This was too good to pass up. The key section of an offering at The Reformed Broker (hat tip reader Gonzalo):
The Five Stages of Panic Buying!
1. Denial (Late March/ Early April)
“Ha, another Bear Market rally…wait til the foreclosure/ new home sales/ confidence data comes in! Right back to 6500, maybe lower…bagholders”
“Dude, the stress tests are coming out next month. B of A may be done-ski. Sell the May 10 calls, you’ll never have to cover.”
2. Anger (Mid-April)
“What the f@&% do you mean the goddamn banks are cheap based on normalized earnings? They will never ever earn anything again, ever! Idiot!”
“You gotta be kidding me with these retailers running now. RETAILERS? Are you nuts? They’re FINISHED!”
“If one more consumer discretionary name rallies on a less-than-expected loss, I’m gonna kick this Bloomberg down a flight of stairs.”
3. Bargaining (May-June)
“Okay, I can stomach picking up some large cap tech and I’ll nibble – NIBBLE! – at discount retailers, but I will absolutely NOT buy Goldman Sachs at 130.”
If China would just pull back 5 to 7% I’d get in, but I can’t chase it here…except Sohu, and I guess a little Baidu and I’ll just take a quarter position in China Mobile just in case. But I’m not chasing here.”
“(whispered) Dear market god, please stop the tape. Just give me one crack at the Nazz and some banks and I will never doubt the solvency of the US balance sheet or the wisdom of the Troubled Asset Relief Program ever again.”
4. Depression (July)
“I can’t believe I missed it. Those D-bags next to me are high-fiving after every earnings report. Hate those f@&%ing guys.”
“How could Las Vegas Sands do this to me? I’ve been watching this stock go up for 900% now. Couldn’t just give me one chance to get in. I suck.”
5. Acceptance (Early August)
“That’s it! I don’t give a damn anymore, GET ME IN NOW! Forget the big ones, they’re already up too much, are there any $5 stocks left that haven’t done anything yet?
“I gotta blow out this stupid GLD, it does nothing, sick of it and sick of hearing about inflation. Even Paulson blew it out. Get me some $2 biotechs and some midwest regional bank stocks, I gotta get poppin’ over here! We’re going to 10,000 baby!”
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Yves,
Five stages of Panic Selling please … we would see whether it tallies with action soon.
I cannot beleive this propped-up party can go on and on … in fact something to the frenzy of 2003-07 or dot.com bubble on a smaller scale is what we are seeing and as is typical ably abetted by Fed et. al It appears we can never learn from history!!
It only gets interesting at step 6 or 7.
Once everyone is in Ponzis have a tendency to crash.
Man, this post almost describes my experience to a T. Except I just yanked all my positions in late June and decided to stay out mostly until I start to see some cracks. I feel I'm pretty fortunate to have gotten out of this whole mess with no losses, and a tiny gain, and my 401K is back to pre-September 08 levels.
I've got a chunk of cash waiting to be used on shorts, but I'm just going to hold tight for now.
Yes, I know this well.
The problem is reading too many bear blogs/sites.
A nice entertaining post; resonates with what I have seen amongst some formerly bearish investment pros; but as Jojo says, who's to say what does what next?
The U Mich consumer survey out today shows horrible current conditions. Since the average person is not an economist, it seems to me that the reason the future expectations reaading is a good deal stronger than current conditions is media and Big Finance "cheerleading".
If the media were as gloomy as in the 2001-3 period (9/11, anthrax, looming Iraq war, terrorism fears), I would suspect the stock market would be a good deal lower.
The money pit is almost full, just a few more buckets and the floor will show its real strength.
A/V refreance: http://www.youtube.com/watch?v=5UYaPbT96S4&NR=1
Skippy…Ha…ha ha..snort..ha.
Yeah, sitting here on cash and GLD in my little piggy bank, swayed like a boy following you pied pipers and your righteous melodies of doom and gloom . . . angry like a raging Old Testament prophet at the priests of Ba'al and their temples of financial fornication, the false idols and wickedness, the trinkets and baubles worn in vanity before the Lord, surely to be smote, utterly, by the Lord Of Hosts, like a man wipeth a plate, wiping it and turning it over . . . I wonder, though, in a dark corner of thought, through streams of mental sweat, in a nightmare whose clogged forms of ideation visualized in the dark cinema of the mind loom like grotesque half formed opaque faces from the Brush of Heironomous Bosch himself, the dark luminescence of an obscene possibility encroaches on sleep and jolts the body awake staring into the dark thinking . . . "What if Geithner and Summers are right? What if the banks are OK? What if this is a Bull Market in its infancy"
Oh Lord, I need another Ambien chased down by a tall scotch. Sominex won't do, no, not at all.
Ho ho ho. ;)
Ha Ha craazyman,
America is a theme park now, with some acting as visitors and others as employees, the security is law inforcment/military.
Now you can by its stock and it may go up, but what happens when they can't pay the power bill, umm.
Skippy…"He conquers who endures"-Persius.
To paraphrase Keynes (as someone surely has): The market can stay irrational longer than you can stay rational.
Continued:
September 1,2009
"I finally got long. I did it last week. I could not take the pain any longer. I watched crap stocks triple all summer. I missed the chance of a life time. But now I am set for the ride up this fall."
"My C is going to 10. my FNM is going to 5. My AIG is worth 100. My CIT has a good chance of going back to 10. I own retail stocks up the kazoo. To hell with gold and bonds. They are for scaredy cats. I am not afraid any longer."
"I can't wait for the end of the month so I can count all my profits. Now that I am max long again I sleep better at night. I feel secure and optimistic about the future. The markets and life are good again."
Kaboooom.
These are indeed the times that try men's souls. I sold 75% of my equities in the last two weeks only to watch the blow off continue. Now loaded with S&P puts and a new position in gold with a fat cash account I will have to endure the final week of this madness as the pre-Labor Day week may prove to be more of the same. However, I suspect that some semblance of sanity returns the week of 9/8/09. If not, there appears to be room left on the wagon. Perhaps 9/9/09 will be the day. In China the number 9 means longlasting and is used in weddings. Perhaps 9/9/09 will usher in the longlasting (5 or 6 year)sideways to bear market continuation I am expecting.
It’s a good article.