I THINK THE MARKETS HAVE BOTTOMED!!!

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[quote author="bltserv" date=1228621437][quote author="morekaos" date=1228567737]I was making a intermediate to long term bottoming call. Not a trading call. I don't think the markets will violate the 7450 level for the next year. Having said that I am taking UCLA and the 33 points</blockquote>


Morekaos.



I am going against you on this one too.

My prediction:



USC wins by 35. 45 to 10</blockquote>


Thank God for generous bookies!!!
 
[quote author="morekaos" date=1228698457][quote author="bltserv" date=1228621437][quote author="morekaos" date=1228567737]I was making a intermediate to long term bottoming call. Not a trading call. I don't think the markets will violate the 7450 level for the next year. Having said that I am taking UCLA and the 33 points</blockquote>


Morekaos.



I am going against you on this one too.

My prediction:



USC wins by 35. 45 to 10</blockquote>


Thank God for generous bookies!!!</blockquote>


USC came up short for my bet. 2 INT`s and 3 missed FG`s. Oh Well.
 
[quote author="awgee" date=1228704353]It looks like a good time to go long oil and short treasuries.</blockquote>
Not that I am in disagreement, but what are you basing that on?



I still don't think we've hit bottom, so any input on where the next hit is going to land (even if it's only educated guesses) would be appreciated.
 
According to the OC Business Journal,



<em>ECONOMIC INDICATORS



DOWN: Consumer bankruptcies in Orange County doubled to 852 in November from a year earlier, according to the National Bankruptcy Research Center. </em>



<a href="http://www.ocbj.com/industry_article_pay.asp?aID=53049216.89381.1717625.3353359.5736855.607&aID2=132116">OC Business Journal Executive Summary section</a>
 
[quote author="Oscar" date=1228707855][quote author="awgee" date=1228704353]It looks like a good time to go long oil and short treasuries.</blockquote>
Not that I am in disagreement, but what are you basing that on?



I still don't think we've hit bottom, so any input on where the next hit is going to land (even if it's only educated guesses) would be appreciated.</blockquote>


Simple fundamental and technical analysis. I have no idea if oil has hit bottom or if treasuries have topped. I do not find the top or bottom particularly relevant except for hindsight.



Oil is about $42 right now. How much lower can it go? $35? $30? How high will it go in the next few years? $100 $200 More? From a simple risk vs. reward basis, this seems like a no brainer.



The ten year is 2.55%. How much lower can it go? The three month is 0.05%. Both the short end and the long end are in negative return territory. Institutions are now paying the US gov to hold their funds on an inflation adjusted basis. How long can that go on? How high can they go? 7%? 10%? 15%? More? Seems like another no brainer on a risk vs. reward basis.



On another note, just because I got something stuck up my craw:

How you ever noticed that every investor, trader, speculator, etc. considers themselves to be a "contrarian" investor? By my estimation, 99.9% of all investors are contrarian? And 99% of them make money, if you go by their posts.
 
I think oil has room to go down, and if you want to invest in it then do it in stages as predicting a bottom is impossible. Stage it and cost average if it continues down. Don't simply go all in...in anything you buy.

At the same time you won't see oil go as high as before. it won't happen. Wall street drove the price of oil to where it was, not demand. Well that is still demand, but its artificial demand. Just like people buying homes left and right, but half were empty as it was investor owned, not occupied. This is fake demand. So demand for a commodity as widely as used as oil can't drop from its peak to where its at in a matter of 3 months. World didn't all of a sudden consume 70% less oil. Did you consume 70% less oil? I bet not. Some demand will go down as prices rise, but often its something people need and will cut back on other expenses.



Saying that oil was a bubble that popped...I will agree that at some point oil will go up...but not to 150 any time soon.

Same thing happend to home prices. When do you think home prices will rise to the levels we had in 2007? When do you think that home valued for 250K in the Inland Empire will go back to 700K?

Or when do you think Microsoft will go back to 90 a share? Some are still waiting. Or Yahoo to go back to 1500 a share? Still waiting?



You can find value in the aftermath of every bubble...however be careful catching the knife on the way down. I did this when I first started investing. I bought Cisco Systems at 42 a share, thinking market has bottomed. Eventually I sold for 22 a couple years later, and now 8-9 years since Cisco is at 16 a share.



Good luck.
 
<a href="http://www.businessweek.com/magazine/content/08_49/b4111063900772.htm?chan=magazine+channel_what's+next">The SUV is backkkk</a>
 
[quote author="awgee" date=1228710510][quote author="Oscar" date=1228707855][quote author="awgee" date=1228704353]It looks like a good time to go long oil and short treasuries.</blockquote>
Not that I am in disagreement, but what are you basing that on?



I still don't think we've hit bottom, so any input on where the next hit is going to land (even if it's only educated guesses) would be appreciated.</blockquote>


Simple fundamental and technical analysis. I have no idea if oil has hit bottom or if treasuries have topped. I do not find the top or bottom particularly relevant except for hindsight.



Oil is about $42 right now. How much lower can it go? $35? $30? How high will it go in the next few years? $100 $200 More? From a simple risk vs. reward basis, this seems like a no brainer.



The ten year is 2.55%. How much lower can it go? The three month is 0.05%. Both the short end and the long end are in negative return territory. Institutions are now paying the US gov to hold their funds on an inflation adjusted basis. How long can that go on? How high can they go? 7%? 10%? 15%? More? Seems like another no brainer on a risk vs. reward basis.



On another note, just because I got something stuck up my craw:

<strong>How you ever noticed that every investor, trader, speculator, etc. considers themselves to be a "contrarian" investor? By my estimation, 99.9% of all investors are contrarian? And 99% of them make money, if you go by their posts.[/</strong>quote]



"If I am going to have an argument I must take a CONTRARIAN POSITION!!"



