I THINK THE MARKETS HAVE BOTTOMED!!!

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[quote author="skek" date=1229567636]So I wanted to kick around a few half-baked ideas:



Continuing on morekaos' point, the yield on the 10 year is 2.13% and the 30 year is 2.65%. Those are absurd yields over the long term. Doesn't it seem like shorting Treasuries is a viable play, at least looking out 18 months or longer? The question is, how to do it in a manner that can ride out any near term declines or stagnation. I am mindful of acpme's point about the inefficiencies of ultra short ETFs. I suspect PST and TBT suffer from the same risk.



...



When's the last time there has been so much uncertainty on so many fronts?



I'm not nearly as sophisticated an investor as some/most on this thread. How do you folks analyze these issues?</blockquote>
I have the same questions and even fewer answers. blackvault recommended stocks in another thread, and awgee recommended gold, as places to invest. My problem with corporate bonds is that it is almost a certainty that major corps are going to enter Ch. 11 but at this point it's not possible to tell which ones. And as you and others have pointed out, Treasuries are just waiting to be sold off in massive quantities. It's nice to know I'm not the only one feeling confused.
 
[quote author="awgee" date=1229568450]

I think bv and I think in different time frames.</blockquote>


Perhaps. I don't really have a timeframe though. Once I hit a target on a particular investment, I dump or re-asses the situation.

But overall, I spend majority of my time analyzing what I will do 1-2 months ahead. I also have a few investments that are 1-2 years from maturity, however I won't go past that as I can't see beyond that point.



There is no wrong or right way of doing things. You simply have to do what is comfortable to you. Do what you do best and I believe you will succeed. Once you start branching out and sticking your dollars in investments where your knowledge is limited, you are bound for trouble. Thats just what I've experienced, but we are all different.
 
[quote author="blackvault_cm" date=1229569954][quote author="awgee" date=1229568450]

I think bv and I think in different time frames.</blockquote>


Perhaps. I don't really have a timeframe though. Once I hit a target on a particular investment, I dump or re-asses the situation.

But overall, I spend majority of my time analyzing what I will do 1-2 months ahead. I also have a few investments that are 1-2 years from maturity, however I won't go past that as I can't see beyond that point.



There is no wrong or right way of doing things. You simply have to do what is comfortable to you. Do what you do best and I believe you will succeed. Once you start branching out and sticking your dollars in investments where your knowledge is limited, you are bound for trouble. Thats just what I've experienced, but we are all different.</blockquote>


That?s what I?m talking about BV.

All you should care and think about is making money, all the time.

Are you up and running yet?
 
[quote author="Oscar" date=1229569873]



I'm not nearly as sophisticated an investor as some/most on this thread. How do you folks analyze these issues? My problem with corporate bonds is that it is almost a certainty that major corps are going to enter Ch. 11 but at this point it's not possible to tell which ones. </blockquote>


Learn to read a balance sheet and a cash flow statement. And read the 10-Q's and 10-K's. Combine that with a little foresight about the future for a given market sector and you can eliminate a lot of fears of bankruptcy.
 
[quote author="skek" date=1229570595][quote author="tenmagnet" date=1229570151]That?s what I?m talking about BV.

All you should care and think about is making money, all the time.

Are you up and running yet?</blockquote>


Sorry, ten, blackvault's minimum investment is $100k. You'll have to find somewhere else to "invest" your allowance. I've heard that corner lemonade stands offer a nice return.</blockquote>


100K is that all?

Thanks for telling me. I was going to start him up with a lot more than that.

My investment will ensure that we?re partners and that I'm not just a client.

Keep saving your money, tighten that size 42 waist belt and you?ll get there eventually skek
 
well said re: timing, bv. skek, there are many who share that same medium term investment thesis as you. all those ideas make economic sense. 2% treasury yields, $40 oil, 15% yields on AAA debt, 0% long term inflation - it almost seems like there's easy money to be made by betting that against all of them. but at the same time no one can be reasonably certain those trades won't go against you in the near term. under normal circumstances, placing the bet down right now would be little cause for concern. in this extremely volatile environment however, timing becomes ABSOLUTELY critical, especially if you're crazy enough to consider applying leverage to your bet.



and because no ones got a clue as to how to time these bets, that's why so much money continues to sit on the sidelines.
 
