A Positive Light At The End Of A Shitty Week

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October 10, 2008

One ray of light was my buy in QLD and UWM right on the opening lows. Have a 16% gain in UWM and a 5% gain in QLD. The bad news is that I’m down huge on the week in my leveraged funds. Minus being up about 22% for year as of Friday plus an avg loss of say 30%, makes me down probably 10-12% for the year because of one stupid trade and 5 days of the worst market the world has ever seen since the Great Depression. I was wrong and the trade didn’t go the way I thought it would. I put too much on the line at the wrong moment which is the real mistake, but its history now and have to make the right moves going forward.

There are some unique things I’m seeing that are virtually guaranteeing we see at least a 10% rally from these levels. Now next week could have gyrations, but ultimately its going higher. For how long is anyone’s guess. We either have an entire bull market off this low, or we have a 10%-25% rally off this low and then sell off again, make a new low, and eventually bottom sometime around the Spring of 2009.

Obviously there are MASSIVE buying opportunities in stocks right now and the new leaders will emerge now that the old leaders are DEAD; ie GM down to levels seen in 1929. New leaders will emerge in these next two years that will lead us into the next decade and beyond. Think about your favorite blue chips, but buying them at the earliest stages.

Later, I’ll post a list of some really cheap stocks that have low PE’s and high growth prospects. Post your own below.


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  • http://BuyOnTheDip.com BOTD

    the buying opportunity of a lifetime! right?

    …. on the next big hit down, … buy the farm.

    BOTD!

  • http://www.stockrake.com StockRake

    Yep, BUY THE WEAKNESS!

    Anymore down blips are the “fuck over the panic seller” moves.

    Of course if an asteroid is heading to Earth none of this matters.

  • http://www.stockrake.com StockRake

    Some stuff won't run the way it did before. Can you see the ag names making another whole run like the 06-07 run? I can't. I see a big bounce in those names, but they are on the other side now and it might be like 2000 tech era for commodity related stocks for a few years before they regain that luster.

    Huge bear market rallies though are possible in the oils, coals, dry shippers, and agriculture for sure from right at these levels.

  • http://www.redwooddesign.com Redwood

    I see only a bounce here also – the economy is flatline and these have had huge bull runs. This is a game changer and everything is going to be pressured. There will the inevitable recent bull sector bounce but it will be as short lived as any other sector.

  • http://www.redwooddesign.com Redwood

    Did not say what I wanted to say which is keep posting and trading and kudos for staying in the game.

  • Stocktrader

    Thanks for the honestly in all of this. I've been reading for quite awhile and in all of this you've been making good moves. I was skeptical of your move to bet the farm last friday having gone through this before when I was so sure of something. My lesson was always whenever the itch seems that clear, it usually backfires.

    I still think your analysis is dead on and value your opinions. Keep it up and good luck in this unprecedented and tough market.

    I daytraded DRYS on fri and was ready to bail at 16, but my position was small. I sold out before close…but I was like damn, their P/E is at <0.88 at the time. Good pick?

  • http://www.stockrake.com StockRake

    Yes its a good one. Remember TBSI always moves more in % terms than DRYS when the shippers pop. EXM often does as well, but DRYS is the most loved of the shippers.

  • http://www.stockrake.com StockRake

    Yes its a good one. Remember TBSI always moves more in % terms than DRYS when the shippers pop. EXM often does as well, but DRYS is the most loved of the shippers.