Looting the American Coffers. Discussion About the Stock Market Weirdness. Predictions.

By John C Dvorak Thursday September 18, 2008

Here is the second conversation I had with superstar stock picker Andrew Horowitz about today’s weird stock market. Horowitz runs the Disciplined Investor website. There are a couple of interesting stock tips in this discussion. This chat is not produced and presented as-is for anyone who wants to listen in.

click ► to listen:

Right click here and select ‘Save Link As…’ to download the mp3 file.

11 Comments

Springheel Jack says:

9/19/2008 at 12:54 am

Behold the market: self-correction is a beautiful thing.

Capitalism is a beautiful thing.

All hail von Mises and Hayek.
Lou says:

9/19/2008 at 1:33 am

Never was a free market and by the looks of things, it never will be.
QB says:

9/19/2008 at 8:27 am

This has been years in the making ever since that stupid Gramm McCain bill. The government should be providing reasonable oversight so people can trade with confidence.

Stopping short selling? Right….that’ll keep the markets liquid.
chuck says:

9/19/2008 at 9:02 am

Trying to ban short-selling is like telling us we can only do addition, never subtraction. It’s idiotic.

When you short a stock, you’re “borrowing” the stock from someone else and have to repay it eventually. The other person still owns the stock, and they are “going long”. If the stock goes down, it costs you less to repay the loan that it was worth at the start, so you make money.

This means that someone else thinks the stock will go up and that when you repay the loan they will make more that it was worth.

In other words, if you ban short-selling, you are also banning other people from going long.
Springheel Jack says:

9/19/2008 at 9:03 am

I haven’t seen this much government intervention since the U.S.S.R bit the dust. And this is a Republican administration?
chuck says:

9/19/2008 at 9:48 am

We need to balance out the bail-outs.
As Horowitz said, there is a moral/ethical problem with the bail-outs: why should any bank CEO be concerned about taking risks if they know the government will always bail them out?

Here’s a way to balance the equation: if a bank or company (like GM, Ford) gets a government bail-out, the CEO and the top executives of the company get executed. Preferably in public, if the most disgusting and gruesome method imaginable.

So the public is protected, and the CEOs of other companies learn that risk-taking has some downside.
Paddy-O says:

9/19/2008 at 9:50 am

#7 “Here’s a way to balance the equation …”

LOL!
brian t says:

9/19/2008 at 11:50 am

Are they banning ALL short selling? I knew that Chris Cox (SEC Chair) had a problem with “naked” short selling – selling shares you haven’t even borrowed, expecting to buy them for less than you paid to sell them..!
Software Developer says:

9/19/2008 at 12:31 pm

Thank you for including this in the discussion. I will never cease to be amazed at the volatility and unpredictable nature of the stock market. Respect it or it will eat you alive!