Whole new animal

[Dr George]

Ok, I have a few things to say.

1) This is a whole new animal. Notice that we are no longer talking correction we are talking about recession.
This is huge! In a correction, prices come down because they are overvalued, but the general direction is still upward. In a recession, prices come down because there is just no confidence in the market and cash in ones pocket is king.

2) This is a suggestion as to why prices have come down other than big players liquidating (and shorting). Valuations are being changed. Remember that a lot of the markets pricing schemes are built into long-term projections centered around growth and future earnings. What would happen to the majority of stocks if the growth projections are tapered down, or even put to marginal? Lots of downside from current (2007) prices.
What about risk? What if the institutions needed to reevaluate their risk perspective due to the major writeoffs from subprime? First thing to get hit is probably the emerging markets where it is very risky and future growth is the main driver of prices.

How valuable are junior uraniums in this market? Probably the least.
Projects are very long-term, financing is tight, risk is tremendous, the sector itself is sketchy. I like the uranium story, especially producers: PDN DML BRD; or near-term FSY UUU FRG, maybe even high-grade UEX JNN RSC but from my perspective, those juniors who have no real prospect of opening a mine anywhere on the horizon are complete writeoffs (or lottery tickets for the optimist).
CHX - toast; DIT - garbage; MGA - nothing; LAM - nope; PNP - I shudder

Remember the market is both an art and a science. For the time being it may seem like manic panic, but I bet the biggest of the big institutions are crunching numbers and finding out valuations that fit their risk appetite and growth projections.

Questions, Comments, Thoughts?

[loser]

In the context of a 3-5 year timeframe (which most of us give lipservice to at least) and a nuclear energy story that continues to unfold positively, there's no need to shudder, even over PNP and MGA.  The big boys will be back.

[richmanch]

Can't help but watch what's happening in asia. tomorrow is going to be bad again. If you are committed to not selling or trading, might I suggest taking the day off and going for a nice hike.

It could be capitulation day. but it also could be the day where the dow dives 8% and then reverses midday and gives us the V that would begin a rally. Even if it's brief.
The fed has to use their trump card, whatever that is.

Not that I'll have the guts to buy. Maybe I'll try. I've already "locked in" some losses, but I have to preserve my capital. And I have had no luck predicting what's going to happen day to day. And I think it's too late to play shorts. Last year's bull market made my sloppy style look genius--this year it's costing me $$$.

[gadge78]

yeah... asian looks awful. i have to preserve my capital too which is what everyone is doing.... vicious cycle.

emailed dines... of course his email is full again.

fingers crossed.

wonder if the feds could just drop the rate 1.5%

[richmanch]

I would also add that I am not completely kidding about going on a hike. I think this is a time to reconsider what's important and not lose perspective. Some people get desperate at times like these. People's lives got torn up during the tech crash (suicides, divorces, etc.)

Take your kids to the zoo. Sign up somewhere as a volunteer--a hospital or something. Some of us have taken serious losses here, and we forget why we invested in speculative stocks to begin with--to improve the quality of life. I had a BMW 6 series in mind, but I guess it's going to be reading another novel instead.

[megadeth]

Richman is right.

I spent the entire day looking at the TSX, calculating my (paper) losses which amount to over 70k so far.  You can either moan and groan about our steep losses, or simply turn off the computer and go do something fun with the kids/spouse/etc.

So far, the market has behaved differently than 2007.  In 2007, large drops would be followed by large gains.  Not so for 2008.  A bit scary.

Go on that hike.  Go spend time with your kids.  Money can easily be made and lost.

Time with your family is well spent.

[punter]

I couldn't agree more . Markets come and go. You're only a big loser if you sell it all at a big loss into an irrational market. You wouldn't have a huge overhang with a disciplined selling strategy. If you manage your risk profiles then you probably have core positions which are down but manageable and you have a cash reserve to buy back when the time is right. It might be too late for some so that person will just have to wait. In the meantime the dividends and distributions are still rolling in, thank you. HTE.UN has a sweet 'D' above 15%. How about the bargains showing up like MBT with it's 8% + dividend? It's not all doom and gloom. Let me state unequivocally that I am not recommending anything. Do you own DD.
In the meantime you can be a hero to your family and friends. The market will come back. There will another big thing. Thats just how the market and the law of unintended consequeces work. Risk management, a firm selling strategy and sure, a bit of medication and sooner or later we'll be smiling again. Jack Bass over at AMProgram has a sensible blog. No hype or unusual opinions.

The Punter.

[langman57]

This is when we find out what the government can do for us. This is when we see what they're made of, and whether democracy as an institution will find the right solution. Kramer suggested the US Government should close the bond insurers, hell, they are insolvent anyway, and taking over that role. The cost would be about the same as this small-minded bailout plan. But it would immediately instill confidence, something the markets lack. (Not sure if it's a good plan or not). But I can't say much about all the other political dissapointments - the falling dollar, high oil, war in Iraq, housing crisis, global warming, huge deficit, etc., but the question remains - Can they navigate this storm, or will politics run the boat aground...

[JDH]

I can only assume that I am probably crazy, but I spent yesterday buying, and I will probably buy more today.

What are the chances that the markets will fall by 6% every day, forever?  Zero.  Obviously the New York markets will open significantly down this morning, and may crash for the next day or two, but eventually stocks get to the point where they are so cheap someone will buy them.  That someone will be me.

My plan is this:  I will sell my weakest junior high risk stocks, since they will probably be the last to recover.  I'll take those proceeds, and my cash, and put it in the blue chips that will recover first.

I assume the geniuses in Washington will lower interest rates or do something, the market will bounce, and we can make a nice buck on the pop.

Of course the economy is still in dire straits, so after that pop upwards we will need to retest the lows, so that will probably be a good time to exit and wait for the retest to start buying again.

(I have been wrong more than right recently, so take this with a grain of salt......)