What does DOW below 7,000 mean to you?
 

To me it means very little, since it isn't real money. It's just as fake as the rest of the money that people used to leverage businesses and lifestyles.

I have had friends make claims to me like, "I've lost $50,000 in the market!" I ask them the simple question, "Did you sell your holdings?" The response is always, "No, but the value of them... it dropped like a rock!"

Well yes, that's true, but until you've actually sold your stocks, you've not made or lost any money. Until you've converted it into money, it is just a marker like any bet.

When the dot com bubble burst driving the first wave of DOW pushing upwards and the economists and government all wanted to suspend the cycle, I wasn't a fan of their finagling.

What does this signal to you? Does it mean anything to you?

Everytime it drops all I think about is how funny it is that a group of people are sitting around a bunch of monitors in the middle of NYC on their phones contemplating whether or not this will be a good stock day. If they think it will, it is a good day. If they think it won't, it won't. It's quite comical!!!!!

I don't really follow the DOW at all. It's just numbers to me. I do own stock in my local bank, which is one of the top 200 community banks in the country. During the current economic crisis this bank has had solid earnings and doube-digit loan growth. I follow the quarterly reports. I could never handle this daily nightmare stuff.

To me it means there are a lot of good deals out there right now.

Ditto! It's like a sale at my favorite store. 50% off, everything must go! WoooHOOO.

:thumbsup:

To me, it means the money going into my 401 K each week is buying me more for less. Unless the market tanks for good, which is highly unlikely, times like these are where you make your best earnings long term.

Yep. Remember when the winning business strategy was to put together a company that would make money from venture capital and IPO, rather than from customers? That was so weird.

market correction. The fake inflated money value is finally coming back to normal. Maybe this time, gov and business will realize it's about product quality and service, not quantity and replacement costs.

And maybe this time investors will keep their emotions in check.

capitalism is failing.

The revolution is coming comrades!

Everything is on sale!

Seriously! That is exactly what the DOW below 7000 means to me. I'm looking for solid companies that have good balance sheets and have been dragged down with the rest of the market. Ebay, Microsoft, Eli Lilly are all at great prices right now. Do you really think that they are going under? Not really likely. I won't be buying GM or Citi right now, but there are some great deals in lots of other areas of the market.

I've got my 403b on auto-pilot of course, so it is buying me dollar cost average shares in 3 Fidelity mutual funds while the market is down. Sure, it is tough to look at the balance in that account and see that it has gone down from 2 years ago despite putting in more cash each month. But, if I look over to the column for number of shares bought for each transaction, I'm buying nearly double the number of shares each month this year as I was at this time last year. I'm also taking any extra money that I can get together and working to find good stocks to buy in my brokerage account.

The responses on this thread are interesting. Who thinks we're in for a bargain-seeking bounce soon?

I agree it's a bargain hunt for those with the stomach and fortitude to do so. If I had not bought a foreclosure last year, maybe I'd have used some of that capital to buy some bargains. I'm not a stock guy, at least not yet. Funds I've got the stomach for, but regular stocks, I'd rather play in Vegas.

Funds typically under-perform the market. They are pretty much guaranteed to under-perform based on the way that they are structured (they have to hold a certain number of stocks, used to be 30+ but I haven't kept track, the size of their transactions are cumbersome, they have certain regulatory restrictions on how they can enter or exit positions). If you are willing to put in a little bit of effort educating yourself about what makes a good company perform well, then you can pick good stocks and do well for yourself. I sold a good bit of my portfolio to put in a larger down-payment on our current house and to pay for remodeling costs a few years ago. Because of that, I haven't been as active in tracking the market as I once was. But, with this current downturn, I'm shifting my attentions back in that direction. Some people like to go shopping for shoes when there is a big sale. That's how I feel about the stock market right now.

I don't think that there will be a bargain-hunters bounce in the short-term. Too many people are too frightened and already depressed in their holdings to want to push more cash at a falling market. I'm looking for solid companies at a discount, and dividend paying companies that have enough cash on hand and revenue stream to continue to pay out without cutting in the near future.

I think that 12 years isn't very long. That is how long it has been since the DOW was this low. I have found that most things are cyclical, the stock market included. We are hurting right now and the DOW is showing that but soon we will be building back up and we will forget about this dip, until it happens again.

I wouldn't wish for this too hard. One revolution is bound to bring others.

---------- Post added at 04:52 PM ---------- Previous post was at 04:51 PM ----------

I do, and I hope i have enough spare change to grab even a small chunk to ride the way up on.

It's scary knowing that the value of so many companies has halved from a few summers ago. Do you all remember when we hit 14,000? That number seems SOOOOOOOOOOOOO distant now.

If I had to retire now, my 401k would only be worth about 70% of what it was last year. Hopefully I can build it back up by buying in now and riding it out a few more years.

I agree with this. The market should have been at most 10,000.

Now certain companies have lost costumers and revenue, but some are still good and doing business like normal.

I think this should have happened 4-5 years ago, but the Fed kept lowering rates (which was a way of cheating instead of fixing the underlying problem). A certain political party with donors that didn't want to pay taxes were probably pushing for a policy that devalued the dollar (takes more dollars to buy anything, including stocks/houses), and were letting the market do pretty much whatever it wanted to.

