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I was expecting stocks to rally sharply ahead of the election, and pull back when the results were announced. It looks like that prediction came true.

I based my prediction on the conspiracy theory that the market is controlled by a relatively small group of ultra rich people who preferred McCain for president. A phony surge in stocks ahead of the election might have convinced some people that the economic downturn was already on the mend, so no need for a change.

I have long suspected that all major movements in the markets are manipulated by billionaires who would like to become trillionaires. They know in advance which way the market will move, because they cause the movement, so they sell high and buy low while the unwashed masses are doing the opposite.

If you based your investing on the conspiracy theory that markets are manipulated by the rich, you would do very well, even if that theory is wrong. For example, you would have bought stocks every time the media told you the economy was doomed, and sold stocks whenever the market was testing new bubble highs, because you cynically believed all financial news was intentionally misleading.

Unfortunately it's psychologically hard to buy stocks when the economy is circling the drain (according to the media) and even harder to avoid investing when things look bubble-iscous. The way to get past that is to convince yourself the billionaires are manipulating all information about the economy in order to fool you. When the media says sell, it's time to buy. (Disclaimer: Do not get your investment advice from cartoonists.)
 
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Nov 8, 2008
Never take investing advice from folks wearing fuzzy red hair, a fake red nose and honks twice for yes and once for no. That's the last time I go to "Citi Financial" for advice.
 
 
Nov 8, 2008
NOT MINE, BUT RIGHT
We know that the money system is fake, the federal reserve is owned by a private corporation that prints the money out of nothing and owns over 70% of the stock market, basically what we're looking at here is a very, very small group of people that control everything, all the money, all the weapons, all the resources and all the media (about 118 people total own every media source in the entire world
 
 
Nov 8, 2008
Booms and Busts. The rich make money both ways. For a boom the Federal Reserve Bank (which is owned by bankers) drops interest. People invest their time and everything they own in making good. Then the Fed says "surprise ' and bump up interest rates.. . People lose everything they have and the rich (who made money selling what was needed and still have money) cherry pick what they want out of the wreck. And money fails into the hand of the banks owners. Who run the Fed.
 
 
Nov 6, 2008
While I agree with the general concept, and there is actually evidence of such "manipulation" by only one or two !$%*!$%* (although they are called "hedge funds", not "billionaires"), the theory breaks down on specifics.

Is today, the day after the DOW dropped 500 points (again) the bottom, or is there still more room for panic by the unwashed masses to drive it down further? If so, it would certainily be foolish to buy today what will be cheaper tomorrow.

The core question you should be asking yourself is - are you a Trader, or an Investor? The former looks at short-term gains, and tries to time the market. The latter ignores the market fluxuations, and looks for long-term growth. Each has it's own strategy as to when to buy and when to sell, but the stategies are often at odds with eachother.

Don't take financial advice from anonymous blog commenters either.



 
 
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Nov 6, 2008
How about the fact that the president elect has promised to raise capital gain taxes which results in investors selling now before the rates are raised.
 
 
Nov 6, 2008
I for one am pleased with the result, and look forward to seeing whether the optimism of Obama's supporters was well-placed.
 
 
Nov 5, 2008
If you wish to listen to some particularly good offbeat Australian satire of the American election listen to the 'race race' at

http://www.abc.net.au/triplej/racerace/media.htm

Start at number 2 and listen to comparisons between Luther King's 'I have a dream' and Obama's 'I Like Pie' oratory. Genius.

Also listen to the mega mix at the end on No 8. A great summary of the election.
 
 
Nov 5, 2008
Scott, I agree with your conspiracy theory. The Govt. gave Wall Street everything they wanted, even our very own souls, and W.S. felt the need to reciprocate. Apparently it didn't work. Apparently the majority of people in this country aren't as dumb as the Govt. (and dare I say, ruling class?) would like them to be. Besides, we don't control the world anymore. The world thinks back. After today, my faith in my country and in the human race ( lost but returned) is renewed.
 
 
Nov 5, 2008
Correction: Do not get your investment advice from conspricy theorist.

Come on Scott. A different comspricy theory every day?? That's getting a little old.

Here's one for you. Now that Obama has been elected, expect (around Feb.) to start seeing alot of good economic news from the mainstream (i.e. liberal) media. I have a theory that the economy is driven more by the mood of consumers than by anything else. Hence, if the media reports are always gloomy then the economy will follow. For example, the last 2 years the news has continually reported gloom and doom, but the actual economy has only recently taken a downturn. When they start reporting only 'happy' news, the economy will follow and then they can gloat that they were right about Bush all along.
 
 
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Nov 5, 2008
It is ridiculous to think that there is a group that both manipulates the stock market and prefers McCain. The recent stock market crash is what gave Obama the edge in the end. Before that, McCain was almost even with Obama.

It is more probable that this "group" prefers Obama (although I personally doubt the conspiracy idea altogether).
 
 
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Nov 5, 2008
Google "Behavioral Finance" and read all about your discovery...bla bla bla!

I like your conspiracy theory though. Categorized as things that make you say, "hmmm..."

Keep your market predictions coming and you'll soon be attracting money to invest and become one of those greedy bastards on Wall Street that everyone loves to hate. Call it the DIlbert Hedge Fund, hire some burned out Merrill jockey, slap up a web site and BAM, instant business plan! Would help offset losses in the restaurant business...food for thought, so to speak.

 
 
Nov 5, 2008
Old Wall St. adage:

Buy the rumor, sell the news
 
 
Nov 5, 2008
I'll be interested to see if gas starts going back up...

