Thursday, October 9, 2008

One for the books - Another horrible day - Markets today

Our slow-motion crash continues and picks up steam. The S&P 500 finished down for the seventh straight day, but that doesn't begin to reflect the damage we have suffered. We are down nearly 25% over the last nine days. During the crash of 1987, we fell 29.57% in the worst nine-day period before finally bouncing 15% in two days.

By any measure, this is historic action, and there is absolutely no way to apply any logic to it. Many investors are frightened, and they just want out at any price. They have absolutely no confidence, and nothing that the government is doing is helping.

The big question is, when will this market finally stabilize? How do we restore enough trust so that there are at lest enough buyers to stem the waterfall decline? I don't think anyone has a good answer to that, so we just have to stay out of the way.

At this point, all you can do is try to protect your capital as best you can and worry about profits later. The key right now is to simply survive with as much capital as possible. There will be great opportunities down the road, but for now we are observing history.

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