I was thinking just the opposite of you, that I may lock up some big profits and look for a likely lower entry point
We pay our money and we take our chances.
Today's action, coupled with the report yesterday, suggest that a lot of big buyers, likely a lot of institutions, disagree with you, and believe that the 7.3 range is just dandy.
Who knows. I surely don't have a crystal ball. You might be 100% correct.
Downdrafts like this one IMO opinion are very odd. Let's put things in perspective.
The purported immediate cause of the slide which began Tuesday was the Chinese stock market.
Well, the value of the downdraft Tuesday was less - or close to, I forget - than the value of the whole pumped up, bubblefied, engineered, manipulated, Chinese market. The Chinese market had gone up 120+% in the last year, and we still had our downdraft Tuesday equal the value of the whole Chinese she-bang.
Perspective? Yup, time to grab some.
Then there was the subprime credit market going to pot, taking the entire US economy down with it. It is, however, a tiny part of the entire mortgage market.
Perspective? Yup, time to grab some.
The hedge funds in my view, those unregulated cowboys, are a much more serious problem than what has been trotted out as the reasons for the downdraft. Check this out:
financialarmageddon.com
The unwinding of highly leveraged hedge funds could really hurt.
It may be what has happened in the last week. But because information on them is so scarce, folks like you and me will never know.
The expenses on a hedge fund make them incredibly speculative things. The minute they stop delivering the kinds of returns a stable market provides, they'll start to unwind, IMO, and then the selling starts, lots and lots of painful selling.
The game is played at a level several levels above yours and mine. While we look for a good company with a good future, the big money is thinking in terms of financial instruments like hedge funds and the strategies they use. And they can take take down little fish like you and me when these oh-so- smart people find that, yes, no one has yet figured a way around the business cycle.
Hedge funds, watch the hedge funds. When the media start mentioning them as the real reason for the downdraft, head for the hills. |
