The End of the World
Has anyone else been reading all the doom and gloom on this forum lately? They say pessimism is always highest near bottoms. Anyone else out feeling great that everyone around them is in a panic? There is blood in the streets, we have seen three big failures, MF outflows have accelerated the last couple of months. Does this sound familiar to anyone else?
[quote=iceco1d]Starting to stink of Communism IMO.[/quote]
You think this is bad???
I’m feeling a little weary and battered, and this despite the fact that I have no AIG, LEH or Fannie or Freddie common or preferred. I do have about 25k in debt in an AIG sub (International Lease Finance) that I purchased recently for a client who was willing to speculate a bit. I’ll be interested to see how that plays out…my read at this point is that the debt holders should be made whole, so that could be interesting consider the yield we got on the deal.
And yet despite my weariness, I can only imagine how others must feel, and think that it must be reflected in current prices…and as such that must represent an opportunity.
He's dressed as a bear for Halloween.
The end of the world is near. In fact, I am almost done building my bomb shelters at home and in my office. I have stocked up on 3 years worth of canned food, water, and Ensure.Seriously though, at what point would this crap be considered capitulation? Down 500 and 450 in two of three days?! With the VIX above 36, it is higher than it was at any other point where we rallied. It's actually approaching the 2002 levels. Also, historically, the average bear market is down 25% from the highs. Now that we are down 20% YTD, we are right about there from the highs. This is so stupid.
He's dressed as a bear for Halloween.[/quote] While I was busy talking clients off the ledge, you stole my answer. Morgan Stanley talking to Wachovia and Wamu offering itself for sale...let the consolidation begin.
[quote=snaggletooth]The end of the world is near. In fact, I am almost done building my bomb shelters at home and in my office. I have stocked up on 3 years worth of canned food, water, and Ensure.. This is so stupid. [/quote] Snags, I know you say this in jest, however I bet we'd all be surprised at the % of Joe Lunchbucket doing this very thing. I have a client that has devised a system of trapping rainwater by placing a bullseye flapper in his downspout and directing it to a holding drum. He has hooked up a pump system driven by a battery (car I think) that lifts water flow to his house to flush the toilet. Those retired SBC cable splicers are pretty creative. Course he also dumps his trash in the bin behind the grocery store.
I'll admit, it's getting to me. My alcohol intake has increased lately. It's tough to listen and read negativity all day and then reassure clients that all is well. I do believe that all will be well, but it's still tough.I like your tag Johnny.
I am glad that Paulson is on duty during these times. The loan to AIG has real teeth: the longer AIG takes to unload assets, the higher the balance due becomes. Shakespeare’s Shylock comes to mind.
Another curious thought: he has basically eliminated most of Goldman’s competitors.
I still don’t have the details on the RTC BAD BANK model, but I believe that any bank that wants to sell their bad loans to Treasury will get a low-ball price, at least initially.
I'll admit, it's getting to me. My alcohol intake has increased lately. It's tough to listen and read negativity all day and then reassure clients that all is well. I do believe that all will be well, but it's still tough.I like your tag Johnny.[/quote] Remember, you can't lead a client to a decision until you've made it yourself. More important, remind your self: "If I say it, they tend to doubt me. If they say it, it's true." Every word you say to a client means something. Make them say it! Ex: "Historically, selling stocks after a 25% down move has been a bad idea, hasn't it?" "Ultimately, to meet our goals, we have to grow our invesmtents at a rate higher than that of inflation, don't we?" "The best way to do that over the past 150 years has been investing in equities, hasn't it?" "We should probably stick to our agreed upon allocation at this point, then shouldn't we?' Forget MPT, aset allocation, Alternative Investments, blah, blah, blah right now. That's stuff we care about. All that couple across the desk want to do is retire to Arizona and have the grandkids visit a couple times a year. If you believe in equities, it's time to sell 'em. If you don't, Joe and Jane Lunchbucket won't either Tom Hopkins is cheesy and annoying but he is the best. I think many folks need to go back to refining the sales techniques of guys like him. You think you have to do a sales job to get a client to invest at Dow 14,000? Exponentially more crucial to exercise these skills at Dow 10,500 (as long as you've made the decision