Will A Rising Stock Market Hurt The Coin Market?
wondercoin
Posts: 16,982 ✭✭✭✭✭
I bought stock today for the first time in a while. That was money that might have otherwise gone into coin purchases.
Do you think that if the stock market begins to rise from here, it might hurt the influx of cash into the coin market? Is there possibly an inverse relationship between stocks and coins at this time, or will the coin market possibly even sail higher with a rising stock market, as profits from stocks are possibly diversified into coins?
What do you think?
Wondercoin
Do you think that if the stock market begins to rise from here, it might hurt the influx of cash into the coin market? Is there possibly an inverse relationship between stocks and coins at this time, or will the coin market possibly even sail higher with a rising stock market, as profits from stocks are possibly diversified into coins?
What do you think?
Wondercoin
Please visit my website at www.wondercoins.com and my ebay auctions under my user name www.wondercoin.com.
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Specializing in 1854 and 1855 large FE patterns
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SELL ALL STOCKS TODAY TO BUILD WAR CHEST FOR RICK KAY PATTERN PURCHASES. ALSO, GO BACK TO PAWN SHOP TO RETRIEVE RICK KAY'S LATEST PATTERN COIN WE "HAWKED" TO PAY FOR STOCKS - RICK NOW KNOWS.
Specializing in 1854 and 1855 large FE patterns
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After raw ones right now with a decent strike. Anything in plastic is getting out of hand, plus some I've seen look like they are bleeding to death, or porous! It's best to see it raw and get a better idea on intergranular corrosion which is typical of any coin with copper or cupro-nickle alloys!
Got the stock low and it's alot higher now so what the hey!
NEVER LET HIPPO MOUTH OVERLOAD HUMMINGBIRD BUTT!!!
WORK HARDER!!!!
Millions on WELFARE depend on you!
I'm still in the procurement stage, so it should be evident what my perspective is.
Cameron Kiefer
Those who look at coins as an investment will put less money into coins as the return on other investments, including stocks, improves.
Those who look at coins as a hobby will put more money into coins as the return on their investments, including stocks, improves giving them more discretionary income and a sounder outlook on the economy.
WH
Gold and silver react positively to a weak dollar. Gold and silver coins (at least mine) have seen an increase as the dollar weakens .....I am hopeful that they will retain partial gains when the dollar gets stronger.
Because of rarity, I believe coins also have their own market pressures beyond the dollar. If I ever figure it out...I'll be wealthy
roadrunner
Wondercoin,
It seems to me that people hyping up rare coins are always trying to scare people into thinking the market's about to crash.
You know - those ads that go like - "Worried the market is about to tumble? - Buy some coins", etc.
The wierd thing is that I think that is a stupid, stupid, stupid way to market coins. I would much rather spend alot of money on coins while the market is rising and I feel good financially, and my 401K is holding up, etc. then to buy $1000s on coins while the market is falling, recession is hitting, companies are laying off, my 401K is falling, etc.
I think the coin markets need a new approach - something like "With the market so strong these days, why not be a bit on the safe side and buy some coins!". Coin companies should feel terrible that they couldn't convince the average Joe who held tech stocks from say 98-2000 to at least take some small profits (out of the huge profits some people had) and buy coins with the profits. Scaring people into doing business with your company isn't going to work - but if they had reasoned with them ("You know, you could trade just 1 of your 10000 shares of QCOM for a MS67 Morgan") it may have worked. BTW - QCOM got to $800/share and had people predicting $1000 a share. Certainly, the coin people should have been able to find a way to get people to buy coins when their brokerage accounts were soaring almost daily.
Roadrunner, from what I have seen, I think many if not most investors have already thrown in the towel. Just remember that the market tends to change directions quite fast and not when anyone is prediciting it. I was just crusing the Yahoo message boards last night, and with the futures down quite a bit, many people were predicting the DOW to fall 200+ and the NAS to fall 40+ today. Shows what those guys know!
JJacks
Who is the head of this delegation designed to fleece the Joe Average and where is their headquarters?
I hate it when you see my post before I can edit the spelling.
Always looking for nice type coins
my local dealer
MacCoin,
I just laugh whenever someone says that because:
If you really know what the market will do (and you "know" it will plummet), why not buy all the Puts that you can afford (Puts allow you to make large profits on large declines in the market or a certain stock)? Oh, maybe you aren't so sure it will fall as much as you thought, huh?
