Warning: Crash dead ahead. Sell. Get liquid. Now.

reply to post by grimreaper797


I have to laugh because really only about 1% truly understand the mechanics of market movements (on a short enough timescale). The rest are just liquidity providers for those institutional investors and whales.

I know a lot of CFP's and they are wrong most of the time as well. Having a series 7 even IMO doesn't qualify you for knowing when to get in and out, it just shows that you know how to read and comprehend study material. You would also have a liquidity problem if we were to implement that and the cost of getting in and out of trades would be enormous (bid vs ask spread).

Maybe a good idea in theory but would have terrible results IMO. But the sell side vs. buy side is what makes a market. Without that we would have no market, just a few guys with the same idea.

reply to post by blujay


I bet you were one of the people screaming like their head was about to get cut off back when the economy collapsed under itself and the bailouts were in the midst.

Who made money off the economy collapsing? This guy did.

You can talk all you want, but I bought MS after the first bailout bill failed because I knew the second one wouldn't and made almost 100% on my investment then bought it again when it hit 12.50 and sold it at 22 dollars.

JPM? Yep, I made money off that.

If I had enough capital, I would make a bunch of money off what is coming. Just because you don't understand the game doesn't mean some others don't.


[edit on 30-5-2010 by grimreaper797]

But it won't it never will. The GLOBAL financial system would have to collapse. It's simply not possible. Just because the United States or a couple countries in the European Union have major debt issues does not mean the "system is in danger".

reply to post by grimreaper797


On the contrary, the biggest constant throughout human history has been empirical collapse. And there have always been those like yourself who couldn't see it coming due to cognitive disonance. Denial is a defense mechanism. If one cannot even take into account possible secondary outcomes then one is left with an all or nothing singular option.

I would posit that the person who sees and allows for as many options as possible is the true optimist. Being as ready as possible to face a world that............wait for it.............may..........CHANGE! Unheard of, I know.

reply to post by GreenBicMan


You essentially perfectly summed up a poker game.

Without the vast majority of losers, we couldn't be winners.

reply to post by grimreaper797


Have to have losers in a zero sum game.

No other way to look at it.

reply to post by HimWhoHathAnEar


I've been having a face palm reaction to just about every post you've made in this thread, and I know you have 0 understanding of how the markets work, so why would I take your advise on it?

This is the world of globalization, even if the US were about to default, I could still survive it as long as I wasn't stupid enough to not see it coming which really isn't possible for somebody who understands the markets.

I bet you believed the media when they said nobody saw the 2008 market fallout coming. Ha

reply to post by GreenBicMan


Btw, just to clarify, we are talking from an profit investor point of view?

In reality, as long as investors invested in businesses that always succeed (impossible I know), then there shouldn't be a loss. A majority of the losses (and gains) is coming from speculation not market fundamentals.

Making money off speculation is essentially knowing when to sell overvalued stocks because somebody didn't realize it was overvalued. It's playing off stupidity.

Fundamentally sound investments are investments made to businesses that show promise of success. Ideally people would only invest in those, and not invest in a business because they think other people will, then sell before people realize that it will flop.

reply to post by grimreaper797


I haven't appreciated any of your posts either. So now that we're done with the pleasantries, I was on this board talking about the '08 collapse way before it happened to people with your exact attitude that 'it could never happen'. They loved to talk about how it wasn't 'technically' a recession at the time.

As far as 'how the market works', why are Billionaire investors like Marc Faber talking about the very things you say can never happen. Along with those like Schiff and Celente who called the last one. But no, I'll listen to grimreaper797 on ats.

reply to post by grimreaper797


Yes, what you state is impossible.

But lets say this..

We have 10 investors in the USA.

If all 10 of these investors agree on the same thing, what would the cost of the transaction be for the other 9 parties? Meaning, who gets in at 10/share and who gets in at 11/share? Who decides this? And who is selling to them in the first place? Everyone just gets in on the IPO?

