May 21, 2008

HousingPANIC Quote of the Day

"Meanwhile, watch the market crash next week. That's how it works, right?"

-Me, Sunday night, after saying I've been accumulating buy-and-hold mainly foreign stocks over the past month, right before the US market as if on cue and to teach me a lesson again about talking about stocks on a housing blog, gave a few percent back

(meanwhile, I'm buying more... thank you sellers! and what are you all doing?)

56 comments:

Reality said...

Still think we are range-bound for now, between 1340 and 1440 on the S&P500, with a non-insignificant chance of a drastic downside risk to 1200, before a summer rally back to 1400 or so by LaborDay weekend. The fall is going to work out to be a massacre. We will probably see 1000 on the S&P500 by year-end. It is not a time to buy and hold.

Anonymous said...

buying foreign utilities and food producers

Anonymous said...

Mom and Pop Boomer are starting to get their pink slips. Wait till they start ransacking their 401K in the next few months to keep on making mortgage payments on their McMansions, boats and country houses. Ouch!

I'm not flirting with stocks.

Agent 99 said...

Here's my investment advice. Pull over, take a nap. It's too risky to drive right now.

Anonymous said...

We're not going to see the Hindenberg go down until the complete collapse of Fannie and Freddie. Thanks to Con-gress and the Senate we should see that collapse happen very soon.

They already don't have enough capital to cover their losses and now they'll be saddled with even more garbage paper?!!

And then we have the morons who think this is going to help the housing market recover. Wrong dumbasses - the market is still going all the way down the only difference is that we're all going to end up paying for those losses instead of the banks via our tax dollars.

The dumbass public gets screwed again.

Anonymous said...

Solar
Wind
Oil
Food

mickeyc said...

I hope you do tell us next time you are optimistic.
It looks like you picked the exact top of the market!
AAPL will go down to $145.00 in this drop and if it breaches that level we are looking at $115.00 or lower again.
GE is on a ride south to the $20.00 region within 18 months.
Those are the two you mentioned.
I've nailed my colors to the mast so no wiggle room!
I'd be very interested in a post when you sell these holdings.

xxxooo said...

Keith, you also added this comment to your post:

"I generally don't like indexes, especially the Dow with just 30 stocks."

this made your case totally pathetic since money managers-- historically, rarely beat the indexes;

that's why most people stick with index based funds since the overhead costs are far less!

so, don't worry-- after I read your comment about indexes, I discarded your advice.

personally, I put about 45% of my 401k into income funds and about 45% into bond funds and both have withstood current market fluctuations and grew.

my growth fund, however, just got back to where it was months ago and will probably head downward as soon as bush's cash infusion starts to cool down.

the folks who will hurt the most are those who didn't start saving early enough and those who have large expenses like a house or family.

LibVet said...

My Cash Management Account at Merrill Lynch pays 4.8% but I pulled most of my dough out last month when it's stock price started whipsawing back and forth 10% a day. Too creepy.

Now I'm mostly in plain old, money losing CD's. And I don't care. This is short term.

Sooner or later I'll have one of my "bright ideas".

;)

LLC said...

What did Warren say "Be greedy when everyone else is scared, be scared when everyone else is greedy" As contrarian as it may seem, in every bubble in the last ten years (Tech bubble 1999-2000) housing bubble (2002-2005) the biggest delta up happened just before the pop. I see this with oil - it has creeped up slowly 3 dollars here, back a dollar, up two, back two etc. for the last 6 months, now in the last two weeks it has gone up from 120 to 130 a barrel - 10 dollars in two weeks without a corrective pullback? That is not natural for ANY commodity. In my humble opinion ANYONE that buys anything oil or commodity related right now is playing with fire. I admittedly thought oil was pushing it at $112 a barrel and had no idea that it would get this high, but just be warned....and be careful. These markets LOVE bubbles and if there is going to be a massacre, I doubt it will be in retail or banks. I will caveat that statement with caution - only about 1 or 2 banks out of all of them are worth a damn, and only a handful of retailers, however if you are patient and prudent, there is a lot of future returns in those beaten down names. The same holds true for tech - anyone remember Apple earlier this year at $115.00 - seriously. That was one of many bargains. Just be careful all.

