Wednesday, October 08, 2008

"What and When" is the bottom?

"Bottoming" is the PROCESS.
It does not happen overnight, especially after humongous loss if credibility by people who were suppose to safeguard all the weak links. Instead - we are treating the very same people who screwed up like our own children, we have no choice but to forgive, and being Americans, to forget...and pay up...again...and again...
And just like in case of (I will be politically correct now) having "mentally challenged" children - we will be paying up all the way, we have no choice, we were left no choice...except for the difference that we might just stop "loving" our government and pull the plug one day...
Well, 'nough ranting, we can change nottin anyway.

Bottom after bear market (which is really just momentum/grows crowd performing panicky selling after being unpleasantly surprised that all "money making fertilizer Chinese cannot live without in reality is just another, pardon me, form of shit/tulips"

So, with momentum "hot shots" getting annihilated on yet another pipe dream ( like Pete Najarian's "Coal is a REAL Story"), market plunges and value investors, so called smart arses say their famous "I told you so" and they keep saying that until ...until valuations price in "unavoidable" Armageddon. So, value guys and girls ( like Karin Finnerman who thought of (C) as a value play since $27) stepping up to the plate and start buying with all the money they managed to keep while saying "I told you so"
That is component #1

When that begins to happen, the last shorts, who are smart and diligent, begin to cover positions they were holding for ages in order to protect profits they made by being smarter than hopeful idialistic late to the party idiots longs.
That is component #2.

And only after that bagholder "Mad Money" watching Joe Schmoe who was waving the flag all the way to the bottom and sold when Jane Schmoe divorced him for being an idiot and a gambler, so that Joe makes few extra dollars during few months he's been out of the market ( normally from 6 to 18 months - new money does not come easy) and then he decides to put cash back into mutual funds, of course by that time they normally 10-20% up from the point where Joe sold out. This is when "The new Big Thing" begins to develop.

And we all know how it ends up every single time, we heard it and, may be, said phrases like that ourselves: "I think I will retire at 50 with the way stock market/real estate/fertilizers/tulips are doing..."
Good luck suckers!
P.S. Valuations are really tempting now - start buying ...suckers!