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Why is there so much optimism in the market?

Reply
Not applicable
Is the recession near end? Bad news a daily occurence but it just seems to be ignored. Or am i the only one that seems to think it's bad?
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11 REPLIES 11
Not applicable
Bloomberg.com - go and read the good news...
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Wizard
Super Contributor
The DOW had a similar period in the previous recession. Period 21-09-01 to 20-03-02. What followed afterwards is probably what is coming ahead. When Greenspan comes out of the woodwork and calls the end of the recession normally when things get exiting!
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SimonPB
Valued Contributor
markets look 12-18 months ahead .. so ignore what you see happening today, look at where the economy will be second half of 2010 ..
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Not applicable
Right now you need to be a bull, market says so. Next week/month you might have to be a bear (market might say so). Basically trade the trend if you long term investor. If you medium term investor, follow the market direction. If you short term trader, follow your TA. Bad news is what the public gets to hear about in the media. Opportunity is what investors read between the lines.
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Not applicable
Yeah i know the terms, "follow the market". It is however harder to do then it is said. And what if the market is wrong?
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Terra
Super Contributor
The chances of you being wrong is greater.
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SimonPB
Valued Contributor
more chace of you being wrong then the market .. notwithstanding that teh market can't be wrong ..
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Terra
Super Contributor
Great minds think alike. Look at the time of the posts. Simon you are starting to rub off on this Forum.
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Not applicable
But in a sense buying low and selling high is going against the market, is it not? And that is the basics of making money in this game, yes? (excl derivatives). Or do you wait for the upswings in which case you "mostly" become the greater fool, but then as soon as you sell, the share turns again. If we all moving with the market, who is the market?
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richardw
Super Contributor
The panic level is down, which is enough to take the market up. It's probably going to wander up until there's a surprise on the downside. Not just bad news, but surprisingly bad news. Remember, this is the same market that put highs on equity prices last year, when every single sign said we were in for a world of pain.

Possible surprises:
Commercial real estate
Option-arm etc mortgages
Banks unable to sell more assets to boost their 'profits' and actually booking a few serious losses (like Citi and BOA).
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GL
Contributor
Apparantly the market can stay "wrong" for longer than you can stay solvent.
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