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Old 02-05-2013, 07:38   #1
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"..a 90% market *correction*.."- BOHICA moment in the offing

"It's the ECONOMY, stupid!"-- Who said then and when did they say it? Never mind, this lurking disaster is not news to most here who follow such things... but the bad news is, a correction of that magnitude is absolutely certain to hurt just about every American. I doubt I'm wrong in this.
http://www.moneynews.com/MKTNews/bil...source=taboola

"Billionaires Dumping Stocks, Economist Knows Why"

"
It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.
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Old 02-05-2013, 07:43   #2
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Somebody needs to let the stock market know?
It seems to be headed in the wrong direction.

..

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Old 02-05-2013, 07:52   #3
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Quote:
Originally Posted by JBnTX View Post
Somebody needs to let the stock market know?
It seems to be headed in the wrong direction.

..
Oh, I think it will get the message.
"It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.
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Old 02-05-2013, 08:04   #4
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Quote:
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Oh, I think it will get the message.
"It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.
It's funny that there are actually people who think that printing massive amounts of money doesn't affect anything in the economy.

But, there are.
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Old 02-05-2013, 08:14   #5
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... and sudden destruction came upon them. Man falls for it everytime in greed of all.
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Old 02-05-2013, 08:29   #6
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Being 'governed' by 52% know-nothings sux !

.
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Old 02-05-2013, 08:31   #7
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Quote:
Originally Posted by series1811 View Post
It's funny that there are actually people who think that printing massive amounts of money doesn't affect anything in the economy.

But, there are.
... and they're in the position of running things ! ...

.
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Old 02-05-2013, 09:35   #8
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This is why I have been positioning myself for just this senario. Absolutely no debt. Sufficient supplies to last a year if necessary. As in food not doomsday foolishness. When it tanks those with just enough income to cover bills will be in deep fecal matter.

Still have the farm which could have been converted to cash that the government would have wanted half or better of the return. Have a place to live and raise food. Enough cash to pay taxes.
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Old 02-05-2013, 09:51   #9
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I think it was Greenspan who talked about "irrational exuberance" in the past when stock prices ran up so high while the economy didn't support the investor confidence. A DJIA above 14,000 seems irrational to me, so a huge correction wouldn't be shocking. But what do I know since I got my butt kicked in 2008's meltdown.
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Old 02-05-2013, 10:27   #10
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If you believe in technical analysis (and I do since it is simply a proxy for human psychology), we are finally re-testing the previous high before the March 2009 low. We've come straight up from S&P500 660 to 1520. These "V-bottoms" are NEVER left untested. The March 2009 low will be retested and the fundamentals of a second Obama administration support this to a 'T'. It ain't 90% but a 50% retracement from this high would be well within most technicians' definition of normal. So, S&P 750 is a real possibility.

Note to blind optimists ala JebinTX: High flyer AAPL could do no wrong a few months ago, now it's down 40% even though its fundamentals are still strong. I think AAPL is giving everyone a loud warning. Can you hear it?

Short the S&P 500.
Short US Treasuries (TBT e.g.)
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Old 02-05-2013, 10:35   #11
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Quote:
Originally Posted by Skyhook View Post
... but the bad news is, a correction of that magnitude is absolutely certain to hurt just about every American.
Every American that is in the stock market. I pulled all of my retirement (401K) funds out of the market last year and parked it in cash. Yeah, I lost out on the latest gains. But, if you try to time this you'll get burned. Better safe than sorry - get out now!
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Old 02-05-2013, 10:46   #12
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There are always different ways to look at something.

Time to Re-Think Role of Stocks in Retirement
Stocks in Retirement may be your best Inflation Protection



It's a gamble, but I moved a chunk of money out of stocks and into treasuries last week. I'm thinking a 5 year high is a good time to take some profit. Also, I see that the fundamentals are dismal, and sentiment may follow for a while. If there is a large drop in the stock market, I'll try to time the bottom and throw all that money back into stocks.

It's money I can afford to gamble with. It's not my only planned income during retirement, which is still about 20 years away still.

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Old 02-05-2013, 11:49   #13
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Every American that is in the stock market. I pulled all of my retirement (401K) funds out of the market last year and parked it in cash. Yeah, I lost out on the latest gains. But, if you try to time this you'll get burned. Better safe than sorry - get out now!
I did the same thing!

At this point in my life, keeping what I have is more important than making more.
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Old 02-05-2013, 12:01   #14
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Since I am absolutely certain, from what we've seen in the past, that no matter where citizens place their cash, the government will eventually fins a *legal* path to it, I am likely to listen to a friend advises sinking considerable funds into 'hard investments'.. and if I knew what the heck he is talking about, I'd do it.

Anyhow, fat bank accounts will tempt those bureaucrats to the point they will all require froth bibs and drool cups. Until they can find a tunnel into the vault, that is.

We have seen the enemy.
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Old 02-05-2013, 12:15   #15
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Quote:
Originally Posted by JBnTX View Post
I did the same thing!

At this point in my life, keeping what I have is more important than making more.
Just remember, in the case of hyperinflation, all those mason jars of cash will be becoming worth less and less very quickly. Stuff. Buy Stuff.
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Old 02-05-2013, 12:26   #16
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What Cavalry Doc said. Also, Treasuries or any other fixed income investment will get creamed when interest rates start to soar. You can run but you can't hide.
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Old 02-05-2013, 12:29   #17
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Inflated currency generally has a positive effect on the market.

