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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#411

Post by blackearl »

allovernow wrote: post #279
jamesjyu wrote: post #268

Earlier quoted context omitted.

"No one will be able to time this" "put your retirement into bonds and hold on" facepalm

What? That's how you minimize risk because there's a good chance the markets will continue to slide. It's literally why the markets are down - because investors are pulling out and parking their cash in safer havens.

If you're not yet close to retirement, what happens today in the markets will have almost no effect on what your portfolio looks like in 10, 20, 30 years. Making any big changes would be stupid. Maintain a diverse portfolio and basically forget it exists outside of maxing it out every year. This is especially true if you're lazy and have it all in something like a retirement target fund like Vanguard.

Re: Trading halted as U.S. stocks plummet

#412

Post by virgilp »

mensetmanusman wrote: post #390
cletus wrote: post #376

Earlier quoted context omitted.

I didn't think this could still be true but apparently you are correct [1]. Wow. That being said, there are factors to contribute to this: - Essentially zero population growth [2] - A government and a system that propped up an insolvent banking system that likely extended the downturn significantly [3] - A massive asset bubble that we really haven't seen the likes of, not even in the subprime era. [1]: https://www.ma…

Yep, over half of GDP growth is tied to population growth. If 2% of humanity is about to die...

2% (maybe more actually) is the mortality rate of those infected. But so far infection rate was 0.001% ; it would need to be 3 full orders of magnitude worse to even approach an infection rate of 2%....

Re: Trading halted as U.S. stocks plummet

#413

Post by ouid »

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Those circuit breakers are not to allow people to come back from "panicked feelings". It's to stop algorithms from deterministically destroying hundreds of billions of dollars.

Re: Trading halted as U.S. stocks plummet

#414

Post by TremendousJudge »

chungus_khan wrote: post #252
burlesona wrote: post #218

Earlier quoted context omitted.

In large part these are designed to break the feedback loops that can happen in automated high frequency trading and give humans a chance to look at things. These policies were implemented by all the stock exchanges after flash crashes triggered by ML algorithms encountering something "weird" and going into hard sell mode. https://en.wikipedia.org/wiki/Flash_crash

The breakers were originally implemented as a response to Black Monday in 87, which was before algorithms were so dominant, but it happens that humans are really good at panicking and acting irrationally too.

Somebody said above that it was due to the 29 crash, which one is right?

Re: Trading halted as U.S. stocks plummet

#415

Post by jahlove »

bluGill wrote: post #330
rafiki6 wrote: post #316

Earlier quoted context omitted.

I thought these circuit breakers actually existed to stop algo's from going haywire?

They have existed since the crash of 1929. There were no algorithms in place then. The goal was just to force human traders caught up in the moment to take a break and stop panicking. I assume they have been tweaked since 1929, but they started with the crash back then. Edit: someone else is claiming 1987 as the start. My memory says 1929. If this matters do your own research.

> In 1933, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.

https://en.wikipedia.org/wiki/1933_Banking_Act

Re: Trading halted as U.S. stocks plummet

#416

Post by camjohnson26 »

Frost1x wrote: post #402
1121redblackgo wrote: post #365

Earlier quoted context omitted.

I wonder if the inverse rings true as well. Bull markets are paved with the blood of pessimists.

So do the meager realists get to avoid bloodshed? Or, better yet, capitalize on the blood of pessimists and optimists?

Realists miss out on volatility

Re: Trading halted as U.S. stocks plummet

#417

Post by wait_a_minute »

A4ET8a8uTh0 wrote: post #198
bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Without going into too much detail, short answer is yes. Most people don't seem to know how far away current setup is from 'free market' touted in school. It is weird given that this information is not hidden. It is just not widely spread.

I'm a fan of free markets and I'll be the first to admit that it's nonsense to have a black and white perception of the world. It's not either 100% free markets or state-driven economy. There's a huge world in-between both extremes. Being a fan of free markets simply means you err towards one side more than the other.

Having common sense regulations and tools like circuitbreakers are fine with me. I wouldn't say it's meaningfully less of a free market just because we have these tools in place to protect us against the automation we use.

Re: Trading halted as U.S. stocks plummet

#420

Post by flatline »

gameswithgo wrote: post #325
cletus wrote: post #315

So, children of summer (there are many here who have only known the longest bull market in the last century), let me give you some free advice. If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. Some points to consider: - If your time horizon is 10+ years out probably none of this ma…

as usual, the financial advice is "who knows what to do good luck"

I think he’s saying, invest for the long term without concern for the present market movements, and if in the meantime you want to gamble, good luck.
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