Owner Earnings said...

Keith, you should not comment on your holdings or the direction of the stock market. It significantly hurts your credibility when you are proven wrong.

Anonymous said...

"Here's my investment advice. Pull over, take a nap. It's too risky to drive right now."

I agree agent 99. Stay out of this market until the credit unwinds. I'm buying pennies on the dollar in late 2009.

Anonymous said...

The suckers rally last week was to lure in sovereign wealth funds and amateurs like Keith.

Intelligent investors know the market volatility has been extreme, there is huge downside risk, and that it is a bad time to buy stocks unless your *long term* is 20 years and you will be satisfied with breaking even at that point in time.

Anonymous said...

Hate to say it, but I took your buy recommendation as a likely near-term top. So far it turned out that way.

Recently I've been wondering if I missed the "bottom", but mostly I'm still convinced that we didn't reach the ultimate support level we need to and will eventually reach, didn't reach the VIX level we will, haven't seen the upside volume we need for a real bull, didn't reach the P/E or PEG level we will, and haven't reached the nadir of earnings or job losses either.

Maybe I'm just an underinvested perma-bear, but it seems like the country's troubles (credit crunch, housing wealth, burning up our fiat currency in Iraq, etc.) aren't close enough to the end yet to see a sustainable bull market again.

Plus, I'm sort of waiting for a REAL capitulation--you know, a period of two or three days where you see people standing on the street watching a stock ticker through a window, mumbling or looking like they are going to cry. THEN maybe I'll start to dollar-cost average in on some things.

Or maybe I'll start in if we get down toward recent lows again.

My other trigger would be if the fed raises rates--or perhaps even if they really do start holding them steady. (Those are my at-least-partial-sell triggers on gold/silver too.)

In both 2001 and 2007, the first rate cut of the cycle were EXCELLENT sell signals for stocks. I expect the reverse to be quite timely too.

Anonymous said...

Keith my man, you have been so right for so long. But, no one has a perfect record over time. You are way off. The non-sub prime adjustable mortgages don't get started until late this summer and don’t peak until 2011. You know this because you have said this before. The deflationary black hole has started and nothing will escape it. You know this and said it before. The fed will not keep cutting because inflation is out of control as they said today. The worse possible environment for stocks is stagflation. You know all this because you yourself have said it before. Get a grip, look in the mirror and get back a hold of yourself. Signed Brent

Anonymous said...

Where else would you put money right now, banks, RE, Bonds NO NO NO the market will still go up. This is
a great time to buy, when other sell I'm buying.

Anonymous said...

XOM and ADM are making me money.

Anonymous said...

Shit is getting ready to happen, I can feel it. You know, that roller coaster anxiety.

Kinda like the frogs in Cali.

Beans and bullets baby.

Thanks Boone, since I saw you on MSNBC I've gotten a feelin'

It won't happen tomorrow but sometime in June. . . . .

Anonymous said...

gee, keith, you should be able to get a job at cnbc.

ha ha ha

Anonymous said...

GK

Look, the Federal Reserve and the Afghanistan heroin crop are throwing off so much freaking cash, that it will take just a few flicks of the keyboard on the futures market Friday at 2pm to hyper-inflate the indexes right back to where they started. Just watch.

Just make sure though:

1. You actually own the shares of the company (see www.deepcapture.com)

2. The company earns money in a solid currency. (There is one? hahaha!)

3. The company officers are honest. (double ha!)

4. The government in the country where they do business is honest. (triple ha!)

5. The people who buy their products have jobs. (quadruple ha!)

Anonymous said...

Demographics guarantee a collapsed market at some point before christmas. Boomers are asset rich in houses and pensions and this is the year the first ones cash out.

They need to sell but sell to who? No-one has the money to buy.

Something will trigger the rush for the exits very soon, as Schiff said "It's a giant bubble in search of a pin".

I wouldn't get involved. It's like watching a poker player go all in before the flop, while you look down at a pair of jacks. Why get involved?

Nick

Malcolm said...

