I was watching Fast Money on CNBC tonight and they were talking about the recent turmoil in the markets:
- The Dow falls to lowest since April 1997.
- 52% of Americans are afraid they will lose their jobs.
- 1/3 of Americans are losing sleep due to economic concerns.
The sky is falling! Fear reigns! Time to Buy Low?
While you might interpret this as a "buy low" moment, a Fast Money guest analyst Yamada looked back at the Great Depression and made a great observation that the real wealth destruction did not occur in the crash of 1929... it actually occured in the 3-4 years after the crash.
My thoughts?
I think we're STILL in dangerous investing times... so be careful out there. Cash is still king. "Buy and Hold Forever" is officially dead. This is no ordinary recession.
Two months ago, I said right here that stocks were NOT CHEAP and that it was a sucker rally. I hope you got out while you could. Based on how bad the last quarter was, the estimates I had in that January post might be considered "very optimistic". It appears things are much worse.
Below is a chart on how we compare to three of the last bad bear markets courtesy of Calculated Risk Blog and dshort.com:
- The Dow falls to lowest since April 1997.
- 52% of Americans are afraid they will lose their jobs.
- 1/3 of Americans are losing sleep due to economic concerns.
The sky is falling! Fear reigns! Time to Buy Low?
While you might interpret this as a "buy low" moment, a Fast Money guest analyst Yamada looked back at the Great Depression and made a great observation that the real wealth destruction did not occur in the crash of 1929... it actually occured in the 3-4 years after the crash.
My thoughts?
I think we're STILL in dangerous investing times... so be careful out there. Cash is still king. "Buy and Hold Forever" is officially dead. This is no ordinary recession.
Two months ago, I said right here that stocks were NOT CHEAP and that it was a sucker rally. I hope you got out while you could. Based on how bad the last quarter was, the estimates I had in that January post might be considered "very optimistic". It appears things are much worse.
Below is a chart on how we compare to three of the last bad bear markets courtesy of Calculated Risk Blog and dshort.com:
By being on television on a weekly basis, President Obama has scared everyone and the entire stock market has plunged. If you follow this blog, you'll note that I like Gold here, but even Gold is getting dragged down as well. But if the fundamentals for Gold are in tact, why the selloff?
I suspect that someone is being forced to sell their gold holdings and we're going to have another major event (bank/corporation failure, another industry asking for money, alt-a mortgage defaults, etc.). It could be anything, but I think this could happen in the next few weeks. Watch the weekly GLD chart, this could be the entry point we've been waiting for!
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