GET OUT NOW

[Me.]

Felix Salmon's Message To Investors: Get Out Of The Stock Market Right Now

Financial blogger Felix Salmon has a message for investors: unless you're a large institution, get out of the stock market right now.

The lesson from the nearly instant crash and rebound of the Dow on Friday is that "stocks are dangerous things to own." Salmon cautions that we are "entering an era of massive volatility. You, as an individual investor, just simply don't have the risk appetite to be able to deal with that kind of volatility."

It's best to get out now because you can sell "without taking a big loss because come back a lot from their lows."

Video here: http://www.huffingtonpost.com/2010/05/08/felix-salmons-message-to_n_568989.html

[Warpy]

1. I don't trust the numbers, never have

but my stock is what is providing me the income I live on, so I guess I'll just tell Mr. Salmon that fear is the worst basis for any decision.

If I needed the face value instead of being able to rely on income, I'd probably take his advice and go to something a little safer until they fix whatever allowed one trader to diddle the market last week.

[girl gone mad]

7. It wasn't one trader diddling in the market.

It was the result of the takeover of the machines, not a surprise by any means to those who have been paying attention. You should expect much more of it the future. This analysis based on fear, it's based on cold, hard reality.

[Warpy]

10. I know that, but it started with one trader. The machines just

kicked in their automatic sell orders in response to it. I have a hazy idea what happened.

And yes, HFT is what needs to be abolished.

[girl gone mad]

15. It didn't start with one trader.

Citi has flat out denied that story. Investigators are still trying to sort everything out, but the sell-off was probably triggered by key valuations being breached, not by a fat fingered trade. As long as computers dominate the markets, this type of volatility should be expected. HFT firms all employ the same fundamental strategy and it isn't buy and hold, it's get the fuck out of positions as soon as possible when there are no buyers around. That isn't going to change because they aren't investing, they are simply engaging in a sort of high speed arbitrage.

[Warpy]

20. No, the fat finger story is likely bogus

but the fact is that one trade started the cascade. That's what they're reconstructing.

What they need to do is eliminate HFT.

[BrklynLiberal]

2. ..but...but...but..didn't the repukes promise us that privatizing social security and

investing it all in the stock market would make us all rich?????

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[RKP5637]

8. Yeah, Bush-Hole really had a genius of a plan with that one, didn't he. n/t

:silly: :silly: :silly: :silly: :silly: :silly: :silly: :silly: :silly: :silly: :dunce: :dunce: :dunce: :dunce: :dunce: :dunce: :dunce: :dunce: :dunce: :dunce:

[Enthusiast]

27. Oh yes.

And it is ours to keep forever and ever. And we can even pass it on to our grandchildren. What could go wrong?

[cutlassmama]

3. I think it will crash again too, probably sooner than later. nt

[Me.]

9. My Guess Is That It's Going To Be A Long Hot Summer

Financially speaking

[eleny]

4. Deficits don't matter!!!

[truedelphi]

5. Any rational person understands that since almost our entire monetary

Ball game is about our perception of collecting a whole bunch of IOU's as actually being worth something, the monetary system would, at some point, come apart.

And that point apparently is now.

[girl gone mad]

6. Can't argue with him.

In their current iteration, the markets are a ponzi scheme built out of government bailout money and mo-mo chasing high frequency trading algos.

[4 t 4]

12. Must be nice to even have enough

money to be In the market and need to Get Out Now

[RKP5637]

13. Yep, basically smoke and mirrors flying around a charade of gambling for profit on a

Ouija Board
http://www.huffingtonpost.com/2010/05/08/felix-salmons-message-to_n_568989.html

[prolesunited]

11. I'm glad I didn't listen to any of you in 2008

I would have lost big time. The market holds steady as long-term investment. If you have less than a five-year horizon, you should have little in stocks anyway.

[northzax]

14. Exactly. I have a 25 year horizon

Right now. If cash outperforms the market over the next 25 years we are all so fucked that it doesn't matter anyway. I have a plan and I'm sticking to it. I don't know the balance of my 401k, beyond a rough idea, I check it once every six months and reallocate annually in line with my plan, and any other adjustments I see fit. So yes, by all means, sell. Makes it cheaper for me to buy. And Felix? I do have that level of risk tolerance, because of just that. I don't care how the market does today, or this week, or this month, or even this year. I care how it does over the next two and a half decades.

