Thursday, October 09, 2008
The Stock Market Crash Of 2008
Although the market spent most of the day searching for stability, the sellers swamped the tape in the final hour pushing us to new multi-year lows.
With these losses, we've moved far away from just a mere correction or nasty bear market, but we're now in stock market crash mode of the likes we've never seen in our lifetime and most likely will never see again.
Like sitting on a sinking ship and taking on water fast, I spent the day plugging holes in my life raft by booking losses and renting shorts to offset my equity exposure while at the same time looking for reasons to raise the level overall equity exposure. Much like yesterday, I found very few compelling reasons other than what we continue to see day after day after day. Once again, we continue to see zero price confirmation that being long this market is the right move and being early has been wrong.
They say you have to listen to the message of the market and that message today is to run for your life. Every business in America (see General Motors) is going bankrupt and taking you, your financial future, job, savings, and everything you know with it. If you believe that, you should have been selling everything today. I don't, which is why I'm going to the mattresses and fighting the good fight every single day. Sure, the battle scars are starting to get numerous and even I am having a difficult time staying opportunistic, but everything I've worked for and learned over the past twenty years has prepared me for what we're seeing now. My only hope is that I stay up to the challenge and hold true to my strategy even though like everyone else, I'd very much like to run for my life and sell & short everything in sight.