Tuesday, June 1, 2010

Blog Readings

More on 1930s

from http://quicktakespro.blogspot.com/2010/06/more-on-1930s.html



Larry McMillan had a nice piece in MarketWatch about how the current market compares to the 1930s as well as a few other bear markets. We posted a comparison to the 1930s here last week so scroll down to see it.


Quote:


So, we have three previous time periods in which a severe bear market shook the financial system. These then gave way to strong rallies, fueled by the liquidity thrown into the system to stem the bear market. However, once those rallies ran their course, reality set in and prices drifted, grinding their way lower for three or four years.

(end quote)

Two things here - first, the concept of a liquidity rally.

The second is the term "grinding their way lower." That is how real bear markets end when the market demoralizes everyone and nobody wants to own stocks.

Why you shouldn't sweat Europe



http://wallstreet.blogs.fortune.cnn.com/2010/05/25/why-you-shouldnt-sweat-europe/


Do rising credit spreads and tumbling stock prices signal that the U.S. is in for another shock like the one that sent the economy into free fall in 2008?

Glass half full


Don't bet on it. While there are problems all over the globe and stocks could easily head still lower after a recent correction, there are signs the domestic economy is strong enough to weather the storm.

"People are completely ignoring any good news domestically," said Matthew Keator, a partner at the Keator Group wealth management firm in Lenox, Mass. "We've been here before, in 1994 and 1997-1998. We can handle an international crisis."

What's more, Keator said, corporate balance sheets are in good shape after big companies slashed spending and boosted productivity. That should help the biggest corporations to keep growing, even as small businesses struggle to get financing and compete for penny-pinching customers.

Keator concedes that there are plenty of problems around the world for investors to consider, from a double-dip in real estate, to the problems in European banks, to the fiscal health of the United States and other rich countries.

But he says that stocks rallied so sharply from their March 2009 lows that "everyone has been looking for some bad news" that would justify a decision to cut equity exposure. As troubling as the European banking problems are, he believes policymakers will sooner or later devise a response that will stamp out the current political rancor among euro zone members and stabilize the situation.

5 comments:

men said...

Dear Mr. Sudarhsan,
Which is better for a trader a 1:1bonus or 2:1 stock split.
Thanks,
Sudhin

men said...

Dear Mr. Sudarshan,
Is it better to take the bonus and split for ITC and HDFC, or exit now and reenter at a later date? I have got a doubt because when HUL split its share it has underperformed, may be because people who had huge holdings tend to offload to keep their number of share holding the same.
Infosys after its 3:1 bonus has not been giving the regular 2 way movements which it was giving before the bonus, may be over time it has been a good stock to hold for investors, I may be wrong so considering the above is it better to sell ITC and HDFC before the bonus and split respectively? RIL is another example which has been underperforming after its bonus, my point is had this bonus not been there it would at least give the 5% moves regularly even though in a fixed range.
Please give your views and thanking you.
Regards,
Sudhin

nagu said...

I THINK MEN IS RIGHT.

kk said...

RESPECTED SIR
IN THE LAST TWO MONTHS NIFTY HAS BEEN IN A STRICT DOWNWARD WEDGE PATTERN, NOW IT SEEMS IT'S BREAKING OUT AND LIKE THE LAST 3 TIMES THIS TIME ALSO IT SHOULD RECOVER ALL IT'S LOSSES. AT LEAST 5200 IN THE NEXT 2-3 TRADING SESSIONS.

men said...

Dear Mr. Sudarshan,
If I have a corpus of 3L to invest and want to invest by SIP, how many companies do you suggest me to invest into at these levels? and how much to invest on each fall. It is becoming difficult to make a call now hence the request.
Thanking you,
Regards,
Sudhin