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[quote author="awgee" date=1229490577][quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?</blockquote>
Knee jerk reaction, just give people some time to think about what the Fed really sad by its actions. I honestly think we make new lows next Fall.
 
[quote author="awgee" date=1229490577]

There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?</blockquote>


when the joker was dumping money on the poor people of gotham, they didn't realize they were getting poisoned by smile-x gas at the same time. their only concern was, hey free money!
 
[quote author="awgee" date=1229490577][quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?</blockquote>


It always happens like that. Market almost always rallies on Fed cuts even though they already knew it was coming so its somewhat baked in. It's just a psychological thing. You see it all the time, thats why I bought back my dec. calls to close out my positions before it was officially cut.

Then at the end of today I wrote another set of calls on CSCO, AA and XOM for Jan. I did 75% of the calls at the money to lock in about 10% return for the month. The other 25% I'll decide on later. If the market goes south immediately, i'll pass on writing them. If the market goes up another couple hundred pts, I'll use my other 25% and lock in an even better return.



But imo, people will wake up and say "oh sh%^" that was their last bullet...what if it doesn't work? And yes...they are panicked. (Fed) I think its only a matter of time before ppl realize.



Thats just my hunch, I could be dead wrong...so thats why I'm not going all out and buying puts either. Taking a conservative approach.
 
[quote author="blackvault_cm" date=1229500819][quote author="awgee" date=1229490577][quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?</blockquote>


It always happens like that. Market almost always rallies on Fed cuts even though they already knew it was coming so its somewhat baked in. It's just a psychological thing. You see it all the time, thats why I bought back my dec. calls to close out my positions before it was officially cut.

Then at the end of today I wrote another set of calls on CSCO, AA and XOM for Jan. I did 75% of the calls at the money to lock in about 10% return for the month. The other 25% I'll decide on later. If the market goes south immediately, i'll pass on writing them. If the market goes up another couple hundred pts, I'll use my other 25% and lock in an even better return.



But imo, people will wake up and say "oh sh%^" that was their last bullet...what if it doesn't work? And yes...they are panicked. (Fed) I think its only a matter of time before ppl realize.



Thats just my hunch, I could be dead wrong...so thats why I'm not going all out and buying puts either. Taking a conservative approach.</blockquote>
I understand that the market reacts in a positive manner to rate cuts, but going to 0%? How anybody can see that as a positive is beyond me.
 
[quote author="awgee" date=1229503605]I understand that the market reacts in a positive manner to rate cuts, but going to 0%? How anybody can see that as a positive is beyond me.</blockquote>
I supose if you were Japan it looks like a nice return :lol:
 
[quote author="awgee" date=1229503605][quote author="blackvault_cm" date=1229500819][quote author="awgee" date=1229490577][quote author="blackvault_cm" date=1229486961]Fed Cut rates...as expected. I bet market will start going south from here and maybe retest 7500. The fed fired its last bullet. Lets face it, each bullet before missed anyways. It was just a psychological way to try and put some confidence in the market.

I wonder if market will start thinking and say...where do we go next? There are no more rate cuts. Just a possible scenario to think about.</blockquote>


There are more ways to print money than just lowering the fed funds rate, but I am confused. To me, lowering the fed funds rate to 0.25% is a sign of desperation and panic. Why aren't investors reading it the same?</blockquote>


It always happens like that. Market almost always rallies on Fed cuts even though they already knew it was coming so its somewhat baked in. It's just a psychological thing. You see it all the time, thats why I bought back my dec. calls to close out my positions before it was officially cut.

Then at the end of today I wrote another set of calls on CSCO, AA and XOM for Jan. I did 75% of the calls at the money to lock in about 10% return for the month. The other 25% I'll decide on later. If the market goes south immediately, i'll pass on writing them. If the market goes up another couple hundred pts, I'll use my other 25% and lock in an even better return.