I decided to support Democracy (and America) by buying a car: Cadillac CTS, I’m quite happy with it.

I’m still staying in garbage and toilet paper.

Since the dividends on these stocks have already been declared (as of last week), a drop in the market will actually work to my advantage (since I reinvest dividends and will therefore get more shares if the price drops before the dividend is paid).

If you want to be totally fatalistic about this, consider: Invest in the stock market. If everything crashes, you’ll have a lot more to worry about than whether your shares are doing OK. If it doesn’t crash, life goes on and you’ll make it up over time.

LauraVella said...

Stocks have been over evaluated for some time now, now is not the time to jump in....

Those who dive in will find their swim trunks tied around their ankles...

Anonymous said...

Don't forget Gold.

Bear Turns said...

I guess you'll be alright if you have enough money to buy all the way down.

Anonymous said...

What kind of contrarian play is this by buying into an over inflated stock market that only dropped 15 percent in what looks to be at least a massive recession on our doorstep? The contrarian play is to wait you suckers out with money that should have been in gold/silver and commodities for a while now and jump into the stock market when the Dow is at least under 8000. Look at history for your reference points...and no, don't look at just the last few decades. Go all the way back a few hundred years to the South Sea bubble. People have not changed all that much over all these years and still react in the same ignorant emotional way every time.

William Behm said...

I feel your pain Keith.

I can go 5 years watching from the sideline without buying a stock, but the day I step in and purchase some shares, they fall like a rock.

Anonymous said...

Sell in May & walk away.

I am staying in cash until mid fall & then invest wisely minimizing my exposure to the world's newest banana republic, the USA.

not andrea gressinger said...

I actually bought a couple of energy stocks today.

Energy stocks in 208 = Tech stocks in 1999

Anonymous said...

playing mostly otcbb...up over 50% since Jan.

Check out:

FEEC
NEOP
ICPR

i've had it said...

i'm in oil, wheat, corn, soybeans, sugar, euro, swiss franc, yen, base metals.

not a time to buy stocks IMHO; i still believe the market is going to tank...oil hit $135 and looks to go higher...the economy can't take this pounding forever...it's gotta break at some point...i say this summer.

don't believe any inflation stats coming out of the govt...they are all lies. all you need to do is go to the store and see the inflation...it's out of control. we are in recession.

Vanilla Ice said...

What am I doing? I'm just trying to pay off my massive credit card servitude.

The way I see it much of the blame or praise for the last two sessions can be given again to our old friend Ben. Lower interest rates to save housing, yet creating another bubble, this time in commodities, especially oil. So let's see now; it's an oil bubble created by the housing bubble created by the tech bubble.

Oil should continue its assent into the stratosphere until the American economy can't take it and we have a severe recession. Then oil will come back crashing down again. Keith how about OilPanic?

Well thanks Ben, at least this time some good is coming from your actions. People will begin to drive less, or maybe think about driving less and realize that almost free gasoline is not a entitlement as an American citizen.

John S said...

My recession is just beginning. I lost a major 1099 contract yesterday, will work out to a 25% haircut on my gross. The other two jobs are okay... for now.

My eye is on oil futures. The logarithmic rise we've seen in the past 5 days is becoming a national emergency. And I don't care about gasoline prices. Worst case I'll walk the 6 miles to work. But heating oil will be a big problem. It could reach $1,000 a week to keep a house warm in New England. And at 30 below zero you have to pay it. Otherwise you'll freeze to death within hours.

Anonymous said...

Buying silver...it should be worth at least 20$ today...and soon will trade north of 50$/oz...in 1-2 years.

keyser soze said...

C < $20
BAC < $33
MER < $40
Staying long EP, COP, & DYN from several years ago.

It's quite obvious that HPers aren't contrarian buyers, as is ole Keyser Soze. It's extremely difficult to buy when everyone else is selling, isn't it?

Rantenki said...

Buying stock?!

You don't seriously think all that cheap credit bought only houses, do you?

Anonymous said...

Buying DGP.

Double Gold.

Dragonsbane said...

