Blacks and others,1987 was a Bull market correction that...

Blacks and others,

1987 was a Bull market correction that corrected to an upward market trend. There was no huge systemic crisis in 1987. Banks were not collapsing and the government did not need to announce bailout, after bailout, after bailout all to no avail.

The circumstances here are vastly different. I believe this is truly an historic turning point. Iceland, decimated. Russia looks like it is about to default. Carry trades are unwinding. There if extreme fear in both equities and credit. I truly do not think that these conditions are anything like 1987. This is a slow moving train wreck gathering momentum as reality sets in as opposed to a sudden panic. We are yet to see any real damage to the economy but that will pick up steam.

I learnt a valuable lesson post tech wreck - don't buy in straight away. I read a lot of bear sites at the moment and it seems the best way to pick the bottom is to wait until the 20W moving average crosses back above the 50W moving average by about 1%. Buying in then with fairly tight stops is probably a good play (or wait for valuations to be 85% peak to trough). You might miss 10% on the upswing, but so what? You can loose a lot more than that on the way down.

Of course buying now is not a bad option and if you were all cash from the start, that is quite a discount. However, anyone that thinks that things can't get far worse probably hasn't read much about 1929 or Japan 1990 or about debt deflation which is what is happening right now. By the way, don't read Ben Bernankes opinion on 1929. He is an incompetent academic fool who might see micro level trends but fails at understanding the big picture. So far he has shown himself to be an epic failure.