Sunday, January 13, 2008

Conviction is very important NOW !!!!

Markets have taken a "dive in the last 2 weeks"

Dow has taken a "nosedive of 1674 points from its high...which is 11.7% of nose bleed"

The latest PLUNGE came after jobs report two Fridays ago........

I have never observed two weeks of straight line decline with this "intensity"

Majority of "high fliers are below 50 DMA"

No only that..... but most of them are half way to 200 DMA......

I have never seen RSI take a "plunge to 30 area for so many good stocks...in such a hurry"

So...this is a bear market tape.........

Based on "one jobs report which actually showed growth in jobs by 18,000...."

Is this an "over-reaction to jobs report"......NO

"This is a Mother of all over-reaction to a single neutral jobs report"

So......it begs a question......a very good question......are we "NEAR the bottom or NOT"

I say "Damn near or have seen the bottom already"

So...why the talk of "conviction" instead of selling all & head for the hills......

Conviction....because ..if you project to end of 2008......can you try to do that...please !!!!

We should be @ least 2,500 points higher on Dow .......

So ...if we can project that...or Clearly SEE NOW !!!!

What we should be doing......go ahead ...say that word....

That word is......

Buy aggressively......

Why ?

You do NOT see an opportunity of fast growing companies selling @ deep recession level.....

So go ahead.....and develop some conviction....

Conviction in good stocks.....

Conviction in US economy....

Conviction in stock market moving UP.....

Conviction may be "the best idea ...since slice of bread"

So...on a Sunday morning.....go ahead &......

Have a "mega dose of CONVICTION"

You will feel good with this idea alone.......

"know when to holde'm"

Time is NOW !!!!!

Hoping for a happy Monday !!!!

Saleem

21 comments:

Bruce said...

Saleem,

I agree with you. Let's face it, if you don't know by now there is serious "softness" in the US economy, you're braindead. There is no NEW bad news, its all on the table!

What the market wants to SEE is action, and action NOW! Based on what I have read and seen, President Bush, Secretary of the Treasury Paulson, Federal Reserve Bernanke, and Congressional leaders Pelosi and Reed know this and finally realize the time for Action not political jockeying is NOW. I belive MAJOR pronouncements that will move the markets UP will be forthcoming from all this week!

Stocks100 said...

Hi Bruce,

Market is discounting deep recession.

This adminstration has been very slow....but waking UP in a hurry.

Yes ...I expect major announcement from several front this week...Pelosi & all.

Saleem

madmax said...

SALEEM

thanks for all the extreamly hard woth that you do on hte blog
3 cherrs to ya!!! Thanks for the confidence building I thibks htat we are all gun shy at this point. I hate being underwater like this at the start of the new year.
By the way we are refinancing out home and we are floting the rate till settlement in APRIL, (we had 5 year ballon) so we are hoping for BBernanke to lowere rates real low.
I thinks the market like me like to know what is hgappening behind the Fed Reserve curtains. How much lower and when!
Cheers and Peace to all
Madmax
PS so far my PC is running great Saleem how many programs does your PC show running in hte start up mode---In processes I show 33 programs running-thanks

Doug said...

Saleem,
I feel like the song New York New York, If I can make it in this crappy market, I can make it anywhere. LOL. If I/We can come out of this market with profits, I/we will be that much more prepared in the future. Love your optimism. Thanks for the insight this morning. Good morning Bruce...I hope you are right. Up to now, they sure have been asleep at the wheel. Maybe they will wake up before they crash.

Stocks100 said...

Hi Madmax,

Youa are approaching home financing with smart move....

April should bring interest rate 50 basis point guarenteed...

36 process is ok.....

What you have to understand that PC is no different than car....

If you want your car/PC to run @ optimum...you must do few things as a given....

Running Ccleaner every 2 hours...also in Ccleaner..
click registry and
click scan for issues tab.....it will identify many registry problem.....
click FIX selected issues...
say NO to backup...
click FIX again....

