Sunday, July 13, 2008

Stock market collapse

Stock Market Collapse
I predict that the stock market will suffer a total collapse within the next 20 years. Here’s how I got there:
First of all let me explain the difference between a prediction and a forecast. Weathermen forecast the weather based on Newton’s law of inertia that a large moving body will continue to move in the direction it is currently moving unless something stops or alters it’s course. Based on scientific measurements including satellite photographs and Doppler radar they can forecast pretty good within a short time frame but still not 20 years in advance. I "predict" that the Cincinnati Reds will beat the Atlanta Braves in the upcoming games based, mostly on my desire to see my home team win, although some facts are taken into account. (This probably isn’t the best analogy to use since I haven’t kept up with baseball since Pete Rose and Johnny Bench). So bare with me when I use some facts that may not be true. Using some information like both teams are equal in the win loss ratio against each other and that the Braves leading pitcher is on the disabled list and their second best pitcher pitched in the last game, and that the games will be in Cincinnati, my predictions are educated guesses. Now back to the stock market.
Not yet. First I have to set the background for my prediction. Many years ago back when the US population was 1/100 of what it is now, and John McCain was just a young man, a college professor explained to us how the baby boomers would never be able to retire because they constituted such a large proportion of the population. Now that no longer holds true but the perception is still there. Back then only a few billionaires manipulated the stock market. People got rich bought million dollar yachts and multi million dollar homes. Where did the money come from. Did you know that speculation accounts for about 95% of your stock investments. Most companies are only worth pennies on the dollar for their stock value if that. I believe in 1929 that percent was more like 50%. A lot of money doesn’t really exist. Those investors with billions of dollars in the stock market are getting nervous. It has taken decades for small investors to "buy out" the stock market and they are not done yet. You always hear "the stock market is risky" although "there has never been a 10 year period where investors have lost money". Conflicting statements. Intentional? I believe that the billionaires are trying to get their money out. The problem is there is more than one billionaire and they still constitute a significant portion of the stock market. As they try to take money out the remainder of their money is worth less. At some point, when they have most of their money out, the market will no longer be able to sustain itself. I guessed a long time ago that when that happened (billionaires taking their money out) would be that the stock market would swing wildly to mask the removal of such large sums of money moving out of the market. That’s happening now. Stocks would take a "general" negative trend though somehow they need to mask this blame it on something else. SUBPRIME anyone. Housing market. Weakening dollar?
I still have a large part of my Retirement invested in the stock market. Shouldn’t I be taking it out? I know, but I am greedy and just don’t trust my own judgment, like last year when oil went down to $50 a barrel. I was just about to put a lot of my money into oil stock, when someone on CNBC said that oil was still overpriced it should drop to $42 per barrel. I got distracted for a week and oil was back to $90 a barrel, surly it wouldn’t go over $100 so the profit margin just wasn’t worth it! Wrong again. Besides most of my retirement is as secure as the US dollar. :(
and Property :’O. OMG .
Like John McCain I’m not an economist, but if my information is incorrect at least it’s an honest mistake. Unlike the news reporter the other day that said she was cutting cost by clipping coupons. HUH. Why do you think they invented coupons in the first place. They make you spend more money!!! I wonder how much the coupon industry paid her to say that?? Or the reporters who are suggesting that you trade your new $50,000 SUV in for a Toyota Prius, do the math first. You’re not going to get anything out of your SUV and next week people will get used to the price of gas and go back to their SUV’s.
That’s just my opinion, and now it’s in print for everyone to see.

1 comment:

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