[quote author="blackvault_cm" date=1229566366][quote author="morekaos" date=1229565917]Call me crazy but I am thinking of going short the gov bonds. PST and TBT.</blockquote>


You're crazy.</blockquote>


Not everyone thinks I am all that crazy (with the exception of Mrs. Morekaos)



<a href="http://money.cnn.com/2009/01/02/markets/bondcenter/credit_market/index.htm?cnn=yes">Analysts say Treasurys may have a fast and furious decline this year when investors decide the time has come to test the stock market waters again.</a>
 
[quote author="tenmagnet" date=1229571379][quote author="skek" date=1229570595][quote author="tenmagnet" date=1229570151]That?s what I?m talking about BV.

All you should care and think about is making money, all the time.

Are you up and running yet?</blockquote>


Sorry, ten, blackvault's minimum investment is $100k. You'll have to find somewhere else to "invest" your allowance. I've heard that corner lemonade stands offer a nice return.</blockquote>


100K is that all?

Thanks for telling me. I was going to start him up with a lot more than that.

My investment will ensure that we?re partners and that I'm not just a client.

Keep saving your money, tighten that size 42 waist belt and you?ll get there eventually skek</blockquote>


Ten you should know that big fingertips come with that 42 in waist. Don't fault him for punching K instead of M. They are very close to each other...
 
[quote author="morekaos" date=1230956215][quote author="blackvault_cm" date=1229566366][quote author="morekaos" date=1229565917]Call me crazy but I am thinking of going short the gov bonds. PST and TBT.</blockquote>


You're crazy.</blockquote>


Not everyone thinks I am all that crazy (with the exception of Mrs. Morekaos)



<a href="http://money.cnn.com/2009/01/02/markets/bondcenter/credit_market/index.htm?cnn=yes">Analysts say Treasurys may have a fast and furious decline this year when investors decide the time has come to test the stock market waters again.</a></blockquote>


I think treasuries are due for a decline, but I don't know about fast and furious. Too many analysts are calling for a big, fast fall and I tend to think the majority is always wrong, especially financial analysts. I don't see how treasuries can stay inflated, but they have been in a bull market for 22 years and the bond traders are some of the brightest. Also, the Federal Reserve is now committed to buying treasuries and I do not see that behavior stopping soon.
 
[quote author="awgee" date=1230975652][quote author="morekaos" date=1230956215][quote author="blackvault_cm" date=1229566366][quote author="morekaos" date=1229565917]Call me crazy but I am thinking of going short the gov bonds. PST and TBT.</blockquote>


You're crazy.</blockquote>


Not everyone thinks I am all that crazy (with the exception of Mrs. Morekaos)



<a href="http://money.cnn.com/2009/01/02/markets/bondcenter/credit_market/index.htm?cnn=yes">Analysts say Treasurys may have a fast and furious decline this year when investors decide the time has come to test the stock market waters again.</a></blockquote>


I think treasuries are due for a decline, but I don't know about fast and furious. Too many analysts are calling for a big, fast fall and I tend to think the majority is always wrong, especially financial analysts. I don't see how treasuries can stay inflated, but they have been in a bull market for 22 years and the bond traders are some of the brightest. Also, the Federal Reserve is now committed to buying treasuries and I do not see that behavior stopping soon.</blockquote>


There was a great article in the WSJ today... <a href="http://online.wsj.com/article_email/SB123086035502948067-lMyQjAxMDI5MzAwMjgwNjIwWj.html">The Doomsayers Who Got It Right: More Bad News in Store for 2009? Last Year's Cassandras Are Still Gloomy</a>.



<em>By July 2007 he wrote that the real risk to the system would likely emerge in October 2008. He wrote that by the time the crisis passed, "at least one major bank will have failed."



Surveying the wreckage today, he says that the unintended consequences of the government's response so far to the crisis are "unknowable. There is no playbook."



For instance, he says "competitive currency devaluation" could break out among nations as each tries to boost its own economy by weakening its currency, possibly spurring similar moves by other nations fearful of losing any economic advantage. A weaker currency can boost exports (by making those goods cheaper abroad) but also heightens inflation risk.