I will say, that for me, I am better off, since I get to buy more stock at a lower price then if I had to pay the inflated price. Even if the market doesn't go back up quickly, I still have a long time before I need that money. I didn't lose too much however.

We are still likely overpriced and will go lower, probably 600-650 on the SPX.

http://dshort.com/charts/bears/four-bears-large.gif

There's a long, long way to go yet.

As for the stability in 'indicators' (which are only indicators until they don't work anymore), pshah. Horse.

If you're looking for a bounce, don't go thinking it'll last too long. P/E at the end of a standard bear market are much lower than they are right now.

[Oh, and just think, these comparisons with 10-15 years ago levels on Dow and S&P... The dollar is worth about 50-75% of its purchasing power back then, depending on whose stats you look at... Interesting.]

It means my 401K is worth 50% of its value one year ago. It is now worth less than I've invested over the last 20 years.

Meanwhile, I've been hit with a huge tax bill because I was self employed for most of 2008. The government takes the money I worked my ass off for and hands it over to deadbeats on main street and wall street.

There's going to be a revolution alright.

not to be too jaded here, but if yo'ure saying "O, the blue chips" or "strong companies" are going to be fine....just remember that 10+ yrs ago, those companies were GM, F, GE, BSC, LEH, MER, MS, GS, BAC, WFC, PG(which is just back to 1997 levels, not nearly as bad as the others), T(same case), pfe, vz...

Well, let's just say that half of those would mean you're bankrupt right now and the other half mean you lost 10-15 yrs of growth...which is half of the time most people spend saving for retirement (most don't start til 30-35, unfortunately).

So, while things are cheaper...normally they are cheaper for a reason.


But, if you want a fund and you're worried that funds underperform the market, then buy the index etfs, Spy, iwm, qqqq, dia, etc. Why fight the market, you know? I'm wtih jericho, though, this probably has another 10% to fall

U.S. economy will be in shambles all this year: Buffett
 

So the DOW is below 7,000, and now Warren Buffett has weighed in:

Business Day - News Worth Knowing

Where is bottom? It's still all speculation.

i'm not optimistic about this ending this year, but i can say that predictions about it are about a dime a dozen and worth just as much. i mean, really, every year during the depression, people were saying "the worst is over" and it woudl just keep getting worse..same thing last year on cnbc.

it's gonna end when it ends, any predictions are taken with grains of salt.

I read the letter from Omaha on Saturday.

Somewhere in today's NYC rags is something about now being the time to buy stocks. That's what people were saying when it was DOW 10,000 going into 9,000.

What I'm sensing is that people got burned and got burned bad. Those that are looking from the sidelines aren't interested in that game. The barkers are trying to convince more people to put money into the markets. I'm glad I didn't buy at 10k, because I'd be forced to continue to buy down to average out my losses. I'm already doing that in World of Warcraft auction house...

Paq: Buffett has a pretty good (and long) track record.

What does it mean? I'm glad I invested in tangible goods.

Some of the smartest people I know are saying 6500 by the end of 2009. That doesn't seem unreasonable at this point.

considering dow was 6600 just an hour ago, 6500 isn't that hard to fathom.....

baraka: ask how he did last year....

you're only as good as your last statement. I'm not saying he's wrong, i agree with him right now, but i am saying that anyone making predictions right now is just staring at a coffee cup and dragging stuff out of their arses. Look at CNBC for the past year, look at Carter and Ford, look at jfk/ike, looka t JFK's father or hoover. Predictions from anyone right now is just .... well, grab a ball bc yours is as good as anyone's.

paq - I've been of the school of thought that it's always the same as anyone's. people do make mistakes, Buffet's investment into oil at the peak of prices hurt his portfolio, but again because he's diversified well it didn't wreck him unlike those that were all in with Mr. Madoff.

6500 is just a trading day away as a possibility.

Oh, he's fine, i'm sure, but he's down 50% from the highs like the rest of the market. I'm not saying he's right or wrong, just that predictions about stuff like this rarely ever pan out. yea, his voice carries more weight, but heck, he's in GS at 115 and was investing in oil at 90-110 and not taking small risks there.

He also shuns techs and was shunning the brokerages (rightfully so) bc of the insane PE ratios...

He's fine, but about as well as people who just bought the spyders or diamonds.

What I meant is that by the end of 2009 we'll still be where we are now.

This is the time to buy blue-chips for the long hold. I've picked up several (GE, Microsoft, BB&T, Wells Fargo) with the idea that I won't sell anything for at least 5 years. The dividends alone in that time should pay for most of the sale price anyway.

I sincerely doubt that the end of Western civilization is upon us and that the stock market will cease to exist.

Me personally:

More competition for jobs as older people are coming out of retirement because they have lost the bounty of their hard work.

No chance of an early retirement.

Chance of losing my job as management chases any possible profit.

Stress at work as management does more with less manpower.

Loss of any vacation because I am/will be doing the job of 5 all by myself.

Loss of profit sharing as their is very little if at all.

It takes time to recover. Unfortunately many people are lacking the time to wait out the markets. There is no confidence in the markets. Too many people have too much debt and have decided to pay off debt instead of investing. I will be buying land. At least they can spread my ashes on it.