PDA

View Full Version : Translating investor-speak in a bear market and recession



EJ
12-09-08, 09:24 PM
http://www.itulip.com/images/translate.gifTranslating investor-speak in a bear market and recession

When it comes to investing, people rarely say what they mean. Use this handy guide to translate.


When they say: "The stock market is experiencing a period of volatility."

They mean: "The stock market crashed."


When they say: "Stocks are in a bear market but are due to rally 50% or more soon."

They mean: "I stayed in the market all year waiting for it to come back. Now I'm praying for one last chance to get out."


When they say: "The stock market is oversold due to irrational fear and will come back soon."

They mean: "I had more than 70% of my net worth in stocks and if it doesn't come back soon I'm in trouble."


When they say: "Housing prices will recover soon."

They mean: "Most of my net worth is tied up in my house. If housing prices don't come back soon I'm in trouble."


When they say: "The price of gold will collapse to $200."

They mean: "I don't own any gold."


When they say: "The price of gold will fall to $400."

They mean: "I can't believe it's still over $750 when four week Treasury bills are at 0%, oil prices have collapsed over 70%, and the stock market is at 1998 levels."


When they say: "The price of gold will fall to $600 before recovering."

They mean: "I bought at $1000, sold at $900, bought at $800, sold at $700. Aaaarg!"


When they say: "Gold prices will fluctuate before some day reaching a peak of $2,500 or so."

They mean: "I bought gold in 2001 at $260 and have not traded it since."


When they say: "The price of gold will rise to $2,000 next year."

They mean: "I told my investors that the dollar was going to collapse and gold will shoot over $1,500 this year."


When they say: "Silver will go to $30 before gold goes to $1000."

They mean: "I own a lot of silver and hardly any gold."


When they say: "The economy will come back soon."

They mean: "I have hardly any savings and a lot of debt. If it doesn't come back soon I'm in trouble."


I'm sure you can think of other phrases to translate.

WDCRob
12-09-08, 09:42 PM
When they say: "Rob, stop. Please, I beg you stop. I don't want to hear any more about the collapsing economy, deteriorating housing market, policy proposals, pending inflation or what the Fed's trying to do."

Oh, wait. Maybe this wasn't the best example.

Contemptuous
12-09-08, 10:30 PM
EJ wrote:

QUOTE:

When they say: "Stocks are in a bear market but are due to rally 50% or more soon."

They mean: "I stayed in the market all year waiting for it to come back. Now I'm praying for one last chance to get out."

Just a minor objection here insofar as at least this reader tries to take scrupulous care to never put forward an opinion which is merely cheerleading or projecting his own hopes for his own investment positions. Actually that practice (or call it an "self-coddling" or "self-affirming" exercise) irritates me also, so I agree with EJ's take on that this whole syndrome merely points out how hopelessly married to their own yearnings such investors are.

But it might be noted with regard to an interim bottom in this market decline, there's a very real possibility that actually the "due to rally 50% soon" delusion above may in fact be the reality at this juncture in 2008. In fact, expressing an opinion in December of 2008 that stocks are due to rally significantly soon, arguably has some firm basis in rational and objective observation.

The historic parallels clearly have noted that for extent and time compression, the current market decline is running straight out past 200 years of comparables. That's one red flag against assumptions it will merely continue. Then the visual evidence in the infamous "charts" - these charts give a strong hint that stocks have made a significant intermediate low.

An interim bottom pattern does indeed appear to be more than a hint here even to the observer most averse to "reading anything into" visual records of elapsed market action. For all the rest I think EJ's entire point here is absolutely spot on. Waaay too many people are constantly posting cherry picked bullish factoids celebrating their investment positions - most often posting "celebrations" of whatever they may happen to be long (or short).

If one tries posting "celebrations" of why ones own investment positions are flat wrong one soon discovers it is altogether less enjoyable.

876

875

877

GRG55
12-09-08, 11:40 PM
When they say: "Stocks are in a bear market but are due to rally 50% or more soon."

They mean: "If we can game it that much, it'll be a widows and orphans short for us"

*T*
12-10-08, 06:34 AM
When Lukester says:

EJ wrote:
QUOTE:
Just a minor objection here insofar as at least this reader tries to take scrupulous care to never put forward an opinion which is merely cheerleading or projecting his own hopes for his own investment positions. Actually that practice (or call it an "self-coddling" or "self-affirming" exercise) irritates me also, so I agree with EJ's take on that this whole syndrome merely points out how hopelessly married to their own yearnings such investors are.

But it might be noted with regard to an interim bottom in this market decline, there's a very real possibility that actually the "due to rally 50% soon" delusion above may in fact be the reality at this juncture in 2008. In fact, expressing an opinion in December of 2008 that stocks are due to rally significantly soon, arguably has some firm basis in rational and objective observation.

The historic parallels clearly have noted that for extent and time compression, the current market decline is running straight out past 200 years of comparables. That's one red flag against assumptions it will merely continue. Then the visual evidence in the infamous "charts" - these charts give a strong hint that stocks have made a significant intermediate low.

An interim bottom pattern does indeed appear to be more than a hint here even to the observer most averse to "reading anything into" visual records of elapsed market action. For all the rest I think EJ's entire point here is absolutely spot on. Waaay too many people are constantly posting cherry picked bullish factoids celebrating their investment positions - most often posting "celebrations" of whatever they may happen to be long (or short).

