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Stocks Off Sharply as Market Upheaval Grows

nytimes.com

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Re: Stocks Off Sharply as Market Upheaval Grows

#131

Post by jazzyk »

code4tee wrote: post #77
code4tee wrote: post #31

Earlier quoted context omitted.

PS... I don't deny that a subset of the US economy/workforce got hit really hard in 2008 and never recovered. But when you look at the US economy as a whole things are doing quite well.

"In the US, for starters, there's a huge bubble in stocks" The median PE ratio of S&P 500 stocks at the moment is $14. That's certainly not "bubble" territory. The current market correction is surprising nobody, but I don't think many people consider this a bubble (at least for the US markets). Now there are certainly subsectors within the US that could be in bubble territory and could get hit really hard... unrealis…

I assume you meant 14, not $14. Anyway, it is false.

S&P 500 P/E ratio was (until last week) around 19. The more accurate Shiller P/E was closer to 27.

Way above the historical median.

http://www.bloomberg.com/news/articles/2015-06-26/the-s-p-50...

Re: Stocks Off Sharply as Market Upheaval Grows

#132

Post by dataker »

code4tee wrote: post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy.

0% interest rate for several years is not healthy.

QE is not healthy.

100+ % debt:GDP ration is not healthy.

Inflating assets is not healthy.

A vanishing middle-class is not healthy.

Re: Stocks Off Sharply as Market Upheaval Grows

#133

Post by mikeash »

code4tee wrote: post #23
ceejayoz wrote: post #5

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Market_timing#Evidence_for_mar... > Studies find that the average investor's return in stocks is much less than the amount that would have been obtained by simply holding an index fund consisting of all stocks contained in the S&P 500 index.

The biggest "secret" on Wall Street is that active money management is often worthless. The ability of someone to 'beat the market' on a long term basis is extremely limited. Most investors are better off just buying a few index ETFs and letting it ride for 30 years. Given that many banks have gotten out of prop trading and are now shifting into "wealth management" shops (hey we lost all our money when we tried that…

We see a lot of stories on HN about how so many medical studies are false positives, because when you set up your analysis to yield 95% confidence, and most of your studies are on things that have no effect, the 5% false positive chance translates to a much higher false positive rate.

Active management is subject to the same thing. Everyone hammers on the idea that "past results do not guarantee future returns" but that's all anyone ever looks at, what with it being very difficult to observe the future. Some active managers will be successful simply by luck. They'll tout their results and get more customers from it. And then eventually their luck stops and they'll revert to the mean, minus their fees. Because of the proportions involved, lucky managers will heavily outnumber those who are actually good at it (if there are any).

Re: Stocks Off Sharply as Market Upheaval Grows

#134

Post by bunderbunder »

photosinensis wrote: post #117
jebblue wrote: post #89

Earlier quoted context omitted.

Why was this down voted?

Because it's ignorant. There are cool down systems in place if the stock market swings too wildly in a short period of time.

And downvoting instead of pointing out that there are cool down systems does nothing to reduce the ignorance.

If you've really got a problem with ignorance, do the grown-up thing and attack the ignorance rather than the person.

Re: Stocks Off Sharply as Market Upheaval Grows

#135

Post by mikeash »

logicchains wrote: post #129
mikeash wrote: post #103

Earlier quoted context omitted.

I don't understand your critique. It's a good thing that the market rebounded but how does that make the article better? It's like writing an article about a guy falling out of a plane and how he's going to go splat when he hits the ground, and by the time you hit "publish" the guy has already opened his parachute and landed safely. It's great that he survived but the article is bad!

I wasn't defending the article. The poster I was replying to referred to the market as "flawed", so I suppose I was defending the market?

Right you are. I think I got mixed up somehow. Just apply my bad parachute analogy to the comment above, then!

Re: Stocks Off Sharply as Market Upheaval Grows

#136

Post by forgetsusername »

dataker wrote: post #132
code4tee wrote: post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

>QE is not healthy

QE is over (though, I wouldn't be shocked to see more).

>0% interest rate for several years is not healthy.

Why not?

>100+ % debt:GDP ration is not healthy.

Why not?

I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

Re: Stocks Off Sharply as Market Upheaval Grows

#137

Post by bunderbunder »

bunderbunder wrote: post #26
[deleted] wrote: post #15

Earlier quoted context omitted.

[deleted]

I think they're the only ones who should really feel much need for anyone to save the day. These kinds of daily and hourly aerobatics are high-frequency noise that should only be interesting to people who make money by speculating or placing advertisements next to the articles they write.

To the downvoters, there is empirical data to back up my point.

Individual investors who pay attention to daily (or worse, real time) stock quotes tend to get significantly poorer returns than those who ignore this kind of stuff. This is even borne out in lab studies where some participants' access to market data is restricted.

Re: Stocks Off Sharply as Market Upheaval Grows

#138

Post by cryoshon »

dataker wrote: post #132
code4tee wrote: post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

I keep trying to tell people, but they've drank the koolaid from the mainstream media, unfortunately... the facts as you have listed them are there for anyone to think about, but the rabid "EVERYTHING IS FINE, SHUT UP AND BUY MORE" crowd won't have the thought of weak fundamentals in their head.

Many of the problems are "easy" to fix with government action, but the consequences of the easy fixes are problematic.

Re: Stocks Off Sharply as Market Upheaval Grows

#140

Post by valarauca1 »

logicchains wrote: post #125
valarauca1 wrote: post #93

Earlier quoted context omitted.

That's more or less US anti-communist propaganda. I've been to china once, lived with Chinese Nationals for several years, and currently telecommute with partners in China. There is wide spread support for the party. People do understand that the chinese system is unique, and not necessarily the only government system. They simply believe it is better. Which from a socio-economic outlook it kind of has been for the p…

Counterpoint: I lived in Eastern China from 2011-2013, and the majority of the people I met around my age (early twenties) hated the party. They hated the Great Firewall, hated the censorship and hated the Chengguan ( https://en.wikipedia.org/wiki/City_Urban_Administrative_and_... ). They just didn't linger on it much as they didn't feel there's anything they could do to change it. Certainly none believed it was "bet…

I will agree largely. My corresponding age (same as yours) group has a lot of negative attitudes (especially involving internet/entertainment).

Its the older generations (I assume who got more propaganda growing up) that carry the parties line a bit more firmly.

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