But lets also say there are 1,000,000 shares available. Everyone gets the same amount? All one sided trading is impossible, but so is this scenario for a lot of reasons.

There needs to be losers in the short term and there needs to be losers in long term trading. Without losers in some timescale, there is simply no market.

The zero sum theory states there MUST be losers because all accounts are squared at the end of the trading day. This does not necessarily apply to equities because of the way the accounts are settled (very short timescale) but does on a longer timescale.

If you put any money in the market you should know you are stepping into a snake pit.

Originally posted by MrDarlingFace

And like GBM stated, the stock market has been romanticized by a lot of people. Like in the gold ole days...things weren't like this. It absolutely was but worse.

I am not romanticizing the stock market.

One area I see that seems to be a point of contention is when the stock market began, and how it originally acted.

I dont disagree with you that things were worse in the early 1900's. The stock market did not begin then. And it did not originally act the way it was acting both in the early 1900's and now.

I am not completely ignorant on the subject of stock. I degreed in philosophy, but I changed to that major in my third year of business school. I also took classes as elective on the law of business organizations from the legal program because I originally intended to go into business law. In those classes we studied the corporate form, (and other business organizations) rather thoroughly, including drawing up the partnerships agreements, etc. We also had to understand stock and the classes, etc.

While I have never been a broker, or investment banker, I am very familiar with what stock is, why it is sold, and what it is intended to do. In philosophy, while it may seem an unrelated field to some, we also studied economic theory. The big difference between the way we studied it and the way economic majors study it, is that we arent required to memorize it and quote it as gospel. Philosophy focuses on reasoning itself, theory itself, and so we are allowed and encouraged to a greater degree, to question and run the logic ourselves.

So I dont think I am romanticizing it. I am not incredibly romantic in general, and I have never been a believer in the "good old days" because I am pretty aware of how not so good the good old days were.

We may disagree on some points, but we certainly dont disagree on the fact that in the 1900's the lack of regulation allowed manipulations that in theory dont happen today.

Originally posted by HimWhoHathAnEar

I haven't appreciated any of your posts either. So now that we're done with the pleasantries, I was on this board talking about the '08 collapse way before it happened to people with your exact attitude that 'it could never happen'. They loved to talk about how it wasn't 'technically' a recession at the time.

First, if I say everyday, "somebody I know is going to get hit by a car today," eventually, I'll be right. That is what you do. All the time you are calling for a collapse. The US economy didn't completely collapse. When I say collapse I mean a major loss in value, you mean the system falls apart.

Second, don't group me with the lemmings on the media saying that we could never imagine it happening. I laughed at the idea they didn't know.

As far as 'how the market works', why are Billionaire investors like Marc Faber talking about the very things you say can never happen. Along with those like Schiff and Celente who called the last one. But no, I'll listen to grimreaper797 on ats.

To scare you so they can make more money. You honestly think they are going to show their hand and screw themselves just because they are trying to play it honest this time around? Quit fooling yourself. They are self made billionaires. Being such, look for them to do whatever makes them the most money.

If I'm buying gold, you know what makes me the most money? Fear.


So actually you know what? The dollar is going to collapse, the markets will fall apart, the world will be in ruins, and gold will be the sole standard left, ALL FIAT CURRENCIES WILL FAIL!!!!!....hold up, I haven't finished buying all the gold I wanted yet....okay, I'm good now. THE ECONOMY WILL BE IN RUINS!!!

*sigh* yeah, trust the billionaire, I'm sure he's looking out for your best interests, even though he made all that money off the average workers back.

[edit on 30-5-2010 by grimreaper797]

reply to post by Illusionsaregrander


I didn't think we disagreed on anything but gambling being incorporated into the markets. The way I see it, it always has, because in the end not everyone can be a winner. This is the zero sum theory.

reply to post by GreenBicMan


I'm not saying that, I'm just saying as an investment, ideally people would buy shares on fundamentals, not speculation. It would certainly reduce the volatility and amount of people losing their shirts.



