Stock Market mania igores cost to fix Y2k, indications of deflation, lower profits, higher interest rates and considers higher unemployment a good sign without recognizing numerous problems ingreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
the economy. Years ago, the stock market was a good indicator of the direction of the economy. Now it is being manipulated so that it is not reliable. How can "investors" logically pay 50 times earnings for a stock. Mania? Unemployment goes up and the stock market reaches an all time high on the premise that there will not be inflation. What these idiots fail to realize is that it is a sign of DEFLATION which will cause the market to go down when people wake up. Has any major company reported that the costs to fix the Y2k problems are less than anticipated? Not likely. Some companies do not have the money to fix the y2k problems and have abandoned the effort as reported earlier tonight. If costs go up, profits go down. If sales go down profits go down. What is the magic event that will increase profits with all of these problems? The only reasons are hype and the continuation of the present trend. When interest rates increase,profits go down. When unemployment increases, the income of the workers decreases, sales decrease and profits decrease. This is not rocket science. Too many vested interests are talking the market up so they can sell out at the top and Clinton gets the credit for a good economy. The higher it goes, the further it will fall. Count on it. When it does crash, the exits will be jammed and some will not escape with their finances intact. Will you be one of them?
-- Steve (firstname.lastname@example.org), March 07, 1999
With the Stockmarket at a peak, I just bought several LEAPS Put Option contracts that expire in January, 2000. When the market crashes, I will make enough to retire on!!! Ask your stock broker how you can do the same!!!!
-- Freddie the Freeloader (email@example.com), March 07, 1999.
LIQUIDITY driven markets pay little heed to fundamental or technical measures. They do pay attention to LIQUIDITY. When the LIQUIDITY dries up, as it must, the results will not be pretty.
-- Ray (firstname.lastname@example.org), March 08, 1999.
Ok, so I'm paranoid about money stuff, and not posting under my usual moniker.
Puts. Before you buy, check the premium based on volatility. Last year it hit the 40-60% level. You had to have quite a fall to make a little, little bit. Investors were buying portfolio "insurance" expensively. Would have been better to SELL both puts and calls betting on premium going down. I should have cashed out my LEAPs Puts while they were high, too, but I thought the y2k avalanche had begun and had plenty farther to go. Now they just sit, waiting for one more shot at glory.
And the great y2k question: Will you be able to cash out, even if you're right? As GN always reminds, "electronic promises to pay" may go missing under many circumstances, such as banks freezing accounts, brokerages likewise, options exchanges refusing to back contracts (do they now, anyone know?), your counterparty (if that's who's on the other end) not meeting margin calls.
These are not ordinary times. Or are they? How much of a contrarian do you feel like being? Simplify.
-- hiding_guy (anotherme@$.com), March 08, 1999.