19
Nov
2008
Never Try To Catch A “Falling Knife”
Posted by John as Market Action
As many investors (Warren Buffet included) have been attempting to pick a bottom in this bear market over the last few months they are learning that this is a poor risk/reward proposition.
Mainstream and traditional investors have a great fear of missing a bottom in the stock market. This (among other things) creates bear market rallies [...]
24
Oct
2008
Thoughts on near term action in equities
Posted by John as Market Action
Many people have been telling me “we’ve hit bottom.” My usual reply is “well, were getting there but were not there yet….” Rallies will continue to be sold, they are just short term rallies against the dominant bear trend. The rest of October will continue to be down for equities, generally speaking, but there is [...]
03
Oct
2008
Has the sky fallen yet?
Posted by John as economy
I view the financial markets in terms of which theory is accepted by market players and increasing or decreasing in truth (or verisimilitude). The current dominant theory can be labeled “the sky is falling.” This theory and its effects will continue to increase in verisimilitude (degree of truth) in the days and weeks [...]
07
Sep
2008
What will the bailouts do for the stock market?
Posted by John as Investing & Trading
The Fannie & Freddie bailouts will help with sentiment in the short run, much like the Bear Stearns bailout, as we will likely see a general rally in equities on Monday and for a few days after that. This short term correction (rally) against the long term trend may take some of the indices [...]
26
Jun
2008
Bear Trend For Equities Remains Dominant - Update
Posted by John as Investing & Trading
Back in April, I wrote the following:
“Earnings are bad, inflation is bad, the credit crisis is bad…. But isn’t it always darkest before the dawn? Are stock market bottoms made when the news is the worst and things look bleakest? Yes and yes.
But how does one know when a bottom is in place? It’s very [...]
02
May
2008
Warren Buffett To Go Shopping For Bargains
Posted by John as Investing & Trading
Berkshire Hathaway Inc. Chairman Warren Buffett, who has used dozens of acquisitions to beat every major U.S. stock index, is poised to extend his lead with more than $40 billion to spend as the credit crunch sidetracks other bidders.
With the U.S. on the brink of recession, investors expect Buffett to deploy Berkshire’s cash to scoop [...]
16
Apr
2008
The Distressed Securities Strategy
Posted by John as Investing & Trading
This strategy involves investing in the securities of a company that is or is expected to be in trouble. Some distressed securities can trade at large discounts to their actual risk adjusted basis. This is due to the psychological effect that occurs in the marketplace when a firm gets into trouble or files [...]
16
Apr
2008
10 Reasons To Like US Stocks
Posted by John as Market Action
LONDON (Reuters) - BlackRock, the giant U.S. investment fund with some $1.36 trillion in assets under management, reckons the banking crisis is not over and companies are delaying expansion plans and in some case cutting spending.
But in a note, Bob Doll, the firm’s global chief investment officer for equities, says there are nonetheless 10 positive [...]
16
Apr
2008
Hedge Funds Buying Distressed Securities
Posted by John as Market Action
Hedge fund managers are poised to leap into the pool of distressed and incorrectly priced securities created by the credit crunch.
Swiss private bank Union Bancaire Privée and Swiss manager Gottex Fund Management are launching funds that will invest in debt they believe is temporarily undervalued as a result of market conditions.
The opportunity is on a [...]
14
Apr
2008
Bear trend for equities remains dominant
Posted by John as Market Action
Earnings are bad, inflation is bad, the credit crisis is bad…. But isn’t it always darkest before the dawn? Are stock market bottoms not made when the news is the worst and things look bleakest? Yes and yes.
But how does one know when a bottom is in place? It’s very simple. The price action will tell you. Looking at long term charts of equities, such as the sp500, dow, etc, in my view the dominant trend remains down and rallies should continue to be sold and a long/short portfolio should be more heavily weighted toward the short side. Eventually things will change, probably at the end of 2008 or early 2009 and the dominant trend will turn bullish…. but for now short positions are in order until the fundamental context and price action prove otherwise. –John Bardacino