The 2007 stock market

The only thing I regret now is that I should have sold more of our funds, rather than just 35 to 40 percent of the annual gain, when the DOW hit 14,000. Hindsight is 20/20 every time!


But I'm still waiting for the bottom before I buy "back in." I figure it'll still take several weeks before we get any indication of where it will settle.

Will Wall Street lay another egg, C.I. ? I see strange parallels between this market and the one in the great depression. When I think that Woodrow Wilson got re-elected on the slogan, "He kept us out of war" and then we went to war, and Roosevelt went to war to get us out of the depression.

Now look where we are, buddy- another weird war.

Sorry to brag, but I sold 80% of the shares in my passively managed EuroStoxx index fund at 4550. The EuroStoxx is now at about 4050. (I kept the other 20% to avoid paying short term capital gains tax. The long term capital gains tax is zero in Germany.)

I expect that the Dow will go below 11000 before it recovers, but I'm not confident enough of this expectation to go to the derivatives market and buy put options on the Dow.

Thomas, Congratulations for a smart move. I bet over 95 percent of stock holders didn't do anything when we hit the new highs on the market.

I'm a bit more conservative than you are, and expected to see more activity close to the 14,000 range before the drop.

All I can do now is wait out this bear market, and re-buy some of the funds I sold. No capital gains for us, because I just transferred the money into the same IRA institutional federal money market funds. Prices are increasing while interest drops, so it shouldn't be too bad.

The only reason we're still ahead for this year is because of the funds I sold in May and July.

The "bottom" might be around 12,500. Only a wild guess.

Looks like the bargain hunters saved the day from the 340 point drop. The next few weeks will reveal much.

So, the DOW closed down 15.69 today at 12,845. I'm guessing the next 3 days will roller-coaster and then settle into just being usual summertime volitility. I also anticipate that the 4th q-07 and 1st q 08 will be the best (for me) I've seen in 4 years.

It's bad all right. Every day I get poorer and poorer and my age for retirement goes up and up

Yet, I don't need to sell anything, I can wait it out and hope for 15,000
in the near future.

By the way, the lending institutions brought this mess upon themselves.
They made deals that were doomed to fail right from the start, and
looking back into the mid 80s, when banks folded left and right due to
the real estate crisis, history repeats itself.

It won't settle for at least 6 months or more.

There are those who're long term investors and then there are gamblers.

Long term investors know how to endure market turbulence.

Miller, The sub-prime loans default has been on the increase for several months. It will not take six more months to figure out which loans are going bad. They can get an early estimate of the dollar value of those bad loans, and inform the government (the feds) and the public what we can anticipate on the value of the loss.

Japan was in dire straights for almost the same thing some years ago, and their banks have been working to clean up their balance sheets. They've written off most of the bad loans, but the savings rate for the Japanese is very high compared to the US citizens.

Governments all over the world are infusing billions of dollars into banks to keep the liquidity of cash flowing for loans, so that the economy will continue to operate.

I believe that's a smart move, because without the economy running, tax revenue will disappear.

Most of the financial institutions will know who's in trouble in short order. They will not continue business as usual if any bank is showing the strains of bankruptcy. They have to protect themselves too!

I'll bet we're heading straight into a bear market.

We're in one now.

Even the financial pundits are cautious about how low it'll go.

I doubled up my ante and sold 87 percent of our year-to-date gains when the market hit close to 14,100.

The liquidity problem is going to affect our economy; maybe not today, but going a few months forward, we're going to start seeing the effects. Home sales are down, and bankruptcies are up. Not a good sign for our future.

The feds continue to feed money into the system, but most people are already broke with too much debt and very little equity.

Re: The 2007 stock market


The market has the jitters because among many other things, there are too many people calling themselves "investors", who know literally nothing about the subject of "investing". They're the day traders and the knee-jerkers...

They're also the panic breeders...

Inflation + recession = BIG TROUBLE...

In today's newspaper, it shows a report that manufacturing production is down. It's one of the signs that our economy is slowing.

It's reaching an equilibrium point, nothing more and nothing less.

Re: The 2007 stock market


When we had the tech boom in the late 90s, everybody thought they were experts at investing, because they were "rich" on paper. Before they could say "uncle," their portfolio showed huge losses, and the day traders (estimated at over 90 percent) lost big time. Anyone who thinks there's a way to get easy money hasn't learned the hard lessons of life. It also true today as it was in the past.