"But thats not just saying "No it isn't"!!"



"Yes it is!!!"







<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>
 
Let me try that again

<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>





Thanks Graph
 
[quote author="awgee" date=1228710510][quote author="Oscar" date=1228707855][quote author="awgee" date=1228704353]

On another note, just because I got something stuck up my craw:

How you ever noticed that every investor, trader, speculator, etc. considers themselves to be a "contrarian" investor? By my estimation, 99.9% of all investors are contrarian? And 99% of them make money, if you go by their posts.</blockquote>


So are you saying there are 99.9% contrarians and out of that 99% make money? So there are .01% non-contrarians...how much of the time do they make money?
 
[quote author="graphrix" date=1228438769]What!? What do you mean you don't believe in magic? I have all my faith in Hank "The Magician" Paulson.



I dunno about a bottom, but it could be, and if it were I wouldn't call it. However, Morekaos has been right way too many times, and while <a href="http://www.ritholtz.com/blog/2008/12/sp-500-review-2/">Barry isn't saying it is a bottom</a>, we could be in for a nice rally.</blockquote>


Looks like Barry is changing his mind a bit



<a href="http://online.barrons.com/article/SB122852213723784245.html?mod=b_hpp_9_0002_b_this_weeks_magazine_home_right">A Leading Bear Turns Bullish, Sort of </a>

Barry Ritholtz, CEO and Director of Equity Research, FusionIQ
 
[quote author="blackvault_cm" date=1228756260][quote author="awgee" date=1228710510][quote author="Oscar" date=1228707855][quote author="awgee" date=1228704353]

On another note, just because I got something stuck up my craw:

How you ever noticed that every investor, trader, speculator, etc. considers themselves to be a "contrarian" investor? By my estimation, 99.9% of all investors are contrarian? And 99% of them make money, if you go by their posts.</blockquote>


So are you saying there are 99.9% contrarians and out of that 99% make money? So there are .01% non-contrarians...how much of the time do they make money?</blockquote>


I am not saying that there are 99.9% contrarians. I am saying that 99.9% of traders/investors consider themselves to be contrarians. I do not know how often anyone makes money, but if you go by their posts, 99% of their trades are successful.
 
If you are to be successful in any markets you MUST be a contrarian. It is simple to say "buy low, sell high" It is another thing entirely to do so. In order to "buy low" you must be buying an asset that by definition nobody wants (they are all selling it and depressing the price). On the flip, to "sell high" you must be sell an asset that everyone is clamoring to buy. All successful trades are then "contrarian" or against the tide or even what may be considered good judgement by many.
 
Maybe the word "bubble" is over used.



Maybe the best word(s) for this is "OH, S__T!"







<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=adLrsq9KMJL8&refer=home">Treasuries</a>
 
Copied from the comments on Calculated Risk:

<blockquote>blert writes:

It's astonishing that the bankruptcy procedures for Lehman Brothers are not factored into your analysis.

Once Lehman entered Chapter 11 all over her liabilities are frozen and partitioned into buckets? or tranches? of creditor classes.

The legal spadework to determine just what the priorities are is not quick.

In the meantime, all of Lehman?s remaining paper assets mature or spin off cash. (The physical assets have already been sold, mostly. )

There is only one place the Bankruptcy Court will permit the proceeds to flow: Treasury Bills or their equivalent. As a practical matter, it?s going to be 100% T Bills.

Lehman?s T Bills position surges each and every day as its huge pile of short term paper matures.

No matter how much the Treasury pumps into the system the cash drains right back to Lehman Brothers ending up in their T Bill position.

It is the RELENTLESS purchase of T Bills by the bankruptcy administrator that is skewing the yield curve. Every purchase is a forced buy? interest rate be damned.

How much is involved? Lehman entered Chapter 11 with over 600 Billion dollars of assets? marked to market.

Their face value is much higher.

Since only a minority of mortgage debt has soured, which has already been factored into the asset valuations, one must imagine that by now Lehman Brothers has a staggering cash horde.

Such disbursements that the Court will permit ( legal fees and operating expenses) are trivial by comparison.

Tying up this much cash is staggeringly deflationary. This cash drain operates like a black hole sucking in liquidity system wide.

The Treasury needs to use TARP monies to directly buy out creditors holding the senior positions as soon as possible.

The Treasury can then wait for the court to pay off these claims in as much as their already is enough on account, in T Bills, to cover the senior positions.

This is one way to wrap up the bankruptcy and reduce the legal expenses of the creditors.

Such action would at last neutralize the deflating effect of the Lehman bankruptcy.

blert | 12.09.08 - 3:53 pm | #

</blockquote>
I don't know how accurate that is, but it makes more than a bit of sense.
 
Yeah, I read that too. It makes mucho sense.



And, the acceptable collateral for CDSes is US t-bills also, so that may be a few hundred billion or ...



Scary, eh?



What happens when they cut loose with all those?
 
Interesting way of looking at valuations



<a href="http://C:Documents and Settings6267420Local SettingsTemporary Internet FilesOLK1AA3Valuation model shows stocks to be most undervalued since 1974 - MarketWatch.htm">"Market bottom by year-end"</a>
 
Morekaos, how you feel about the bottom? You still think we are at the bottom? More uncertanty is building up as we speak...hell we might not even have a president come January.

I don't know man...I think when my calls expire next week. I might write at the money calls if we stay where we are at or slightly go higher. Lately I was thinking to write slightly out of money, but I might even go as much as writing slightly in the money calls. I think we retest the bottom sometime in Jan-Feb. We'll see...
 
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