Bernanke can't stand in the way of the market. Look at Japan. They tried everything and still failed. I would not over-estimate the abilities of the Fed. Having said that, I'm long gold, oil and nat. gas (with the intention of peeling off most of the oil at around 150). Short (through puts) auto retailers and financials (banks and "specialty finance").

Genesis said...

You're gonna get creamed.

The action today was very ominous.

Read The Ticker for today and tomorrow.

In particular, pay attention to the commentary on the price action in Treasuries, Equities and Oil today that will be featured in tomorrow's edition that will be up in the morning.

Vesuvius is rumbling; if you're not fleet-footed, get to safety NOW.

Anonymous said...

Americano pig roasting nicely in its own juices. The rest of the world is watching in delight. Good ridance Americano pig. The world will be a better place without you!

Anonymous said...

sticking with disaster mode. oil, electricity/water, consumer staples, and physical ownership of precious metal.

always hold onto enough cash to cover 1 year expenses.

separately, i keep my 401k money (not a very big account since I am only 27) in a 20% high yield bond, 40% foreign (mostly developed market, europe/japan) 40% domestic stock mix of mutual funds. i like to think of the 401k as my long term hedge against the possiblility that somehow all this mess works out okay.

West Coast Willie said...

I was out of town. Did something happen? Let me see how my puts are doing?(RTH and APPL)Holy smokes!. Should I double down, take some gains or sell and reload later?

Keep an eye on that VIX. Last time it hit 16 was October blow off. It just bounced off 16 and was up a hefty 30% in two days(July 22 calls) Oh yeah, I bought some of those last week too.

By the way, where I live, they still drive Yukons. At 12 mph, that trip to Tahoe is getting a little expensive. Orinda to Tahoe is 200 miles. Almost $150.00 roundtrip.

John K said...

If your going to invest, you better read energybulletin or The oil drum, my stocks are doing great because I read a magazine called Scientific American, it had an article called The end of cheap oil, that was back in 1998 when oil was around 10 dollars, ignore it at your own peril.
This is going to be our biggest challange as humans to overcome, and I am sure we will transition over to a more renewable lifestyle, most likely solar, but we are starting too late for it to be a smooth transition, the general public have no idea what they are in for.
The housing debacle is nothing, my sugestions would be Canadian oil sand opeoations such as Suncor or Canadian Oil Sand Trust, they pay a great dividend, Encana, Imperial Oil, most of these companies have fifty years of oil already in place, they dont have to worry about replacing their reserves, avoid the majors like Exxon, they will be pushed out of projects around the world as countries nationalize their fields, one great stock for me has been sto, Statoil a Norwegian oil company, I am making 15 percent yield on my initial investment as a yearly dividend and am sitting on massive capital gains should I sell, beware of US government trying to reposess shareholders stocks as panic sets in, thats why I like Statoil, its 70 percent owned by the Norwegian government, so government interests and shareholders interest are non confrontational.
Also think about alternate energy, it will power the world eventually, the problem is which technology will survive and win is tough to say, however I would look for the common denomonator, and from what I can tell that is going to be electricity infrastructure, whether solar or wind or geothermal, nuclear, natural gas.
I beleive we are going to use renewables to creat electricity, which will be brought to our house, and our cars will plug into the rechargers while we sleep, but todays electric grid can barely handle our houses, much less millions of cars.
Who builds the equipment to upgrade, deliver and meter this power, what company has the capability to build all these projects such as Flour, ABB, CBI...
Tommorows Shell, Exxon or Mobile may be your local utility company.

barber pete said...

Despite the short-term noise from various cheerleaders and disinformation from the likes of Paulson and Buffett, the long-term trends for the U.S. economy have not changed. The dollar is toast, oil supplies are getting tight, and our addiction to credit-fueled consumption continues.

Ignore the noise and invest in the trends.

Big Cheese said...

I've been long on CFSG, since the beginning of this week. The stock is traded in the US and is an infrastructure play for fire detection in industrial plants. They are the market leader and growing at 40% per year... remember China has tons of foreign reserves and is spending it on growing infrastructure... so guess the direction these types of stocks will go???

Lets see...

Earnings in RMB but traded in dollars, check.

