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Buying opportunities now runneth over

A look at the market since PM Harper predicted some ‘great buying opportunities’


 

Stephen Harper, October 7“I suspect that there’s probably some great buying opportunities emerging in the stock market as a consequence of all this panic.”

The Toronto Stock Exchange at close of business on October 7. 9829.55
The Dow Jones Industrial Average at close of business on October 7. 9447.11

The Toronto Stock Exchange at close of business yesterday. 7647.67
The Dow Jones Industrial Average at close of business yesterday. 7114.78


 

Buying opportunities now runneth over

  1. Tsk, Aaron. Those short ETFs (that go up when the market goes down) have made an absolute killing.

  2. For every person who sold their shares, someone had to buy them and presumably they think they’re getting a deal or they wouldn’t be buying. If you are involved in the stock market, and not thinking long-term, than you are likely to get burned. Lets see where we are in a few years.

    • I love how people respond to criticism of whatever nonsense or wisdom is gleaned from reading the stock market by explaining it, over and over again.

      I think most of us understand how a casino works by now.

      • Except the house always wins in a casino but that’s not the case with the stock market. Way more people benefit from the stock market than are hurt by it but casinos thrive because of the high percentage of people trying to win back money they have lost.

        • Except the house always wins in a casino but that’s not the case with the stock market.

          Well, that’s how it’s supposed to work, in theory. Before the massive bailouts of financial institutions and stimulus-through-public debt, I was a more credulous about that, but I don’t believe it anymore.

          I don’t actually believe it’s a casino; just a complex system no one really understands anymore and from which no sensible consequences can be reasonably expected or predicted.

          • no way TI Guy it is the invisible hand and only the invisible hand at work.

          • You mean the invisible hand with the firmly extended middle finger ?

        • Nice way to deflect the real criticism here… Your economic genius couldn’t have been more wrong. And it continues to be proven by the market so I hope you Harper-lovers are all in. Kinda like his November FU, the fool’s bon mot that keeps on giving.
          My guess that the best buying opportunity will be the eve of Harper’s downfall, because that’s when grey clouds gonna clear up…

      • Actually every game in a casino has set and quantifiable odds. This is not true of the stock market.

    • If you are involved in the stock market, and not thinking long-term

      If you are involved in the stock market you are not thinking at all.

      • Alrighty then, o wise man. Please share with the rest of us non-thinking dopes who are planning ahead for the future with RRSPs and RESPs and so on, where is Guru McClelland The Thinker stashing his fortune?

        Because, to this observer who likes to vainly believe to be at least an occasional thinker, “On Sale One Third Off!” on the flyer at least gets this shopper’s attention. Where am I going wrong?

        • Where am I going wrong?

          By erroneously thinking that when you buy stocks you’re buying something that has value. You’re not. What you are buying is valueless unless you can find another sucker to buy it from you.

          where is Guru McClelland The Thinker stashing his fortune?

          Canned goods and shotgun ammo. When civilization collapses you’re not only going to go hungry but you won’t even be able to defend yourself from becoming someone’s beyotch. :-)

          • By erroneously thinking that when you buy stocks you’re buying something that has value.

            Enjoy your canned goods and your shotgun ammo, Bob. But your “Guru” and “Thinker” medals are hereby revoked. I’ll be off investing in shares of firearm and can-opener manufacturers. Given your investment patterns I see a bright future in those sectors. See ya.

        • Where am I going wrong?

          Nowhere. You are operating within well-established parameters. Congratulate yourself.

      • ^Stupid comment.

  3. Some pretty good distressed assets out there soon too. Let’s celebrate!

  4. Actually there are some fantastic deals out there right now … my gold is stock and bullion are doing well too … I have been cashing out T-Bills every month since November and increase the purcahsing every time time the market takes a sudden dip like yesterday and then decease when the markert rises – it’s called buy low sell high folks … very simple …. next Monday I increase the amount of cash out and buy buy buy – I use a form of dollar cost averaging if you will .. it helps being a natural contrarian .. if you really want to succeed in the market watch which direction the herd is moving and do the oppostite.

    • if you really want to succeed in the market watch which direction the herd is moving and do the oppostite.

