<<So what are you going to be looking at going in the other direction once all the blood is drained out of the down leg>>
that could be 10 years down the road if Japan is any indication...
LET'S HOPE NOT, REALLY.
we all expect better from the U.S., don't we?
the problem is overhead supply, too many people -and institutional funds- trapped at higher levels, a large percentage even owing money to their brokerages (margin debt).
when relief doesn't come, selling gets emotional, and the same people/funds who couldn't get enough TulipFiberOpticNetworks at $ 780 3/4 liquidate at $ 12 1/4 just to avoid the cramps in their stomachs..., they can't stand the pain.
they couldn't get enough YHOO at $ 120 billion market cap, couldn't buy ICGE fast enough at $ 55 billion market cap, CORV with zero revenues worth more than General Motors right from the start, INSP trading at 683 times/revenues at its top, etc etc etc.
Goldman Sachs recommended ETYS as a "trading buy" and put an $ 80 price target on it when ETYS was hot!
i can find a link to that upgrade and a thousand such examples.
a lot, if not all, of the blame falls on analysts and brokerage houses, who instead of educating the public were throwing fuel to the fire, and widows and orphans to the slaughter.
is there really, as they say, much money left on the sidelines? i doubt it, people wouldn't have margined themselves to the hilt if that had been the case.
a lot depends on mr. green$pawn, how badly he wants to break the market's spine and kill the newly born turtles before they ever get to the sea.
a whole crop, the new generation of companies, could be lost.
again, let's hope not, it would be a tragedy for mankind, because some of these companies are trying to build great things.
between -arguably- a bubble, and a 10-year depression, i prefer a bubble.
they say 1929 was a bubble too, but look where the market is now..., so it WASN'T a bubble in the end, just a bit ahead of time (or over-extended relative to its moving averages, ;-)).
on the one hand, i feel very happy that empty shells (not referring to Ariba here) are going down the tubes, on the other, it's sad watching viable, proven, even undervalued companies (EGRP comes to mind) being thrown out along with the garbage or the insanely priced merchandise.
what i will be looking at? i'll keep doing what i'm doing, trading, not "investing" anymore.
day/swing/position trades lasting from 15 minutes, a day, a week, a month, 2 months, or 1 year, but it's always just that, a trade.
the time-period for the trade may vary, but ALL stocks are trading vehicles.
the opportunity to profit from TRADING, as opposed to investing, is truly infinite, limited only by your own skill, and this is regardless of market direction since you can play both sides.
you could take a $ 20,000 account and turn it into a $ 50 million account in a matter of years, it's perfectly doable, as long as you never violate the essential rules (stops, money management, etc).
i'd rather concentrate in analyzing the chart/price action, timing the swings, the crowd psychology, and perfecting the technique until it becomes second nature, than wasting time reading analyst reports or trying to find the next great buy-and-hold forever type investment. |
