Sell Low Buy High

Jim Cramer doesn't know what he's talking about.

Big surprise there. For years he's been telling his viewers to buy when the market is high, and now he says sell, when the market is low.

In the HBO show Deadwood, they have a name for people that follow the masses and let their emotions make decisions - Hoopleheads. In Deadwood, all the Hoopleheads pannic when they think their gold claims may become worthless. The non-Hoopleheads remain calm, and buy up gold claims on the cheap from the stupid Hoopleheads and later make fortunes.

Clearly, all Hoopleheads should steer clear of the stock market, in bad as well as good markets, because their lack of logical/critical thinking skills is sure to earn them fat losses in the long run. Please-- name someone who has made a fortune buying high and selling low. Here's a tip for the Hoopleheads: do the opposite of what Cramer says, and you may actually make some money.



What Cramer, and others like him do, is play on their viewers emotions and make cash selling ads on their shows. According to the New York Times, since the financial crisis has started, the number of Cramer's viewers has doubled. That must be good for Jim's portfolio! I don't normally like to give investment advice on this blog, but here's some for the Hoopleheads: Watch Oprah instead!

And please remember, no one knows what the market will do in the short term, all we do know is that the markets are forward looking, they are predictors of future earnings, not present. We also know that long term investments in stock markets are historically an effective method of building wealth. Don't lose that confidence, and above all don't panic.

Don't Wait for Birds!!!!

Some good news has risen from the mess: The Ted Spread is moving in a direction we can enjoy.

Another piece of good news, the Oracle has spoken, and it said:

"...if you wait for the robins, spring will be over..."



If you get to read the article, you'll see Buffett is very optimistic about long term market returns, which should be a relief to most, since this is the guy who knows more about markets (there is no better way to say this) then anyone else ever on Earth.



As a side note, I've stopped following the day to day, moment to moment, moves of the market. This is something I would recommend to anyone with enough money in the market to make it important to them.

Bullshit

Am I the only person out there that thinks this slide is about 90% bullshit? Is this not a reverse bubble? Will anyone out there stand up and tell me there are not Hedge Funds and other large pools of cash making big dough selling the market short?

I have big concerns, but I am optimistic. The index to watch now is the Ted Spread, see the link the below. For those of you not in the know, this is the difference between the rate banks will lend to each other and the rate they can borrow from the U.S. government.

Ted Spread on Bloomberg

Watch this thing, right now, its WAY OUT OF WACK. Until it straightens out, we will continue to have major major bad stuff happening. When the spread starts to level off and better yet narrow, look out here comes the big rally and hopefully you can be a part of it.

P.S. I am going on record here as a proponent of financial industry regulation. I think anyone who works or has worked in financial services knows (whether or not they will admit it) regulation is a necessary tool that serves the public interest.

what do you know

I would not have believed the credit crisis would have gotten this bad had I been told. I felt like a housing downturn was certainly coming, but could not have predicted this catastrophe. That said, I do believe the entire mess is oversold and likely to recorrect in the opposite direction once investors realize and get comfort that the bailout is working, and I do believe it will work.

Has anyone heard the term "recession" recently, it seems to be noticeably absent from the conversation taking place on public radio and in the newspapers. Can we finally say it has arrived? I think the sooner that happens, and once investors realize that its not over and we will go on living and making a living, the market will recorrect. The amount of uncertainty and fear priced into the market at this moment is beyond measure. Be brave?

I have been looking for another house, as an investment or to live in and rent my current house. There are definitely some serious deals out there. I can offer cash, no financing, and am relatively fearless when I see a giant mess. Just to give you an idea, I have been seriously looking for about 4 weeks, and have seen two houses I was interested in (my criteria is extremely tight) made one offer and lost.

I will go ahead and be brave, since if things get worse it wont matter anyway. Another sign we are near bottom, the Oracle is making serious moves, that more than anything gives me comfort. If I had those resources I would do the same, but I don't. The biggest move I could make at this point is new house.

For the stock market, I am simply playing long term odds, like a decades long game of black jack, no 10 points cards for a while, so they must be on their way! Right? Just stay at the table.