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# Apocalipse or a unique oportunity

Author Message
VP
Joined: 09 Jan 2007
Posts: 1045
Location: New York, NY
Schools: Chicago Booth Class of 2010
Followers: 10

Kudos [?]: 161 [0], given: 3

Apocalipse or a unique oportunity [#permalink]

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12 Oct 2008, 00:06
Ok, usually I don't like posting this kind of thing, but seeing what's going on, I'd like to have your opinions. I will show you some things:

House prices in US

well by now everybody has seen this one...

TED spread (3 mths Libor vs 3 mths T-bills:

This Chart says: You want credit, come get it if you can...

If you see here the prices for Credit Derivatives (Index), it's very awkward to see the iTraxx Cross Over that was around a 15 months ago at 70bps at 730bps, 10 times higher...
https://www.markit.com/markit.jsp?jsppage=indices.jsp

And now a long term trend of the DJI deflated (is this the right term, I wanted to say that I took inflation out) - I prefer the S&P but I couldn't get anywhere a S&P for that long, you know, hehehehee:

All this with volatility - take a look at the VIX:
http://finance.yahoo.com/echarts?s=^VIX#chart4:symbol=^vix;range=19920601,20081010;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

It's either more explosive than TNT or a once in a life time buying opportunity. What side are you in?
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Senior Manager
Joined: 30 Jul 2007
Posts: 385
Location: Europe
Schools: St. Gallen '09
Followers: 6

Kudos [?]: 59 [2] , given: 5

Re: Apocalipse or a unique oportunity [#permalink]

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19 Oct 2008, 08:31
2
KUDOS
Beware the pre-election fake-out rally!

While everything could look cheap at the current levels, we could see the markets go down further to reflect the "real economy", i.e. increasing unemployment which will further act as a drag on the 66% of GDP consumption-led economy of the USA. Company earnings will most likely decline, and this may add further fuel for downside action. However, the market may have already discounted this, but it remains to be seen, i.e. the DOW will need to stay above the mid 7000s. As Bill Gross (the portfolio manager of the world's largest bond fund at PIMCO) has called earlier, the DOW could very well see 5000.

The most conservative thing to do in this environment would be to stay out of the markets and be in cash (but, cash that is readily available and accessible). If you must be in the market, definitely have some gold exposure, and it never hurts to be short the overall market indices (DXD, SDS) while being long a few stocks that will be around over the next 50 years, i.e. MMM, PG, KO, JNJ, K, GIS, MCD, CL.
CEO
Joined: 17 May 2007
Posts: 2959
Followers: 61

Kudos [?]: 601 [0], given: 210

Re: Apocalipse or a unique oportunity [#permalink]

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12 Oct 2008, 04:55
Kwam - I hope after the MBA I can understand everything you mentioned in that post
Senior Manager
Joined: 30 Jul 2007
Posts: 385
Location: Europe
Schools: St. Gallen '09
Followers: 6

Kudos [?]: 59 [0], given: 5

Re: Apocalipse or a unique oportunity [#permalink]

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15 Oct 2008, 14:37
kwam wrote:

It's either more explosive than TNT or a once in a life time buying opportunity. What side are you in?

Markets will tank further. Too early to buy.
VP
Joined: 09 Jan 2007
Posts: 1045
Location: New York, NY
Schools: Chicago Booth Class of 2010
Followers: 10

Kudos [?]: 161 [0], given: 3

Re: Apocalipse or a unique oportunity [#permalink]

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15 Oct 2008, 18:10
I agree with you trader the environment is pretty damn ugly.
_________________

Rhyme´s guide to interviewing
http://www.gmatclub.com/forum/t55030

Kwam's Profile
http://gmatclub.com/forum/111-t57360

CEO
Joined: 15 Aug 2003
Posts: 3454
Followers: 67

Kudos [?]: 874 [0], given: 781

Re: Apocalipse or a unique oportunity [#permalink]

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18 Oct 2008, 22:27
take a look at your 52 weeks lows and you might find a couple that are ridiculously cheap.

AAPL held up pretty good around \$100, but its possible that markets are waiting for the earnings.

trader1, very happy to see the progress with the forum.
Manager
Joined: 11 Jan 2007
Posts: 202
Followers: 2

Kudos [?]: 30 [0], given: 0

Re: Apocalipse or a unique oportunity [#permalink]

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26 Nov 2008, 19:09
what may seem very cheap now might be a fortune in 9 months...

I'm still uncertain on this market!
Re: Apocalipse or a unique oportunity   [#permalink] 26 Nov 2008, 19:09
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