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Originally posted by amit kalia
For a short term investor would investing in ETFs that are inverse in nature; e.g. PSQ (Short QQQ ProShares), Short MSCI EAFE ProShares, Pro-Share MSCI emerging Markets (EUM), make any sense? Any views?

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

From the value managers:

There is a theory out there based on historical trends that the US economy has another five years of 'level' value. It is based on the theory that the Us market at every few years interval has a 13-16 year 'plateau' value.

Currently the 'plateau' value started in 1998. Even though the Dow went up to 14100 it has been leveled back to the 8000's and the plateau value is between 10,000 to 11,000. This does not mean that it won't overshoot that to 12000 or even 13000 but if that occurs within the next 4-five years it will pull back down so that a straight line can be drawn at between 10,000- 11,000 from 1998 to 2012 or efven extended to 2014, with the points above and below that forming a bell curve.

For the value managers now is a good time to plunge into the markets as the view is that in a couple of years it will climb to 10-11,000 and then perhaps even overshoot with momentum before being pulled back again.

By 2012 - 2014, the DOW or S&P will break out of its current plateau and go for the next plateau which they are betting will be in the 18-19000 as things stand now but they could revise the next level as time goes on.

Maybe some of you saw Keith Richards (not the Rolling Stone guitarist) with Pat Bolland last week on BNN who expounded some of this theory.

A great proponent of this here in Canada is the lady fund manager, Kim Shannon, who split from CI to go to Brandes. She expounded this way before the Dow crumbled and everyone thought she was cookoo.

http://www.reportonbusiness.com/servlet/story/RTGAM.20081020.wjokes1020/BNStory/Business/?page=rss&id=RTGAM.20081020.wjokes1020

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The financial crisis may ruin some banks and throw thousands of people out of work, but it has generated a wealth of jokes spawned by gallows humour. Here is a sample:

Q: What's the definition of optimism?

A: An investment banker who irons five shirts on a Sunday evening.

***

An investment banker said he was going to concentrate on the big issues from now on. He sold me one in the street yesterday.

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A man went to his bank manager and said: ‘I'd like to start a small business. How do I go about it?' ‘Simple,' said the bank manager. ‘Buy a big one and wait.'

***

The credit crunch is getting bad, isn't it? I mean, I let my brother borrow a tenner a couple of weeks back, it turns out I'm now Britain's fourth biggest lender.

***

Q: What is the difference between an investment banker and a pigeon?

A: A pigeon can still make a deposit on a BMW.

***

Q: What is the difference between an investment banker and a large pizza?

A; The pizza can still feed a family of four.

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Q: What does a hedge fund manager with no fund to manage say?

A: Would you like fries with that sir?

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Q: What is the capital of Iceland?

A: About $3.50

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I tried to get cash from the ATM today but it said “insufficient funds.” I don't know if that meant them or me.

***

Mark Twain was ahead of the curve: “October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February.”

like TSX kissing 10000 and Dow cracks 9000.
Looks like the concerted efforts of the world are resuscitating the markets.
South Korea jumped in today by arranging a $130bn package.
Hope I ain't speakin' too soon.

I guess people are really taking on Warren Buffet's advise.
US Fed indicated a further rate cut.
That should further prop up the markets

There may be some profit-taking selling later this week, though.

BTW, did anyone sell off their bond or fixed-income holdings to move into equities?

Are any of you heavily buying US equities or still wait-and-see?

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

Wow, Dow Jones futures down 550 points, S&P futures down 60 points and they are frozen!

DAX, FTSE, CAC , Hang Seng Nikkei all down heavily.
OPEC cuts oil production by 1.5 mil barrels a day but oil for Dec delivery drops $4.
Gold down, Silver down more than half from its high when gold was at 900 plus.

Japanese Yen rises to highest level agnst USD in 15 years asa carry trades unwind...

Man things are happening at warp speed here.

Anybody interested in short term table values of Dow and TSX- please see

The word out there is 'the Crunch will steal Christmas' (no need to say where that is taken from)

http://investdb.theglobeandmail.com/invest/investSQL/gx.price_history?pi_symbol=DJIA-I&pi_old_symbol=DJIA-I Dow

http://investdb.theglobeandmail.com/invest/investSQL/gx.price_history?pi_symbol=TSX-I&pi_old_symbol=TSX-I TSX

TSX on Sep 12 closed at 12769 and yesterday at 9331. Some drop in a month's worth of trading days !

As you folks know recently many markets like Indonesia, Russia and a couple of tohers stopped trading.
Today the futures in Chicago were frozen.

Read this article to find out what it would take to freeze trading on the Dow.

http://www.globeinvestor.com/servlet/story/RTGAM.20081010.wcircuitbreaker1010/GIStory/

Breaking News from The Globe and Mail

What would it take to halt U.S. stock trading?
The Associated Press


Friday, October 24, 2008

NEW YORK — As harrowing as the U.S. stock market's plunges have been in recent days, they still haven't been enough to trigger the “circuit breaker” mechanisms that result in an automatic timeout in trading.

The Big Board implemented the automatic halts after the stock market crashed in the late 1980s to force traders to take a break from frenzied selling.

The Dow Jones industrial average would have to fall 1,100 points in a day to trigger the first halt. If that point is reached before 2 p.m. (ET), the market will shut down for an hour. If the threshold is breached between 2 p.m. and 2:30 p.m., the halt will last 30 minutes. No trading stops would take place if the plunge occurs after 2:30 p.m.

If the index were to fall 2,200 points before 1 p.m., the market would close for two hours. If such a decline took place between 1 p.m. and 2 p.m., there would be a one-hour pause. The market would close for the day if stocks sank to that level after 2 p.m.

In the event of a 3,350-point decline, the market would close for the day, regardless of the time.

The thresholds are computed at the beginning of each quarter to establish a specific point value for the quarter. The 1,100-point drop represented a 10 per cent decline at that time; the 2,200 level, a 20 per cent drop and the 3,350 level is a 30 per cent drop.

The rules would halt trading on the major securities and futures exchanges in a co-ordinated cross-market halt if the circuit breaker is enacted.

© The Globe and Mail


This articla was also posted when Russia and Indonesia stopped trading- so maybe it's old hat for some of you.