You Don't Have to Play the Wall Street game By Rev Shark RealMoney.com Contributor 11/19/2008 7:48 AM EST
The doorstep to the temple of wisdom is the knowledge of our own ignorance. -- Charles Haddon Spurgeon
No matter what is going on in the stock market, the nature of vast majority of investment advice is that you should continue to hold on to your positions and/or buy more. There is never a time when traditional investment managers will not find good "values."
That is what people on Wall Street do. They find places for you to put your money. They don't want you to just sit there in some money market account because they won't feel like they are doing their jobs and they can't justify charging you fees and commissions.
The end result is that very few folks on Wall Street will ever say they don't know where the market is headed. They don't want to be seen as uncertain because that doesn't seem very professional. They would much rather be wrong with great confidence than do little until there is greater clarity.
Individual investors don't have to play that game. They can simply say, "I'm confused and uncertain about this market, so I will hold high levels of cash and wait for better odds before I put my cash to work." Traditional Wall Street really hates that approach because it renders useless all their predictions about market direction and advice about great values.
If you have any doubts about that, just review all the advice and predictions made by Wall Street professionals so far this year. I'll bet that at least 90% of what you have read talks about bottoms, is bullish and suggests that you accumulate some great bargains. That is just the nature of Wall Street, and it doesn't work well at all when we are in a bear market like we are in now.
Individual investors need to block out all that noise and embrace the idea that we don't know when the market will make a lasting turn. Once we admit that, we can track the action patiently and objectively. We don't have to rush back in with our precious capital; we can watch for things to set up and for the market to prove that it really can produce a lasting bounce.
Trying to stay patient and unemotional in a market that is dominated by professionals constantly pushing you to do something isn't easy, but you'll be amazed by the control and comfort that it provides. You'll actually start to feel like you really will make some good returns again by staying patient while you watch all the others flailing about, making their grand declarations about what will happen next.
The biggest problem this market continues to face is the crazy volatility. Some folks like to say this is a great trading market. Maybe for a few with ultra-short-term time frames, but for most traders, the moves are far too big, fast and random to allow for good trading. In markets like this you will hear a lot about five-minute time frames, and you might start to think you'd better trade that way. You might try it, but until we can pick individual stocks in a calmer market, the trading is going to be extremely difficult.
We have a little softness this morning and the news wires are a bit slow; the focus is mainly on how bad this economy really might be. Overseas markets were mostly weak and we have oil down and gold steady. ----------------------------- Ülespoole avanevad:
In reaction to strong earnings/guidance: PSUN +3.6% (also upgraded to Neutral at UBS), LDK +1.3%, PVH +1.2%... Other news: IDMI + 0.2% (continued strength from yesterday's 60% jump), UN +2.6% (still checking), TEVA + 1.9% (Albany Molecular Research announces agreement with Teva Pharma and Barr Labs to settle litigation in ALLEGRA and ALLEGRA D-12 U.S. patent dispute), MGM +1.9% (James Murren elected Chairman and CEO), NOK + 1.7% (still checking).
Allapoole avanevad:
In reaction to disappointing earnings/guidance: TSL -8.0%... M&A news: FONR -23.3% (very light volume; says not interested in entering into a merger or other agreement with Diversified Lending Group)... Select financials trading lower: ING -8.7%, UBS -6.6%, BCS -5.8%, DB -5.0%, HBC -4.5% (trading ex-dividend), MS -3.8%, MER -3.5%, C -2.5%, JPM -2.2%, GS -1.3%... Select oil/gas related names showing weakness with crude lower: ACGY -9.1%, STO -3.9%, RDS.A -3.2%, TOT -2.6%, BP -1.5%, XOM -1.0%... Select solar names trading lower following TSL results: SOL -6.6% (downgraded to Neutral at Credit Suisse), SPWRA -5.2%, FSLR -2.8%, STP -1.8%... Select metals/mining names showing weakness: BBL -4.6%, RTP -4.1%, BHP -3.7%, MT -2.9%, GOLD -2.5%... Other news: SYT -6.0% (still checking), GM -4.5% (says Opel brand not for sale; talk of selling Opel brand "pure speculation" - DJ), LVS -4.2% (modestly pulling back after yesterday's late rebound), RCL -2.8% (announces discontinuation of dividend), TM -2.0% (Toyota to cut output, Nissan downbeat - Reuters), SNY -1.7% (settles on Allegra, Nasacort generics in U.S. - Reuters.com)... Analyst comments: SUN -2.8% (downgraded to Sell at Deutsche), CSCO -1.8% (removed from Conviction Buy List at Goldman - Bloomberg).
Solarite sektorist LDK beatis kergelt ootusi ning tõstis ka prognoose, kuid aktsia kaupleb -1.8% languses. Seda eelkõige tänu TSL-ile, kes pani täna tulemustega korralikult pange. Süübinud kvartalitulemustesse ei ole, kuid tundub üsna huvitav ja TSL on selle mõne rea kirjutamisel juba +5.6% tõusu läinud. See peaks eelkõige LDK-le ja ka ülejäänud sektorile tuge andma.
Dept of Energy reports that crude oil inventories had a build of 1599K (consensus is a build of 1000K); gasoline inventories had a build of 539K (consensus is unchanged); distillate inventories had a draw of 1471K (consensus is a build of 700K).
Ühest äärmusest on nafta hind teise äärmusesse jõudnud, millele viitab ka see, et negatiivsetele uudistele reageeritakse pigem positiivselt. Seetõttu võiks tehnilist laadi põrget oodata, lühiajaliselt tundub langus liiga järsk. Fundamenataalselt on aga pilt nukram ja trendi muutust on veel vara oodata.
Valuutaturul toimuvad taas korralikud liikumised ja seda mõlemas suunas lühikese aja jooksul. Kui 3 tundi tagasi kaubeldi tasemel €1=$1.264, siis vahepeal ralliti tasemele €1=$1.281 ning nüüd oleme taas all €1=$1.258. Kui Forexi liikumised juba päevasiseselt 2% ligidal, pole siis imestada muude varade volatiilsuse üle...
Bloomberg reported that MSFT CEO Ballmer said MSFT is done with all acquisition talks with YHOO; Ballmer says search deal with YHOO is interesting, but there are no active talks on a search deal with YHOO.
Flows overtook fundamentals, dealers said, and the dollar stumbled across the board due to a big buy orders for euros. This boosted sterling even as BoE minutes showed that board members had considered an even bigger rate cut, suggesting further aggressive moves might be on the way
Traders cited buying from a U.S. bank on sterling/dollar from the $1.50 level upwards, moving the pound up more than 3 cents from levels seen just after the BoE minutes were published.
Throughout the day, I have heard that a financial-biased hedge fund was in a liquidation mode. Throughout the day, I have heard that a financial-biased hedge fund was in a liquidation mode. I suppose I should have posted this earlier in the day based on the carnage this afternoon in brokerages, insurers and banks.
Turud jõudnud uutele põhjadele - turgu vaadates tundub tõenäoline, et nii mõnigi hedge-fund sai laupäeval lõppenud rahade fondist väljakutsumisel suuremad tagasikutsumispalved, kui oli oodatud...
Igavesti vahva turg jah... Ei taha praegu kraaksuda, aga need, kes on suutnud rahas olla ja hakkavad lähitulevikus jupikaupa turgudele sisenema, naudivad mingil hetkel ajaloolises võrdluses väga kõrget tootlust.