"With so many moving parts," he says, "you could easily have a surge of inflation."



Treasury bonds, he says, are currently overpriced, "the 30-year ridiculously so." Bond prices move in the opposite direction as yields, and at current price levels, the 30-year bond is effectively forecasting little more than 1% annual inflation for the next three decades.



"In your dreams," Mr. Grantham says.</em>



I'm in the same camp to "short" treasuries. I'm not exactly sure when the time will be right, but I'm looking to get in on TBT. You can also trade options on TBT. Nothing says risk aversion is for sissys, when you invest in a derivative of a derivative based ETF.



BTW, I am recording a show on the history channel, <a href="http://www.history.com/genericContent.do?id=61014">Crash: The Next Great Depression</a>. Crazy to think us and any of the other Cassandras were considered total freakin nut jobs two years ago. Now even the history channel has a show documenting what we have been saying all along. I should hit up Obama, his economic team is good and all, but just think what it would be like if he had IR, awgee, morekaos, blackvault, and myself added to his team. That would kick ass. We would have a weekly auction on Ebay for the people to kick Greenspan in the nuts to raise revenue. I would also see what I could do to not spread skek's wealth as long as he would let me borrow his aston martin once a month. Uhhh... that is not some sort of bribe... is it?
 
[quote author="graphrix" date=1230999205][quote author="awgee" date=1230975652][quote author="morekaos" date=1230956215][quote author="blackvault_cm" date=1229566366][quote author="morekaos" date=1229565917]Call me crazy but I am thinking of going short the gov bonds. PST and TBT.</blockquote>


You're crazy.</blockquote>


Not everyone thinks I am all that crazy (with the exception of Mrs. Morekaos)



<a href="http://money.cnn.com/2009/01/02/markets/bondcenter/credit_market/index.htm?cnn=yes">Analysts say Treasurys may have a fast and furious decline this year when investors decide the time has come to test the stock market waters again.</a></blockquote>


I think treasuries are due for a decline, but I don't know about fast and furious. Too many analysts are calling for a big, fast fall and I tend to think the majority is always wrong, especially financial analysts. I don't see how treasuries can stay inflated, but they have been in a bull market for 22 years and the bond traders are some of the brightest. Also, the Federal Reserve is now committed to buying treasuries and I do not see that behavior stopping soon.</blockquote>


There was a great article in the WSJ today... <a href="http://online.wsj.com/article_email/SB123086035502948067-lMyQjAxMDI5MzAwMjgwNjIwWj.html">The Doomsayers Who Got It Right: More Bad News in Store for 2009? Last Year's Cassandras Are Still Gloomy</a>.



<em>By July 2007 he wrote that the real risk to the system would likely emerge in October 2008. He wrote that by the time the crisis passed, "at least one major bank will have failed."



Surveying the wreckage today, he says that the unintended consequences of the government's response so far to the crisis are "unknowable. There is no playbook."



For instance, he says "competitive currency devaluation" could break out among nations as each tries to boost its own economy by weakening its currency, possibly spurring similar moves by other nations fearful of losing any economic advantage. A weaker currency can boost exports (by making those goods cheaper abroad) but also heightens inflation risk.



"With so many moving parts," he says, "you could easily have a surge of inflation."



Treasury bonds, he says, are currently overpriced, "the 30-year ridiculously so." Bond prices move in the opposite direction as yields, and at current price levels, the 30-year bond is effectively forecasting little more than 1% annual inflation for the next three decades.



"In your dreams," Mr. Grantham says.</em>



I'm in the same camp to "short" treasuries. I'm not exactly sure when the time will be right, but I'm looking to get in on TBT. You can also trade options on TBT. Nothing says risk aversion is for sissys, when you invest in a derivative of a derivative based ETF.