      Just by investing in the stock market makes you a part of that herd.

    • Wise counsel from the kakistocracy.

      • I’m not proud. What’s the kakistocrazy?

    • Nice to know that you have the time to watch the market, most folks – the ones SH was talking to on the leftie…er cbc – have to something every day, i believe it’s called working. [ course some prefer to tease conbots and investors with lot’s of time on their hands.]

  5. It’s best to go by the premise that ‘anything Harper says is wrong.’ If I had listened to Harper and put $1000 into the market to get these great deals Harper was talking about, today I would have $778. Conversely, had I gone by the ‘everything Harper says is wrong’ premise, today I would have a full $1000 that I can invest in the market today. When it gets back to October 7 levels, I will $1285 to Harper’s $1000.
    That $285 extra that I would have could then be used to buy a raft into which Harper and Co can be set adrift, thereby leaving Canada to be governed by someone more competent.

  6. Harper’s barber told him that if he uses dollar cost averaging and keeps on buying throughout the dips, then he’ll make %15 per year on mutual funds over the long run and retire at age 65 as a millionaire.

    But … he decided instead to get a job that pulls down $250k + p.a. with a gold plated pension and benefits, retire young, and run out the clock double and triple dipping in the lucrative lobbying and consulting opportunities that ex-political leaders are offered. With generous expense allowances ‘bien sur’. Works for him, but he can hardly advise the rest of you to do it. You’ll have to take your chances on the TSE, and if that doesn’t work out there’s always the CPP and dog food.

  7. Slow news week much, Aaron?

  8. OK, sure he was wrong then. But TODAY it’s a totally awesome buying opportunity…

    • Harper wasn’t wrong – yes, you could have done better if you waited till now to buy, but I don’t think the Aaron Wherry school of short-term investing provides a particularly compelling model. The stock market will almost certainly go up again, and probably quite quickly.

      In the tech crash, the market troughed down 25% from its peak. However it regained its value in less than a year.

      By 1974 the market lost 40% of its value, reaching a trough. By January 1976 it was back to its pre-crash value.

      The crash of 1987 was reversed by 1989.

      That means people who bought post-crash, but pre-trough were still well ahead of the game in under two years.

      • History will most certainly prove the literal meaning if his words to be accurate. The market will go back up. so the decline in value between his comments and today will be recouped over time.

        On a strictly investment adviser level, it’s still shit advice. Did anyone really think the market was anywhere close to bottom when Harper gave his buying advise? Of course not. It was clear the downturn was just beginning, and would continue for some time.

        Now, yes, it’s impossible to predict the bottom with any certainty, except in hindsight. But I really don’t think many sensible investment advisers were advising their clients to start buying at that point. Not with far worst loses to come.

      • Hoosier’s comment is about as meaningful as someone saying, at the outset of a war, that it’ll be over eventually, because all the other ones in history ended as well.

        Of no more value than what a chatbot can produce, quite frankly.

        What it avoids quite nicely is any requirement of empirical observation; which real-world events are the same now and which ones are different.

        Shedding light on those things would in fact contribute the accumulated knowledge, but then again…that’s hard work!

        • Dead wrong, Ti-Guy.

          The stock market, over the long haul, reflects economic growth and productivity growth. The present recession has created some real economic storm-clouds, but it would be ridiculous to doubt that economic growth will eventually resume. At the very least, such a far out prediction would require some sort of explanation. So I concede that I initially showed the data, without the theory. Well, the above is the theory.

          “On a strictly investment adviser level, it’s still shit advice. Did anyone really think the market was anywhere close to bottom when Harper gave his buying advise? Of course not. It was clear the downturn was just beginning, and would continue for some time.”

          Wrong. The market price for things includes expectations about the future. You can’t implicitly know when you are at the bottom or top when you are dealing with something that resembles a random walk in the short term. The market has fallen further since October because the recession was worse than expected. Have there been recessions that were less bad than expected? Sure – the dot com crash was pretty smooth sailing, particularly for Canada.

