Comments on: Almost Everyone Is Breathing A Big Sigh Of Relief… http://informedspeculation.com/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/ Refunds Cheerfully Given To All Who Disagree Fri, 10 Feb 2012 06:53:00 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Steve http://informedspeculation.com/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/comment-page-1/#comment-569010 Steve Tue, 14 Oct 2008 20:39:15 +0000 http://decision08.net/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/#comment-569010 They are investing in, essentially, all the big banks, even if they had to strong arm some of them into going along. This means that any stigma associated with a government investment, which could have driven away "regular" investors and depressed values, is reduced and so the market value is protected (so we the people can get our money bank). Finally a smart-ish move. They are investing in, essentially, all the big banks, even if they had to strong arm some of them into going along. This means that any stigma associated with a government investment, which could have driven away “regular” investors and depressed values, is reduced and so the market value is protected (so we the people can get our money bank). Finally a smart-ish move.

]]> By: Jacques Distler http://informedspeculation.com/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/comment-page-1/#comment-568801 Jacques Distler Tue, 14 Oct 2008 05:14:02 +0000 http://decision08.net/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/#comment-568801 <blockquote>Let’s hope the credit markets, largely closed down because of Columbus Day, respond positively tomorrow…</blockquote> Particularly to <a href="http://www.nytimes.com/2008/10/14/business/economy/14treasury.html" rel="nofollow">this</a>.

Let’s hope the credit markets, largely closed down because of Columbus Day, respond positively tomorrow…

Particularly to this.

]]> By: Mark http://informedspeculation.com/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/comment-page-1/#comment-568725 Mark Tue, 14 Oct 2008 04:02:46 +0000 http://decision08.net/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/#comment-568725 Well, GM is part of the Dow, and it rose 30%, so I don't see how you can possibly overlook it...but I largely agree with your post (I did point out that there was a lot of pent-up buying demand in my #1 above). However, I remain concerned that the rally will be a brief respite...we shall see... Well, GM is part of the Dow, and it rose 30%, so I don’t see how you can possibly overlook it…but I largely agree with your post (I did point out that there was a lot of pent-up buying demand in my #1 above). However, I remain concerned that the rally will be a brief respite…we shall see…

]]> By: peter http://informedspeculation.com/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/comment-page-1/#comment-568714 peter Tue, 14 Oct 2008 03:22:53 +0000 http://decision08.net/2008/10/13/almost-everyone-is-breathing-a-big-sigh-of-relief/#comment-568714 I don't think the GM-Chrysler thing had much to do with it, and I would add the enormous amount of liquidity the Fed and other central banks are throwing at the world economy. However, I think the main reason the market rose is that it exists to make fools of the greatest possible number of people. Shortly after the turn of the century, the Economist did an analysis which asked how much money you would have if you started with $1000 on 1/1/1900 and rebalanced on 12/31/1900 with the best performing asset class of that year, and then repeated the process for another 99 years. You would have ended up with a gazillion dollars. They then ran the numbers to see how much money you would have if you bought the worst performing asset class of the year just ended, and found that you would have had four gazillion dollars. The contrarian approach outdelivered the rear view mirror approach by 4x. In investing, when everyone is on one side of the boat, it usually pays to get on the other side. When the world thinks that nobody will ever buy another car or get another mortgage, it's usually a pretty good bet that everybody who wanted to sell their shares already did so. While the other factors played a role, I think that the main reason the market went up today is that fear of a market cataclysm was replaced by fear of missing out on the nascent rally. I don’t think the GM-Chrysler thing had much to do with it, and I would add the enormous amount of liquidity the Fed and other central banks are throwing at the world economy. However, I think the main reason the market rose is that it exists to make fools of the greatest possible number of people.

Shortly after the turn of the century, the Economist did an analysis which asked how much money you would have if you started with $1000 on 1/1/1900 and rebalanced on 12/31/1900 with the best performing asset class of that year, and then repeated the process for another 99 years. You would have ended up with a gazillion dollars.

They then ran the numbers to see how much money you would have if you bought the worst performing asset class of the year just ended, and found that you would have had four gazillion dollars. The contrarian approach outdelivered the rear view mirror approach by 4x.

In investing, when everyone is on one side of the boat, it usually pays to get on the other side. When the world thinks that nobody will ever buy another car or get another mortgage, it’s usually a pretty good bet that everybody who wanted to sell their shares already did so. While the other factors played a role, I think that the main reason the market went up today is that fear of a market cataclysm was replaced by fear of missing out on the nascent rally.

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