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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

#311

Post by mjevans »

forgetsusername wrote: post #207
MCRed wrote: post #58

Earlier quoted context omitted.

I predicted the 2008 crisis in 2001. (Well an article on http://mises.org made it clear it would happen.) This was before the housing bubble started to inflate, and was easy to expect due to the changes in the CRA and the artificially low interest rates. I profited from the bubble quite well, decided the top had been hit when things got really wonky and got out of the market in 2007. I was a year early, but I'm not c…

> downvoted across all of my comments Maybe you're being down-voted because you're just a guy on the internet, bragging about how you saw it coming (7 years in advance!), timed it perfectly, made a bunch of money, and are now lecturing us on how it's "easy"...without a shred of evidence?

I think you're not thinking critically enough in interpreting what he had said.

More or less, he had said 'I felt it was unhealthy 7 years in advance'. The actual 'prediction' was only a year or two from the event in question; 'the market didn't make sense' and reacting to that.

Re: Stocks Off Sharply as Market Upheaval Grows

#312

Post by debacle »

joezydeco wrote: post #10

How do oil prices factor into this? The price has already been diving in this last quarter. Oil stocks also make up a huge portion of the Dow formula.

Oil prices are low both because demand is waning (relatively) but also because there is a glut of supply.

Excess supply of oil is great for most of the economy. Waning demand is a bad indicator, though.

Re: Stocks Off Sharply as Market Upheaval Grows

#313

Post by wiz21 »

blakecaldwell wrote: post #308
slg wrote: post #288

Earlier quoted context omitted.

Beyond the slow and steady recommendation, I also think this is a reminder that most people really shouldn't be paying attention to the day to day movement of the stock market. Even after all the panic, standard total market ETFs are currently down between 1-2%. It would look like a perfectly normal day on the market if you ignore the intraday prices. It is amazing how much of the market volatility disappears when yo…

Yep. If you invest broadly enough, then shrug this off and consider that the market is on sale today. Your existing holdings will return to their yesterday prices at some point, and everything you buy in the meantime will have gone up.

Pardon my ignorance, but why will the : "existing holdings will return to their yesterday prices at some point" ? The way you put it seems so inevitable (although "at some point" may be 100 years from now). So, as you're not the only one to say that, I'd like to know what makes you think that the holdings will get back to their previous level ? Because, if they increase from their current position, then you certainly imply that they will increase indefinitely, which in turns mean (because you didn't frame that), that putting money on stock exchanges is always a good move, because holdings value increase...

Re: Stocks Off Sharply as Market Upheaval Grows

#314

Post by chiph »

wiz21 wrote: post #313
blakecaldwell wrote: post #308

Earlier quoted context omitted.

Yep. If you invest broadly enough, then shrug this off and consider that the market is on sale today. Your existing holdings will return to their yesterday prices at some point, and everything you buy in the meantime will have gone up.

Pardon my ignorance, but why will the : "existing holdings will return to their yesterday prices at some point" ? The way you put it seems so inevitable (although "at some point" may be 100 years from now). So, as you're not the only one to say that, I'd like to know what makes you think that the holdings will get back to their previous level ? Because, if they increase from their current position, then you certainly…

There is obviously nothing guaranteeing that will happen. However, it has done so every single time that a correction has happened in the past. This is where the word "faith" applies to the markets.

Re: Stocks Off Sharply as Market Upheaval Grows

#315

Post by randyrand »

jebblue wrote: post #52
Cshelton wrote: post #6

I think it's a bad sign when they can write an article and get it out in under 25 minutes...but by the time they release the article, the market has gone up by half the amount it fell on opening. This market is severely flawed.

I'm not rich enough to be an investor but I agree, some kind of cool down system should be required.

> I'm not rich enough to be an investor

It doesn't take much money to invest in the stock market. Do you consider yourself thrifty? That's the major criteria for becoming an investor. Living below your means and saving. I have been in the working world for ~8 weeks now and already have some investments lol.

Re: Stocks Off Sharply as Market Upheaval Grows

#316

Post by [deleted] »

slg wrote: post #288
grellas wrote: post #238

People's investment philosophy will vary and tolerance for risk will play a major role in it all. My own view is this, and it is based on a lifetime of having made all the typical mistakes. Steady is the best way to go for your investable funds. That means, go with stocks for a decent segment of your investments but temper this with investments that will help preserve capital when things get rocky. Keep a ratio betwe…

Beyond the slow and steady recommendation, I also think this is a reminder that most people really shouldn't be paying attention to the day to day movement of the stock market. Even after all the panic, standard total market ETFs are currently down between 1-2%. It would look like a perfectly normal day on the market if you ignore the intraday prices. It is amazing how much of the market volatility disappears when yo…

[deleted]

Re: Stocks Off Sharply as Market Upheaval Grows

#317

Post by slg »

wiz21 wrote: post #313
blakecaldwell wrote: post #308

Earlier quoted context omitted.

