Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, and T...
The Future for Investors in Cyberspace
08/07/2008 12:00 am EST
Panelists Howard Gold, executive editor, MoneyShow.com, David Callaway, editor-in-chief, MarketWatch, and Jon Markman, editor, Strategic Advantage and Trader's Advantage, discussed the impact of online investing on the domestic and global investment arenas.
Gold began by asking how online investing has changed from the 90s until the present. Callaway remarked that once limited to day traders, investing via the Internet is now commonplace to most investors and becoming very competitive.
Markman noted that a sea change has occurred in information exchange. Ten years ago, news was top down, with journalists determining what constituted news. Today, news comes from many sources, including communities of bloggers. While this has enabled investors to gather a tremendous amount of information, at the same time, this democratization of data makes it essential to separate facts from opinions. As well, Markman suggested that to discern all sides of the story, investors need to challenge themselves by also consulting Web sites that express opinions different than theirs.
The panel then discussed how this surplus of news sources is making journalists more accountable. Both Callaway and Markman agreed that instead of the accountability they used to have to their editors or publishers, journalists are now accountable to their readers. However, that can be detrimental as it is very tempting to pander to what your readers want, such as negative commentary or focusing discussions on specific 'hot' companies, instead of seeking out the more important stories.
Gold asked the panelists to describe the features on their sites that are the most beneficial to individual investors. Markman said that the commentary at MSN Money, as well as the credible data, stock screeners, and rating systems offer a one-stop-shop for investors. And Callaway remarked that the bread and butter at MarketWatch is breaking news. Additionally, the site offerings include commentary, data, technical analysis, industry news, commodity reports, and a new portfolio tool that is catching on with investors.
Discussing other favored sites, Callaway mentioned a variety of Web sites including, Reuters, Yahoo, Bloomberg, MSNBC, Wall Street Journal, and Barron's online. In addition to those sites, Markman noted that his colleagues at major hedge funds rely on the New York Times deal book, BusinessSpectator.com, Barron's Australia, and FinViz.com.
Gold asked the panelists for predictions for the end of this bear market. Callaway thinks the market will bottom out about six months prior to the trough of the housing market, perhaps around the end of the year. He added that oil may come back down to $100, then push back, although perhaps a little lower than the previous $147 high. Markman is looking for the S&P 500 to bottom around 960, and he stated that the credit crisis cannot end until the value of houses stops declining. His best forecast of that occurrence-maybe in a year.
Winding up the panel, Terry Savage, the host for the Opening Ceremonies, asked each panelist for one piece of unique advice for individual investors. Markman recommended that investors trade long and buy dips in a bull market, and trade short or be neutral in a bear market. Do not try to fade the market and sell into rallies. He added that the average bear market in the past 100 years has declined some 30%. The current bear market is the result of the worst credit crisis in 100 years, and he expects a total decline of 30%-40%.Callaway estimated that the DJIA may fall another 800 points, finishing lower this year, maybe 13%, but up next year. Gold recommended that investors make sure their portfolios are broadly diversified, stay with strong sectors and stocks, and use dollar cost averaging to smooth out extremes. Markman agreed and warned investors that the leaders of the last rally, like banking, will most likely not be the leaders for the next bull-run.
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