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Discussion in 'Current Events' started by Unspeaked, Feb 23, 2009.
When does a recession turn into a depression? This is bad.
Don't think the bloodshed is over yet, but there's lots of good deals to be had.
Seeing as we still have a 14 trillion GDP and unemployment only at 8%...we are a long, long, long way from a depression, technically speaking. As for the mindset, many people feel we are there.
One has to wonder if the market would be so low if people would look at the facts. The Dow Jones being down 50% from the all time high is just crazy. Either the market was in a bubble and is finding a new balance or people need to stop trading on emotion.
That's the ticket. Although there's always a prelude to the problem, once that happens, the situation tends to get worse as people tend to hoard their money out of the market/overall economy. If people want to act and spend like we're in a depression, we'll be in one in no time.
The media certainly isn't helping matters...
Media - Didn't hear too many complaints when they were helping to push prices up.
For all the analysts, experts and professors, it still comes down to human nature.
Now is the time to invest. There are too many undervalued stocks to be ignored. The bloodletting will not continue forever. Fortunes will be made off this downturn, for the bold.
You ever heard the quote "never try to catch a falling knife"
Yes, you're describing the paradox of thrift. This is why measures of consumer confidence are so important - the more people think the economy will tank, the less likely they will spend so personal tax cuts prove ineffective as it is not spent back on the economy.
Just don't grab the blade. Do your research. With all the fear in the market, now is the time to buy. I have.
I think we all kind of knew all this was going to get worse before it got better. For weeks I have been saying depression.
And Gordon Brown agrees
You know how it goes:
If it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.
Gordon Brown is a politician so his opinion on the matter is rather worthless. He will saw things like this to get votes even no matter if it is true or not.
I will believe it when I read the true expects are saying that it is that way and right now I read it time and time again they just say it is a rough down turn but still not anywhere near as a depression.
No DZ is right. The market WILL bounce back. Now is the time to invest because long term the market still will hold it 9-10% growth a year. It will jump up quicker this time to keep on that pass.
While short term you may and will lose money on paper long term it going to go up. If I had the spare funds with out dipping into my emergency fund I would put money into the market right now for long term investments but I will NOT dip into my emergency fund to do so.
Oh fer goodness sakes…
I think you didn't understand it quite correctly.
The UK Prime minister (former Chancellor of the Exchequer) slips up and calls it a depression… do you really think he intended to? Hardly a vote winner. It was a cock-up.
How's the weather in Denial?
We are about half way to the depression according to this chart.
You know the difference between recession and depression right?
It's Having a job...
Why buy now when you can short sell?
It is always better to go with the tendency, and now is a great time to go against the market. I fail to see the point in buying something that you know will go down in value when you could be making money from that loss in value. The bottom isn't anywhere near so while you're buying, I'm selling, that is until there is any indication that it is reasonable to buy.
That is why good investors always keep some cash around to take advantage of the sales.
Stocks have routinely gone up around 8-9% per year over the long term. Stocks do not always go up. They fluctuate in value. As long as your investment horizon is 10 plus years, you should be okay. If however, your investment horizon is less, then your funds should have been diversified into other more secure investment vehicles. The recent market movement is the reason why.
Another point concerning investing in stocks is that you may not pick winners each time. Take Microsoft. If you got in early, you now have 512 shares for each original share that you purchased. If memory serves, an original share was around $27. Today a share is about $17. That means for each $27 someone invested, they now have $8,704. Not bad at all. However, if someone invested in Microsoft a few years ago, they would now have about 25% of their original investment.
Companies go through cycles. One definitely needs to do their research first before investing.
I think the time to invest is within the next 8 months.
I read the market a lot (as much as a 20 year old Engineering student can), and I have some solid picks for the ensuing years. Take my advice, or leave it.
(T) - AT&T is one of the strongest companies on discount at the momeny. They pay an amazing dividend, aren't hurting badly due to the recession, are continuing with growth, and are financially sound.
(VZ) - Same story as AT&T. These will be the two big players in the mobile market within the next 5 years.
INTC - Intel makes the chips for just about everything, and will continue to do so.
I think if you purchased these 3 companies at the moment, you can expect some big gains in the next 5 years.
Or the government....
When the media or government continues to say how bad things are, people stop spending money and things do get bad.
Trying to get a spending package through by scaring people may help the spending package go through but will tank the economy.
I agree that you should invest but I think it's very doubtful that you will make a fortune investing long (The market will go up in the long run but will be very flat). The size of the deficit, the rate they are printing out money, and the large budgets (new social reforms) means to me that there will be a considerable tax hike in the future along with very high inflation. Both of these factors directly influence your equity returns (if a company is earning less money, your rate of return will be lower).
That line of thinking is way too rational for the markets...
I'm not putting in another cent until Bernie Madoff tells me it's ok