Buffett bought hugely in the 08 downturn and has significant gains. I suspect he would love to see another dramatic correction.

A correction is coming. No one debates that. 90%?

It sure is starting to look like a bubble to me.
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Old 02-05-2013, 12:30   #18
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I did the same thing!

At this point in my life, keeping what I have is more important than making more.
If inflation takes off you're gonna be eating dog food.
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Old 02-05-2013, 12:31   #19
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Quote:
Originally Posted by Cavalry Doc View Post
There are always different ways to look at something.

Time to Re-Think Role of Stocks in Retirement
Stocks in Retirement may be your best Inflation Protection



It's a gamble, but I moved a chunk of money out of stocks and into treasuries last week. I'm thinking a 5 year high is a good time to take some profit. Also, I see that the fundamentals are dismal, and sentiment may follow for a while. If there is a large drop in the stock market, I'll try to time the bottom and throw all that money back into stocks.

It's money I can afford to gamble with. It's not my only planned income during retirement, which is still about 20 years away still.
What fundamentals are dismal? Balance sheets look great. Even top line numbers are growing.
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Old 02-05-2013, 12:38   #20
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What fundamentals are dismal? Balance sheets look great. Even top line numbers are growing.
Yes, it reminds me of real estate values at the beginning of 2009. What could go wrong?
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Old 02-05-2013, 13:24   #21
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Quote:
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What fundamentals are dismal? Balance sheets look great. Even top line numbers are growing.
It's my sentiment that the fundamentals do not support the current prices. Stocks are due for a fall. Companies are about to be hit with fines/taxes, unemployment is higher than reported, families are going to have less to spend..... it's gotta hit reality at some point.

I'm not planning on pulling out anything from my TSP/401 anytime in the next 18+ years.

I do plan on taking advantage of the next dip. It's gambling in slow motion. I understand that. I never bet more than I can afford to lose.
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Old 02-05-2013, 13:27   #22
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The posted article states that billionaires are selling off major positions but fails to point out that they are reinvesting that money elsewhere in the stock market. Buffett has been buying Wells Fargo and IBM nonstop for a while, among others.

Quote:
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This is why I have been positioning myself for just this senario. Absolutely no debt. Sufficient supplies to last a year if necessary. As in food not doomsday foolishness. When it tanks those with just enough income to cover bills will be in deep fecal matter.

Still have the farm which could have been converted to cash that the government would have wanted half or better of the return. Have a place to live and raise food. Enough cash to pay taxes.
How does having absolutely no debt help in a hyperinflation scenario?

That's cool that you have a farm. I want one of those once I get out of the military and settle some place.

Quote:
Originally Posted by jeanderson View Post
Every American that is in the stock market. I pulled all of my retirement (401K) funds out of the market last year and parked it in cash. Yeah, I lost out on the latest gains. But, if you try to time this you'll get burned. Better safe than sorry - get out now!
If we experience a 90% market correction it will destroy the economy and everyone will be SOL regardless of who is in the market. Nobody's money will be worth anything, so it wont matter who had how much where.

If you think trying to time the market will get you burned, why did you sell during the middle of a rally? (works both ways)

Quote:
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Inflated currency generally has a positive effect on the market. Truth.

Buffett bought hugely in the 08 downturn and has significant gains. I suspect he would love to see another dramatic correction. Value investors always love corrections. The difference between now and then is that Buffett bought nothing in the years leading up to the 08 mess.

A correction is coming. No one debates that. This is always true, doesn't really say anything about our current situation.

It sure is starting to look like a bubble to me.Interested to hear your opinion on what is looking like a bubble and why.
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Old 02-05-2013, 14:01   #23
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Quote:
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The posted article states that billionaires are selling off major positions but fails to point out that they are reinvesting that money elsewhere in the stock market. Buffett has been buying Wells Fargo and IBM nonstop for a while, among others.



How does having absolutely no debt help in a hyperinflation scenario?

That's cool that you have a farm. I want one of those once I get out of the military and settle some place.
If one doesn't have debt one doesn't have to worry about interest payments on loans. I remember the 22% and higher in the late 70's. I paid the interest on what debt I had. I survived but never again.
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Old 02-05-2013, 14:16   #24
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I owe 90k in student loans. My rate is fixed. They can not come to me and say, " we know you owe 90k but with inflation we are readjusting it to 200k. And your payments have just quadrupled as well." Not gonna happen. My income will adjust to inflation. If not, I'll pay my debt when the government pays theirs. I'll continue to service my debt, before some get all snippy about MY debt.

A classmate of mine did an internship at a halfway house (criminal justice degree). They told a story of a convict that used to be an investment banker. He owed a huge restitution debt, according to my classmate. He swore that he would only work a minimum wage job for the rest of his life as a screw you to his debt. Yeah, like he'd have any other choice as a felon.
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Old 02-05-2013, 14:34   #25
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If one doesn't have debt one doesn't have to worry about interest payments on loans. I remember the 22% and higher in the late 70's. I paid the interest on what debt I had. I survived but never again.
That doesn't have anything to do with hyperinflation though. Hyperinflation helps debtors. Not advocating debt, but I'm not too worried about my 4% mortgage rate.
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