Fake news shouldn't deter prudent investors
...the Wall Street Journal. Good stuff from Aaron.
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14 comments:
Here is a headline from 14 Aug 07 NY Times: Small Investors Seen as Safer in Stock Slide.
I feel better already.
So... what will it take to finally realize you are on the the completely peaked out side? Your are hopeless, regardless of diversification. You are toast for at least 6 mos.
If it were "my money" I'd be on the sidelines in FXF or FXY. Or maybe betting in the downside vis SRS and SKF.
I have to laugh at the longs. You are toast 5 - 15 years.
I wonder if Mr. Pressman thinks that having an exit strategy is timing the market as well?
Or does he suggest that one buys, diversifies, and holds until retirement? (with some periodic re-balancing only)
I also agree that one should not try to time the market with guess-work. But when you are sure that you are in a burning house, you head for the exits. It's when to buy back in that's tricky.
"I have to laugh at the longs. You are toast 5 - 15 years."
Don't the traders say that every time something like this happens?
toast for 5 to 15 years?????
I sold out between july 10 - 18 so I am obviously a bear right now.
The sky will not fall. There will be large scary rallies for the bears (I still expect a rally prior to options expiration on thursday).
That said this is just the beginning. More Significant declines are still to come. This will take months to resolve.
I still think it makes sense to sell here, but the sky will not fall and excellent buying opportunities will be available next year.
This needs to be kept in perspective and comments like toast for 5 to 15 years are simply silly for people with diversified portfolios.
If you have opinions you should act on them. But don't confuse opinions with knowledge.
Me, too. I cleared the deck half way thru July. Then went to ultrashorts. Piece of cake. Making this much money is just too easy. Who said you couldn't hit the easy button? Just call me a virtual money manager.
I have a very interesting suggestion for your readers. It's about the 07' august calls of TYCO (NYSE: TYC) which are very very mispriced: the title is at about 43.50$ and call 30 is at 0.15$, call 35 at 0.10$ and almost all others are mispriced. I don't have much money to buy them, but I think it's a great deal... Source:
http://finance.yahoo.com/q/op?s=TYC
those are adjusted options. stock at $43, call struck at $30 can't be priced at a dime unless it is adjusted.
The package underlying the option is 25 TYC, 25 COV and 25 TEL. For the 30 call to be at the money that combo would have to worth $3000. At the close on Tuesday it added up to about $2900.
Do your homework before leaving a comment like this.
The reason not to delete the comment altogether is so people learn from this very stupid idea.
I am sorry to be so harsh but this is the sort of thing people don't research, think they are getting something for free and end up getting hosed.
Do you believe that the big insurance businesses are possibly as vunerable to the mortgage meltdown and all that contains as the big banks--AIG for example? thanks
AIG specifically? I have no idea. But a ginourmous, complex financial company with a lot of moving parts be vulnerable to this? Not an unreasonable guess.
If this thing is really that big (IE Roubini is right) we should expect a really big company to fail. Really big.
Short run or long run for the insurance companies?
My wife works for one and I suspect they will be hosed in the short to medium term. But if they are not forced to sell until the debt market recovers and I think that is most plausible, they should end up fine in the long run IMO.
BTW I consider my self a bear with 90% in cash
Anon 4:12, You are clearly stupid if you really believe TYC options that far in the money sell for 10c a pop. C'mon do some research before speaking about something you have no clue about.
Some comments, from a previous blog, expressed concern about money markets breaking the buck. The blog was on Friday, titled “Pukification?” and the comment was from “gjg49”. This article, on the “Sentinel Management Group” financial problems, explains the money market situation.
There’s a big difference, by law, between a money market fund and a short, short bond fund.
The article is here:
http://tinyurl.com/2yunvv
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