We need to watch the market closely...!
08-16-2007 | 10:57 AM
#12
Line Holder
Joined: Jan 2007
Posts: 680
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From: CH2T Worst plane ever
Ok, well this is going to sound dumb, but this is one of the best threads I have ever read on APC. I'm 22 and am dying to learn how the stock markets work and the forces behind them. Please keep this stuff coming.
08-16-2007 | 12:06 PM
#13
Can't abide NAI
Joined: Jun 2007
Posts: 12,078
Likes: 15
From: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
Aviator Mar -
Stock market is just like buying & selling anything else, with a much more transparent and easy process. Stocks ride up and down based on the motivation of buyers and sellers and the inherent value of a little bit of whatever Company is being traded.
Big swings like we have had in the last few days are the result of everyone reacting out of fear. Inversely - big run ups in price are motivated by greed - the result of everyone wanting a part of the action. When you see either extreme it is time to be very pragmatic and try to adjust your view to the end of the runway - makes for a better landing.
Short selling is borrowing a stock. Lets say I can't stand SKYW so I arrange to borrow some shares at $25 for a period of time. Those get sold off and I hope the stock goes down so when I have to replace the shares it only costs me $20 each. The $5 spread is my profit.
The airlines are great for day traders who can't get enough of the casino action. You can bet with and bet against the house by buying, or selling short.
For any serious investing - average your money month to month into a regular old index fund and just watch the result. I lost more than $10,000 in the most recent market swing. If I had invested a week ago I would be upset, but with 25 years of investing it is more of a curiousity. After all, some accounts I put $7,000 in 20 years ago are now over $35,000.
I am starting to shift more money offshore, but the lack of an effective legal system and political instability make some foreign investment REAL risky. For example you can buy a beachfront lot in the Philippines for $4,500. The down side is squatters might take it, or the Muslims might kill you for it. But if the Country ever pulls itself together you have a little bit of land headed towards stratospheric prices.
Stock market is just like buying & selling anything else, with a much more transparent and easy process. Stocks ride up and down based on the motivation of buyers and sellers and the inherent value of a little bit of whatever Company is being traded.
Big swings like we have had in the last few days are the result of everyone reacting out of fear. Inversely - big run ups in price are motivated by greed - the result of everyone wanting a part of the action. When you see either extreme it is time to be very pragmatic and try to adjust your view to the end of the runway - makes for a better landing.
Short selling is borrowing a stock. Lets say I can't stand SKYW so I arrange to borrow some shares at $25 for a period of time. Those get sold off and I hope the stock goes down so when I have to replace the shares it only costs me $20 each. The $5 spread is my profit.
The airlines are great for day traders who can't get enough of the casino action. You can bet with and bet against the house by buying, or selling short.
For any serious investing - average your money month to month into a regular old index fund and just watch the result. I lost more than $10,000 in the most recent market swing. If I had invested a week ago I would be upset, but with 25 years of investing it is more of a curiousity. After all, some accounts I put $7,000 in 20 years ago are now over $35,000.
I am starting to shift more money offshore, but the lack of an effective legal system and political instability make some foreign investment REAL risky. For example you can buy a beachfront lot in the Philippines for $4,500. The down side is squatters might take it, or the Muslims might kill you for it. But if the Country ever pulls itself together you have a little bit of land headed towards stratospheric prices.
08-16-2007 | 12:07 PM
#14
Thread Starter
On Reserve
Joined: Aug 2007
Posts: 20
Likes: 0
From: 777 FO
There are a couple of named storms. Erin hit Corpus without much effect, but the market may sense hurricane season causing fuel supply issues.
Also, Wal Mart's reported that US consumers are simply tapped out due to increased energy costs and taxes. Their report was interesting because they illustrated a link between payday and shopping activity and many customers said they do not have any cash to shop until payday - folks are living paycheck to paycheck and just not making it.
I see this effecting the discretionary travel market more than the network carriers. With oil above $70 a barrell there isn't such a thing as a "low cost" or "discount" carrier - it is all flippin high cost with AirTran costing $600+ to fly cross continent, just like Delta. Fuel levels the playing field to some extent resulting in network carriers having an advantage. It is interesting also to watch AirTran's effort to become more of a network carrier with NWA trying to keep them out of their back yard. The effort is getting expensive either way.
So there is more to this than Countrywide mortgage. Like you, I found it odd that Countrywide threatened bankruptcy and Continental's stock fell off more sharply than the mortgage lenders - but Continental had a heck of a run and folks may have decided to take profits.
We have two highly inflationary factors upsetting the market - Energy and Taxes. The housing and liquidity bubble acted as a spring but now that has run its' course and is rebounding. This could cause energy prices to decline and help stabilize the market. The tax situation has to get worse. Congress and the Bush administration have been profligate spenders. Nothing really works to fix this problem, if they lower interest rates inflation will increase, if they continue dumping cash from the central bank, devaluation will occur causing more inflation and more of a transfer to a Euro-centric economy.
Also, Wal Mart's reported that US consumers are simply tapped out due to increased energy costs and taxes. Their report was interesting because they illustrated a link between payday and shopping activity and many customers said they do not have any cash to shop until payday - folks are living paycheck to paycheck and just not making it.
I see this effecting the discretionary travel market more than the network carriers. With oil above $70 a barrell there isn't such a thing as a "low cost" or "discount" carrier - it is all flippin high cost with AirTran costing $600+ to fly cross continent, just like Delta. Fuel levels the playing field to some extent resulting in network carriers having an advantage. It is interesting also to watch AirTran's effort to become more of a network carrier with NWA trying to keep them out of their back yard. The effort is getting expensive either way.
So there is more to this than Countrywide mortgage. Like you, I found it odd that Countrywide threatened bankruptcy and Continental's stock fell off more sharply than the mortgage lenders - but Continental had a heck of a run and folks may have decided to take profits.
We have two highly inflationary factors upsetting the market - Energy and Taxes. The housing and liquidity bubble acted as a spring but now that has run its' course and is rebounding. This could cause energy prices to decline and help stabilize the market. The tax situation has to get worse. Congress and the Bush administration have been profligate spenders. Nothing really works to fix this problem, if they lower interest rates inflation will increase, if they continue dumping cash from the central bank, devaluation will occur causing more inflation and more of a transfer to a Euro-centric economy.
I am agree with you Bucking Bar ,....and about this Administration....hopefully this is going to be a "Costly " Lesson for all of us. for the next future.
"SatChip" thank you for the Compliment ..!
SexyJeny
08-16-2007 | 01:16 PM
#15
Gets Weekends Off
Joined: Jun 2006
Posts: 998
Likes: 0
From: B737/Capt
Please chime in Mike734
08-16-2007 | 03:04 PM
#17
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Joined: Feb 2007
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08-16-2007 | 03:07 PM
#18
Gets Weekends Off
Joined: Feb 2007
Posts: 440
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The market and your investments are going to have gains and losses. Over the long-term you will come out ahead.
08-16-2007 | 03:18 PM
#19
Gets Weekends Off
Joined: Jan 2006
Posts: 305
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Buy, Buy, Buy
That's pretty much as scientific as it gets. When Business Week (and the like) is running cover stories about the housing meltdown as they did several weeks ago, its time to buy. I'm going with IAI, a broker-dealer index.
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