But imo, people will wake up and say "oh sh%^" that was their last bullet...what if it doesn't work? And yes...they are panicked. (Fed) I think its only a matter of time before ppl realize.



Thats just my hunch, I could be dead wrong...so thats why I'm not going all out and buying puts either. Taking a conservative approach.</blockquote>
I understand that the market reacts in a positive manner to rate cuts, but going to 0%? How anybody can see that as a positive is beyond me.</blockquote>
Welcome to Japan ver. 2.0. We'll be sitting at these low rates for years. The 30-year bond will have a 1% handle and we will see 30-year mortgage rates in the 3%s.
 
[quote author="usctrojanman29" date=1229515886]

Welcome to Japan ver. 2.0. We'll be sitting at these low rates for years. The 30-year bond will have a 1% handle and we will see 30-year mortgage rates in the 3%s.</blockquote>


it made no difference in Japan.



plus, the Japanese were sticklers about paying their mortgages, Americans prefer to just walk away.
 
[quote author="No_Such_Reality" date=1229516513][quote author="usctrojanman29" date=1229515886]

Welcome to Japan ver. 2.0. We'll be sitting at these low rates for years. The 30-year bond will have a 1% handle and we will see 30-year mortgage rates in the 3%s.</blockquote>


it made no difference in Japan.



plus, the Japanese were sticklers about paying their mortgages, Americans prefer to just walk away.</blockquote>
And it won't make much of a difference here now. You are right about the Japanese paying their debt obligations, but the Japanese had much higher saving rates which was one of the causes for the slow economy. We are again in a similar situation, but our savings rate will go up involuntarily mainly due to the lack of new credit so the US will become a nation of savers, like it or not.
 
[quote author="usctrojanman29" date=1229520145][quote author="No_Such_Reality" date=1229516513][quote author="usctrojanman29" date=1229515886]

Welcome to Japan ver. 2.0. We'll be sitting at these low rates for years. The 30-year bond will have a 1% handle and we will see 30-year mortgage rates in the 3%s.</blockquote>


it made no difference in Japan.



plus, the Japanese were sticklers about paying their mortgages, Americans prefer to just walk away.</blockquote>
And it won't make much of a difference here now. <strong>You are right about the Japanese paying their debt obligations</strong>, but the Japanese had much higher saving rates which was one of the causes for the slow economy. We are again in a similar situation, but our savings rate will go up involuntarily mainly due to the lack of new credit so the US will become savings, like it or not.</blockquote>


The Japanese pay their debts? Are you talking about the same 90s-00s time period in Japan? Because if you are talking about that time period, <a href="http://archives.cnn.com/2001/BUSINESS/asia/05/29/japan.banks/index.html">then I suggest you revisit history</a>.



<a href="http://www.wtop.com/?nid=111&sid=1486612">This one is a classic</a>...



<em>JAPAN



THE PROBLEM: <strong>Japanese financial institutions bet that real estate prices would continue to rise in the 1990s. Reality hit when the inflated value of assets plunged, and borrowers were unable to repay loans. Money became more difficult and expensive to obtain.</strong> In 1997, Sanyo Securities Co. and Hokkaido Takushoku Bank went bankrupt. Then Yamaichi Securities Co., a "Big Four" brokerage, also collapsed, stunning the nation. Delayed action and the lack of transparency in Japan's financial system exacerbated the problem as many financial institutions hid the bad debts.



ACTION: <strong>Banks started writing off their bad debts in the mid-1990s.</strong> The Japanese bailout began in earnest in 1999 when the government set up a special organization, the Resolution and Collection Corp., to handle the disposal of <strong>nonperforming loans</strong>. The net public outlay to clean up the bad debt mess was 18 trillion yen ($168 billion), according to the Financial Services Agency.



