Friday, August 03, 2007


The market ended in a grip of panic as traders dumped equities in mass. Blame it on Bear Stearns for their CFO commenting on the current fixed-income market being the worst he has seen in his 22 years on Wall Street. Banking and housing were the worst hit sectors with big financial names like BSC GS MER MS C JPM BAC CFC and housing stocks like HOV BZH TOL KBH DHI all getting killed . Gold and Silver sector was the only one that escaped relatively unscathed and the price of gold and silver were both up nicely today along with the Euro.

The current market problem can be summed up in one word and that is Liquidity. What we have right now is an increase in borrowing costs, lack of available capital and large scale redemptions in hedge funds as investors panic. The problem I believe is temporary and will be solved courtesy of Bernanke and Co. via large scale liquidity injections into the trading desks of the big institutions. It appears to be a perfect time to take long positions in anticipation of a bail out of sorts.

My strategy right now is to hold tight and add into long positions selectively. I like the bull ETFs here as a sudden sharp rally could lead to substantial gains. Shorting here would be counter productive due to the large number of puts and short positions in play. The Fed meeting could be the backdrop for an explosive rally.


The Double-U Show said...

I'm thinking of getting into the stock market pretty soon, but I keep hearing about hedge funds, I even see that on one of the HD channels there's a show called Hedge Fund managers or wall street warriors or something, but I have no clue what they are. do you?

You can take a look at my blog too if you would like at

TheCapitalGame said...

Hedge funds are relatively unregulated pools of capital that are used to trade/invest in equities, commodities, PIPES(Private investment in public entity), real estate or any other area that can bring about a profitable return. Hell you can take capital to Vegas and bet it the craps,roulette or the football game. Its all about making money. Some investors care about making returns with low volatility and others care about the highest return on capital no matter the risk.

JJ2000426 said...

Who SOLD OUT a piece of national treasure vital to our survival, to Russians, dirt cheap? On paragraph 4.

Watch out SWC on monday for earnings release after hour. Crooks knocked down SWC from $16.47 to $8.56 in less than 3 months, for no good reason. Maybe they want to sell the remainder to Russians cheap?

Deeply oversold, I expect a blowout SWC quarterly earning, and from here SWC MUST have a dramatic reversal and a great rally on the good earnings. Don't let go of the opportunity!