Originally Posted by gkrykewy
Well, you seem to have been right about the 13,400 wall. So you're saying I should NOT liquidate all of my assets and buy gold coins and Halo 3 legendary editions? :D
hah.. well. I wish I would have taken my own advice on that 13400. I jumped the gun a couple days before when I saw Hank Paulson come out on CNBC and basically say there's not going to be a rate cut. I thought for sure the market was going to see that, freak out, and drop then and there.
It would be hard for me to give you a suggestion on what to do with your money I don't know what your account looks like and I don't know what your goals are. I'm playing this thing with a very specific purpose in mind and i'm playing with a lot of risk.
I'm a game designer trying to start a studio
I think the market will be back up by October but, in the near term we're going to fall. Problem is I'm really not sure how hard. Not to call for doom but there are some pretty scary catalysts that could spark at any time.
- Citibank and bank of America we're given permission by the Federal Reserve to put 30% of their assets into their brokerage accounts last Friday. Prior limit was 10% which is something that was put in place to help events like 1929 from happening again.
- Housing is BAD! Prices are falling, there is a 9.6 month supply for sale and the speed at which they are selling is getting worse.
- A lot of people signed up for variable interest loans in the last couples years and those are getting set to change (I think most start early next year) and all of a sudden people are going to be paying a whole lot more than they thought they would for their houses. because the above they aren't going to be able to sell them very easy and they won't be able to re-finance either read: August 28, '07 The Market is What it is…
Credit is drying up partly because the amount of people foreclosing has doubled since last year. Places like Countrywide write their loans, package them, and sell them to financial institutions all over the world. These packages are rated and then sold off. Problem is they were taking subprime loans and packing them in with AAA+ rated loans. Think of it like a hot dog. Normally pure beef (AAA+) hot dogs are supposed to be 99.2% meat. Countrywide was doing something a little closer to 85-90% meat in these packages and still calling them 'pure beef'. Now you're seeing these institutions around the world losing money because of it. I'm telling you right now, Countrywide isn't long for this world. On a different note neither is Circuit City.. (Actually, I think the safest bet in the market right now is shorting CFC and CC to Zero.)
Then you have the devaluation of the dollar and really I could go on and on. Don't think it's all bad though because it's not. Stocks are still a pretty good value and consumers are still spending but, if this housing crisis starts eating into our ability to spend look out.
There's even some tinfoil hat crap out there like someone betting many billions that the S&P 500 (which is 20% banks) is going to tank hard. They've shorted a ton of WAY in the money calls. These will only make money if the market falls and with the amount 'they' have laid down odds are 'they' know something none of us do.
Saying all that. I'd be glad give you, or anyone else, specific advice based on what you're looking to do but for the right now I think you should just hold on to what you have, provided it's a solid company with strong growth moving forward.