This is Not a Bull Market Stocks Are Not Up and They’re Headed Even Lower
 

Apologies for the slightly depressing title, but why lie?
This is Not a Bull Market: Stocks Are Not Up, and They?re Headed Even Lower -- Seeking Alpha

It's long past time we start to be honest about what's really going on. It hurts, finding out that things really aren't picking up the way MSM is trying to suggest, but isn't it better to come at this as objectively as possible?

Like the article says, I believe in buying precious metals and gems, commodities, and companies that have products that must increase in cost with inflation. I know it's tempting to buy into things that dropped to the floor recently because it seems like they have nowhere to go but up, but the smartest people I know keep telling me that's not a good idea. You need to be safe. We all do.

I've got a bit in commodities right now simply because I'm not comfortable with everything in the bank (right now, Wells Fargo seems to be the safest US bank, but who knows?).

What's your take on the reality of the market? Bear or bull? What are you investing in (feel free to be vague here if you're not comfortable)? How much are you keeping in the bank for fear that nothing is safe? Do you think the banks are safe?

Wait, who said it was a bull market?

From sources I trust, we are smack dab in the middle of a secular bear. It started at around 2000 and could continue up until 2015 or so.

A wealth manager I work with has been telling her clients, her readers, and the media that right now is a good time to be parking a lot of things in cash. You don't want to lose money? Don't put it all in the market. The best money managers out there know that you don't (and shouldn't) always be fully invested.

Buy & hold (indefinitely) is almost never a great strategy.

This whole thing might seem shocking to many because of common perceptions of the markets. But it's the herd mentality that causes much of the problem in the first place. Greed and myopia are interrelated.

I've been seeing "bull" crop up here and there over the past few weeks, but I'm drawing a blank right now. It might have been on CNBC early last week.

Then it's up no one thinks it's going to fall. When it tanks no one thinks it's going to recover.

I was down 48% last year. Most of that in that last 4-5 months. Now I'm down 18%. Never thought I'd be happy about being down only 18% but thats where things are right now.

Could it tank again? Sure. Could it keep crawling out of the hole? Possibly. There's still stuff out there that can make you money. I bought BAC when it was around $4 and sold it when it hit $12. I've also bought some stock that was low and never seemed to do anything but flat line. I've got hook into a couple Mutual Funds that have absolutely tanked recently. No one bats 1000. So far I'm still doing better this spring then last winter. I see hope. Not bright gleaming hope ready to rise tomorrow but hope none the less.

I still think real estate is a good buy. But what do I know? I think at a 1.80 AIG is a pretty attractive deal. And they could well be the next Enron.

It does look very like this particular bounce is about to crash again...

Yeah that kind of been the trick for the last few months- following the bouncing ball and sell the minute it begins it's free fall.

Well I hope you're not caught out, man... It could just take one 'event' on top of the unrelenting bad news - a lack of EVEN WORSE news is still awful news atm - to send the whole lot into a tailspin again...

Probably including the bond market this time, too...

Best of luck.

I find it interesting the similarities and differences in language used here: http://www.tfproject.org/tfp/tilted-...arkets-up.html

I think a lot of people are too quick to attach a "bull" or "bear" label on a market that is going to be tumultuous for a while.

They're simple labels for what are generally complex situations. Considering how complicated economics can get, people desperately want available to them simple concepts. "Bear" and "bull", in most minds meaning "up" and "down", are a lot easier to not only comprehend but operate with as a framework.

Absolutely; I'm just saying it is premature to claim the market is headed up or down at a time when the market is in such a state of flux. I don't believe the rules that used to apply to market analysis are applicable anymore; the definitions of "capital," "assets," and "liabilities" are evolving in the current economy. We are still very much in a transitional stage, and could be for a while yet, as a new economic paradigm emerges to fill the vacancy left by the failure of "trickle-down," "supply side," whatever you want to refer to the collapsed economy as.

This just bakes it in.

Actual numbers, measures of reality, are released today and show enormous amounts of gloom everywhere.

A single report on confidence goes up a touch, a report that was showing high levels throughout the beginnings of the economic troubles all the way up to September 2008, and the markets 'surge' on the news.

Reality = Awful
Perception = not quite as bad as we thought it might be, however baseless

Markets add billions to general values.

