| Author | Message | ||
| Howie/ExoticAutoBrokers.com (Brokerofexotics)
Member Username: Brokerofexotics Post Number: 368 Registered: 11-2001 |
I completely agree with Matt. In the markets, you must "buy the rumor and sell the fact." After the war breaks out, I'll be looking to short crude oil. | ||
| William H (Countachxx)
Intermediate Member Username: Countachxx Post Number: 1845 Registered: 2-2001 |
Jon I agree thye market is down for several reasons. But people seem to panic when a war starts and after Sept 11 things have become much more uncertain. Could be good to start wading into the market now. Certain sectors will definately improve from the war such as weapons, aircraft, Gold, maybe oil. I think the market is at the bottom of a trough, maybe 5 years out I believe we could see a new bull market, maybe sooner. $ in now could make Serious gains  | ||
| Matt Karson (Squidracing)
Member Username: Squidracing Post Number: 374 Registered: 3-2001 |
The market always discounts news ahead of the actual event. Prices are already built in to the market, before anything takes place. Institutional participants hate uncertainty, and the market will always be punished for it....as it already has. With a quick, 'low' allied casuality conflict, there should not be any hammering of the market. On the contrary, I would expect just the opposite. Unfortunately, as Jon mentioned, there are other variables to take into account which we did not previously have to. Upside potential can also be somewhat limited due to basic market fundamentals. Companies have reported somewhat good numbers this quater, but the visibility going forward has not been; clear, or overly optimistic. There are several other variables to contend with as well. But to get back to the original point...the market is way ahead in already discounting the military action which is certain to occur. If one is to position themselves from this perspective, it would be wise to buy now, if you think things will procees quickly and smoothly. | ||
| Jon P. Kofod (95f355c)
Member Username: 95f355c Post Number: 409 Registered: 8-2001 |
William, It seems everybody is banking on this scenario but history shows this to be incorrect. What the stock market hates more than anything is uncertainty. Uncertainty means buyers and sellers aren't able to accurately predict the future and thus are hesitant to purchase or hold stocks. Prior to the Persian Gulf War in 91 the market was down nearly 20% just a few weeks before the invasion began on January 17th. Read the excerpts below from the NYSE website. In most cases the onset of war raised stock prices. "Operation Desert Storm, Thursday, January 17, 1991 - A powerful worldwide rally greeted news that the U.S.-led coalition forces had dominated the early stages of the war against Iraq. The DJIA soared 114.60 points - on trading volume of nearly 319 million shares - to close at 2623.51 in the following weeks the market rallied 21%." "The United States Enters Korean War, 1950 - On July 19, 1950 President Harry S. Truman announced that the United States would enter the Korean War. He asked Congress for $10 billion for a huge rearmament program. Truman's message sent stock prices up, with stocks in the aircraft, auto, oil, copper and steel industries leading the way." When Germany attacked Poland at the onset of WWII the US stock market actually went up primarily because investors thought the United States would benefit from the demand for goods generated by the war. The other side of the coin is Pearl Harbor, which caused a 10% decline in the stock market that week. My guess is that once the decision has been made to go to war the stock market will rally ahead of the actual start of bombs dropping. Another thing to beware of is the general consensus that the stock market will rally 20% or more as it did in 1991. The circumstances are much different this time around. In 91 we had no idea what to expect in terms of how long the war would last, what the casualty rate would be, and what weapons Saddam had at the time. The amount of uncertainty going into the 91 war was huge and this resulted in a large drop before hand and a huge relief rally when we liberated Kuwait in just a few days and then saw pictures on TV of thousands of Iraqis surrendering as we enter Iraq. This time around the uncertainty or doubt of how hard the war will be is not in doubt. Most people believe that we will rout them again and that the war will be a quick one. The actual danger is that the war doesn't go as planned and we start taking large amounts of casualties. The market has factored in a quick decisive war. Anything less will decimate the market from this level. We are also dealing with the uncertainty of retaliatory attacks by terrorists. this threat was not present in 91. Although Saddam threatened to do so, no one in the US took it nearly as serious as we do now after September 11th. I can remember flying from LAX to LaGuardia on Sunday the 16th of January (1991) and there wasn't much in the way of heightened security or fear of attacks. With so much current uncertainty it's impossible to gauge what will happen. Also remember that in 91 we went into recession after the conclusion of the war so it's not clear that we will be out of the woods just because Saddam is out of the picture. The stock market is down for more than just Iraq in my opinion. Regards, Jon P. Kofod 1995 F355 Challenge #23 | ||
| Jerry W. (Tork1966)
Member Username: Tork1966 Post Number: 401 Registered: 7-2001 |
Ya, you make cents. | ||
| Pat Pasqualini (Enzo)
Junior Member Username: Enzo Post Number: 217 Registered: 2-2002 |
you make sense | ||
| William H (Countachxx)
Intermediate Member Username: Countachxx Post Number: 1833 Registered: 2-2001 |
No, I'm not a war monger, far from it, I hate war but nobody in the white house asked my opinion so I just have to react to whatever they do. I know somebody is thinking that I'm a warmonger for saying that, I'm just a shrewd investor | ||
| William H (Countachxx)
Intermediate Member Username: Countachxx Post Number: 1832 Registered: 2-2001 |
You just know the prices on EVERYTHING are going through the floor when the bombs start falling in Bagdhad & people in the US & EU & basically everywhere start thinking that Armageddon has arrived. So that day I'm gonna drop some major change into the stock market. Hell its gonna be a great day to buy a Ferrari LOL Maybe I can get an F40 or that nice Porsche 962 at 50% off. What are you gonna buy ? |