If one tries posting "celebrations" of why ones own investment positions are flat wrong one soon discovers it is altogether less enjoyable.


Lukester means: I loaded up on energy stocks too, dammit
:p

c1ue
12-10-08, 11:19 AM
Lukester,

I played the bear market rally. As usual, sold out too soon - but the 75% jump in UYG in 10 days was nice.

Now I await the entry point for the trip back down. Likely to be the very day that the automaker bailout comes.

SKF under 100?

Contemptuous
12-10-08, 01:01 PM
Check out HMU also for a leveraged play on the gold miners. I think this cyclical rally has to have a little more longevity than a mere week. We're looking at maybe a multiweek rally (4-12 week) and a play in something like HMU that's good for 70%++ maybe. It's up 15% today just breaking out of a multi-month downtrend. Look at the unbroken extent of the markets collapse - the severity and lack of significant relief rallies. When the real relief rally gets underway it's got to be proportional to the decline-to-date - more than just a one or two week wonder. Rick Bishop is sniffing around this miners rebound idea. That guy is a merciless, pitiless scavenger. Has zero tolerance for "buy and hold" investments that are stting around dawdling. "If it ain't goin' up smartly, like right the f**ck now - it's crap!!". :D


Lukester,

I played the bear market rally. As usual, sold out too soon - but the 75% jump in UYG in 10 days was nice.

Now I await the entry point for the trip back down. Likely to be the very day that the automaker bailout comes.

SKF under 100?

[ Postscript for *T* - I actually own nothing at all in shares. Zip. Just a lot of bullion. Doesn't impede me from looking at the markets with interest at the large turns. ]

And how's this for a coda to the above pithy comments regarding self-reaffirmation-bias-prone investors (just to cover all the potential variants):

When they say: "All the markets are in a runaway crash and anyone dabbling in such silly notions as cyclical rebounds is a dilettante."

They mean: "I am fully invested in short term treasuries and gilts, with a prudent rump of gold plus a sprinkling of highly prudent short positions - and I won't tolerate a market rebounding against my eminent good sense."

rabot10
12-10-08, 04:59 PM
Check out HMU also for a leveraged play on the gold miners. I think this cyclical rally has to have a little more longevity than a mere week. We're looking at maybe a multiweek rally (4-12 week) and a play in something like HMU that's good for 70%++ maybe. It's up 15% today just breaking out of a multi-month downtrend. Look at the unbroken extent of the markets collapse - the severity and lack of significant relief rallies. When the real relief rally gets underway it's got to be proportional to the decline-to-date - more than just a one or two week wonder. Rick Bishop is sniffing around this miners rebound idea. That guy is a merciless, pitiless scavenger. Has zero tolerance for "buy and hold" investments that are stting around dawdling. "If it ain't goin' up smartly, like right the f**ck now - it's crap!!". :D



[ Postscript for *T* - I actually own nothing at all in shares. Zip. Just a lot of bullion. Doesn't impede me from looking at the markets with interest at the large turns. ]

And how's this for a coda to the above pithy comments regarding self-reaffirmation-bias-prone investors (just to cover all the potential variants):

When they say: "All the markets are in a runaway crash and anyone dabbling in such silly notions as cyclical rebounds is a dilettante."

They mean: "I am fully invested in short term treasuries and gilts, with a prudent rump of gold plus a sprinkling of highly prudent short positions - and I won't tolerate a market rebounding against my eminent good sense."

Luke, I couldn't seem to fine HMU. I did get into some good PM stocks over the last week or so as we talked about. And I will be holding them long term, that is overnight.

The two mistakes I have made over the last year investing are;

1. Not really understanding "Ka-Poom"

2. Not taking action even though I knew what was coming down the road. I knew we were going into a bear market and didn't buy puts - even leaps if I was that unsure of the timing. Was I short? Very little. It was as if I was a deer in a headlight. Didn't move, just got run over. Not this time.. I see it coming and not only am I getting out of the way I'm getting even!! That eighteen wheeler is gonna get more than one flat tire this time around.

You see SRS? I think it closed at 76 today and the reits are smoking up. That is the best investment news I have seen in some time. With this rally who knows what fools will keep buying -then I'm all in. Chased that stock down for a loss two weeks ago but overall it has made some good money and will again soon. I really want to get back to investing, you know buy and hold for the long term - that could happen end of next year I hope.

Good luck
rick

c1ue
12-10-08, 05:03 PM
Lukester,

Understand your sentiment, but I have zero feel for the gold miners.

Financials are much more predictable - at least so far.

I'm protecting myself mostly by taking half of gains and putting them into 'don't touch' areas, so am only walking up 1/4 step with each successful flip. 10% to 15% VARs and the 2 forays I've taken this year have left me at +25% overall, 169% for the buys themselves.

Hard to replicate that profile with the gold miners.

Contemptuous
12-10-08, 05:14 PM
C1ue and Rick Bishop seem to be busy "skinning cats" in here. Yeesh. What a pair of heartless opportunists. ;)

*T*
12-11-08, 06:52 AM
Postscript for *T* - I actually own nothing at all in shares. Zip. Just a lot of bullion. Doesn't impede me from looking at the markets with interest at the large turns.

Me too on both counts. Just teasing old chap. Didn't know you had so much bullion though.