And you are done.....

Defrag...one more time..then weekly !!!

Always remember...

What goes DOWN....

Must come UP...

If it is a frontline growing company...

Cheer UP.....

Saleem

Stocks100 said...

Hi Doug,

Good plan.....

Prepares you for market setbacks...

Good plan....

Takes you NEAR your dreams....

Good plan.....

Tells you to take money off the table after each GAIN....

Good plan......

Tells you to adjust quickly....if market is changing..both UP & DOWN..

OPTIMISM without PLAN is NO plan...

Always plan for.....

Beyond the obvious.....

OPTIMISM always take you FAR.....

Saleem

Doug said...

Saleem,
When you say "always plan for beyond the obvious". Is that something that comes with experience? Can you elaborate on that point? This is what I thought yo mean when you said that: everyone is screaming recession and fear but markets/govt. will find solutions to ignite healing, so plan for what the market will look like at the end of the year, up from here. Thanks for the insight to see a glimpse through eyes of 40 years experience. Doug...

Doug said...

By the way, didnt mean to over simplify with "market up from here" comment. I was not implying a straight line up. LOL...

Stocks100 said...

Hi Doug,

When I am saying

"look beyond the obvious"

It MEANS NEGATIVE & POSITIVE...

Let us take negative first :

What if market goes down another 1000 points.....

Are you ready to handle that...

If NOT...then you better FACTOR that in your equation of life...

By the way.....I AM prepared !!!

Beyond the obvious

also entails seeing that by end of2008..markets will be UP 2500 points...based on my analysis....

Now a good plan entails.....

Surviving another 1000 points drop..

And getting the benefit of a RISE of 2500 points...which may NOT come into full swing until aug 2008......

See.... a good plan takes into account good ,bad & UGLY.....

We have seen BAD already...is UGLY in store....only time will tell !!!

I am still sticking by my thesis that end of 2008 will be much much higher.....which is 12 months away????

Hope it helps !!!

Saleem

madmax said...

SALEEM

Your approach to the market is brillent....I have just guggged along keeping some cahs and looking for opportunities and lately getting creamed! I nover looked down the road that far ahead. I guess that goes along with learning to take profits and let the stocks that are raging bulls run and charging ahead keeping them, not just selling for a quick profit. Of course learning to spot my dogs and selling them ASAP.
thanks again for your point of view on the market and how to perceive market directions. Still not sure the bottm is in BUT hope so.
Madmax

Doug said...

Thanks Saleem. Now I understand your emphasis on conviction even better. Talk soon. Doug...

Preet said...

Hello Sallem,

First, i would like to thank you so much for your respopnse.

I have read your response very carefully and some questions.

As you have mention that focus on stocks which are showing YOY growth in Sales & EPS....can you please explain this, i do not understand.

Minaccess.??? Is this the web site for ETF ?

I would like to share my mutual fund symbol with you. My portfolio includes prnex,prlax,prasx,prmtx,mchfx.Can you please suggest me about this?

Are BIDU,ACH,CSIQ,LDK are for daily trading or i can keep this for some time and then sell ?

I appreciate your response.

Thank you,

Regards
Preet

Stocks100 said...

Hi Preet,

My focus for you is on learning before you leap.

Fundamental analysis is very important....that is where you learn about Sales & EPS....

You should read some books first one author is Peter Lynch

His books are available on www.amazon.com

Title is

One up on wall street..it is $10.20

Plus he has another book which I also recommend for you

Beating the street $10.20

You should hold on buying any stocks until you have read these two books.

Saleem

Stocks100 said...

Hi Preet,

I checked all your mutual funds and they are all very good.

I suggest you make maximum monthly contribution in those funds only...$ amount divided equally.

Their performance is better than most stocks....so why go for headache.

Keep learning more about stock market....but stay in all your mutual funds with a very long term view.....

Visiting my BLOG is also part of your learning.

Saleem

Preet said...