We should really change the word "Speculated" to "people who don't know wtf they are doing" cause that's what it boils down to.



As for your example. If their were 10 investors, and they all believed this company would be profitable to X and X exceed 10 dollars a share, whoever acted first gets it. If then another investor wanted to invest but its 11 dollars a share and they don't think that it X exceeds 11, then they will avoid buying it. They missed their opportunity and will have to wait for the next profitable idea to invest in.

Unfortunately what happens is that scenario but the second investor doesn't understand the X does not exceed 11, so he buys it because it was a good investment before, hell investor one bought into it. Investor 3 falls under the same misconception and now the stock is say 12.50. Investor one sees this and goes "hey...I can sell this stock for 12.50, and make more money that way." so he sells to investor 4. The stock is overvalued after all expected profits are priced into the stock price. Now it's no longer a good investment. But if investor 5 and 6 don't know that maybe investor 2 wises up some and looks at what investor one did, catches on, and sells.

The whole thing boils down to fundamentals.

Fundamentals in a company will dictate if investing in them will turn a profit, not because the stock will increase but by dividends and such.

Remember not everyone makes their money off the speculative market, some people stick to fundamentals, pick good companies and get paid nicely every year by a company that produces a hefty profit and gives some money back to the investors.

reply to post by grimreaper797


OK, but if everyone was "smart" why would anyone sell anything to anyone else? In your example, who would be selling at 10/share? And on top of this what would the bid/ask spread be? It would be enormous. It would theoretically cost too much to enter and exit a trade, so there would be no market.

That is why we need HFT (Liquidity Providers) while most are ignorant to the facts, they are very much needed. That is also why we had major problems when they shut down a few mins. before the flash crash. That is what liquidity does to markets.

Originally posted by GreenBicMan

OK, but if everyone was "smart" why would anyone sell anything to anyone else? In your example, who would be selling at 10/share? And on top of this what would the bid/ask spread be? It would be enormous. It would theoretically cost too much to enter and exit a trade, so there would be no market.

Well when the company first goes public, they don't always have the luxury to know exactly what the value of their company is. It is all estimates. So you can't be exact.

We were talking in certainties. That the companies value was definitely X. In reality X isn't an exact number but a rough estimate, which will vary from person to person for no other reason than I may not believe the consumers will receive it as well. At that point it isn't really speculation.

It is a disagreement in the fundamentals of the company itself, as oppose to somebody who is buying it because other people bought it, and the outlook is more people are going to buy it. When you start buying stuff out of speculation, you are buying based on the hope other people don't realize the fundamentals say "don't buy it" even by the loosest standards.

We may have different degrees on how profitable a company may be. I don't believe that to be speculation so much as different degrees of understanding. Speculation is the guy buying on the assumption others are going to buy it and he will make money off that. The person who gets screwed in that is the person who reacts. He buys when others buy (reacts to the jump in prices, not the fundamentals, and thus buys it overvalued.) and then sells when others sell (he reacts and sells when sometimes the stock is no longer overvalued. The other people sold and now the stock is correctly valued, but he sells and screws himself even more.) He is always on the wrong side of the curve, because he's not going off of fundamentals, but speculation.


EDIT: Also, I may sell my stock for a minor loss (which would also be a minor gain for you) if I think that I can make more money investing in another company. You may not know of this company yet. So you buy my stocks for a moderate win for you (hey, you made some money off of this) while I take that money, buy the company you didn't know about, and score a big win for me.

Why would I sell, because I didn't have the capital to do so otherwise. Nobody has unlimited capital to work with. When you have to choose, sometimes you have to sell something slightly under value to buy something way undervalued. I can say out of experience that this is the truth.

[edit on 30-5-2010 by grimreaper797]

reply to post by grimreaper797


I think everything is speculation unless you are going into a DPP (limited partnership). And the people that do this are accredited investors anyway so they most likely have other reasons such as tax implications.