BTW, I am recording a show on the history channel, <a href="http://www.history.com/genericContent.do?id=61014">Crash: The Next Great Depression</a>. Crazy to think us and any of the other Cassandras were considered total freakin nut jobs two years ago. Now even the history channel has a show documenting what we have been saying all along. I should hit up Obama, his economic team is good and all, but just think what it would be like if he had IR, awgee, morekaos, blackvault, and myself added to his team. That would kick ass. We would have a weekly auction on Ebay for the people to kick Greenspan in the nuts to raise revenue. I would also see what I could do to not spread skek's wealth as long as he would let me borrow his aston martin once a month. Uhhh... that is not some sort of bribe... is it?</blockquote>


We need Panda on that team to use as a contrarian indicator
 
[quote author="graphrix" date=1230999205][quote author="awgee" date=1230975652][quote author="morekaos" date=1230956215][quote author="blackvault_cm" date=1229566366][quote author="morekaos" date=1229565917]Call me crazy but I am thinking of going short the gov bonds. PST and TBT.</blockquote>


You're crazy.</blockquote>


Not everyone thinks I am all that crazy (with the exception of Mrs. Morekaos)



<a href="http://money.cnn.com/2009/01/02/markets/bondcenter/credit_market/index.htm?cnn=yes">Analysts say Treasurys may have a fast and furious decline this year when investors decide the time has come to test the stock market waters again.</a></blockquote>


I think treasuries are due for a decline, but I don't know about fast and furious. Too many analysts are calling for a big, fast fall and I tend to think the majority is always wrong, especially financial analysts. I don't see how treasuries can stay inflated, but they have been in a bull market for 22 years and the bond traders are some of the brightest. Also, the Federal Reserve is now committed to buying treasuries and I do not see that behavior stopping soon.</blockquote>


There was a great article in the WSJ today... <a href="http://online.wsj.com/article_email/SB123086035502948067-lMyQjAxMDI5MzAwMjgwNjIwWj.html">The Doomsayers Who Got It Right: More Bad News in Store for 2009? Last Year's Cassandras Are Still Gloomy</a>.



<em>By July 2007 he wrote that the real risk to the system would likely emerge in October 2008. He wrote that by the time the crisis passed, "at least one major bank will have failed."



Surveying the wreckage today, he says that the unintended consequences of the government's response so far to the crisis are "unknowable. There is no playbook."



For instance, he says "competitive currency devaluation" could break out among nations as each tries to boost its own economy by weakening its currency, possibly spurring similar moves by other nations fearful of losing any economic advantage. A weaker currency can boost exports (by making those goods cheaper abroad) but also heightens inflation risk.



"With so many moving parts," he says, "you could easily have a surge of inflation."



Treasury bonds, he says, are currently overpriced, "the 30-year ridiculously so." Bond prices move in the opposite direction as yields, and at current price levels, the 30-year bond is effectively forecasting little more than 1% annual inflation for the next three decades.



"In your dreams," Mr. Grantham says.</em>



I'm in the same camp to "short" treasuries. I'm not exactly sure when the time will be right, but I'm looking to get in on TBT. You can also trade options on TBT. Nothing says risk aversion is for sissys, when you invest in a derivative of a derivative based ETF.



BTW, I am recording a show on the history channel, <a href="http://www.history.com/genericContent.do?id=61014">Crash: The Next Great Depression</a>. Crazy to think us and any of the other Cassandras were considered total freakin nut jobs two years ago. Now even the history channel has a show documenting what we have been saying all along. I should hit up Obama, his economic team is good and all, but just think what it would be like if he had IR, awgee, morekaos, blackvault, and myself added to his team. That would kick ass. We would have a weekly auction on Ebay for the people to kick Greenspan in the nuts to raise revenue. I would also see what I could do to not spread skek's wealth as long as he would let me borrow his aston martin once a month. Uhhh... that is not some sort of bribe... is it?</blockquote>


How about buying 2010 Jan 85 LEAP Puts on TLT? This way you don't need to worry about perfectly timing the implosion, or the decay/slippage on TBT.
 
I have to admit I get pretty nervous when lots of people agree with me.



<a href="http://online.barrons.com/article/SB123094029415750267.html?mod=b_hpp_9_0002_b_this_weeks_magazine_home_top">Get Out Now! </a>



The bubble in Treasuries looks ready to pop, sending prices on government debt sharply lower. But just about every other corner of the bond market beckons -- and could provide competitive returns with stocks, even if the equity markets have a strong 2009. (Video)
 
But sometimes it's OK



<a href="http://online.barrons.com/article/SB123094015454950251.html?mod=b_hpp_9_0002_b_this_weeks_magazine_home_left">For a New Year, Signs of a Bottom </a>
 
Ok...coming out of my vacation mode...



