Call the bottom

DJI 3000. I think I’m being conservative, it could drop under 1000.

1,000? That would be pretty much the day Armageddon starts.

Jakub - why waste your time posting here? Capitalize on your “conservative” prediction by loading up on puts.

Japan’s GDP dropped 3.3% in the last quarter. That’s not the annualized figure, that’s how much the GDP dropped in one quarter.

Oh, and FYI, the Dow dropped to roughly 10% of its peak value between 1929 and 1932. :)

You are indeed a market guru. Shall I call Cramer and try to book you an appearance?

Your prediction?

My prediction is continued volatility.

Chance of rain, chance of sunshine, possible chance of snow or hail.


There are a few people out there with enough market knowledge, wisdom, insight, and data at their fingertips to make predictions about the market future that are significantly better than a null hypothesis. (The null hypothesis generally being that the best prediction of the future is roughly the present, plus long term average rate of change).

The likelihood that Jakub, myself, or any poster in this thread in the near term has such superior resources, and can demonstrate it to the others such that the others can rely on said person’s abilities and resources, is low.

Paper tiger, meet your maker.

Sure, but it’s fun, once you let go and accept that you’re in for a ride either way. I don’t understand your hostility. Well, I might, if I were to suspect your nuts are stapled to the stock market and not really enjoying the stretch and bumpy ride down, but I doubt you think you’re alone in this situation so such a cause for hostility would be rather unlike the level-headed Phil Stein I’ve come to know here.

I have none of the above, nor do I need it. The bottom is book value. At that point the raiders show up, and a slew of tender offers will prevent further decline.

… and I didn’t even need to nullify any hypotenuses.

Jakub - if you’re just having fun, that’s fine. But there are a few “stock up on guns and ammo” type reactions out there (not necessarily on QT3) to the market losses and economic downturn.

Also, folks tend to be overconfident about their ability to outpredict the market, and go to extremes - either loading up heavily on the riskiest asset classes like emerging markets or using leverage, or doing the opposite and going to 100% cash and/or gold even when they’ve got fairly long-term investing horizons and some ability to bear market risk.

Cost of acquisition can be considerable, further Poison Pills make this very difficult with some smaller companies. It can go lower. Not that I am betting it will, I am long, but it is possible.

Who cares about the stock market bottom? I’m more worried about the unemployment rate peak.

The s&p500 over 1987 fell from 338 to 216. (peak to low)

But what if the bottom is above book value?

I more or less agree (I think it has less to do with resources, data or wisdom and more to do with the intractability of the problem). However I sure wish we’d see some of this humility the next time we have a discussion of economic principles.

While exact numbers are intractable I also think you can at least hazard some rough guesses. Will we be up or down in a year? What’s the lowest you think it would be possible for us to go? More interesting to me than what the bottom is (for stocks and unemployment): how long will it take to get there?

My gut, worthless instinct is that we’ll be slightly down in a year and people will still be talking about all the “bargains”. I hope my predictions are as worthless as I think they are because I’d have to guess that we’ll be bottoming out right before Obama starts up his reelection campaign.

As they say, the bottom will be when people stop trying to call the bottom. So I guess from this thread I’ll say “not yet.”

I think the DJI will be around 6000 by the end of next month. I’m hopeful that will be the bottom. At least near term.

If the nerds on wall street who spend their entire careers studying charts and trends have little chance of predicting what the market will do, nobody on a random internet message board does either.

That said, my gut feel is that we’re near the bottom. The market has shown a lot of resistance lately to dropping lower (this past week of no-rational-reason-for-it selling aside). We’ll probably flail here for the next year or so before it starts climbing back up as the spending we’re kicking off now starts to take real effect.