Lots of capital expenditures in china, check

Market leader, check

Good IP and technology for leading edge systems, check.

Sits on safety committees in China mandating the use of fire detection systems, check.

In at $11.45 per share, I will see this one to be a 3X ROI. There will be a time to sell as infrastructure plays come in big cycles but this one still has legs.

Remember this post HPers...

-BC

keith said...

It's funny, I said in my post I don't like indicies, that it's a time for stock pickers, and that it's also time to buy and hold and that I don't care what the market is doing hour by hour or day to day

And then everyone freaks out because of the tape over a few hours

Meanwhile, if you own food, energy, foreign stocks, resources - all the kind of stuff HP'ers and people like Schiff recommend, your portfolio is doing just fine. Mine was even up yesterday. And if you had been buying over the past month or two, the Dow going down 4% is a non-event compared to the 10% to 20% you made

That said, when it comes to stocks, YOU ARE ON YOUR OWN. They may go up, they may go down, and day to day they'll be wild and unpredictable.

But you should always remember a few things

1) buy when there's blood in the streets and everyone's selling

2) there's a wall of money being made with 130/bbl oil prices that will be looking for a home

3)130/bbl+ serves as a catalyst for all kinds of green and dirty companies

4) the us dollar is toast so buy companies who make money in good currencies

5) there's still a LOT of pigs out there that should be shorted. we're nowhere near bottom for compaines like Countrywide

I do like this thread though. You'd be amazed at the quality of ideas you can get from HP'ers. If you had read HP these past couple of years and invested accordingly (shorted REIC, bought commodities, bought foreign stocks, etc), you'd be doing just fine

Lee said...

Don't sweat it Keith...

But you're comment of buying when you see blood in the streets is confusing with your call here..You said buy when they were popping champagne corks with the DJIA surpassing 13,100. Who knows in the short term but history is on your side.
Lee

keyser soze said...

LauraVella said...
Stocks have been over evaluated for some time now, now is not the time to jump in....

Those who dive in will find their swim trunks tied around their ankles...

May 22, 2008 2:03 AM

Your post reminded me of one of my favorite song verses by John Prine titled 'Dear Abby':

Dear Abby Dear Abby,
I never thought,
that me and my girlfriend
would ever get caught.

We were sitting in the back seat
just shooting the breeze, with her hair up in curlers and her pants to her knees.

Signed.....Just Married

Anonymous said...

Just the fact that you chose to live in Europe when the Euro is breaking all-time records, shows a certain financial disdain.

mickeyc said...

The great thing about dumb positions in the market is that you'll lose your $$$$.
Keyser Soyze: you buying when everyone else did makes you contrarian??!!!

Anonymous said...

OK. Keith. Prepare to learn a valuable lesson with your buy and hold stock picks. Unless you buy recession proof stocks (not AAPL), you are going to get your a$$ handed to you.

Anonymous said...

Kieth:

All they are doing is slowly ratcheting down the markets from their inflated peaks while simultaneously trying to build up the base. That said, until all this mess is taken care of (which will not be until the DOW reaches a low of at least 9500-10000) we will see big swings over the next few years, the peaks will not reach their previous highs and the lows will begin dropping even lower.

To think that this mess can be taken care of in a matter of six months or a year is just crazy. It took until 2003 for most stocks to find their lows after the tech bubble.

Anonymous said...

" Malcolm said...
I decided to support Democracy (and America) by buying a car: Cadillac CTS, I’m quite happy with it."

If more Americans would support OUR economy we would have better jobs, more tax revenue for schools and such and just might not need to rely on Ponzi bubbles. Pisses me off to hear Americans bad mouth American cars. I have a Buick Rendezvous, 115k miles never, ever been in the shop, gets great gas mileage for a seven seater (21mpg) and looks great.

Good Time Charlie

Anonymous said...

Oh, yeah forgot;

Short SPG

Good Time Charlie

farmboy said...

I am not stepping back into this market until after the election maybe even the inauguration.

Anonymous said...

GK

So did any check at what time the DOW reached its peak today?

2PM. EXACTLY as predicted. Yah, free market like the Soviet Union has free goods for all its comrades.