Wednesday, November 7, 2007

DOW down 360 points!!!

Are you panicked? I'm not. Are you stupid? Valid question that will become clear within a few months, I think.

Anyway, first of all, DOW had gained over 150 points yesterday, and like I posted, yesterday was huge for me. The dow did take back some of my gains, but not all of them. How does the DOW drop more than twice as much but my loses don't?

Option trading. I made another sweet trade today, this time it was a day trade on NILE that netted me a 20% ROI.

I think the DOW will go up tomorrow, as traders bought beaten down stocks at the end of the day at bargain prices, and push them back up tomorrow to make their profits.

The other reason that I am not panicking is because I am not selling my core investment holdings at this time. I have some dividend payers, and some blue chips (some are both) for steady growth and income on this portfolio. I know that they will regain ground, and then some when the market recovers. How you may ask? Because they did when this happened in the spring, and again in the summer. In the mean time, if I can execute one or two option plays a day successfully, that 10% return per month is well within my grasp.

Someone pinch me, surely I'm dreaming.

Always perform your own due diligence before making any investment.


Anonymous said...

Two obvious points:
There is obviously a huge emotional component that broad indies reflect. Right now, that emotion is over-reaction (in both directions.) Huge swings up and down are over-reactions or over-corrections.

There is always money to be made in any kind of market. So your tactics allow for that better than most becuae you're drilling deeper into the details. I took a more aggressive approach to my investments at the end of May and have made only two small corrections since then. Those investments took a beating yesterday, and yet I am still well ahead of where I would have been if I had continued my much more conservative approach. (I track my old approach on paper for comparison. Well, on electronic "paper".)

And yes, the market will likely adjust back up in the coming few days.

Socially, the war impact is taking its toll on the ecomony, I believe. Not based on a firm cause / effect; just a sense in my mind. The economy is certainly more global than ever, and yet when the leader shows weakness, even strong components lose their sense of direction and confidence. Evidenced by the anemic dollar and our inabilty to see through obvious accounting and economic "scams"; Enron and the like first, and now billions of dollars of incredibly dumb loans. If the government bails people out to any large degree, we will grow weaker yet.

I assume you have several foreign and emerging market stocks in there somewhere? I haven't looked in detail.

Good luck - and remember if you're not lsong money every now and then, your risk level is probably too low.


CaPrincess said...

Hey 52, great read. I did get another knock down today on my account, but it's strong stuff that I know will bounce back when the market wind changes direction again. I'll post more later, but thanks so much for your input! It's always great to hear from you. *hugs*