Hello Saleem,

Thank you for your response and I appreciate your view about my selection of mutual funds.

Basically, I am doing the same thing which you have suggested me....I mean dollar average. Every month i invest in mutual funds, but i do not think this year i shall be getting good returns on my mutual funds.

So, i thought i can invest in stocks also.

Minaccess.??? Is this the web site for ETF ?

Is this block the only way to be in contact with you or is there any other contact ?

Please let me know.

Thank you

Regards
Preet

Stocks100 said...

Hi Preet,

Based on what I saw today....you are ALREADY invested in T Rowe Price ETF......

I do not suggest changing your current strategy......

You are trying to time the markets...which after 40 years of investing..I am UNABLE to do.

BLOG..comment section is the only way.....

I think I have already given you all the answers for all your questions.....

If you are worried that you will have negative return in 2008...then the safe way is to PARK all your funds in T Rowe money market fund...until you are confident again to go back into your original ETF.

Please DO understand ...currently you are invested in ETF.

Saleem

Claude said...

Bad, but not that bad...

From Briefing.com

The recession obsession should take a back seat this week to the start of earnings season. The fourth quarter numbers in aggregate are not pretty. That is due entirely to the financial sector. Excluding financials, the earnings reports will be decent. The outlook for the financial sector might also be seen as improving.

There are no major economic reports all week, so the focus should shift to earnings.

Alcoa kicks off fourth quarter earnings season with their report on Wednesday after the close.

The real action starts next week with Genentech on Monday, Citigroup and a number of other banks on Tuesday and through the week, IBM on Thursday, and General Electric on Friday.

Fourth quarter operating earnings for the S&P 500 in aggregate are expected to decline 8.5% from the fourth quarter of last year. This forecast is down from a projected decline of 3.8% just one month ago.

The news isn't as bad as it might appear.

The overall declines are due to the write-offs in the financial sector. Excluding financials, earnings growth is still positive.

In fact, for the fourth quarter, each of the 10 sectors of the S&P 500 is forecast to post earnings growth except financials and materials (just 3% of the S&P 500).

Doug said...

Good morning Saleem,
I've thought a lot about your last blog and it has given me a better understanding of conviction, especially applied to my current situation where I am in three loss positions currently. Your points have given me a chance to calm down and not rush to sell for big losses but rather, look out down the road a little and realize that these trades will have better opportunities to be profitable or at least minimize damage. So thanks for the renewed focus, understanding and calmness/conviction. This is a perfect example of your positive influence on real people. Doug...

Stocks100 said...

Hi Doug,

Thanks for taking my BLOG message with enthusiasm & focus.

The biggest GAINS...which I have made was always when I bought with conviction & held it as long as it was profitable.

After a HUGE run then I try to trade within range....NOT before the anticipated RUN....

I can tell you that by the end of 2008 LDK has the-most to GAIN....so do NOT sell for a chincy gain.....$70 is first STOP before 2008 is over.....

Always think beyond the obvious $$$

SOHU is an easy $60 by end of 2008..

ESLR..can be traded....to keep the juices flowing !!!

So...it is important to KNOW based on FA for 2009.....the difference between each stock.....

Some are long term HOLD and most are tradeable for quick 1,23,4 points.

Life is NOT tough...but we go out of the way to make it TOUGH..by NOT thinking things through !!!

Saleem

Doug said...

Saleem,
I am getting a little infusion of cash into my trading account this week. This will enable me to continue my trading strategy and allow me to stick with my three for awhile without pressure. This is a real blessing to me and the timing couldn't be better. Maybe LDK will be a longer term hold and provide a kicker to my account towards the end of the year, obviously monitoring as we go. Thanks for the encouragement and I just wanted to share with you so as we share results, you would know that I had a little more trading $$$. Best wishes today.

Stocks100 said...

Hi Doug,

working with "less is OK...you just build it UP...slowly & surely"

It is "where you place your money ...which is important...than how much you place in market"

"food for thought"

Saleem