Dow drops to 5 year low

[Digging4Truth]

Originally Posted by Ferd

In 2000 (the last resession) the NYSE lost 43% of its value and the NASDAQ lost around 66% of its value and everyone seems to agree that this is going to be a harder recession.

the NYSE high is somewhere just over 14,000 so we are nearing that 50% mark now.

It should also be noted that the stock market tends to be a leading indicator. Meaning it will drop before the full effect of the recession hits and will also rebound before the rebound takes full effect in the wider economy.

I do think we are getting close to the bottom because most of the losses have been factored in for the financial sector and the housing sector. However, the retail season is going to be tuff on retailers and there is still some room on the down side for retail stocks.

We hobbled from 2000 to here thanks to a housing bubble caused by slack lending practices. That did get us from there to here but it is now an additional complication to an already bad problem.

When there is a big hole in the side of the boat the fact that the water has been this high before is not the issue. The issue is that there is a rush coming in that we cannot overcome and the fact that we are sinking isn't changed by statistics of how close we have come before. We have been here before but the problem has never been what it is now.

High water marks of the past are nice info when everything is the same. We are entering a near perfect storm and no past experience we have been through is going to relate to where we are now.

[Ferd]

Originally Posted by Digging4Truth

We hobbled from 2000 to here thanks to a housing bubble caused by slack lending practices. That did get us from there to here but it is now an additional complication to an already bad problem.

When there is a big hole in the side of the boat the fact that the water has been this high before is not the issue. The issue is that there is a rush coming in that we cannot overcome and the fact that we are sinking isn't changed by statistics of how close we have come before. We have been here before but the problem has never been what it is now.

High water marks of the past are nice info when everything is the same. We are entering a near perfect storm and no past experience we have been through is going to relate to where we are now.

I think you might have taken me wrong. I wasnt saying this is like 2000. (I said most agree that this is worse. So the 2000 recession provides some benchmarks. if 2000 lost 43% of the NYSE value, then this time it should be worse, no?

I do think there is a chance we can come out of this by 2010 and be ok. I dont think it is a perfect storm....yet.... But with the dems in charge of everything, we have the potential to slide hard into a real serious depression.

I have heard the other "D" word used this week. Deflation. that is really really bad.

[Digging4Truth]

Originally Posted by Ferd

I think you might have taken me wrong. I wasnt saying this is like 2000. (I said most agree that this is worse. So the 2000 recession provides some benchmarks. if 2000 lost 43% of the NYSE value, then this time it should be worse, no?

I do think there is a chance we can come out of this by 2010 and be ok. I dont think it is a perfect storm....yet.... But with the dems in charge of everything, we have the potential to slide hard into a real serious depression.

I have heard the other "D" word used this week. Deflation. that is really really bad.

Perhaps it will come out in time for a $50 gift certificate to be due to you?

[Ferd]

Originally Posted by Digging4Truth

Perhaps it will come out in time for a $50 gift certificate to be due to you?

LOL! 2010 would be the year! did we determine the month?

[Digging4Truth]

Originally Posted by Ferd

LOL! 2010 would be the year! did we determine the month?

March 20, 2010...

[Ferd]

Originally Posted by Digging4Truth

March 20, 2010...

well heres mud in your eye!


LOL! regardless of if we are out of the recession or not by then, I dont think the stock market will be at 12500... and that we will have recovered all the jobs that have been and will be lost.
I think you are off the hook no matter what!

[gloryseeker]

Originally Posted by ILG

Dow drops to 5 year low. I have felt it would probably go into the 7000's before coming back. Hope it doesn't go too much lower.

Don't hope it comes back too quickly, this is a great time to buy.

I like what Buffet says, "Be fearful when everyone's greedy and be greedy when everyone's fearful."

[Ferd]

Originally Posted by gloryseeker

Don't hope it comes back too quickly, this is a great time to buy.

I like what Buffet says, "Be fearful when everyone's greedy and be greedy when everyone's fearful."

I have a few pennies put back and am watching some particular stocks very closely.

the housinng and financial sectors have taken a pure beating and dont have much room on the down side left in their stocks.

those companies that survive this mess are going to be huge winners over the nexst coupe of years.

[gloryseeker]

Originally Posted by Ferd

I have a few pennies put back and am watching some particular stocks very closely.

the housinng and financial sectors have taken a pure beating and dont have much room on the down side left in their stocks.

those companies that survive this mess are going to be huge winners over the nexst coupe of years.

I just bought a rental...it was a steal. Been funding some mutual funds also.