Setting the Bottom on Setting the Bottom (Trees And Things)

joshv: Re: Calling the bottom (Show your math!)

Mon, 13 Oct 2008 06:18:53 EST

Found this little snippet in a WSJ article today. Graham was Warren Buffet's mentor.

Robert Shiller, professor of finance at Yale University and chief economist for MacroMarkets LLC, tracks what he calls the "Graham P/E," a measur

Shy Elf: Re: This is rediculous.

Sat, 11 Oct 2008 15:41:03 EST

We've mostly had pretty typical bear/crash market interday patterns. I've always interpreted it as down at open = foreigners and US hedge funds selling, up during the day = retail investors buying, and down at close = US mutual funds selling, probabl

Shy Elf: Re: Calling the bottom (Show your math!)

Sat, 11 Oct 2008 15:33:29 EST

As Milo already pointed out, annual economic growth around 3% is a deflated(does not include inflation) number, while stock index growth around 9% is a nominal(includes inflation) number. Also, even if you match up apples to apples here, they don't n

Shy Elf: Re: I should be an Economic Indicator

Sat, 11 Oct 2008 14:49:33 EST

I said that bankruptcy sucks, because corporate bondholders have to demand their money too fast. If the bond contracts were written so that bondholders couldn't demand their money when the company cannot pay, but were compensated when this happens, e

Milo: Re: Calling the bottom (Show your math!)

Sat, 11 Oct 2008 08:20:56 EST

(1.03)^13 = 1.47. The DOW at October 13, 1995 was 4793.79 so I'll call bottom at 4793.79 * 1.47 or 7046.87.

The only thing to note is that GDP growth is reported as "inflation adjusted". The stock market isn't. So, take your 3% growth and add

thefadd: A News Report From The "Malaise" Of The

Fri, 10 Oct 2008 15:27:11 EST

The Dow had hit a record high of 1051 earlier that year.

pO157: This is rediculous.

Fri, 10 Oct 2008 14:55:09 EST

It dropped almost 8% down at opening, then held about 3-6% down all day, then suddenly shot up about 3-4% in the green a few minutes ago, now it's holding around neutral a few minutes before close.

Maybe they should just hook still haven't reached bottom yet.

joshv: Re: Calling the bottom (Show your math!)

Fri, 10 Oct 2008 11:23:51 EST

Well, the S&P 500 has grown an average of about 9% per year between 1950 and 1995 - if you take that out to 2007, the percentage doesn't actually change much. So I think 3% might be low.

But - this is what gets me. How does the overall e

pO157: Re: Calling the bottom (Show your math!)

Fri, 10 Oct 2008 10:50:53 EST

How much overshoot? And is 3% a healthy growth rate? As explained above, I know little about the stock markets and I was working in the lab when most of the B-school majors were out getting blizted.

Although, I didn't have to wear all black or anything

joshv: Re: Calling the bottom (Show your math!)

Fri, 10 Oct 2008 10:40:57 EST

I'd go for that, but I would expect some overshoot on the down side, especially if we are in for a protracted recession.

pO157: Calling the bottom (Show your math!)

Fri, 10 Oct 2008 10:29:55 EST

Because I have absolutely no business experience or training, I thought the most productive thing for me to do would be to call where the bottom should be.

I'll assume the market got inflated due to the internet bubble, dot.com boom and property booms

skeptic: stock market strategy

Fri, 10 Oct 2008 09:08:07 EST

It is often a mistake to sell when stocks are going down. While some businesses will never recover (i.e., Lehman Brothers) most will (probably) go back up. The first rule of business (as you may recall) is buy low, sell high. That's how y

Lou: Re: I should be an Economic Indicator

Thu, 9 Oct 2008 17:32:12 EST

Maybe I'm tired...but I have no idea what that means.

Shy Elf: Re: I should be an Economic Indicator

Thu, 9 Oct 2008 17:08:26 EST

With a rational capitalization model, they would just take their bonds and make them voting preferred stock and make the common stock non-voting until they make large profits, and everyone would be reasonably happy without too much in the way of disruption

Lou: I should be an Economic Indicator

Thu, 9 Oct 2008 16:59:10 EST

You know the economy is fucked up when when the share prices for companies that have been industrial icons fall so low that I can afford them.

Shy Elf: Re: Oil's Cheap? Ford Is Cheaper Still.

Thu, 9 Oct 2008 16:58:53 EST

GM's market cap is now below what it was in 1929.

MayorBob: Oil's Cheap? Ford Is Cheaper Still.

Thu, 9 Oct 2008 16:28:56 EST

You can now own a piece of the company that Henry Ford built for less than a gallon of gas. You might just want to kee

Shy Elf: Re: No Capitalists In Fox Holes

Thu, 9 Oct 2008 16:04:21 EST

Tell me about it. Just trying to evaluate any stock in the news makes my head hurt trying to guess how much manna they'll be given by King Henry.

thefadd: No Capitalists In Fox Holes

Thu, 9 Oct 2008 15:41:46 EST

Twenty years on, communism wins. Good news is Spiders, an S&P 500 index fund. I bought a some at around $114 a few weeks

port1080: Re: How are TnT'ers responding?

Thu, 9 Oct 2008 07:54:54 EST

So you are actually thinking about buying?

At some point...not necessarily right away though. I agree there's still some time to go before things completely bottom out. Although I'm not sure that you need to wait for the rock bottom t

joshv: Re: How are TnT'ers responding?

Thu, 9 Oct 2008 07:24:34 EST

So you are actually thinking about buying?

Even assuming we are not going into Mad Max territory, I think we've got a long way to go on the down side here, especially since we've only begun to feel the effects of this crisis outside the financial sector

port1080: Re: How are TnT'ers responding?

Thu, 9 Oct 2008 07:04:15 EST

Well, my wife and I are "lucky" enough to have inherited a relatively (at least, as of our last statement - hah) substantial investment portfolio. We're also both pretty young, so at the moment we're basically thinking of this as a nice long term inv

joshv: How are TnT'ers responding?

Thu, 9 Oct 2008 06:55:55 EST

I'd be interested in everybody's practical reaction to the market tumult. Do you plan to sell your stocks? Have you sold already? Have you cashed out your 401k, bought krugerands and sown them into your clothing? Or are you sitting

Shy Elf: Re: Setting the Bottom on Setting the Bottom

Wed, 8 Oct 2008 16:55:14 EST

I heard the Dow was down 800 points yesterday. That kind of surprised me, because I didn't think there were 800 points left.-- Stephen Colbert

MayorBob: $2 Trillion Just Disappeared.

Wed, 8 Oct 2008 12:37:13 EST

That's what the head of the Congressional Budget Office said happened to the value in retirement funds and 401Ks over the past month. Not good news for all those people looking to have a nice quiet retirement.

As I checked the stock market indices