Bear Stearns

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<p>morekaos - I'm with you there. We have done very well in the stock market as well with this theory. When everyone said to buy a house - we knew it was the wrong time to buy.</p>

<p>(I know I'm going against this blog but) . . . we are also staying away from gold right now because the public says to buy. {ducks behind tree} </p>
 
<em>"I have made a long and profitable carear by being contrarian. When 75% of the public says we are in a recession and the market is not the place to be I hold my nose and pull the trigger. in 30 years of trading it has never failed that the public are always wrong."





</em>Six months from now, I will probably feel the same way. When we are at the bottom of the recession and everything looks bleak is the best time to buy. We are not at the bottom yet.<em></em>
 
If you listen to Institutional Investors, they are saying that we have already been in a recession for the last five months. Although they expect a rough year, they expect to be out of cash by the end of the Q1 2008.
 
I do respectfully disagree. If you really want to get into the technicals and fundimentals look at the Stock/bond yield indicators (lowest since march 2003 when the dow was 7500) current and forward PE ratios on the s and p (17 and 19 historically very low) Cash positions in mutual funds (4-6% depending and historically high) Cash on and balance sheets of S and P companies ( largest and strongest in decades) ...Ultamitly this is a game of horse shoes, hand grenades and slow dancing...close is good enough and I think 11700 is close enough...I could be wrong but I am a patient man
 
<p>The silenced dude has the last laugh...</p>

<p>http://www.washingtonpost.com/wp-dyn/content/article/2008/03/17/AR2008031702616_2.html?sid=ST2008031602369</p>

<p>One winner is former Bear Stearns executive Warren J. Spector, who sold most of his shares after losing a power struggle. Between 2003 and early 2007, he sold $157 million worth of the firm's stock, at prices as high as $164 a share. </p>

<p></p>

<p><a href="http://www.nytimes.com/2007/08/05/business/05cnd-bear.html?pagewanted=1&hp">http://www.nytimes.com/2007/08/05/business/05cnd-bear.html?pagewanted=1&hp</a></p>

<p>Bear Stearns Ousts a Top Executive</p>

<p>But since the crisis broke in June, he had been pushing to find answers, accepting responsibility internally and telling people that Bear never should have introduced such a highly leveraged fund that carried so much risk, one of which would go on to lose all investor assets.</p>

<p>But that was not enough. According to people briefed on the events, Mr. Cayne, a tournament-level bridge player who is famous for keeping people in the dark about his intentions, felt that the move was critical to restoring trust in Bear. Few were aware of his decision, these people say, although Mr. Cayne did take the counsel of Vincent Tese, the lead director at Bear and an intimate of Mr. Cayne whose involvement in the firm’s</p>
 
No one ever hits the exact bottom. If I am wrong I can average down more in six months like you said. But if I am right I will average up in six months. Either way I feel this market will be posative for the year by year end. The economy was in an actual recession in 1992 and the market rallied from 1990 till 1994 when the fed had to raise interest rates 300 bps to cover the inflation they had ignited fighting the 92 recession. Even with fed funds up 3 full percentatge points in 12 months the market managed a gain in 1994....the year OC went BK. Not a big gain but a gain none the less. Then it continued to rally right through the next credit crisis in 1997 with Long Term Capital and the collapse of the the russian rubble and all the asian tiger currencies. Remember that earth shattering credit crisis? Here we are again..the more things change the more they stay the same.
 
It ain't personal CalGal. You know I dig you.<p>

Gold is being talked about in the MSM, but the public is not buying. Be honest. How many of you have either bought gold in the last year or know somebody who has? 99 out 100 people do not even know how to buy or sell gold. The few who I have heard about in here who have owned gold, sold after they made a profit. The gold market, even the futures market is tiny. If or when the general public actually buys gold, it will quadruple. All the gold that has ever been mined will fit in a 100 ft x 100 ft x 100 ft cube. (Forgive me I got the measurements wrong, but you get the idea.)<p>

When we sold our home, folks looked at me in sympathy. When I told a couple of folks what I was doing with the proceeds, they thought I was stupid. I have heard that gold is topping since it was $350. IMO, the minimum top will be $1800 and the maximum will be close to one share of the Dow. <p>

The federal reserve has just begun to inflate. Gold is just an inverse of the dollar and other fiats. Gold is not usually a good investment. Most of the time, it sucks. Gold does not pay a dividend. You can not live in it. But, gold is a safe haven during inflationary times. And Bernanke's answer to deflation is ... That's all. It is simple. The technicals are unimportant. Look at the fed's history. Look at what Bernanke has written and done. Lucky for me it doesn't take a genius to figure it out.<p>

I have no prediction on the equities markets. B-52 Ben will inflate the money supply and the money has to flow someplace. It may flow into the equities market. I dunno. It may even flow into the housing market. But in real dollars, re prices will sink.
 
You know i respect you awgee but I have to tell ya I just can't buy gold at 1m. I did buy it aggressivley when it broke a 20 year downtrend at 230 an ounce. That chart was mind boggling and it was very obvious it was going up...a lot! Bought the bullion, coins, NEM, CEF and SGGDX but have not sold or bought more since.
 
It is one of the few asset classes propping up my returns this year...LOL. I am tempted though because if the fed reverses course, and i think they will with a vengence one day, the dollar will rally quickly and unexpectedly and the commodity bull run will end in a flash. As I said in a previous post, everybody is on the comodity band wagon now. I may have to get off soon
 
<i>"morekaos-get off while you can, you're better running with the bulls in Spain."</i><p>

CalGal - See what I mean? Ask around. See what the real sentiment on gold is. My guess is that it has not changed in the last ten years; even now. See who has actually bought any in the last year or two.
 
Awgee,



Lot of people buy gold...the most uneducated buy gold, because it is something we are familiar with. My parents and grandparents generation always buy gold, because they don't trust any banks....even the US Bank. Unfortunately for me, I didn't listen...because it is old school to buy gold.



Come down to Bolsa area, walk upstair to the Asian Mall and you will be suprise how many buy gold daily. You know how corporate give out bonus, if you work for a Pa and Ma shop down in Bolsa, you get a ounce of gold as bonus at the end of the year (well, maybe not this year).
 
<p><em>Personally, I would rather miss the bottom than endure the drawdown. </em></p>

<p>I'll ride it down and back up. Unlike a house, I don't have to pay anything to keep it. I'd move it, but my moving it options are frankly more volatile, more prone to unwinding than staying. Cash, bad. Gold, probably worse. Gold was great, but not today... Oil, as soon as the dollar quites devaluing, it'll whipsaw with a double whammy if a recession spreads. Commodities, just like oil.</p>

<p>But yeah, watching money vaporize sucks. Unlike a house, I can liquidate immediately. And If it gets to the point I can't, not having any money won't be any of our concerns.</p>
 
tulip - Do you think that any more people are buying gold this year than last? Has anybody who was not inclined to buy gold before, now more inclined and actually buying?
 
<p>In my biz awgee everybody in in comodities now...gold silver platnum oil you name it. Makes me nervous when people brag about how much they made in something. Like 92 whdn the asian market was all that or 99 when everybody wanted internet stock tips or 05 when everybody was suddenly don bren. Whenever that happens I usually run for the doors.</p>
 
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