CHESSNOID

I really don’t understand why investors have such short memories or why they believe the market is different today from yesterday or any day earlier this week.  Each day the news confirm that the current recession is getting worse and not better. This week we had announcements of job cuts everyday.

On Monday we lost 72,000 jobs. On Tuesday we lost 20,000 jobs. On Wednesday we lost 10,000 jobs. Today we lost a few more thousand jobs.

MarketWatch:

“We see no chance of this picture changing in the foreseeable future,” wrote Ian Shepherdson, chief economist for High Frequency Economics. “We expect net job losses of about 3 million through the first half of this year.”

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new employment. The claims data show that businesses are laying off workers at a rapid pace and that finding a replacement job is proving ever harder for those who’ve lost work.

Compared with the same week a year ago, first-time jobless claims are up about 63%, while continuing claims are up 71%. The data come from state unemployment offices’ reports based on actual filings, not a statistical sample.

Anecdotal evidence also points to higher joblessness. Major companies have been announcing layoffs, totaling more than 100,000 just this week alone. Those layoffs will actually take several months to play out.

The investors rallied for a little bit on the fact that the Obama stimulus package passed the House.  There is no chance of real long term success with that plan.  Just read my previous Ron Paul post or listen to his video.   Just common sense of why the economy will go into a depression.

I am sure we will have some rallies as we trend downwards, but I wouldn’t be long in this market.  Many experts have said if you didn’t sell before the downturn, don’t do it now.  Now, I am not sure if that is good advice unless you are dollar cost averaging into your investments and have consistently bought every month for the last 24 months.

If you sell now you may be avoiding another 10-20%  short term loss.  Imagine if you had sold 3 months after the sharp drop in stocks, you could of avoided half your losses.  Of course, you are gambling which direction the market will go, but guessing that it will continue to go down doesn’t really seem like a bad guess.