RESOLUTION: The Japanese government recouped a sizable amount of its bailout funds by reselling collateral, most often land, and other assets. The abysmal times in Japan during the 1990s are now known as the "lost decade." Even though the economy is better now, the Japan's stock market still hasn't returned to its peak before the bubble burst. <strong>And Japan still has about $9 billion worth of property held as collateral that needs to be sold</strong>.



LESSON FOR U.S.: Japan waited too long before resorting to a bailout using taxpayers' money to write off the mountain of bad loans on banks' balance sheets, experts say.</em>
 
[quote author="graphrix" date=1229534115][quote author="usctrojanman29" date=1229520145][quote author="No_Such_Reality" date=1229516513][quote author="usctrojanman29" date=1229515886]

Welcome to Japan ver. 2.0. We'll be sitting at these low rates for years. The 30-year bond will have a 1% handle and we will see 30-year mortgage rates in the 3%s.</blockquote>


it made no difference in Japan.



plus, the Japanese were sticklers about paying their mortgages, Americans prefer to just walk away.</blockquote>
And it won't make much of a difference here now. <strong>You are right about the Japanese paying their debt obligations</strong>, but the Japanese had much higher saving rates which was one of the causes for the slow economy. We are again in a similar situation, but our savings rate will go up involuntarily mainly due to the lack of new credit so the US will become savings, like it or not.</blockquote>


The Japanese pay their debts? Are you talking about the same 90s-00s time period in Japan? Because if you are talking about that time period, <a href="http://archives.cnn.com/2001/BUSINESS/asia/05/29/japan.banks/index.html">then I suggest you revisit history</a>.



<a href="http://www.wtop.com/?nid=111&sid=1486612">This one is a classic</a>...



<em>JAPAN



THE PROBLEM: <strong>Japanese financial institutions bet that real estate prices would continue to rise in the 1990s. Reality hit when the inflated value of assets plunged, and borrowers were unable to repay loans. Money became more difficult and expensive to obtain.</strong> In 1997, Sanyo Securities Co. and Hokkaido Takushoku Bank went bankrupt. Then Yamaichi Securities Co., a "Big Four" brokerage, also collapsed, stunning the nation. Delayed action and the lack of transparency in Japan's financial system exacerbated the problem as many financial institutions hid the bad debts.



ACTION: <strong>Banks started writing off their bad debts in the mid-1990s.</strong> The Japanese bailout began in earnest in 1999 when the government set up a special organization, the Resolution and Collection Corp., to handle the disposal of <strong>nonperforming loans</strong>. The net public outlay to clean up the bad debt mess was 18 trillion yen ($168 billion), according to the Financial Services Agency.



RESOLUTION: The Japanese government recouped a sizable amount of its bailout funds by reselling collateral, most often land, and other assets. The abysmal times in Japan during the 1990s are now known as the "lost decade." Even though the economy is better now, the Japan's stock market still hasn't returned to its peak before the bubble burst. <strong>And Japan still has about $9 billion worth of property held as collateral that needs to be sold</strong>.



LESSON FOR U.S.: Japan waited too long before resorting to a bailout using taxpayers' money to write off the mountain of bad loans on banks' balance sheets, experts say.</em></blockquote>
I was speaking in general terms of Japanese people. From my experience and the people I know, Japanese and most other asian people tend to steer clear of debt or pay it off very quickly. Thanks for the link to the article, very interesting summary of what happened in Sweden and Japan. Looks like the key to a quicker recovery is transparency.
 
For the last three years, I've been playing the stock market simulator over at Investopedia. It's not a perfect simulation, but I feel like I learned a lot about trading. At the moment I'm saving up an emergency fund, but afterward, I'd like to start investing for real with a single lump sum of about $2,000. (Did I mention I was poor?)



I realize I'm talking to day-traders, so I can see where I might be barking up the wrong tree for this advice, but I would appreciate any recommendations for which online trading site to use for someone who is likely to make only 4 or 5 trades in a year? No day-trading, no dollar-cost-averaging. Just a few basic investments with the goal of holding.
 
