Comments on: Those individual investors who left the stock market in 2008 aren’t back yet–which will make any near-term dip short and shallow

By: viwi

viwi — Thu, 01 Oct 2009 18:10:01 +0000

I am still trying to make sense out of $170 bln “on a side”. I assume that only 5% of the total US population are involved (i.e. about 15 mln), which means that it is about $10,000 per person, which what I personally consider normal to keep on my saving account just as an emergency fund. Considering that life is tough for everyone these days, it is normal to assume that people keep more in their emergency funds now than they did 2 years ago. I do not see those money coming back to the stock market until we establish a steady growth and see unemployment figures back to 7%. As I always say, I am not an economist, I am just trying to make a common sense out of it.

By: davcbr

davcbr — Thu, 01 Oct 2009 17:43:26 +0000

My take on this, especially seeing the market at this point in time, is that this “correction” will be a little bigger than what JJ is suggesting.
As I talk to the ordinary folk, I get the feeling that falling prices will scare them. This will have them not buying, and the market is left to fall without this “padding”.
A lot of these people were burned twice, remember.

By: viwi

viwi — Thu, 01 Oct 2009 13:13:08 +0000

Mark: You are kidding, right? Do not take me wrong, but with the current (2008) rates of GDP growth, it will take Indonesia about 200 years to reach the GDP of Russia. By the way, Brazil has lower GDP and growth rate figures than Russia.
P.S. If I remember it correctly the same argument about population growth was applied to Japan, but it is still number #2 on the GDP list, and the last time I was there I did not notice that there are not enough people on the streets.

By: Beabaggage

Beabaggage — Thu, 01 Oct 2009 12:44:45 +0000

I am short brazil, way overbought, money is coming out of the market with the 16% u/e, underemployed raiding their IRAs and 401ks to pay debt,eat and mortgages. so that could offset any “I missed the rally” boobs who rush in now after missing March buy. LLY is one safer bet on my list but at 27 not 32.

By: MarkRumpke

MarkRumpke — Thu, 01 Oct 2009 12:35:18 +0000

viwi – If Indonesia’s GDP doubles over the next two or three years and Russia’s goes down 10%, does it matter that Russia’s economy is 3x as large from an investor point of view? I think what Jim is saying is that Russia’s population is going to decline due to the age of the average person vs Indonesia.