10.9.08: Nightly Random Market Thoughts

More carnage. Unbelievable. The last hour was like a knife through butter. I'm recording my thoughts every night because I don't think something like this will happen again in my lifetime.

The NASDAQ bottomed at 1100 in 2002. Today, it closed at 1645. Another couple of days like today, and we'll match those lows. Same with the DJIA: 7200 vs 8579.

Back when I first started learning about the stock market back in 1997, I came across the idea that the long bull market of the 90s was fueled by easy money policies of the Fed and the bubble would eventually pop, followed by economic devastation. The NASDAQ suffered the brunt of the blow when the bubble popped, but it wasn't nearly as swift as this recent fall, and the recession was mild. I was surprised at how well the US economy fared. Economic devastation never came. I wonder if the reason is that the economy remained distorted via other sectors such as real estate, and we're only now seeing the consequences of excess credit. The real estate bubble only really grew after the stock market bubble popped. Perhaps the consequences of the easy money policies predicted by that cabal in the late 90s are finally coming home to roost.

All sentiment indicators are off the charts. There is going to be a massive short/medium term bounce Any Day Now, though there's no telling how much lower the market will go beforehand. My strategy is to:

1) Accumulate long term positions as the market keeps going lower.
2) Play for extreme risk, short term positions (for that bounce) that could result in 10-20 baggers when people are running for the hills. Small bets, potentially large payoffs.

General Motors' market capitalization today dropped below its value at the 1929 peak. It was a great company back then, at the height of the 20s market bubble. It is a shit company today.

Iceland's government took over its three largest banks and suspended trading on its stock market for two days. Almost every talking head on CNBC after today's market close wanted the government to "do something". If war is the health of the state, so are economic crises.

Kulicke and Soffa:
Market cap: 170.51 M
Total cash: 172.76 M
(I haven't looked closely at the balance sheet, so don't make anything more of it than "heh".)

The 1 year chart for crude looks suspiciously like the state of Virginia.

All part of the New World Order.

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There is going to be a

There is going to be a massive short/medium term bounce Any Day Now, though there's no telling how much lower the market will go beforehand.

Duh.

Don't catch the knife

Hope you didn't try and catch the knife. It's not done yet.

My coworkers are coming to me asking what they should do with their 401k. One was really upset because they asked me two months ago and I told them to move to the money market fund.

NWO

Hegelian dialectic anyone?

Prime example, Gordie calls for NWO.