          • hooser, are you seriously stating you didn’t know, in late September of 2008, that the stock market was going to fall more? Worse, are you suggesting that those clever investors who put their money behind their thoughts, thought the market had hit bottom?

            And you PLAY the market?

            Also, the stock market, over the long haul, USED to reflect economic and productivity growth. Now, and for the last few years, it reflects little more than an adult version of “all the kids at school are getting one.” Prices very often have next to nothing to do with the value of the company, surely you can see this yourself. Nor can I believe prices reflect the investors belief in the future value of a commodity–at least not unless all the investors are certifiably insane.

            Why, for instance, is gold worth so much less this week than last week? Did someone find a gold mine and I missed it in the news? Have people decided adorning their bodies with gold is as bad as with furs? Did someone, somewhere start a thing whereby when paper money is worthless, we shall now barter in platinum? Where is the connection between the price of gold and reality outside of the stock market? Or any stock or commodity? Those connections have all but completely disappeared.

  9. But our “brainiac” PM has a Masters in Economics… how could he possibly not know what he is talking about regarding our economy? Right?

  10. Damn it : I knew I should have gone shopping this morning I could have made a bundle.

  11. The joke’s on all who even thought he was talking stocks. He was only talking about his own political skin folks. He didn’t have a clue but wanted dudes like Wayne to continue kissing his hem and pretending that he was wearing clothing. Harper didn’t need to be a cough* economist to see the *h*t was going to hit the fan but he just wanted to be sure to get his fat keester behind the door first.

  12. short term gain; looong term pain.

  13. “And you PLAY the market? ”
    No, I have no money. Or to paraphrase Dr. Zoidberg: “hurray, the conservative sandwich-heavy portfolio prevails again!”

    “hooser, are you seriously stating you didn’t know, in late September of 2008, that the stock market was going to fall more? Worse, are you suggesting that those clever investors who put their money behind their thoughts, thought the market had hit bottom?”

    Lets say you have a stock. You realize that the banks are about to crash, etc. so you try to sell that stock. As soon as the realization of an impending crash (of unknown magnitude) is widely accepted by actors within the market, stock prices of all sorts collapse on expectations. In other words, the information (ie. the expectation that the economy would get worse) we knew in September 2008 was already factored into stock prices.

    The market fell further because the damage to the economy was worse than expected, and perhaps because the reaction of policymakers to the downturn was less effective than expected. The point is that you can never KNOW that the market will perform worse than expected – you can make decent guesses, however. In this case, the guesses were wrong.

    “Why, for instance, is gold worth so much less this week than last week? Did someone find a gold mine and I missed it in the news? Have people decided adorning their bodies with gold is as bad as with furs? Did someone, somewhere start a thing whereby when paper money is worthless, we shall now barter in platinum? Where is the connection between the price of gold and reality outside of the stock market? Or any stock or commodity? Those connections have all but completely disappeared.”

    There are many reasons gold gets more valuable in recessions. The expected return of buying gold (in the long-term this should roughly approximate growth in the demand for gold, as the population increases, mitigated by the supply of gold, which is limited by nature) exceeds that of many private investment portfolios which promise yields of zero or worse in the short term, not to mention the possibility that they might cease to exist. In other words, gold is more popular for similar reasons that bonds are more popular – they promise a better yield in the short term, and less risk than investing in the stock market.

    • “There are many reasons gold gets more valuable in recessions.”

      Um, yeah, so why did the price of gold go DOWN this week? It may have gone up again already, I don’t follow this stuff much.

      I’ll answer the question for you. Investors, those brainiacs, decided the price had gone UP too high the week before. Why did they decide that? Probably for the same reason they thought, in late September of 2008, that the price of the crash was already factored into, or more particularly, factored in for the full extent, the prices in the stock market. In other words, just because.

      I get that nobody really knows what any given stock or commodity will do on a given day (and if they do know they’re not allowed to play). I’m just saying that as an indicator of reality based value of stuff (companies and their products, commodities) the stock market is not what it used to be. It’s a literal crap shoot, and it seems to me that the more it moves away from reflecting value, the more we (the media) pays attention to it. Which of course makes it move further away from reality (too much attention, like in Hollywood, does mighty strange things to people).

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