[quote author="WaitingToBuyByAndBy" date=1229798310]For the last three years, I've been playing the stock market simulator over at Investopedia. It's not a perfect simulation, but I feel like I learned a lot about trading. At the moment I'm saving up an emergency fund, but afterward, I'd like to start investing for real with a single lump sum of about $2,000. (Did I mention I was poor?)



I realize I'm talking to day-traders, so I can see where I might be barking up the wrong tree for this advice, but I would appreciate any recommendations for which online trading site to use for someone who is likely to make only 4 or 5 trades in a year? No day-trading, no dollar-cost-averaging. Just a few basic investments with the goal of holding.</blockquote>


Go with interactive brokers. Last time i checked, they charge $1/100 shares. You're playing with a small account, so this is probably your best best instead of paying 7.99 a trade at the discount brokers.
 
[quote author="WaitingToBuyByAndBy" date=1229798310]For the last three years, I've been playing the stock market simulator over at Investopedia. It's not a perfect simulation, but I feel like I learned a lot about trading. At the moment I'm saving up an emergency fund, but afterward, I'd like to start investing for real with a single lump sum of about $2,000. (Did I mention I was poor?)



I realize I'm talking to day-traders, so I can see where I might be barking up the wrong tree for this advice, but I would appreciate any recommendations for which online trading site to use for someone who is likely to make only 4 or 5 trades in a year? No day-trading, no dollar-cost-averaging. Just a few basic investments with the goal of holding.</blockquote>


At zecco, if u open a a/c with $2500 and maintain a balance 2.5k then first 10 trades per month r free
 
[quote author="WaitingToBuyByAndBy" date=1229798310]For the last three years, I've been playing the stock market simulator over at Investopedia. It's not a perfect simulation, but I feel like I learned a lot about trading. At the moment I'm saving up an emergency fund, but afterward, I'd like to start investing for real with a single lump sum of about $2,000. (Did I mention I was poor?)



I realize I'm talking to day-traders, so I can see where I might be barking up the wrong tree for this advice, but I would appreciate any recommendations for which online trading site to use for someone who is likely to make only 4 or 5 trades in a year? No day-trading, no dollar-cost-averaging. Just a few basic investments with the goal of holding.</blockquote>


Don't ever feel like you are poor or that you are starting with too little or that you are insignificant. When I started investing I robbed my college scholarship of 5K and lied that it was for school items like laptops, housing etc. I had to justify my reason for withdrawl. I lost that money during the tech crash as I had no clue what I was doing. Just saw people get rich off the market so I jumped right in. But I never got discouraged and realized how quickly you can earn money and how quickly you can lose money. This got me curious and launched my quest to learning everything I can about the stock market. My sophomore year I took out 5K college loan. Used 2k for school stuff and invested 3k and fired my second bullet. The rest is history.



How you want to invest is up to you. My route was extreme risk. I didn't care to have a 15% return on 3K. That was too long to wait for too little. 3K is a decent amount of money, but its money I can reload pretty easily as well if I lost it. My goal was to build capital by getting lucky. I picked Nextel back in the day for 1.80 a share...later sold for 28. My 3K balooned. THen took the proceeds and bought ebay when they were a baby in the early 2k's. Since it had 3-4 splits and I tripled that money, and so on. Today I don't play with risk. I have plenty of money in there to live off interest alone if need be.



I'm not suggesting this approach. I was just a very hungry person. If you want to take a conservative approach. I would simply pick 1 stock and sell some covered calls. This is a simple strategy that will give you some protection and give you some steady cash flow. Or you can simply buy a stock and hold on to it. I would NOT however diversify until you have more cash. This is irrelevant what broker you use. If you only want to make a few trades a year then paying 8.99, 9.99, 11.99 or 14.99 really makes no difference. Either go with one broker and pay 9.99 and buy yourself a cafe latte, or skip the latte and spend 14.99 a trade. If you are making 400-500 trades a year like myself, than 5 dollar spread can add up :P. But, about 2K is minimum I would recommend on a stock. You don't want to be buying 5 stocks with 2K and spend 50 dollars in commissions to buy them. Thats a waste. Simply buy a stock now, and settup a system where money is withdrawn from your account on a bi-weekly or monthly basis. Then when you accumulate another 2K or so, either rebuy in the same stock to cost average if it fell and you want to keep the company, or simply buy a new stock.



