written by reader Newbie Investor…. What are the basic “Red Flags” that point to a “major” Corrections???

By Jim, January 8, 2018

I am a fairly new investor and have really enjoyed Stock Gumshoe. Extremely good conversations and thoughts. I know my question is difficult, but I would appreciate some of the experienced investors to give the ”Red Flags” they believe point to a ”Major” downturn. Thanks in advance to all the Gummies…

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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jeremiahberndt
2 years ago

Well, I am not an experienced investor, but I have been trying educate myself as much as possible for a little while. I think the short answer is: the way the market looks right now. Overvaluation is the first thing that comes to mind. People are willing to pay a lot more for stock than what it is worth. I have read articles recently that have pointed to the fact that “smart money” or institutions are hedging more or betting on a correction in the near term. But at the end of the day I believe no one has the sure answer. It’s hard to “time the market”

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rainsonme
rainsonme
2 years ago
Reply to  jeremiahberndt

well. I have been investing for 40 years. I have made MANY mistakes. I was wiped out in 2000, due to arrogance — I thought I was smart. In 2008/9 I felt a lot like 2000, so I started selling when stocks first started breaking. And in March of 2009, when no one seemed to like stocks anymore, I bought back some large cap value stocks that I still hold, still earning yield, and now with large cap gains. I dont feel like we are at the top of this current bubble yet. My FEELING; I may be totally wrong. But there is still quite a bit of tail wind behind stocks, including new tax laws that will bump up retained earnings, allow repatriation of foreign money, and there is the promise of a huge infrastructure build out, and whatever you think of Trump, regulations have definitely been slashed. Further, there are still no good alternative investments compared to stocks; when interest rates really rise, that may change, but today, stocks are the best place to put money. The market shrugs off North Korea, Trump tweets, terror threats — the market seems to still want to go up. I am mostly all in for stocks. There will be a steep correction, if not recession; that is a certainty. But I do not see it in the next 5 months. Second half of 2018, when the tax gains are all realized and fully priced in, when infrastructure promises stall, and polls indicate a disruption to republican dominance — then things may change. The market is supposed to be predictive —- I think it predicts at least 5 more months of prosperity. By May or June, it may predict more difficult times ahead. The one, and perhaps only lesson I have learned: buy low. The rest of that equation is beyond my comprehension, but buy low (solid large cap value) seems to really work. And there will be another buy low opportunity.

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oba-a-sir
oba-a-sir
2 years ago

Thank you jeremiahberndt for your ,trading insight,hindsight,oversight forsightness. I am a novice

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oba-a-sir
oba-a-sir
2 years ago

Hello,Habari to rainonme, Maxim :Winner never quite and quiter never win. Your advise succor to a novice. How do you pick stock? Do have a pot,oil,gold,energy,utility stock ? What are they by name and stock token. Thanks,Asante sana

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oba-a-sir
oba-a-sir
2 years ago

Where is the best place to buy stock?
A. Broker
B. I buy it.

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