Thursday, November 20, 2008

Top Ten Surefire Signals of a Market Bottom

Not a minute goes by on CNBC when commentators aren't furiously debating whether a "bottom has been set."  First there was definitely a bottom in March.  Definitely.  Followed by another bottom in July.  I've never seen a better bottom.  Then we had October 10th.  Seriously, has anyone seen a bottom more definitive than October 10th?  The inverse upside down quadrangle band was reaffirmed at least 17 times!  That had to be it.  Unfortunately, equity investors are facing yet another potential bottom today.  Could this one be it?  To help those confused investors determine the actual bottom, I have put together a short list of events that must occur for a bottom to be put in place.  If you see these events occurring simultaneously, I strongly urge you to start buying stocks with both hands.
  1. Prince Alwaleed stops thinking Citigroup is a great investment.  Believe it or not, the Saudi Prince is STILL buying
  2. Debt investors throw in the towel on GMAC and ResCap, refuse to swap their debt for more debt and mark that garbage down to zero where it belongs.  GMAC still seeking bailout from Feds; still swapping debt.
  3. Maria Bartiromo jumps out the window on live TV (but lives and returns to work the next day in a cast; I'm not that morbid.)  Ms. Bartiromo is still on my tube shrilly yelling at guests to explain to her WHAT the HELL is GOING ON because she's been telling people for ten years that stocks are a great investment and this is making her look like an idiot!
  4. Vladmir Putin stops threatening the Russian market with violence if it doesn't cease collapsing.  Mr. Putin pledged to do "everything" to prevent a financial crisis.  He did not rule out invading the stock exchange.
  5. Somali Pirates lower their ransom demands from $25 million to $1.50 when they realize that an oil tanker is virtually worthless in this economy.  Somalis still not following commodity futures market; still want $25 million
  6. News reports stop including "The worst level in 27 years!" in every headline.
  7. Microsoft uses its $30 billion cash hoard to buy Chrysler, Ford, GM, Citigroup, JP Morgan and Bank of America.  The Justice Department does not block the deals on anti-trust grounds.
  8. Ben Bernanke and Hank Paulson cry like babies in unison on television at some sort of press conference that they called to attempt to instill confidence in the market.
  9. Not a single airline files for bankruptcy during the downturn.
  10. SEC Chairman Chris Cox comes out from whatever hole he's been hiding in ever since his short-sale ban was a flop, and tries to institute a ban on selling stocks.  Hank Paulson punches him in the face on live television at the aforementioned conference (see 8.) and Ben Bernanke has to hold Mr. Paulson back to keep him from doing any real damage.  All of them are still crying as they make a beeline for the hellicopter.  (This last one is more of a fantasy and less of a real indicator.) 


Anonymous said...

No sense is catching a falling knife. I believe its not worth jumping back into the market long (unless you're a trader) if and when we have a clear upward trend, which in some industries hasn't been around since late 2007. Of course, this may mean you will miss the bottom, but i'd rather miss the bottom yet surely make some money than lose my shirt all the down into the abyss.

Starkplug said...

This is an awesome top ten list. I think I've actually seen Bernanke and Paulson crying on TV together. You should post this on my buddy's site

Anonymous said...

The Delineator knows for sure: