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Anodyne 
LSU Fan
Member since Oct 2011
2127 posts
| Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:25 pm)
This is probably more of a Money Board topic, but with Obama touting the stock market, and with a market pullback's potential impact on the election, I thought I would post here...from CNNMoney...
quote:
U.S. stocks have rallied nearly 15% since the start of June, and one expert said that means the market is ripe for a pullback.
"We've just come too far, too fast," said Sean Clark, chief investment officer of Clark Capital Management Group in Philadelphia, who expects stocks to pullback between 5% and 10% during the next month, leading up to the election. "We think it's time to take some money off the table."
Most of the gains during the summer were driven by speculation that the world's central banks would intervene and take new steps to stimulate the global economy. Then in September, stocks spiked on the days that the European Central bank outlined its bond-buying program and the Federal Reserve announced its third round of quantitative easing, or QE3. With the exception of those two days of robust gains, Clark notes that that stocks were relatively flat through September, adding that the first couple months of the fall are historically weak months for the market.
Plus, the uncertainty over the election and how and when lawmakers will address the looming fiscal cliff presents major risks for investors, he added.
quote:
"It could get really ugly, like what we saw over the debt ceiling debate during the summer of 2011," said Clark. "I don't think we'll get to that kind of scenario because nobody -- not the president, not Congress -- will want to take the blame for that. But we still could see a lot of political drama and increased market volatility."
In anticipation of a pullback, Clark has boosted the firm's cash position to about 15%, from less than 5% just a few weeks ago. The firm's current cash position is close to what it was during the depth of the financial crisis.
LINK
I think it goes without saying that if the market starts to tank over the next 4 weeks, it will not be good for the incumbent.
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Bunk Moreland 
Michigan Fan
Detroit, MI
Member since Dec 2010
3229 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:28 pm to Anodyne)
TEC blog overdoses on doom, but usually puts together a nice compendium of warnings on this stuff.
LINK
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Tiger n Miami AU83 
Auburn Fan
Miami
Member since Oct 2007
25182 posts
 Online
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:29 pm to Anodyne)
I agree the market is risky and probably overbought right now.
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Anodyne
LSU Fan
Member since Oct 2011
2127 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:30 pm to Bunk Moreland)
From Bunk's Article...
quote:
The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012."
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Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
36333 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:30 pm to Anodyne)
Get ready for the margin correction. Only way to save it is to have earning based on economic growth instead of increased margins.
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Anodyne
LSU Fan
Member since Oct 2011
2127 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:30 pm to Anodyne)
quote:
According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point.
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Bard 
LA-Monroe Fan
BR
Member since Oct 2008
12797 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:32 pm to Anodyne)
The market has been running up while Unemployment has remained stagnant at a high rate and GDP growth has been anemic (ie: too low to maintain current employment levels). This has been ripe for a correction for a while now.
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TigerDeacon 
Wake Forest Fan
West Monroe, LA
Member since Sep 2003
23041 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:34 pm to Anodyne)
:inb4Romneywinningdebatecausesstockcrash:
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Bard
LA-Monroe Fan
BR
Member since Oct 2008
12797 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:35 pm to Anodyne)
quote:
According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point.
I think 51% is a bit doom-n-gloom. I think 33% is closer to what we'll see the pullback get to eventually.
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speckledtrout 
Alabama Fan
Birmingham, AL
Member since Apr 2011
1583 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:35 pm to Anodyne)
Suggestions on what to do?
Sell and buy gold? 
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Anodyne
LSU Fan
Member since Oct 2011
2127 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:37 pm to speckledtrout)
quote:
Suggestions on what to do?
Obligatory...buy ammo and guns (from the NRA crowd).
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Bard
LA-Monroe Fan
BR
Member since Oct 2008
12797 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:39 pm to speckledtrout)
quote:
Sell and buy gold?
Buy. When the market starts dropping, investors are going to run back to gold.
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constant cough 
New Orleans Saints Fan
Lafayette
Member since Jun 2007
28352 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:39 pm to Anodyne)
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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
25182 posts
Online
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:45 pm to Anodyne)
quote:
quote:
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According to Doug Short, the vice president of research at Advisor Perspectives, the stock market is somewhere between 33% and 51% overvalued at this point.
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Meh. 10% correction IMO.
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DapperDan
LSU Fan
Member since Jul 2012
1226 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:48 pm to Tiger n Miami AU83)
quote:
IMO
goes a long way around here. Tell us again how Obama won the debate last night...
This post was edited on 10/4 at 2:49 pm
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Tiger n Miami AU83
Auburn Fan
Miami
Member since Oct 2007
25182 posts
Online
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:50 pm to DapperDan)
quote:
goes a long way around here. Tell us again how Obama won the debate last night...
Obama won the substance part of the debate by default due to Mitt reversing course on his tax plan by saying he would not reduce taxes on the wealthy. 
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Anodyne
LSU Fan
Member since Oct 2011
2127 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 2:54 pm to Tiger n Miami AU83)
quote:
Obama won the substance part of the debate by default due to Mitt reversing course on his tax plan by saying he would not reduce taxes on the wealthy
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Bard
LA-Monroe Fan
BR
Member since Oct 2008
12797 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 3:16 pm to Tiger n Miami AU83)
quote:
Meh. 10% correction IMO.
I think it's going to be a bit more than that. The rally has been driven, in very large part, by easy and cheap credit. As we learned with the sub-primes, you have to pay the easy-credit piper eventually and the longer you put him off the more it's going to hurt when the bill finally comes due.
Don't get me wrong, I don't think it's going to be nearly the level of the housing bubble, but I'll be really shocked if the Dow doesn't drop below 11,000.
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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
17398 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 3:29 pm to Anodyne)
Can I get 2:1 odds that stocks rise another 5% before dropping 10%?
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mytigger
LSU Fan
19th hole
Member since Jan 2008
11132 posts
| re: Warning: Stock Correction Coming Soon (Posted on 10/4/12 at 3:33 pm to Anodyne)
quote:
"We think it's time to take some money off the table."
I'm always leery of financial advice given to the masses by the experts. Don't be surprised to see the DOW over 14,000 soon.
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