and moving averages during down days. I primarily look for stocks that may be higher 6 months from now and I buy when the risk/ reward is at least 3-to-1. I do swing trade the top candidates from time to time but I never make too much with this strategy. I short a few overbought stocks that have been high flyers and are now breaking down (but again, this is not my bread and butter). Finally, I do buy and sell calls and puts (another area I am not an expert in but I am learning and have been for about 5 years – still not where I want to be). Move to cash is my advice and wait to pounce on stocks that are trending. I’ll post them up when I see them. YGE was the last stock I bought on the long side. J. Connor,
I had several longs and a couple shorts heading into today’s opening. YGE is one of the longs and I just sat patiently at the opening. It dropped about 15% but finished the day on the plus side. As many of you know, I don’t hold stocks with hard stops due to mornings like this. It did violate the $22.50 level so I am concerned but still holding (with a small profit).

I will monitor my longs very closely as the market looks to be weak heading into the next couple of weeks (and possible months). I won’t predict where it will go but I see weakness on my charts.

What do I do in this type of market? I look for the highest rated stocks with the best relative strength ratings that hold their major trend-lines and moving averages during down days. I primarily look for stocks that may be higher 6 months from now and I buy when the risk/ reward is at least 3-to-1. I do swing trade the top candidates from time to time but I never make too much with this strategy. I short a few overbought stocks that have been high flyers and are now breaking down (but again, this is not my bread and butter). Finally, I do buy and sell calls and puts (another area I am not an expert in but I am learning and have been for about 5 years – still not where I want to be).

Move to cash is my advice and wait to pounce on stocks that are trending. I’ll post them up when I see them. YGE was the last stock I bought on the long side.

]]> By: Ragin' Cajun http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16168 Ragin' Cajun Wed, 23 Jan 2008 02:07:55 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16168 Chris, I was looking for your email address, but I can't seem to find it. I would like to ask you something offline. Would you mind emailing me @ matt504bt@gmail.com Thanks Chris,

I was looking for your email address, but I can’t seem to find it.

I would like to ask you something offline. Would you mind emailing me @ matt504bt@gmail.com

Thanks

]]> By: Kevin Pickell http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16166 Kevin Pickell Wed, 23 Jan 2008 02:00:21 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16166 Stock markets are a leading indicator. Stocks will be well liquidated when the definite reality of a recession hits the earnings reports. It will be too late if you are waiting for numbers to reflect the reality. The market is a leading indicator. It is a 'truth' machine. Don't listen to the talking heads on CNBC. Stock markets are a leading indicator. Stocks will be well liquidated when the definite reality of a recession hits the earnings reports. It will be too late if you are waiting for numbers to reflect the reality. The market is a leading indicator. It is a ‘truth’ machine. Don’t listen to the talking heads on CNBC.

]]> By: J. Connor http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16162 J. Connor Tue, 22 Jan 2008 23:29:47 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16162 I think almost all investors (maybe not Traders though) feel the same way as you feel Dan. These so called "experts" know nothing more then we do usually (we are privy to most of the same numbers they have about the economy). The best way to judge the economy is through the markets themselves. Granted, markets may travel to extremes at times but for the most part the markets are the most knowledgeable "expert" to listen to. They can tell you what is wrong long before the fed or the experts. The markets tell us we are in a recession and I am inclined to listen. It has been saying so since mid July, early August. I know we reached highs back in October but if you notice these highs were reached on weak volume. I consider this to be the transfer of shares between the professionals to the avg. Joe. That will continue to happen over the next several months everytime you hear these "experts" tell you that, "stocks are on sale, right now is the time to buy". Wrong! Then the market will fall lower after each subsequent false rally and the avg. Joe is the one left holding the big losses not the pros. Follow the trend of the market at all times. 3 out 4 stocks follow this trend and so will I. Typically the Russell will make its move first coming out of a Bear, so follow this closest. That's my take, I am curious how Chris handles times like these. Do you play the small bounce back rallies? Do you use these rallies to add to your short positions? I am a couple months new to your blog and really enjoy and appreciate the work you do here. Thank you. I think almost all investors (maybe not Traders though) feel the same way as you feel Dan. These so called “experts” know nothing more then we do usually (we are privy to most of the same numbers they have about the economy). The best way to judge the economy is through the markets themselves.

Granted, markets may travel to extremes at times but for the most part the markets are the most knowledgeable “expert” to listen to. They can tell you what is wrong long before the fed or the experts.

The markets tell us we are in a recession and I am inclined to listen. It has been saying so since mid July, early August. I know we reached highs back in October but if you notice these highs were reached on weak volume.

I consider this to be the transfer of shares between the professionals to the avg. Joe. That will continue to happen over the next several months everytime you hear these “experts” tell you that, “stocks are on sale, right now is the time to buy”. Wrong! Then the market will fall lower after each subsequent false rally and the avg. Joe is the one left holding the big losses not the pros.

Follow the trend of the market at all times. 3 out 4 stocks follow this trend and so will I. Typically the Russell will make its move first coming out of a Bear, so follow this closest.

That’s my take, I am curious how Chris handles times like these. Do you play the small bounce back rallies? Do you use these rallies to add to your short positions? I am a couple months new to your blog and really enjoy and appreciate the work you do here. Thank you.

]]> By: Darin http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16160 Darin Tue, 22 Jan 2008 20:00:21 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16160 We are only in economic trouble to people who leave their money management to someone else. Unfortunately, that is the majority of the investing public. What is "driving the bear market" doesn't so much matter as recognizing it and acting accordingly. I am amazed that some people seem to think the market must always go up. They seem to forget that the market needs time to cool and catch its breath. And whether it takes a regular correction or a bear market to do it doesn't matter. Whats important is to realize that new opportunities are being created. so, keep your powder dry and be ready. We are only in economic trouble to people who leave their money management to someone else. Unfortunately, that is the majority of the investing public. What is “driving the bear market” doesn’t so much matter as recognizing it and acting accordingly. I am amazed that some people seem to think the market must always go up. They seem to forget that the market needs time to cool and catch its breath. And whether it takes a regular correction or a bear market to do it doesn’t matter. Whats important is to realize that new opportunities are being created. so, keep your powder dry and be ready.

]]> By: Dan http://www.chrisperruna.com/2008/01/22/world-markets-plunge/comment-page-1/#comment-16151 Dan Tue, 22 Jan 2008 12:02:34 +0000 http://www.chrisperruna.com/2008/01/22/world-markets-plunge/#comment-16151 I admit. This has been a hard subject for me to grasp. Some “experts” say we are in a recession. Some say we would have killed for the type of economic numbers we now have not too long ago and that we are in good shape. My research so far into what recessions are and what the actual numbers are tend to make be believe the latter. If we are in economic trouble, why aren’t the numbers showing it? If we are not in trouble, what is driving the bear market? I admit. This has been a hard subject for me to grasp. Some “experts” say we are in a recession. Some say we would have killed for the type of economic numbers we now have not too long ago and that we are in good shape. My research so far into what recessions are and what the actual numbers are tend to make be believe the latter.

If we are in economic trouble, why aren’t the numbers showing it?
If we are not in trouble, what is driving the bear market?

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