Job Loss

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Aug 7, 2009 1:21 pm

I am thinking of taking profits now.. This is insane that the market goes up because we only cut 247,000 jobs.... Of course there is still that huge unemployment problem everywhere(9.4%)..



Aug 7, 2009 1:50 pm

This would be the part where someone needs to come in and teach you the difference between a leading indicator and a lagging indicator and which one unemployment is.  If you understood that one thing, you might reconsider taking profits right now.  Unless it's some bank stock that's up like 400% since March, then you might want to go ahead and grab them. 

Aug 7, 2009 2:23 pm

So the market is up around 30%+ since mid march and you think that will continue..



I wasn't saying that I am taking profits because of the unemployment numbers, I am taking profits because people are acting as if the market with continue like this for the rest of the year.

Aug 7, 2009 3:50 pm

Yes, I do.  Maybe not to that extent, but I'm confident it will continue to go up.  That's the way the market works.  I'll hedge my bets and tell clients that we may see another dip, so don't be alarmed, but I think we're headed for some positive territory. 

 
Historically the market his risen 9 out of 10 times following the end of a recession.  Both at the 6 month and 12 month marks.  The indicators are that the recession is either ending or already over.  So, armed with that knowledge I'd continue to hold onto my profits thus far, or at least only take the profits from the asset classes that have really jumped and are now out of balance in your portfolios. 
Aug 11, 2009 12:30 am

I say take profits.

Aug 11, 2009 1:14 am

Put in a stop and sell a put below the stop and your current basis if there is any credit to be had and then a covered call with a delta of 85 or less. Beyond that who gives a crap where the market goes, either way you win.

Aug 11, 2009 10:18 am

Gaddock:



Do you use a computer program to figure delta, if so which one?


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Aug 11, 2009 10:21 am
Spaceman Spiff:

Yes, I do. Maybe not to that extent, but I'm confident it will continue to go up. That's the way the market works. I'll hedge my bets and tell clients that we may see another dip, so don't be alarmed, but I think we're headed for some positive territory.



Historically the market his risen 9 out of 10 times following the end of a recession. Both at the 6 month and 12 month marks. The indicators are that the recession is either ending or already over. So, armed with that knowledge I'd continue to hold onto my profits thus far, or at least only take the profits from the asset classes that have really jumped and are now out of balance in your portfolios.





End of the recession.. do you work for CNBC?

Aug 11, 2009 7:42 pm
JackBlack:

Gaddock:



Do you use a computer program to figure delta, if so which one?


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LOL I don't use pencil & paper!!
 
Yes I do. Your firm platform will have it. If not you can gt it off of Yahoo or a large number of free Internet pages. I will also add you want to have it outside of three standard deviations as well. The probability is the inverse of the Delta. So, a Delta of -.15 will give you 85% probs in your favor. Odds are another calculation but 90% probs give a 20 to 1 typically. 
Aug 11, 2009 8:01 pm
Squash1:
Spaceman Spiff:

Yes, I do.  Maybe not to that extent, but I'm confident it will continue to go up.  That's the way the market works.  I'll hedge my bets and tell clients that we may see another dip, so don't be alarmed, but I think we're headed for some positive territory. 

 

Historically the market his risen 9 out of 10 times following the end of a recession.  Both at the 6 month and 12 month marks.  The indicators are that the recession is either ending or already over.  So, armed with that knowledge I'd continue to hold onto my profits thus far, or at least only take the profits from the asset classes that have really jumped and are now out of balance in your portfolios. 



End of the recession.. do you work for CNBC?

 
No, but I did sleep at a Holiday Inn Express last night. 
 
Skrainka said it was over, so it's over.  I believe everything he says. 
 
I'm not foolish enough to actually tell a client that the recession is over.  I'm not pessimistic enough to tell them that I think we're in for another year or two of it before we see the bottom.  I've read too many articles over the past couple of months to that say it's over to think that they can't possible all have it wrong.  Only the NBER can officially say it's over (10 months after the fact), but the market is sure reacting like it is.  Double-dip?  Possibly.  Thus the comment about another dip may be possible. 
 
Guess we'll find out if I should have paid more attention in Econ 101, huh. 
Aug 11, 2009 8:09 pm

If you find out what most of the smartest people in the world think is going to happen ... DO THE EXACT OPPOSITE;

 
and
 
It's really pretty simple, get as market neutral as possible.