It is humerous to me how often people now say the market will fall to almost nothing, when many of those same people in early 2000 were probably predicting the DOW to hit 20000 and the NAS to hit 12000!
JJacks
What stock(s) did you buy? If you don't want to say in public, please PM me, I'm just curious.
dragon
Why Dragon, you know who they are, it's the fact cats in Washington, starting with President George Bush!
(I learned that by listening in the Wendy's line this evening.)
The only thing I know for sure about the stock market is that it will fluctuate. A quote I believe can be attributed to J. P. Morgan. Still rings true, of course.
The numismatic connection to J.P. Morgan is that he really, really, really wanted to buy the unique 1849 double eagle, but never was successful in the attempt.
You could put Bush and his advisors (Greenspan for one) as well as the current legislators as proponents of the current market wisdom.
It's so pervasive in today's society it's like breathing: "stocks for the long term," gold is nowhere, 3 years down so far but no way a 4th year, etc. etc. Give me break.
Greenspan has been the Captain of the FED during the most aggressive part of the 18 year bull run. How about JP Morgan and the other big banks, and all the larger brokerages. These guys almost never tell Joe to sell only to churn. But I'll bet their advice to the real captains of industry is totally different. Also toss in the media in general as supporters of the policy: CNN, all those talking head stock shows, etc. JP. Morgan owns over 30 trillion dollars in paper derivatives....over 30% of the WORLD's total value of a totally paper asset with no intrinsic value. They do not want to see gold succeed. They and others like them make plenty on it by shorting it and forcing the market down. Rumor has it Warren Buffet has taken a position in gold. If he has, this time he isn't telling like he did when he bought silver. You don't see Warren top heavy in growth stocks. Isn't he essentially out? Buy a share in his company. That would be a better choice than a stock index.
What makes anyone think that TODAY, in this one moment in history dating back hundreds of years to the 18th century London stock market, that we are going to break the trend played before us for 300 years in rising and falling markets?? Somehow Greenspan and Bush will effect a miraculous recovery never before seen in the industrial age and our paper and credit backed society will go on unscatched so that we can fall further behind in debt. For every one dollar our economy creates we increase our debt by $4. Seems like a reasonable plan to me.
Inflation or deflation....either way we have a tough road to hoe to get out of this. The Japanese followed a similar path and for 20 years they have been unable to find a way out. But the US will?
By printing money? By increasing our debt? True unemployment is still rising. So are vacancies on commercial bldgs. Companies are still folding. People are starting to curtail consumption. What positive signs are really there? The FEDs have pulled out nearly every trick they have to keep this juggernaut alive until Bush can get re-elected. I just don't see a nice neat bow to this package. We are probably entering a long term down cycle in the economy.
What we seen "so far" is a slight downwards blip. At some point in the near future the roof is going to cave in and "no one" will have seen it coming. Stock will become a 4 letter word again. Then, it will be time to buy stocks. It's gambling like anything else. I pary this scenario doesn't come to pass. I just don't see any other choice. Just my opinion.
roadrunner
Road,
Please understand I am not "Rampantly Bullish" right now or anything! The market goes in cycles and it will probably be higher then today at some point, and probably be lower at some other point. What gets me is when people like MacCoin like to imply that the market is going to 0. If only it were that easy - I would retire right now - buy a truckload of puts and reap the rewards.
Lets face it - there appear to be alot of problems in the market right now - some P/E ratios still high (even though alot aren't either) - war worries - oil cost worries, terror, etc. In every case however in the U.S. since the market started it has always come back - yes, it may have taken a long time to regain the highs of '29 after the crash, but people who started buying say in '32 may have done quite a bit better. And in the bear market of 73-74, while the market fell about 50%, many stocks dropped 80%. I seem to remember seeing the DOW was around 500 at that point.
Remember that even with Hussain and Bin Laden and unemployment (BTW - Germany unemployment is currently over 11% - and they have a liberal leader, so unemployment is hardly unique to the U.S.), these are hardly the worst things the market has ever seen before.
Some examples:
WWI
WWII
Cuban Missle Crisis
Kennedy Shot
Vietan
High Inflation
Reagan Shot
Many companies have folded in the past as well BTW.
In every case, the market came back - sometimes in a year or 2, maybe other times in 10 years. I don't know what the DOW will be in say 2005. All I know is that I doubt it will be under 2000 or over 20000 (but then again anythings possible.....).