[girl gone mad]

17. Just to play devil's advocate here..

You might want to look at how Japan's market has performed over the past two decades. We are essentially following down the precise same course they went down starting in the early 90s, with respect to quantitative easing, zero interest rate policy and propping up zombie banks.

[bvar22]

29. I'm glad I DID listen in 2007.

Cashed out and bought Bubble Proof property.
Couldn't be happier.


Many of the same people that were ringing the warning bells in 2006 and 2007 are now saying "Double Dip".
I believe the above chart lends them some credibility.

[prolesunited]

32. What is Bubble Proof property?

And if the the market is that bad in within the next 5 or 10 years, what good is the property if you can't sell it when you need cash?

[bvar22]

34. Property that you can live off of if need be.

Property that is already so undervalued that it can't lose much more, even in a total collapse.
Property that has no zoning restrictions, permit demands, and LOW property taxes.
Property like this:

[WCGreen]

16. I bought last year when the market was under 9000....

I'm sticking for the long haul...

But then again, I have only a few bucks, bucks that won't devestate me if they should disappear...

But everything I bought was at or near the recent lows so I'm sticking it out...

[mnhtnbb]

31. If you bought at recent lows you may want to re-evaluate whether as much as 60%

up isn't enough for you. Getting greedy can be very costly in the long run. You might
want to take some profits and hold some cash for the next buying opportunity. Buy low, sell high.

[WCGreen]

37. All my stocks are growing through revenue reinvestment....

I already ditched half of my Ford to buy Pfizer...

[CommonSensePLZ]

18. Couldn't that severely hurt the market?

Not that those CEOs don't deserve it, but obviously if the market gets bad innocent people lower on the ladder could lose jobs which would hurt families.

[Oregone]

19. Not really. Your common stock chump change wont make a dent

401ks give this false illusion of mass ownership by the lower classes but its a fuckn charade.

[SmileyRose]

23. If every single individual who owns stock liquidated at once it would be a mere blip.

the vast majority of stocks are held by a few dozen individuals and large institutions.

Edit to add, this is exactly why the advice to get the hell out. It's one thing to gamble knowing the rules and the risks. The problem now is the biggest players deliberately manipulate the market so they can make money on the upside and the downside.

[tiny elvis]

21. djia has been an artifice for last five or six years

maintained between ten and eleven thousand to provide a stable base for top investors through unstable times and to give confidence to small investors
the recent dip was part of that maintenance
the cause of the dip is a pretended mystery because a rigged market would be unpopular, even one rigged for confidence

[Scuba]

26. No doubt rigged to help the little guy, right?

[Me.]

28. !

[lonestarnot]

36. !!!

[drmeow]

22. My understanding

is that the stock market was highly volatile for quite a few years after the crash that caused the Great Depression and it took 22 years to recover.

This is a very interesting chart:

http://stockcharts.com/charts/historical/djia1900.html

[pa28]

24. I think he's right.

Buying the dips in this fed sponsored rally and thinking in terms of a carry trader has been reliable. The foundation is shifting though. The market will have a strengthening dollar to contend with despite the fed's efforts to cheapen money and this could go on for some time.

Also, you can excuse a "fat finger" for the market plunge all you want but it looks like a symptom of an overbought market and if you just look at the print without any backstory you see quite a bit of technical damage. Anyone looking at the market from a trading standpoint is probably reversing their strategy now with a focus on selling the pops.

[troubledamerican]

25. Summer 2010 War On Iran, continued oil spill spread, time to escape U.S.?

GET OUT NOW

[mnhtnbb]

30. Been out for several months. Getting too old and too close to retirement

to be able to withstand another roller coaster ride.

Where to put cash? We finally decided to rebuild on the lot where our house burned down
a couple of years ago. We're going to build without a mortgage. Where can you get 5.5%
return? Can't use cash to generate any income in retirement, so we figure we'll use cash
to reduce our need for income by eliminating a mortgage payment.

[prolesunited]

33. In your position, you shouldn't be in stocks.

I will have my house paid off well before retirement. Friends and family have all traded up, but how much space do I really need? And then it just costs more to heat, cool and maintain. Sometimes I wonder if it's too big now and I have just a very modest house.

[mnhtnbb]

35. That's rather an audacious statement for knowing nothing about me.