And now that everyone is panicking, the markets are rallying. S&P up over 2% so far.

 

 

It's the oldest maxim of investing. You wait for there to be total panic........chaos.......blood everywhere in the streets.......................then you buy in like there's no tomorrow. Works every time.

The "rally" is starting to fizzle.

 

It will be interesting to see how the day ends today.

 

Is the discount rate the same as the prime rate?

Is the discount rate the same as the prime rate?

 

The discount rate is what the Fed lends to banks at, while the prime rate is what banks charge each other.

 

The move by the Fed isn't a real surprise, as they have made sure there is liquidity in the market at every turn. Plus they have been really diligent not to raise rates whenever, and to guard against inflation. Bernanke had really picked up the torch where Greenspan left off.

The "rally" is starting to fizzle.

 

It will be interesting to see how the day ends today.

 

The ended on an up note, over 200 points, but not on the highs. Its good that they carried a rally into the weekend. We are now up about 600 points over the intraday lows from yesterday.

For someone who has limited knowledge of the stock market, what's the best place (books, websites, etc.) to begin understanding the fundamentals of investing? I'm aware of CD's, t-bills, mutual funds, and stocks, but I don't know too much beyond that and I really would like to start figuring this all out. My 401k starts in a few weeks, and now that I actually have a real job, I've got some money to start thinking about investing.

For someone who has limited knowledge of the stock market, what's the best place (books, websites, etc.) to begin understanding the fundamentals of investing? I'm aware of CD's, t-bills, mutual funds, and stocks, but I don't know too much beyond that and I really would like to start figuring this all out. My 401k starts in a few weeks, and now that I actually have a real job, I've got some money to start thinking about investing.

Rule thumb = put your money in, as much as they will match, and forget about it for 40 years.

 

Rule thumb = put your money in, as much as they will match, and forget about it for 40 years.

 

Oh, I'll be doing that with the 401k for sure. I meant that I'll have other money that I'll want to invest in mutual funds, CD's, money markets, etc., except that I have very limited knowledge when it comes to those sorts of things. I'm looking for a good source for information on the fundamentals of investing.

Oh, I'll be doing that with the 401k for sure. I meant that I'll have other money that I'll want to invest in mutual funds, CD's, money markets, etc., except that I have very limited knowledge when it comes to those sorts of things. I'm looking for a good source for information on the fundamentals of investing.

This is where I usually go when I run into some terms at work that I am unsure of. The stock simulator is also interesting here. I kind of compete with one of my co-workers with that.

 

Investopedia

Oh, I'll be doing that with the 401k for sure. I meant that I'll have other money that I'll want to invest in mutual funds, CD's, money markets, etc., except that I have very limited knowledge when it comes to those sorts of things. I'm looking for a good source for information on the fundamentals of investing.

 

At your age, you don't really need to care about "conservative" investments. The rule of thumb is one percent conservative for each year old you are. So if you are 25, you want 25% of your money either in bonds or something like that. You need to look more at mutal funds and stocks for the long-long term gains.

Does anyone know what it would signify if a company announced a repurchase program for their shares?

 

is this healthy? or is this a sign of a bad economic future?

Does anyone know what it would signify if a company announced a repurchase program for their shares?

 

is this healthy? or is this a sign of a bad economic future?

It signifies that they want to raise the value of their stock.

 

Market Cap Value = $10,000 with 10,000 shares outstanding = $1.00 per share.

 

They go in and repurchase their own shares and now there is $10,000 with 5,000 shares outstanding = $2.00 per share (without declaring dividends, etc). Long story short, they are trying to not dilute the value of the share price.

 

It's not a bad thing necessarily - if they have the funds to repurchase, then they have at least some cash flow to do so. In the long run, they are trying to have a higher cap value with fewer shares.

 

 

It signifies that they want to raise the value of their stock.

 

Market Cap Value = $10,000 with 10,000 shares outstanding = $1.00 per share.

 

They go in and repurchase their own shares and now there is $10,000 with 5,000 shares outstanding = $2.00 per share (without declaring dividends, etc). Long story short, they are trying to not dilute the value of the share price.

 

It's not a bad thing necessarily - if they have the funds to repurchase, then they have at least some cash flow to do so. In the long run, they are trying to have a higher cap value with fewer shares.

On occasion, it can also be a defensive move, if they are afraid of someone trying to buy into more control of their company.

 

On occasion, it can also be a defensive move, if they are afraid of someone trying to buy into more control of their company.

Good call. Less shares outstanding = more shares that a company can control.

 

Does anyone know what it would signify if a company announced a repurchase program for their shares?

 

is this healthy? or is this a sign of a bad economic future?

 

 

The short term benefit is a higher stock price. BUT, the companies do not have to follow through with the re-purchases. These are only announcements to re-purchase stock, not actual re-purchasing itself.

Does anyone know what it would signify if a company announced a repurchase program for their shares?

 

is this healthy? or is this a sign of a bad economic future?

 

In my experiences it is usually an move to artificially prop up a sagging stock price. I know history bears out that when a stock experiences a buy back rally, it usually fades right back to where it started at.

In my experiences it is usually an move to artificially prop up a sagging stock price. I know history bears out that when a stock experiences a buy back rally, it usually fades right back to where it started at.

yea, see TWX for an example.

 

Major equity indeces down 2 to 2.5% today. Consumer confidence with biggest drop in 6 years. Housing prices falling further, and the trend doesn't appear to be levelling yet.

 

And, sure enough, the major equity indexes have gained back almost all that 2% again today.

 

And, sure enough, the major equity indexes have gained back almost all that 2% again today.

It's insane, isn't it?

 

OHHHHH the Fed isn't going to cut rates! BAMMMMM. Down we go.

 

OHHHHH the Fed IS going to cut rates. WEEEEEEEEEE. Up we go.

 

 

If I had to bet, the Fed will not raise interest rates. If you listen to the FedSpeak, they do not want more cash in the system on the public end. They want liquidity in the system, but they don't want to put a bunch of money out there because they don't want inflation. They are still scared of inflation. That's why they did the overnight lending instead of the Fed Funds rate.

If I had to bet, the Fed will not raise interest rates. If you listen to the FedSpeak, they do not want more cash in the system on the public end. They want liquidity in the system, but they don't want to put a bunch of money out there because they don't want inflation. They are still scared of inflation. That's why they did the overnight lending instead of the Fed Funds rate.

I think the same. Anyone want to short, like right now, on some stuff? Because when they leave the rate alone, we will lose 500 points EASY.

 

It'll go back and test 12600 again, I think. We'll see what happens if it breaks through that or not.

http://biz.yahoo.com/rb/070907/greenspan_market.html?.v=6

 

Well, if Greenspan thinks that, I wonder when we are going to have our 1,000 point in one afternoon drop?

 

http://biz.yahoo.com/rb/070907/greenspan_market.html?.v=6

 

Well, if Greenspan thinks that, I wonder when we are going to have our 1,000 point in one afternoon drop?

uh oh. Brace for impact.