PANIC!!!!! (Strategies for those long)

[guitar_legend]

Re: PANIC!!!!!

Hi all,

I bought me first stocks (ever) on Monday. Am I spitting that I didn't wait 3 more days? Absolutely. But that's life eh? Who saw it coming? I'm surviving and hanging in there and buying!

 

[chops_a_must]

Re: PANIC!!!!!

The message has been very clear from open.
opportunity to minimise losses---for those speculating have now been lost.
Punters well taking the majority of longs today was just that.

Here again is the story.

The eerily low volumes pushing prices gently up got me spooked. So I sold my only remaining exposed (as I see it) position. Luckily I don't have many losers. Should be fun over the next week.

Interesting to see the put/ call ratio on LHG on kauri's chart there...

 

[trading_rookie]

Re: PANIC!!!!!

Does History repeat?

In 1987 the crash happened in Oct yet a small correction actually happened in Aug.

Is this 'correction we had to have' just the calm before the actual storm, coming say April???

 

[Broadside]

Re: PANIC!!!!!

I think we will see a bit of a shakeout this next week or two, then a nice rise through to later in the year...then I will be moving into more cash

too much debt in the system, private equity groups awash with borrowed money, housing prices through the roof...crazy stuff

 

[Jimminy]

Re: PANIC!!!!!

Another shakeout will happen tomorrow similar to what happened on Wednesday. This is now 99% certain. Why?

China is down 3% already so this bodes extremely unwell for the US & Europe prior to the ASX opening tomorrow morning.

http://www.sse.com.cn/sseportal/en_us/ps/home.shtml

Expect some more carnage and if you are bold and astute enough some more buying opportunities.

 

[Dr Doom]

Re: PANIC!!!!!

I think the skill needed from here on is determining if secular trends have broken down. Also, reference back to past events are no guide to future events eg regrets about having sold a stock back in the May correction & subsequently gone up bare little resemblance to the current climate, and going back in to 'top up' on holdings so soon is asking for trouble until there is some sort of direction established. If you look back at the May correction there were several more weeks of selling before it took off again. However it's different this time due to -

- The commodities secular bull has probably finished, and will now trade on day to day supply demand fundamentals instead of a blind bull mentality.
- The US is borderline reccession
- China's financial infrastructure is being exposed for what it is, a debt driven liquidity smogasbord
- Japan carry trade

Bottom line is, give it a bit more thought before blindly going long this time around in the belief things will continue as they were - the cycle has to turn at some stage, maybe yesterday was the X factor that tips the balance?

Be prepared for a major company collapse soon (maybe the likes of General Motors) & the sub-prime mortgage contagion spreading to major banks. Not very nice but this is where we are at now in the experiment that started some 35 years ago. Be prepared.

 

[billhill]

Re: PANIC!!!!!

Another shakeout will happen tomorrow similar to what happened on Wednesday. This is now 99% certain. Why?

China is down 3% already so this bodes extremely unwell for the US & Europe prior to the ASX opening tomorrow morning.

http://www.sse.com.cn/sseportal/en_us/ps/home.shtml

Expect some more carnage and if you are bold and astute enough some more buying opportunities.

Not necessarily true. Dax and Ftse are up as are US market futures.
The situation may be stabalising.

http://money.cnn.com/2007/03/01/markets/stockswatch/index.htm?postversion=2007030106

 

[theasxgorilla]

Re: PANIC!!!!!

Bottom line is, give it a bit more thought before blindly going long this time around in the belief things will continue as they were - the cycle has to turn at some stage, maybe yesterday was the X factor that tips the balance?

I've heard this a few times this bull run already...tell me WHY it's different this time? Not a new set of negative circumstances (before it was oil, now it's Shanghai etc.)...the REAL reason.

 

[dodgers]

Re: PANIC!!!!!

The real reason is Risk

At some stage risk had to be re-priced. There's too many variables in the world for the valuations we've just been seeing (Iraq, US economy etc etc).

The US knows this. Whats happening at the moment is a re-pricing of risk. Doesn't mean the fundamentals have to change, merely a short-term re-adjustment...

 

[chops_a_must]

Re: PANIC!!!!!

Be prepared for a major company collapse soon (maybe the likes of General Motors) & the sub-prime mortgage contagion spreading to major banks. Not very nice but this is where we are at now in the experiment that started some 35 years ago. Be prepared.

I think in the not too distant future, right wing economic theory will be shattered once again. It's no different to the 20s really. BRING BACK KEYNES I SAY!

I was talking about this to someone today... that if there are interest rate rises (out of control inflation makes this likely) I cannot for the life of me see how Ford or GM would ever be able to service their ever growing debt.

Another thing that troubles me, how do these hedge funds post ever increasing profits? They are essentially selling to one another in a zero sum game. The game is pass the parcel, and the music has to stop some time, it is going to be soon.

HSBC has already reported serious problems hasn't it? One thing I've noticed in my short time on this planet, listening to financial reports etc. is that there is always an ice breaker of bad news. Other companies then no longer feel obligated to continue propping things up, and feel safer in the knowledge that they aren't the only ones coming out with bad figures. Becomes a herd mentality with companies also.