Yep. If you invest broadly enough, then shrug this off and consider that the market is on sale today. Your existing holdings will return to their yesterday prices at some point, and everything you buy in the meantime will have gone up.

Pardon my ignorance, but why will the : "existing holdings will return to their yesterday prices at some point" ? The way you put it seems so inevitable (although "at some point" may be 100 years from now). So, as you're not the only one to say that, I'd like to know what makes you think that the holdings will get back to their previous level ? Because, if they increase from their current position, then you certainly…

It depends what you mean by holdings. If you mean a basket of holdings that is adequately diversified, then most people assume it is true because it has (almost) always been true. So while Apple may never again be as high as it is today, a portfolio including Apple and 50 other companies can reasonably be expected to go up in the long term. The simplest explanation for this is that the economy generally grows over the long term due to an increase in the productivity of the workforce due to both population growth and technological improvements.

Re: Stocks Off Sharply as Market Upheaval Grows

#318

Post by rancur »

slg wrote: post #288
grellas wrote: post #238

People's investment philosophy will vary and tolerance for risk will play a major role in it all. My own view is this, and it is based on a lifetime of having made all the typical mistakes. Steady is the best way to go for your investable funds. That means, go with stocks for a decent segment of your investments but temper this with investments that will help preserve capital when things get rocky. Keep a ratio betwe…

Beyond the slow and steady recommendation, I also think this is a reminder that most people really shouldn't be paying attention to the day to day movement of the stock market. Even after all the panic, standard total market ETFs are currently down between 1-2%. It would look like a perfectly normal day on the market if you ignore the intraday prices. It is amazing how much of the market volatility disappears when yo…

> most people really shouldn't be paying attention

eh, IDK about that. I was cooping at a company that bottomed to $2.50 ~February 2008. I had been reading everything I could get my hands on regarding the Fed, their history, and general fiscal policy. I had about $7k in cash I was planning to dump into the company's ticker.

But in February, when it was $2.50, I wasn't quite confident of my analysis.

In May or so I had completed my replica-painting of the full picture, I was sure enough to make a jump. Unfortunately the stock had rebounded to ~$9 by then. I'd missed my chance, Fed had already moved, markets were assured, life was continuing on as normal. They later got bought out (4 years later) for $22/share. Would have wiped out my student debt.

Note, this was not trading on any special insider information I had, it was simply my personal analysis of the stability of the company's business model in a rough economic environment, combined with confidence in Bernanke's unwillingness to permit much of any form of market turmoil (he received his PhD for his analysis of what the Fed did wrong that lead to the great depression-- conclusion: not nearly enough).

off topic: my next BUY recommendation was ARMH in 2010 ~$12.50. I figured nobody could be so much dumber than me and my expertise to not also see the imminent growth of the smartphone market at a time when half of everyone I knew were still on flipphones. So then I checked later and they'd made it all the way to $30-something.

so then I said to myself 'no more' and bought NVDA at $16, but had to sell at $12 for other reasons. Lol.

Re: Stocks Off Sharply as Market Upheaval Grows

#319

Post by tertius »

6stringmerc wrote: post #246
tertius wrote: post #232

Earlier quoted context omitted.

By unhealthy credit expansion you mean unhealthy Fed balance sheet expansion? Very little of the credit created on the balance sheet has actually entered the market.

Well I think there's some pretty clear correlation that numerous large companies have been using cheap credit in the bond market to buy back shares at a rapid pace (billions) and further inflate the status of the equities market. That's the cheap credit that isn't doing anything other than fleecing the non-investor class. It's simply financial engineering dependent on access to cheap credit, from what I understand.

Yes, buy backs has been a large contributor to indices heading upwards. A lot of these companies issue their own bonds at rates lower than even their dividends.

In the public bond market, how is lending fleecing the "non-investor class"?

Re: Stocks Off Sharply as Market Upheaval Grows

#320

Post by rsmckinney »

ArkyBeagle wrote: post #259
AnimalMuppet wrote: post #216

Earlier quoted context omitted.

> After pumping QE full throttle at $80B/mo? They did for a while. That part's over, though.

The $xxxxB sat in banks as excess reserves that the Fed paid interest on. None of it hit the real economy.

This is my favorite part. This is how most keynesians react when confronted with the harsh realities of QE. This and "the consumers just aren't spending enough." Ofc it's never enough QE and never enough spending. Meanwhile that creaking sound....
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