There are no guarantees in life. Just because you buy ATT for their dividend doesn't mean ATT can't collapse because their CEO was pictured stuffing 100 dollar bills into Tiny Tim Geithner's G-String etc.

So, every investment carries risk. That is my first point.

The bid/ask spread would be too enormous and would not be conducive to trading like a real market. That is my second point I guess.

Also, I forgot what we were even talking about in the meantime so..

I knew why, when you said it you didn't. You were just being chicken little.

reply to post by grimreaper797

What are you basing this statement on? Provide a link to a thread or something where it shows that I didn't know why it was going to happen, because I knew full well. Back up your statements please.

In the case of Celente, he is a world reknowned trends forcaster, so where is his financial motivation. Being right is far more important in his line of work.

What is your view of the economy? Do you think it's getting better?

reply to post by GreenBicMan


I'm not saying their isn't risk.

To try and make my point a bit more clear I would like to define what it means to speculate:

"talk over conjecturally, or review in an idle or casual way and with an element of doubt or without sufficient reason to reach a conclusion"

Take note specifically to that last part. Without sufficient reason. An investor who follows fundamentals has specific reasons, he isn't speculating on a stock. He has justifications which tell him this is a buy or sell, there is no speculating.

Speculation is part of the problem when it comes to bubbles. Bubbles are created by speculation gone wild. Problem is you can't control speculation because you can't educate a stupid person overnight. You can pause the markets for the day, but what difference will it make? An uneducated fool is still going to act the same way he did yesterday.

You can't control speculation because you can't control stupidity, so speculation will forever go unchecked. Unchecked speculation creates these bubbles. The poster I was talking to wanted to change the system so such bubbles can't bring down the system.

My point was you can't do that without eliminating speculation, and you can't eliminate speculation without taking stupid people out of the markets. Find a good way to keep stupid people from speculating and you got yourself a good law to pass through congress.

reply to post by GreenBicMan


I think this is part of the problem with discussing what happens on Wall Street, and trying to use that version of "how things are and how they should be" while at the same time discussing society, and how things are, and how things should be. It brings up another really good question, and that is, should these versions of economics be considered when making public policy?

Society is not a zero sum game. On the bottom line, thats why I personally think the whole system needs to fall. We have two different ideologies operating, one at the expense of the other. The majority of the people are playing a game that is supposed to be mutually beneficial, though not always perfectly equally, and those who are "smarter" are essentially free riders on that system. Exploiting the cooperators.

And although I hear people talking about that strategy as though it were "smart" it is, in essence, sociopathy. I think all the "little people" or "suckers" or whatever term may be applied to them need to really question whether it is in their continued best interests to support a system that is, at its very heart, anti social.

For most of us, pro-social behavior is in our best interests.

Originally posted by HimWhoHathAnEar
What are you basing this statement on? Provide a link to a thread or something where it shows that I didn't know why it was going to happen, because I knew full well. Back up your statements please.

I'm going to edit that out in name of keeping the thread on topic. If you want to discuss via u2u or chat, thats fine.

In the case of Celente, he is a world reknowned trends forcaster, so where is his financial motivation. Being right is far more important in his line of work.

I know what his job is and what his claims are. He is very crafty in his wording of things. Personally I find him to be a sham. He doesn't actually give you any real advise at all. It's so general that all you can really do is get out of the market...interesting, that is what fear does.

What is your view of the economy? Do you think it's getting better?

My view of the economy is far from optimistic. I see many selling opportunities, meaning that I find the market overpriced by the large and large. I do think that some commodities are a good buy right now. Oil and gold being two of them. I think gold will go into a bubble by the end of the year or into next year and then pop.

I won't give my specific predictions in this thread as that isn't what this is about, but I will say that there are reasons to sell certain companies stocks. Other I would just refrain from buying, not because I think they aren't worth buying but because you can get a better deal on them and maximize their value.

I have my buy area, and my sell area, and then my wait and see area. All and all, I see the economy taking a wild ride this next year.