Really, you need to be a wizard, not a genius, to work on Wall St.

When it looks like a stock is up a lot, double-check what you're looking at. Is it trading in high volume? Probably not. This is definitely a bear market.

keep in mind that the dj industrial numerical meme appears one the nightly news and is understood to be a kind of astrological indicator of the well-being of the zeitgeist--all things thereby have the same interests as capital--but the nightly repetition of this Important Ideological Factoid has been a constant since the early 1970s. so what matters really is less what the meme means than what it does.

what it's supposed to do is indicate All Is Well or at least ok or will be. it's basically a very short weather report, except it covers the All.

the connection of indices to the actual generation of surplus is secondary.

so an opinion management tool--a small one, but since it encompasses the All, it's kinda important. so it follows that if you have to truncate the timeframe that you're using to say "things are lookin up sports fans" its a small price to pay. so what if it's meaningless? the effects are Important: consumers recover a bit of Confidence and begin to do their patriotic duty as americans and exercise the one freedom they have in any immediate sense which is to Buy Things. Buying Things is Good. the Good is an expression of the Beneficience of the All.

i'm sure you've overheard or maybe participated in conversations over the past months that the "real" problem is Bad News and that nothing Bad is really happening, it's all the fault of the Media...

uh..

yeah.

Maybe the "bull" is just bullshit, trying to get us to spend our hard-earned money?

:no:

Whatever, it's a Catch 22: Companies are laying off people in bloody masses because people aren't spending money, and people aren't spending money because companies are laying off people in bloody masses.

Oh, what a world! What a world...

All of this would assume that one uses fundamental analysis as a basis for trading in markets.
That's perfectly well and good but there are other ways to skin the cat.
I trade using technical analysis. Any chartist will tell you that the current primary trend of the market is down.
We have had a very powerful bear market rally the last few months. Depending on the extent of the current pullback and the subsequent rally we could re-enter a primary uptrending (ie bull) market at some point.
There are good ways to make money in either condition but for most investors with a long only bias and a tendency to hold positions long term, waiting for a primary bull makes sense.

It's been very beary since 2000:

http://www.ritholtz.com/blog/wp-cont...markets600.jpg

http://www.topgunfp.com/wp-content/u...-2000-2009.gif

It seems to me that we started hearing that the market was bullish after people in power (ie moneyed individuals) realized that as long as the media reported that the market was down/dismal/etc. then average joes would not invest in there "sure thing" blue chips, or anything in general. As soon as the newsmedia (see CNBC or "mad-money" Kramer) starts telling people that it's A-OK to invest again, they will. It's a self-fulfilling prophecy.

There is money to be made in either a bull or bear scenario, and the smart investor knows this. But, as stated above, most investment firms are long-term oriented and prefer bull markets. Hence the effort to bring the masses back to the stock market via mass-media propaganda.

Maybe I should have posted this under "tilted conspiracies"...

Bear markets tend to crush almost everyone involved.

My take on the reality of the market is that some people are making money and some are not.

The people who went to cash/shorted the market/etc. in early 2000, then started to re-invest in 2003, went to "cash" in 2008 and are now re-investing are experiencing a tremendous "bull" market. Even those with less than perfect timing but with a discipline to minimize losses and to follow (rather than trying to anticipate) market shifts in market trends are doing pretty well. The market is a teacher, wise people learn from the past.

Financials were greatly under valued a few months ago, they have had a good run and are now consolidating.

Energy stocks are following a similar pattern, when oil reach its low a month or so ago, energy stocks were under valued. Now they are running strong. I expect they will reach a peak when the price of oil does.

Technology is due for a run, we are just waiting for the next big thing. I don't think the next version of Windows is going to do it, but it is possible we will see a big upgrade cycle in the PC market.

The china market is going to out perform the US, FXI is a eft and a good way to play China.

Small cap stocks will out perform large cap stocks when economic growth is strong, I expect the economy will start to grow again starting later this year, but small cap stocks will move before you get data on that.

Infra structure companies and commodities, like copper/steal were hit hard and will see a bounce as well.

I am betting the "green" stocks go nowhere, I think it is mostly hype. I am avoiding windmills, solar, and nuke power.

