“I am all cash now” is the new fashion

in Wall Street. Today, on discussion forums, I encountered more posts declaring "I am all cash now". On the contrast, Buffett announced an investment of 5 billion in a financial company yesterday: Goldman Sachs. We witnessed dramatic events happening on Wall Street, bankruptcy of Lehman, government bailout of AIG, Merrill sold itself to Bank of America. The horrible events also prompted institutional investors to pull out billions of funds from money market fund, causing a bank run. US government announced a emergency proposal to take the troubled mortgage loans from financial industry, aiming to solve current crisis from the root. The estimated cost of proposal is $700 billion. I could not imagine a worse week than last week. What else could be more horrible? I think the bottom for financial is very near, although we would not know how long the market will stay there.

I started to use margin again in recent weeks. I paid off my credit card debts and margin after I made a bundle on abk, mbi and ago. Now I am back. I feels a little bit proud of myself, dare to maximize my buying powers through the horrible events. I know this is very dangerous, it is famous on Wall Street that market can be irrational longer than you can be solvent. I am gradually reducing my positions to avoid a sudden dive of the market. I am also seeking to borrow some money from credit card. I am investing in stocks like I am paying a mortgage off. Scarcity leads to great value, right now capital is very scarce in the market which means it is unbelievable expensive, so now is not a time to hoarding cash. Buffett has been hoarding cash for years, he is waiting for this historic moment to exert his cash power, why should I do the opposite?

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• 回复：“I am all cash now” is the new fashion -birdbear- ♂ (53 bytes) () 09/24/2008 postreply 15:07:07

• do u have another name on these forums? I smell -longtermInvestor- ♂ (7 bytes) () 09/24/2008 postreply 15:14:36