Gonna ride this puppy a bit more maybe till Obama waves his magic, then start loading up on shorts and puts. Perhaps when 5s cross the 20s and S&P enjoys reaches a new milestone...the 1k. Yeehaw!



Game plan...protect my AA, XOM, and CISCO with at the money mid Jan/Feb Calls and move to deeper in the money calls the following month. This is defense.

For offense, gonna launch some nukes towards retailers, banks and a few property holders.



This is gonna be fun!
 
Moronic question:



One of my co-workers told me about FLE last week, was trading around .10 cents a share. For the heck of it, I picked up 4000 shares....just to see what would happen with it long term. I figured I'd just buy some cheap and hold onto it until the economy got better and people started to make purchases of this magnitude again. Was some bonus money I got for Xmas so it was burning a hole in my pocket anyways. ;)



So, a week after I buy it it is suddenly de-listed and is now OTC. LOL ! Jokes on me ! First of all, I have no idea what that means. Over The Counter. I have a basic understanding of what the Pink Sheets are..... but here is my moronic question of the day, and for once it's not going to be PANDA asking: (love u panda !)



Since it's now de-listed and no longer being traded on the NYSE, what happened to it? Did my $$ just go kaput ? (Rrrrrrr.....risk, reward, risk, reward......) My ETrade account is reflecting a loss of the 400 bucks now....so I think it just went up in smoke, no?



'Splain please.
 
[quote author="Trooper" date=1231258398]Moronic question:



One of my co-workers told me about FLE last week, was trading around .10 cents a share. For the heck of it, I picked up 4000 shares....just to see what would happen with it long term. I figured I'd just buy some cheap and hold onto it until the economy got better and people started to make purchases of this magnitude again. Was some bonus money I got for Xmas so it was burning a hole in my pocket anyways. ;)



So, a week after I buy it it is suddenly de-listed and is now OTC. LOL ! Jokes on me ! First of all, I have no idea what that means. Over The Counter. I have a basic understanding of what the Pink Sheets are..... but here is my moronic question of the day, and for once it's not going to be PANDA asking: (love u panda !)



Since it's now de-listed and no longer being traded on the NYSE, what happened to it? Did my $$ just go kaput ? (Rrrrrrr.....risk, reward, risk, reward......) My ETrade account is reflecting a loss of the 400 bucks now....so I think it just went up in smoke, no?



'Splain please.</blockquote>


You are down about 15%. You can see what it is trading at <a href="http://finance.google.com/finance?q=fle&ie=utf-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&sa=N&tab=we">on Google</a> (The new ticker symbol is FLTW.PK ) It was delisted because it failed to meet the NYSE market capitalization rules. Whether or not you can still trade it depends on your broker. But as a general rule of thumb, if you are considering buying anything on the pink sheets, or a penny stock in general, think twice about what you do with your money. I would HIGHLY recommend throwing the money you intended to "invest" in the streets. Your money will be gone either way, but at least there is a CHANCE that someone deserving will get the money you throw in the streets.



As far as the Pink Sheets are concerned, it's an electronic trading place for public companies that don't meet the financial requirements needed to trade on real exchanges.
 
So, technically, there is still some sort of small value to the shares I own. Ok. I thought I heard they declared bankruptcy and figured the bit I'd bought was now worthless. It's ok b/c I bought at the ridiculously low price in order to take a chance that it might go back to a decent price in a few years. Just decided to take a risk for a small amount of $$. I just wasn't sure if the shares were worthless now. Thanks for the reply.



Oh, how do I account for it now...since it no longer shows up on my ETrade account.....it just evaporated. Do I get a stock certificate or something?
 
If they declared bankruptcy, the common stock will be wiped out when they go through the court system. (i.e. it's not worthless now, but it will be soon) I'd highly recommend getting out while there is still some value. Stocks get on the Pink Sheets for a reason, and that reason isn't because the market is a democratic vehicle waiting to enrich the poor. With a 15% loss, you are only talking $60 plus transaction costs. It's better to have $340 for a Christmas bonus than to not have anything at all. And if you truly don't want the money, then give it to a charity. At least you will feel good afterwards.
 
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