Once again, if you think the market is heading to 0, please let me know by what date, so I can make my fortune on the way down!
JJacks
If you think the decline will take too long for put options due to their expiration dates, you could do it with index futures and roll them forward. No premiums involved like options, no margin loans, just a nice pure leveraged directional play -- money meets mouth.
another raging bull market. There are lots of problems to work through. In-
flation for one will make an untimely return and the stock market can't do well
again until dividends start looking much better. This generation has never seen
the real reason stocks have value and will need to in order to get a hot market.
I'm looking for several years of backing and filling with a strong upward bias.
Then the market will explode upward. During this time the coin market will do
exceedingly well and cool significantly when the stocks catch fire.
SC,
I agree with your post completely (finally a chance to talk stocks again after all that SUV stuff, huh!).
One point I would like to make is that in the event of a real market tank, far out of the money puts can be a good deal, and are quite cheap even out to Jan 05. For example, lets say EBAY will tank as per MacCoins general market tanking. If you go out to Jan 05, a 40 put will cost $240. If EBAY falls to 35, it will be worth at least $500. If EBAY falls to 20, it will be worth at least $2000. If EBAY falls to 10, it will be worth $3000. Certainly, while EBAY is a long ways away from falling below 40, so was JDSU and company in Mar 2000, but many of them are $5 now. Of course, in my example above, if EBAY remains over $40 through Jan 05, you will lose your $240 investment completely!
I just got done doing a "Modified Strangle" on ZMH (Zimmer Holdings). With ZMH around $44 a few weeks ago -
I did:
Buy 4 Jun 45 - Calls
Buy 8 Jun 40 - Puts
I was trying to maximize my leverage if they came out an warned and the stock really dropped. Turns out, ZMH announced their profits would be good, the stock went to mid $48.5 range and I sold recently for a small profit. Kind of neat to have a low risk trade like that with alot of potential had the stock reacted more sharply to news and especially I could have done well had the stock got clobbered.
JJacks
JJacks
<< <i>Every bad bear market in this century took from 15-24 years before the previous peak was reached.
The market will offer opportunites on the way down and then on the way up to those bold enough to take them.
Hindsight shows that the vast majority of buyers will have thrown in the towel at the bottom, and will not
invest on the way up until well past the bottom. The cycle will repeat and repeat. Human nature. >>
15 to 24 years? I thought this was only the third year of this century!! hahaha!
Seriously, you sound like old Bob Prechter, and I'll guarantee "the bottom is not in". A very volatile week is
ahead. Very dangerous for traders....keep aside.....this is only a bear mkt. rally.
Prechter's Site - We'll see the DOW below 4000 !!!!
Pucker up, and stay in cash unless you're a smart short-seller with deep pockets and nimble fingers.
ALWAYS USE TRAILING STOPS !!!
CHEERS
Dragon: I bought MAYTAG this morning around $19. I wanted to add a Consumer Cyclical stock to my personal basket of stocks. I bought it a few years ago around $25 and sold it close to $40 as I recall. Since it was one of the few stocks I made money on, I decided I wanted it back (perhaps for good luck)
No need to tell me how rotten a company it is I bought and how poor their prospects are - my wife swears by their washer and dryer and that's all I need to go on
except I thought '96 would be the top (around 9400 if memory serves). And I called
them in advance. The bottom is in. (barring an unlikely catastrope in Iraq).
From a trading standpoint, I would be very glad to see some more days like today. Particularly if it brings back some of the volume that's been sorely lacking the last few months.
And then I ask myself, if after all this time of all 3 going up and up (then down a little) then up and and up and up (then down a lot) then up then down then up up up then down, but always up over a long time, will things change? will people suddenly never want houses or equities or collectibles (especially the "hobby of kings"?
no, probably not.
I like wayneherndon's answer,
jjacks, I agree with most of what you said, but you should adjust Qcom's top for splits, it did split 2 for 1 and then 4 for one after the $800 top and $1000 prediction, I rode it from 6 to 200 to it's present 30-something, did a few bull spreads and covered calls along the way and sold a bit, so not too bad, but..
anyway, I guess what I'm saying is that I'll hold my core coins and stocks for the long haul, and try to trade a little with the rest, and try to add to the solid core as I go along. I think that's how most people ought to invest, but I don't think they do.
Liberty: Parent of Science & Industry