Oh, and I love the dividend yield on the cigarette company Phillip Morris. They are in business with the government (taxes,settlements to state governments, child health care) so they will be protected from competition and from going out of business. The dividend is safe.

Ace, care to offer an opinion in movement of the dollar vs 'the market'?

I mean, the dollar drops 2% and the markets go up 1%.

YAY BULL! (shit)

and we're due for a big run up in pc's?

Why exactly? and did you see dell's latest results together with intel's comments from a couple months back?

:-O

The market is driven by many factors and I don't think the value of the dollar is always on the top of the list. A weak dollar means companies doing business internationally will see increased sales, but may be hurt when or if they convert foreign currency to dollars. A company like Caterpillar will benefit from a weak dollar. A weak dollar also means we may see higher interest rates and higher inflation. Our current fiscal policy predicts the dollar will be weak and getting weaker going into the future. One concern we should have is foreign countries and investors selling their dollars or our national debt.

I think the market is pricing in our economic recovery. I think they expect a return of high oil prices and other commodities. I think they expect higher inflation. but the big story is economic recovery and companies being able to return to earnings growth.



My gut tells me PC's are dead. I think there may be another cycle or two, but personally I will never buy another Window's based PC unless I am forced to.

I think Dell is dead money. I think they failed to evolve when they had the opportunity. Intel is still capable of solid growth, but not like in the 90's.

The market is very hard to figure out. If that were not so then we would all be rich. The one thing I've learned over the years is that when most people are bullish it is generally a good time to sell and when most people are bearish it is generally a good time to buy. I don't think this works on those rare occasions when the market resets due to dramatic changes in fundamentals like unforseen credit crisis etc.. I don't think many of us would have held stocks last fall if we had known about all the upcoming bank failures.

Chips are becoming the motors and gears of our society, but moreso.

Chipzilla (Intel) will make a tonne of cash for a reasonable way into the future. That's a 100% banker, if you have a look at how far ahead they are in technologies for processor speed, effective multi-processors, lower power consumption, etc and ponder the increasing dependence and silicon in our lives and societies...

My $0.02.

As for the the other stuff, apart from the topic of Dell, i think it's fair to say we don't agree.

You think the paradigms haven't changed, I think the game is bloodied and dying, engaging in death spasms as we watch.

Welcome to the bond market blow out or some MAJOR hyper-inflationary gasoline in the auctions this week.

---------- Post added at 11:05 PM ---------- Previous post was at 11:02 PM ----------

OUCH.

Global Crisis ?Inevitable? Unless U.S. Starts Saving, Yu Says - Bloomberg.com

I think market paradigms change all the time. I also think that is the game. The investor who is on top of paradigm changes will always find ways to profit in the market.

Those who weather them tend to be of two kinds: 1) those with a properly diversified portfolio, 2) contrarian investors.

Unfortunately, there are many who don't know what true diversification is and many who think contrarian investors are simply bat-shit crazy.

I used to own Intel stock a few years ago. It doesn't do much. And now it is down $10 from where I had it at.

It is a good company, and they don't have much competition, but they are all ready big and they aren't going to be able to grow very much. People are happy with the computers they have, and I don't see a revolutionary CPU coming out in the next few years.

Then again, people are waiting for Windows 7 to come out in October before they buy new computers. And others are waiting for September for Apple to release OSX 10.6 with their new computers.

It is really hard for normal people to make money on the stock market. There is an entire industry of people who make careers out of taking your money.

You see, this is the thing. "Making money on the stock market." When people think of being investors, it's a mistake to think, "Oh, right. Stocks and bonds," and that's it.

People like the idea of making money in stocks, and perhaps they'll look at bonds as the "safe and wise" thing to do...you know, to "diversify." It's only when you get yourself a proper financial advisor (not just a broker) who will also let you know about the function of holding cash (T-bills), real estate, and other vehicles that can be unaffected by conditions that wipe out stock values. Modern portfolio theory has been around for how long now? Haven't enough people learned their lesson? Maybe it's just greed, because with the information and products out there, it really is as easy as picking what level of risk you're comfortable with. I guess some people are merely concerned with making as much money as possible. But it's funny—you can't escape taking on as much risk as necessary.