Just rememember to stick to your strategy. If you are a buy and hold type of guy, and you have a 25% return in the market but only earned 500 for the year, DO NOT get discouraged. Simply get encouraged to increase your contributions and invest more. Because your same moves that netted you 25% could be 25K on 100K. Same moves, same strategy you just had more capital. So build slowly.



Oh and one more thing. YOU yourself is your #1 enemy. 90% of your trading screwups will stem from your own emotions. Learn to CONTROL them early. (It took me about 3 years to semi-control them, and I still make screwups here and there and they usually come because of my emotions) Do not let the market swings push you out of your hand if your hand is solid. Be strategic, disciplined and patient. You can't win othervise. Just like in poker, learn when to hold em, fold-em, and be aggressive and go for the throat and watch your oppenent bleed.



Do not fall in love with a stock either. Once again in poker many love the A, K and will lose their head with it as they chase it to the end. When I play that hand if the flop doesn't hit me I will fold. I can win with a 7.2 just as easy as A,K. So do your homework on the company you want to invest in. If its not doing anything, research it again and find out whats going on...keep up with it. IF things changed, learn to dump it and move on. Don't keep McDonalds just because you love the little toys you got from the kids meals.



One more thing...sorry I can go on forever. Keep a journal. I write down all my trades. How I felt at that moment, why I made the decision, how much I bought it for and what etc. I write this down whether the trades was stupid and makes me look like an idiot or whether the trade was fantastic. I review this often and read it. Next time Im in the same situation where I might buy something on impulse because the market did X or Z, I will remember my previous history and not do it.



Anyway, you have more questions let us know. There is plenty of experience here to learn from.
 
Graph, BV, MoreKaos, and Trojan....



What are you guys shorting these days? MoreKaos, Are you going to short gold again?
 
[quote author="PANDA" date=1230633072]Graph, BV, MoreKaos, and Trojan....



What are you guys shorting these days? MoreKaos, Are you going to short gold again?</blockquote>
I'm selling some out of the money calls on a few stocks and have a few small short positions on SHLD, TTWO, and SPG. The market is so lightly traded that it's hard to predict where it's going.
 
I haven't traded anything for all of December. Too much goes on personally with the holidays, and most of the traders do the same. 1/5/09 should be a fun day. That is when the real traders return from the holidays, and say to the intern: "You did what? No... I did not say that! I said don't short anything that trades soft, not short microsoft! Yes... my cell works fine in St. Johns, and why didn't you email me... I had my crackberry the entire time. Oh dear gawd... this is not going to be a good start to the new year. I can't believe you took the words of crackercakes on IHB seriously. Gawddamnit! No more internet for you!"



And then the chaos/reality begins.
 
[quote author="usctrojanman29" date=1230634623][quote author="PANDA" date=1230633072]Graph, BV, MoreKaos, and Trojan....



What are you guys shorting these days? MoreKaos, Are you going to short gold again?</blockquote>
I'm selling some out of the money calls on a few stocks and have a few small short positions on SHLD, TTWO, and SPG. The market is so lightly traded that it's hard to predict where it's going.</blockquote>


USC,



Are you short via puts or shorting the actual stocks. I think that SHLD and SPG will turn out to be two very good shorts for 2009, but if you are shorting the actual stocks, they could be pulled from you pretty quickly. If you haven't done so already, you may want to consider the March or April puts, though they are no doubt expensive by blackvault's standards.
 
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