Comments on: Ways to tell the market is bottoming out http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/ Helps You Make Better Financial Decisions Sat, 11 Feb 2012 17:32:04 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Manshu http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12903 Manshu Thu, 11 Dec 2008 17:52:24 +0000 http://www.onemint.com/?p=523#comment-12903 Thanks Rob, it's interesting to get different views on investing, and especially on investing in different assets. I can see where you are going with the problem of unknowns. Thanks Rob, it’s interesting to get different views on investing, and especially on investing in different assets. I can see where you are going with the problem of unknowns.

]]> By: Rob http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12902 Rob Thu, 11 Dec 2008 17:44:10 +0000 http://www.onemint.com/?p=523#comment-12902 With long term horizons, stocks and bonds are really the safest bet. The good thing about companies is the amount of data they have to disclose over time, so you can keep yourself informed on the health of your investment. There is risk, but it is less than what you see in commodities. The problem with commodities is that you are facing more unknowns. You can see the level of supply and demand yesterday, but there is a great deal of factors that can effect both supply and demand on a long term scale that can't be predicted. A lot of the time you are facing the unknown of resource finds and technology. It is impossible to know how many new deposits of resources will be found and it is impossible to know what technology will either make a resource less needed or cheaper to supply. Its really a matter of what type of risk and return you want, which the ranking is fairly obvious for most situations. Bonds should be the longest term investments, and are very good for times like these to keep money safe for later buying cheap stocks. Stocks should be used for investments over several years. Commodities are normally safe within a year horizon. Direct currency trade is made available as a high leverage option that should only be with small amounts of money for short time periods. It is the highest volume of trade with the most possible factors to consider in any market I've seen, so it will move the fastest and be the hardest to predict. With long term horizons, stocks and bonds are really the safest bet. The good thing about companies is the amount of data they have to disclose over time, so you can keep yourself informed on the health of your investment. There is risk, but it is less than what you see in commodities.

The problem with commodities is that you are facing more unknowns. You can see the level of supply and demand yesterday, but there is a great deal of factors that can effect both supply and demand on a long term scale that can’t be predicted. A lot of the time you are facing the unknown of resource finds and technology. It is impossible to know how many new deposits of resources will be found and it is impossible to know what technology will either make a resource less needed or cheaper to supply.

Its really a matter of what type of risk and return you want, which the ranking is fairly obvious for most situations. Bonds should be the longest term investments, and are very good for times like these to keep money safe for later buying cheap stocks. Stocks should be used for investments over several years. Commodities are normally safe within a year horizon. Direct currency trade is made available as a high leverage option that should only be with small amounts of money for short time periods. It is the highest volume of trade with the most possible factors to consider in any market I’ve seen, so it will move the fastest and be the hardest to predict.

]]> By: manshuv http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12788 manshuv Tue, 09 Dec 2008 02:37:55 +0000 http://www.onemint.com/?p=523#comment-12788 Thanks Rob, I am really looking to hold something long term. My investment horizon has usually been five years or so with stocks and a few metals that I own. Do you think the horizon should be different with commodities? Thanks Rob, I am really looking to hold something long term. My investment horizon has usually been five years or so with stocks and a few metals that I own.

Do you think the horizon should be different with commodities?

]]> By: Rob http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12786 Rob Tue, 09 Dec 2008 01:54:14 +0000 http://www.onemint.com/?p=523#comment-12786 Be careful with picking up currencies. They do not act like commodities or stocks, so you shouldn't be picking them up for any period longer than a week in most cases. A 400:1 margin sounds amazing, but it can cause you to see your money half in a matter of minutes. To keep currency from becoming like gambling, I would suggest calculating out a max trade limit for yourself that is closer to 10:1, focus on investments over a one day to one week period to avoid reversals. You also need to realize the currency is worth what it can buy unlike commodities or stocks that are tied to the value of a specific set of assets. When stocks are cheap in a country and bargains abound, you will actually see the currency for that country gain in value as opposed to losing value with its economy. For this reason a coming stock crash should have you invest in that countries currency, and a coming stock boom should have you get out as soon as possible. Be careful with picking up currencies. They do not act like commodities or stocks, so you shouldn’t be picking them up for any period longer than a week in most cases. A 400:1 margin sounds amazing, but it can cause you to see your money half in a matter of minutes.

To keep currency from becoming like gambling, I would suggest calculating out a max trade limit for yourself that is closer to 10:1, focus on investments over a one day to one week period to avoid reversals.

You also need to realize the currency is worth what it can buy unlike commodities or stocks that are tied to the value of a specific set of assets. When stocks are cheap in a country and bargains abound, you will actually see the currency for that country gain in value as opposed to losing value with its economy. For this reason a coming stock crash should have you invest in that countries currency, and a coming stock boom should have you get out as soon as possible.

]]> By: manshuv http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12782 manshuv Tue, 09 Dec 2008 00:15:47 +0000 http://www.onemint.com/?p=523#comment-12782 I just went through the list, and 95% of them seem to be banks, and the other 5% related to finance in some manner or the other. That explains it I guess. I just went through the list, and 95% of them seem to be banks, and the other 5% related to finance in some manner or the other.
That explains it I guess.

]]> By: manshuv http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12781 manshuv Tue, 09 Dec 2008 00:05:50 +0000 http://www.onemint.com/?p=523#comment-12781 Ok, I think I got it - http://www.bloomberg.com/apps/news?pid=20601087&sid=ahiVT6vmGNEA&refer=home The report says that these companies hold more cash than their stock and debt together. Ok, I think I got it –
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahiVT6vmGNEA&refer=home

The report says that these companies hold more cash than their stock and debt together.

]]> By: vilkri http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12771 vilkri Mon, 08 Dec 2008 18:58:31 +0000 http://www.onemint.com/?p=523#comment-12771 Sorry, I can't find the link anymore. Sorry, I can’t find the link anymore.

]]> By: Manshu http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12761 Manshu Mon, 08 Dec 2008 14:57:37 +0000 http://www.onemint.com/?p=523#comment-12761 That is an interesting piece of analysis Vilkri....I wasn't aware of it. Do you happen to have a link please? Personally I have started accumulating stocks since the great slide. Now thinking about a few currencies and commodities. That is an interesting piece of analysis Vilkri….I wasn’t aware of it. Do you happen to have a link please?

Personally I have started accumulating stocks since the great slide. Now thinking about a few currencies and commodities.

]]> By: vilkri http://www.onemint.com/2008/12/08/ways-to-tell-the-market-is-bottoming-out/comment-page-1/#comment-12759 vilkri Mon, 08 Dec 2008 14:05:43 +0000 http://www.onemint.com/?p=523#comment-12759 Stocks have become pretty cheap, too. According to a Bloomberg report, the market cap of 2,267 companies around the globe exceeds the current value of the equity and liabilities. Therefore, future profits are offered to investors for free. These 2,267 companies are "eight times as many as at the end of the last bear market, when the shares rose 115 percent over the next year". Stocks have become pretty cheap, too. According to a Bloomberg report, the market cap of 2,267 companies around the globe exceeds the current value of the equity and liabilities. Therefore, future profits are offered to investors for free. These 2,267 companies are “eight times as many as at the end of the last bear market, when the shares rose 115 percent over the next year”.

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