Quite A Week For Online Trading November 7, 2008
Posted by janey in : financial success , comments closedThe market next week will be a real test. I think there are so many of us doing online trading and online options trading that have become so anxious that we are nearly shell shocked. Still, I’d rather be doing online stock trading and have a minute-by-minute ability to access my portfolio and be able to take advantage of market shifts. Not sure whether I’d be cut out to be an online broker though.
I’m going to be up early Sunday morning to catch what the European and Asian markets have done, and try to respond accordingly.
I’m not confident that there will be any big rally. At least not a sustained rally. There is no reason.
Some indicators will look better for the US markets than in foreign markets. I expect that will be the case because even though the US is under strain financially and the economy is in doubt, most of the world still views the US as a safe haven.
The earnings reports coming in have not been stellar. And even when the earnings reports have beaten estimates, those stocks rallied, but then sank with the realization that the world is sink-ing into a recession that could be very long lasting.
Just last week, Alan Greenspan said that the world is facing a once in a century tsunami. I think he may be correct. Greenspan is catching grief from Congress about his actions as Federal Reserve Chief. His keeping money loose for so long is blamed in helping to fuel the real estate bubble.
I’m sure it had a lot to do with it. So did the assorted laws that encourage — even mandated– lending to individuals who could not prove that they could pay the loans back.
There is no share of blame to go around; that is for sure.
Meanwhile, the markets do not know what to do about the assorted conditions sitting out here. There are very few silver linings.
The financial health of the entire world is in terrible shape. The earnings reports are bad. There is no one big technology that will rescue markets on the horizon. The elections that are around the corner show that neither candidate has an inovative idea about taking — or not taking– corrective action.
The market next week for online stock trading will be an explosive one. The only thing to do is to batten down the hatches and safeguard your principle. The markets are irrational right now, and everybody is looking for rationality. Markets, though, can stay irrational longer than the average investor can stay solvent.
There is no simple answer.
It should be quite a week.
Advising Us On Online Options Trading November 7, 2008
Posted by janey in : financial success , comments closedAt age 101, Harry Callahan probably never thought he would be called out of retirement by a bunch of people doing something like online stock trading and options trading. When Callahan began his career at the Chicago Board of Trade in 1927, there were only stock tickers – no such things as online brokers!
He visited our online stock trading group again this morning. He is getting to be a regular. He is typically late, as he has an early morning workout that he does at Cardinal Fitness.
Though he was born way before the first PC, Callahan has his own laptop, and he brought it with this morning. He has many online accounts, and has an active portfolio.
When he first started meeting with us he was more confident that there might be a short-lived panic and a recovery, but as the weeks have gone on, he has become less hopeful.
“The missteps of seventy years ago are being repeated — some of them– and it can’t be good for the markets,” Callahan said today.
He watched the debates, too.
“I’m not believing any one of the presidential candidates has a clue about money and economics,” Callahan said. “This does not bode well for the markets going forward. Remember, after one of them is elected, there is a long lag time before they actually take office. Then, there is the time to get things up and running.”
His advice was to keep very few things long, and if you do, make sure you hedge, because in his opinion the market will fall farther.
“Don’t worry about finding the bottom,” he said. “If a solid stock — and IBM or Apple or another market share leader with a good balance sheet– looks cheap enough, buy it.”
Further, Callahan reminded us that nobody ever went broke taking profits. If any of us were holding stock that was ages old we might want to sell a portion and take some of the remaining profits.
“Remember,” said Callahan, “it was not the stock market nosedive on Black Tuesday, 1929, that caused the Great Depression. It was the tariffs that were put in place, the increase in taxes, and, ultimately, the drain on the economy that FDR’s alphabet soup of government programs that took a panic and made it a depression.”
Callahan had met Franklin Roosevelt.
“He was a good man,” said Callahan, “I met Roosevelt several times. But I would not call him an economically educated man. Neither is John McCain or Barrack Obama. Joe the Plumber — now there is a man who knows economics.”
Callahan then left. He was flying to New York with his girlfriend later in the evening, and he had to get packed.
