Once again, Dow is an awful indicator even without the awful usage of absolute numbers when numbers are obviously higher now.
Now the reason for my post. Where should I go for non-sensational finance news?
Dow plunges 1000 points
251–260 of 365 posts
Re: Dow plunges 1000 points
#252Earlier quoted context omitted.
I dunno, I thought the BBC's coverage laid out some possible rationales without being too over-the-top. And while it isn't a tabloid, they aren't exactly a finance-focused paper: http://www.bbc.com/news/business-42942921 >...It is the largest fall in percentage terms since August 2011, when markets dropped in the aftermath of "Black Monday" when Standard & Poor's downgraded its credit rating of the US. >US investors…
>If salaries rise, the expectation is that people will spend more and push inflation higher. Sure sucks to be a worker. When your salary rises your real gains will be inflated away.
I think of money as a claim check on labor (and to a lesser extent, other resources).
If everyone's income rises by 5% (and most of most people's income is spent rather than saved), I would expect prices to rise by about 5% and find that entirely logical.
Re: Dow plunges 1000 points
#253Earlier quoted context omitted.
>If salaries rise, the expectation is that people will spend more and push inflation higher. Sure sucks to be a worker. When your salary rises your real gains will be inflated away.
If salaries aren't coming out of investor profits, they have to come out of the cost of goods. The only way workers can win is: 1. Productivity gains make goods easier to make. 2. A bigger share of investor profits get redistributed to workers, be it through taxes, pension fund investments, co-ops. #2 will not be happening anytime soon.
#2 happens every time unemployment drops. Yes higher worker pay increases inflation, but it's far from 1:1.
Re: Dow plunges 1000 points
#254Inflation finally is going up after years and we can get out of this stagnating economy. Wage growth up 3% in new January report and so we can finally expect interest rates to rise faster like they did in the past. Many investors, especially institutional ones have for years thought the stock market has been over priced but where else to park money because interest rates are too low? Overall the 3% wage growth is hug…
Trying to find a correlation between how the actual economy is doing and the current president is in my opinion a foolish endeavor. It takes way too long for a policy change to actually impact the economy and on top of that it's pretty much impossible to isolate the cause of the economic change. How the market reacts in the short term is even less relevant since it really only says how a certain group of people likes…
> Every time a president claims economic growth to be because of them they reveal themselves to either be a liar or a fool.
Is both possible?
Re: Dow plunges 1000 points
#255Earlier quoted context omitted.
>If salaries rise, the expectation is that people will spend more and push inflation higher. Sure sucks to be a worker. When your salary rises your real gains will be inflated away.
I think of money as a claim check on labor (and to a lesser extent, other resources). If everyone's income rises by 5% (and most of most people's income is spent rather than saved), I would expect prices to rise by about 5% and find that entirely logical.
Except not everyone gets a salary. Higher worker pay means investors for example get a lower share of economic gains.
Re: Dow plunges 1000 points
#256Earlier quoted context omitted.
>> If stocks have been on a recent runup, gaining, say, 50% or 100% over a period of a few years, then they are very likely to grow more slowly than average (i.e., revert to the mean) over the coming years This is incorrect. Prior performance of the market over the span of years has little to no predictive power on future performance of the market. Your statement is like saying: Because I flipped a coin and got heads…
Absolutely not true. Days of stock market movement aren't independent events, they're loosely coupled together and with the economy overall. Your comment is a good example of, "Knowing just enough to get into trouble."
It's actually your mentality that gets you in trouble because it leads to individuals trying to time the market when they can't.
My assertion is that you cannot time the market at all. As a result, I'd just invest passively and immediately.
For data that supports my assertion, please see the edit of my original comment.
Re: Dow plunges 1000 points
#257For most HN readers this means you should be buying more stock.
Right.
Better yet, wait for the end of this correction, then buy more stock.
Better still, sell any stock you own, and at the end of this correction, buy it all back and more at a cheaper price. Yeah, that’s the ticket!
Guys, all we need to do is find out when this correction is going to end. I feel like we can narrow it down to between one day and one year from now.
Re: Dow plunges 1000 points
#258Earlier quoted context omitted.
There are other strategies to protect long positions if you have cash or an appetite for risk, this allows you to realize the gains from holding during the entire runup. It does require a good exit strategy for whatever hedge you choose.
Do you want to list some of the ones you’re thinking of? I’m trying to level up on hedging strategies for retail investors. I was thinking of buying VIX on Friday, and am kicking myself for missing out now.
You can also just buy puts. Puts on SPY increase in value as SP500 declines.
Re: Dow plunges 1000 points
#259DOW != economy A stock crash is not a recession. The stock market is not the economy. Stocks falling is not a recession.
OTOH, stock market crashes are not uncorrelated with recessions.
There are actually a lot of examples where this is not true
1987 stock crash? No recession.
1980-82 recession? No stock crash.
1992 recession? Also no stock crash.
Re: Dow plunges 1000 points
#260Earlier quoted context omitted.
>If salaries rise, the expectation is that people will spend more and push inflation higher. Sure sucks to be a worker. When your salary rises your real gains will be inflated away.
If salaries aren't coming out of investor profits, they have to come out of the cost of goods. The only way workers can win is: 1. Productivity gains make goods easier to make. 2. A bigger share of investor profits get redistributed to workers, be it through taxes, pension fund investments, co-ops. #2 will not be happening anytime soon.
[Some] Workers can individually win by forcing themselves to spend less than they earn and investing the surplus.
In other words, another way that workers can win is by becoming investors/owners.