I work w/a guy who swears that oil companies always lower prices in the weeks leading up to every election to help republicans - bear in mind that he's one of those that thinks if his kid gets a cold it's because Bush cut the CDC's budget so take it w/a grain of salt but we haven't seen $2 gas in years so if it goes back up to $3 in the coming weeks he might be on to something...
 
 
+1 Rank Up Rank Down
Nov 5, 2008
Scott, your comments are right on the money, and while most people just think it's true, there is actual evidence to support this theory. It's called the Federal Reserve, and it is the vehicle by which the banking elite control the economy. Did you know that the government borrows money from the Federal Reserve at interest, which it must pay back? This is surprising considering the Fed is supposed to be government controlled and holds all of our money not used by the Treasury. Now why would we need to pay ourselves back in interest? Because the Fed pays dividends to a group of shareholders and returns the rest to the treasury. Who are these shareholders? The Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York.

All of this is true, and you can verify it by going to Federal Reserve website and looking at the Annual Report. The list of shareholders requires a little more digging, but I assure you it is accurate.

The Fed is able to control the economy by setting interest rates and controlling the amount of lendable money in the system at any given time. And if the Fed is controlled by it's shareholders, then they can manipulate recession and boom cycles as easily as you change clothes. These are the real pirates of America.
 
 
Nov 5, 2008
Now I see why you have your simple rules for investing (and I think they do work). Taking advantage of volatility in the stock market requires either great luck or great discipline combined with some smarts and a near full-time effort. If you ever read profiles of the star traders (Market Wizards, etc), they spend a huge amount of time watching the market, creating systems, and generally being obsessed and methodical. It is a demanding job and there is no way to be a star trader over the internet on your coffee breaks. Without volatility you are a long term investor (not trader), in which case dollar cost averaging or whatever is a good long-term policy (and you should be happy about the temporary low prices).

But the real point - puppet masters. Supporting McCain? Huh?

First, most mega-rich people are liberal/Democrat. Soros, Buffett, Gates, Jobs, Oprah - the rest run countries that hate the USA (Saudi Arabia). Second, Obama just spent more money than any *pair* of candidates in history. The big money was obviously behind him (even if broken into $200 chunks to fool the FEC), along with the media. If there were puppet masters, pulling the strings of the major media seems like something they could manage (more easily than moving stock markets, with the armies of geniuses at Goldman Sachs and Porsche looking to skin them). Finally, the biggest dip of the market, the mortgage crisis (Fannie/Freddie), hit on virtually the day that McCain moved ahead in national polls for the first time, and was roundly blamed on Republicans (by the media) despite the extensive ties to top Democrats.

So puppet masters? I think not. But if there were, they'd be Democrats as sure as I am about to make some money trading stocks on my coffee break.
 
 
Nov 5, 2008
I personally prefer the dollar-cost averaging method, with more weightage when markets are down, and less when they're up.

As to the hafrican-american classifiaction...it reflects more on the person making it, rather than our to-be president.
We have a choice of various attributes and adjectives when referring to individuals - yet some consistently choose race/ethnicity over others.

Back in the ages, people in Europe identified themselves/others as belonging to certain ethnic group e.g. Germanic/Saxon, Celtic, Slavic, Latin etc. Not any more (other than scientists)... I wonder if one day that form of classification with disappear all-together?
 
 
Nov 5, 2008
Every month I buy a little more. All of those stocks that tanked will eventually go back up and I sould have lots more than before. The only downside is that I took a 25% hit in the last quarter, and if this keeps up I'll be able to retire at 90 if I only eat 1 box of Kraft Dinner per month.

Have you returned you wheelbarrow yet Scott, since you will no longer need it for looting?
 
 
Nov 5, 2008
Your theory is known as contrarian investing, and if you need to invent a conspiracy theory in order to follow it, I suppose that's OK. The opposite theory is momentum investing, where you behave like a sheep somewhere in the back of the herd. Both methods can work, and both methods can fail, seemingly at random. The trouble with either of those theories is that you can't follow them blindly -- a contrarian needs to be right in addition to everyone else being wrong. Worse yet, you may be right but be off on your timing. I read somewhere that John Maynard Keynes once correctly predicted movements in the international currency market and put his money where his ideas were. Unfortunately, other speculators didn't realize that he was right, so the market continued going the wrong way for a very long time before it followed his prediction. Meanwhile, his friends had to bail him out.

A better method is cost averaging, where you put the same amount of money into the market at fixed intervals -- you buy more securities when the prices are low and less when they're high, but over the long haul, your returns will be similar to long-term market trends (assuming you diversify your investments). I invested in the 1960s and then had to wait throughout the 1970s to get my money back. Fortunately, I didn't need it to live on.

If you just act systematically, you don't have to worry much about trends (except maybe long-term ones). Then you can watch CNBC to ogle Maria Bartiromo instead of fretting over the short-term direction of the market.

Lyle
 
 
Nov 5, 2008
My theory is that Murphy's Law is a better explanation for how the market investments work, rather than a bunch of greedy billionaires trying to get even richer. Although, Murphy's Law also says that me not believing your theory means it's probably true.
 
 
+1 Rank Up Rank Down
Nov 5, 2008
I think you might have removed the 'hafrican comment?', I found it simultaneously witty and offensive. The markets are prohibitively volatile, there are little men currently !$%*!$% on cigars, stroking their foie gras clad thighs and !$%*!$%*!$ as the normal people of this world go into economic free fall, perhaps something to enjoy retrospectively, whilst you might lose equity in your house, they are losing millions of their own money by the minute ( I should know I work for one of these muppets), though it's a hit they can probably affort to take.
 
 
 
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