I'm guessing the real big hammering will come after some of these US banks start issuing profit downgrades. Then watch liquidity dry up like a nun's nasty.

 

[Smurf1976]

Re: PANIC!!!!!

I wonder if the situation has lead to any hedge funds blowing up? A few % fall isn't a problem, unless you have incredibly high leverage...

If these funds end up having to dump remaining assets to raise cash then that's the most likely trigger for an outright crash IMO. I'm not saying there will be a crash, just that if one happens then that's a possible trigger.

If history is any guide then it will be a few weeks until we know if any hedge funds have gone under as a result of the volatility. That there has been such a willingness to take on very high risks, due to the lack of volatility in recent times, is the underlying problem there. Very high leverage works both ways...

 

[wayneL]

Re: PANIC!!!!!

Not necessarily true. Dax and Ftse are up as are US market futures.
The situation may be stabalising.

http://money.cnn.com/2007/03/01/markets/stockswatch/index.htm?postversion=2007030106

Whoa! Just walked in and cranked up my screens...

Dow futures down ~100 an hour before open.

 

[wayneL]

Re: PANIC!!!!!

Whoa! Just walked in and cranked up my screens...

Dow futures down ~100 an hour before open.

...and guess what? The yen is up against all currencies.

Beware the YCT unwind

 

[Smurf1976]

Re: PANIC!!!!!

I think in the not too distant future, right wing economic theory will be shattered once again. It's no different to the 20s really. BRING BACK KEYNES I SAY!

I was talking about this to someone today... that if there are interest rate rises (out of control inflation makes this likely) I cannot for the life of me see how Ford or GM would ever be able to service their ever growing debt.

Another thing that troubles me, how do these hedge funds post ever increasing profits? They are essentially selling to one another in a zero sum game. The game is pass the parcel, and the music has to stop some time, it is going to be soon.

HSBC has already reported serious problems hasn't it? One thing I've noticed in my short time on this planet, listening to financial reports etc. is that there is always an ice breaker of bad news. Other companies then no longer feel obligated to continue propping things up, and feel safer in the knowledge that they aren't the only ones coming out with bad figures. Becomes a herd mentality with companies also.

I'm guessing the real big hammering will come after some of these US banks start issuing profit downgrades. Then watch liquidity dry up like a nun's nasty.

You just beat me there with the hedge funds as I was typing my previous post.

As for Ford and GM, I heard somewhere that at the rate they are burning cash (the polite way of saying you're losing money), Ford will be technically bankrupt by the middle of next year. That is, if losses continue at the recent pace then they will consume ALL of Ford's cash and other assets in the next 18 months. GM doesn't seem to be doing much better although I haven't heard any detailed figures for them.

 

[nizar]

Re: PANIC!!!!!

Whoa! Just walked in and cranked up my screens...

Dow futures down ~100 an hour before open.

ALOT of data out 2nite + earnings + M&A action, could still go either way...

 

[Garpal Gumnut]

Re: PANIC!!!!!

There are too many mea culpas from tech/a down.

Nobody knows where this retracement will end.

It came from left field.

If your money is precious to you and you could not bear a further loss ... sell

If you've been through this before, evaluate and decide.

At present I don't see what all the kerfuffle is about.

Garpal

 

[Kimosabi]

Re: PANIC!!!!!

Most of Europe went backwards again...

http://www.bloomberg.com/markets/stocks/wei_region2.html

 

[Smurf1976]

Re: PANIC!!!!!

Regarding problems getting through to brokers during big market moves that some have posted, it's the same problem with any kind of infrastructure relying on the diversity of demand principle.

If we ALL pick up the phone at once then most won't get a dial tone.

If it goes to 50 degrees in Melbourne on any weekday then I'll guarantee you that the power grid will not have enough capacity. Some will have supply, some won't, but the system as a whole just doesn't have the capacity for such an extreme demand.

Same with roads. Try having every car in Sydney on the roads all at once and none of them will be moving faster than walking pace (if they're moving at all).

Same with water. Some of the councils (which distribute water) in Hobart had water restrictions in place for a few weeks earlier this year despite more than enough water. They just couldn't pump it fast enough when everyone turns on the sprinkers all at once so they introduced an "odds and evens" system to limit spikes in demand. Water as much as you like, just don't all do it at the same time.

Same with airlines, public transport and so on. And the same with brokers. They all fail in the event that everyone tries to use it at the same time even though on average they have surplus capacity. So don't count on being able to sell when you want too if there's a big move happening at the time.

 

[theasxgorilla]

Re: PANIC!!!!!

At some stage risk had to be re-priced. There's too many variables in the world for the valuations we've just been seeing (Iraq, US economy etc etc).

I tend to agree with this...I can't say "completely" because I'm not an economist and even if I was I doubt my brain would have the capacity to comprehend all the interplays...so presuming you're skilled and you're brain is big enough to get all of this into perspective...what makes you think you have the timing right for this repricing?

 

[Garpal Gumnut]

Re: PANIC!!!!!

I think all you guys and gals are wimps, unless the all ords falls below 5500 there is no reason to panic.

Just take 2 bex and lie back and relax,

You are going to develop some dreadful disease like stroke, heart attack or something worse otherwise.

Its only money and on my analysis your not going to lose it all this time.

Garpal