Any advice for handling the current markets?

[rowes]

Hi,

I was just wondering how everyone has been holding up the last week or so.
I have been studying share trading and stock markets in my spare time for nearly 2 years and went from theory and paper to the real thing about 3 weeks ago. My timing has been impecable hahaha. So after my first 3 weeks my trading capital is down about 12% (could have been way worse). Not quite the start I had anticipated. I certainly didnt expect to get things right from the start but I thought the more ground work I put in before I started the better prepared I would be. After my 3 weeks I have questioned just about everything I have read because most things have not worked as anticipated but now the dust has settled for me anyway and i have accepted that this is just what happens, can happen and will happen again no doubt in future.

I guess my question sort of is what signals where there apart from hearing in the morning that things went pearshaped in the states, where there obvious signs that this was going to happen?

So now what do you do? close out of everything long (if your still have positions open) and sit back and wait and watch for whats happeing or go bargain hunting?

I'm interested to hear how some of you seasoned traders have handled the last week or so and what you think the probabilites are of things going further south or north or even east.

Rowes.

 

[mime]

I've spend ages in the stock market and I have found that the one type of stock that in predictable are the banks. Just look at all their graphs from the beginning. So if you want a safe trade buy something like the CBA. It's a very strong chance to go up.

 

[lbradman]

Hey mate just like you i've been reading and studying everything I can for like the past 5 years while the bull market surged forwards without me and just like you I only started my first real trades in july after backtesting laboriously a system to get confidence on only to get hit with such bad timing with the correction we have. I'm beginning to think I'm cursed or something since almost every trade I took in the first month went from a profit to a loss in such a short time. Anyway I've realised not to trade is a valid decision and because its so volatile my trendbased system should not be allowed to take trades now so I am out of the market completely until this volatility subsides. If the past few weeks isnt enough evidence for you to stay clear until the dust settles then I dont know what is and if you do have the courage to make trades now then I salute you.

 

[moneymajix]

Part of a post on another forum today. This is from an online newsletter:

Buy Fear, Sell Greed

When we're hit by these massive tidal waves of fear, you've got to be a buyer into that, not a seller. You can't sell fear. You've got to buy fear.

In times like these, it's like shopping at Tiffany & Co. (TIF) for Wal-Mart (WMT) prices. That's the strategy for making money in stocks. You can't worry about the other people losing their heads. You've got to keep your own.

You buy fear and sell greed. It worked for me in 1987, it worked for my old boss, B.P., and it will work for you in 2007, when you have the list of the strongest stocks in the strongest growth areas in the best parts of the market that are getting thrown overboard by panic selling. (If you want to get your hands on that list, click here.)

The bottom is coming. We've seen the signs. I can't tell you whether it will be tomorrow or next week or the next week, but it sure looks to me that if we're not there yet, we're very, very close.

You do not sell at bottoms, you buy at bottoms.

It's no different in 2007 than it was in 1987, my friends.

 

[wayneL]

Part of a post on another forum today. This is from an online newsletter:

Buy Fear, Sell Greed

When we're hit by these massive tidal waves of fear, you've got to be a buyer into that, not a seller. You can't sell fear. You've got to buy fear.

In times like these, it's like shopping at Tiffany & Co. (TIF) for Wal-Mart (WMT) prices. That's the strategy for making money in stocks. You can't worry about the other people losing their heads. You've got to keep your own.

You buy fear and sell greed. It worked for me in 1987, it worked for my old boss, B.P., and it will work for you in 2007, when you have the list of the strongest stocks in the strongest growth areas in the best parts of the market that are getting thrown overboard by panic selling. (If you want to get your hands on that list, click here.)

The bottom is coming. We've seen the signs. I can't tell you whether it will be tomorrow or next week or the next week, but it sure looks to me that if we're not there yet, we're very, very close.

You do not sell at bottoms, you buy at bottoms.

It's no different in 2007 than it was in 1987, my friends.

Except that we've only dropped 10% in 2007. 2007 is in no way comparable to 1987 when it dropped 40 or 50% or whatever it was.

Both markets were selling WMT at TIF prices, in 2007 we are just having a summer sale, but still Tiffany's prices. There are very few true bargains out there yet.

 

[reece55]

Except that we've only dropped 10% in 2007. 2007 is in no way comparable to 1987 when it dropped 40 or 50% or whatever it was.

Both markets were selling WMT at TIF prices, in 2007 we are just having a summer sale, but still Tiffany's prices. There are very few true bargains out there yet.

I have to say I'm with Wayne here.

In my opinion, this is just the beginning. I'm waiting for the sucker rally back up to 6000 on the S&P ASX 200 to really get the mum's and dads in long, but IMO, unless you are a very experienced day trader, hide your cash under the bed! It is clear that there has been a fundamental swing here, this is an economic changing climate about. Just look at the movement in the Yen for god sakes, it's insane.

Seriously though, just look at any IT dot com back from 98 - 00 and the charts look very similar to the spec miners - most of those tech stocks have never ever retraced back to those heights ever again. Take Cisco Systems, great Company (they make the best network hardware in the world, period!). In the tech boom (00) it got to just under $80 - today, it's $30 a share. It will probably take until at least 2010 to get anywhere near that value. Think FMG here guys..........

And for all those Buffet fans out there, just remember that buffet has a war chest of money to utilize and he will sit on his position for 10 + years - are you that patient???

If you do want to play, have a look at some of the IV's on options at the moment. If you are careful, now is the time to be exploiting that fact, because it will eventually cool down....

All the best to all traders and investors alike.

 

[theasxgorilla]

Seriously though, just look at any IT dot com back from 98 - 00 and the charts look very similar to the spec miners - most of those tech stocks have never ever retraced back to those heights ever again. Take Cisco Systems, great Company (they make the best network hardware in the world, period!). In the tech boom (00) it got to just under $80 - today, it's $30 a share.

LOL! I worked for HP back then and I remember getting a recognition award and being given stock options, they had a staggered maturation over 4 years. Strike price, $USD119. When I left the company they were down to about $22...needless to say they did not serve their purpose as a carrot-on-a-stick retainer. Over 5 years on, they still need a rise of around 33% to be back in the money.