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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#781

Post by arcticbull »

allovernow wrote: post #696
arcticbull wrote: post #454

Earlier quoted context omitted.

2% of humanity is absolutely, in no way, shape or form about to die. The Korean numbers are approaching 0.5% case fatality rate, and those numbers continue to fall. It's about the same as the flu, and no, the flu isn't killing 2% of humanity either. Y'all need to settle down and get back to work.

China shut down it's economy for two months. Mecca is closed. 8% of Iranian parliament was infected as of last week and two were dead. Democratic nations are putting millions of people on lockdown overnight (see Lombardy, Italy and the 2AM press conference). This isn't the god damn flu and its irresponsible to say so at this point.

It is the flu, what's different is not the threat but our response to it. So far there have been 95,000 flu deaths since October and just shy of 4,000 nCoV-19 but nobody's shutting down China, Mecca or Italy over influenza A.

Re: Trading halted as U.S. stocks plummet

#782

Post by _7fvc »

dnadler wrote: post #748
_7fvc wrote: post #740

Earlier quoted context omitted.

I used to subscribe to these investment talking points and believed in the US equity market. I adopted these attitudes from reading Warren Buffett, index fund, financial advice. These are sound principles. I occasionally revisit value investing, dollar-cost averaging. But times are changing. The US equity market will unlikely to deliver exceptional returns. Buffett may have a strong bias since he started his investin…

What led you to the conclusion that the market will not behave as it has historically over the long-term?

I think the dynamic of the US equity market has changed. In the old days, you can balance your portfolio between stock and bond. This is portfolio advice from Benjamin Graham's The Intelligent Investor. We can no longer do this because interest rates are heading to 0. Bond investors don't make money from interest rates. Bond traders benefit from rate drop. Bond was an investment. It's now destroyed. We end up with cash and equity.

There's a lot of money pumping into the market by central banks. Markets are no longer free. Central banks manipulate their markets. With these kinds of manipulations, we get diminishing returns. Let's say the economy gets back on its feet. Where does it get the leverage to invest? We're overloaded with debt. The interest rate is probably 0 or negative at that point.

Re: Trading halted as U.S. stocks plummet

#784

Post by jfengel »

evanpw wrote: post #753
jfengel wrote: post #733

Earlier quoted context omitted.

I agree with you. I believe the biggest problem with indexification is that it encourages a generic flow of money into the market, regardless of whether the market can handle it or not. Although the market isn't just gambling, and there is real underlying value, it's not an infinite source of value to give returns to anybody buying into it. Eventually there can be too much money chasing too little corporate earnings,…

Every time you buy a stock, someone sold it to you, so flow of money into the market isn't something that's easy to define in a meaningful way. And even if a lot of the invested capital is passive (maybe half of the US stock market), almost none of the trading is, and that's what determines prices.

Money flows into the market when people earn it and use it to buy stocks. Every stock purchase is matched by a stock sale, but most stock sales turn around and become new stock purchases. That's a net long term inflow of money into the stock market, from people purchasing stocks with their earnings (often, via retirement funds).

Most of the actual trading is traders trading to each other, and that shouldn't raise the market cap long term (though it does create volatility). But there is also real inflow of money into the market.

Re: Trading halted as U.S. stocks plummet

#785

Post by tunesmith »

FartyMcFarter wrote: post #729
tunesmith wrote: post #676

Earlier quoted context omitted.

South Korea's fatality rate will be somewhere between "deaths / confirmed cases" (currently around 0.7%) and "deaths / (deaths + recoveries)" (currently around 28.5%) - those numbers will eventually converge. What really matters though is to keep the raw number of confirmed cases low enough so that hospitals don't get overwhelmed. If hospitals get overwhelmed, fatality rates go up. So containment is key.

How about "deaths / actual cases"? This number would be smaller than both of the ones you mentioned, unless you think that somehow all actual cases are detected.

Yes, that's true - although I would expect that countries with widespread easy testing would have their "confirmed cases" number get pretty close to the "actual cases" number.

And "actual cases" would be the people that have the actual disease, not the people that just carry the virus. For people who are carriers but are not infected, they apparently don't want to mix those people into the numbers because that's not how other illnesses are counted either.

Re: Trading halted as U.S. stocks plummet

#786

Post by tunesmith »

edraferi wrote: post #736
tunesmith wrote: post #676

Earlier quoted context omitted.

South Korea's fatality rate will be somewhere between "deaths / confirmed cases" (currently around 0.7%) and "deaths / (deaths + recoveries)" (currently around 28.5%) - those numbers will eventually converge. What really matters though is to keep the raw number of confirmed cases low enough so that hospitals don't get overwhelmed. If hospitals get overwhelmed, fatality rates go up. So containment is key.

> What really matters though is to keep the raw number of confirmed cases low Sure, as long as you mean "actually slow the spread of infections through responsible personal and social choices" and not "sandbag the numbers because it looks bad for you politically."

Of course, because the latter doesn't protect the hospitals from getting overwhelmed.

Re: Trading halted as U.S. stocks plummet

#787

Post by btilly »

dnadler wrote: post #748
_7fvc wrote: post #740

Earlier quoted context omitted.

I used to subscribe to these investment talking points and believed in the US equity market. I adopted these attitudes from reading Warren Buffett, index fund, financial advice. These are sound principles. I occasionally revisit value investing, dollar-cost averaging. But times are changing. The US equity market will unlikely to deliver exceptional returns. Buffett may have a strong bias since he started his investin…

What led you to the conclusion that the market will not behave as it has historically over the long-term?

Over the long term. Let's go back 150 years and invest in a random stock market wherever you happened to live.

If you lived in the USA or England, this was a great idea and worked out brilliantly.

If you lived in countries like Italy, Germany and Russia, you lost everything when those stock markets were closed down in the first half of the 20th century.

You can't say "historically over the long term" then project forward for the next 50 years based only by the results of the last 50 years in the market where things have worked out best.

Over our lifetime, equities are indeed the best bet. But not a guaranteed safe one.

Re: Trading halted as U.S. stocks plummet

#788

Post by icebraining »

Hoasi wrote: post #641
icebraining wrote: post #562

Earlier quoted context omitted.

Were people under the belief that financial markets grew on trees or were formed by lithification?

That's funny. But I was only pointing out that this is akin to markets saying: this game only works as long as we can change the rules. This kind of statement is not conducive to trust. Unfortunately, the whole financial field needs trust to thrive.

I'd agree if the rules had been changed on the fly, as a response to the current events, but they weren't. The rules were known and they were activated as expected.

Re: Trading halted as U.S. stocks plummet

#789

Post by generatorguy »

arcticbull wrote: post #538
ncallaway wrote: post #516

Earlier quoted context omitted.

0.5% is still well over 5x as bad as typical flu. SK is closer to 0.7%. SK also has a far lower recovery percentage (SK total cases: 7478, total recoveries: 118; 1.5% of cases have recovered, 0.5% of cases have died). Compare to the worldwide CFR and recovery rate, which has a much higher CFR (3.5%). total cases 113,432, total recovered 62,494, 55% of world-wide cases have recovered. That means SK is catching their c…

The reason their numbers are lower than elsewhere is the widespread testing is catching the low-grade infections, the asymptomatic and the so on. Those cases are not reflected in, for instance, US numbers as there hasn't been any wide-scale testing. In a huge quantity of people you wind up with sniffles, a cough or mild flu-like symptoms. They don't go in, they don't get tested, so they're left out of the denominator…

I haven’t read anything that said sniffles or runny nose was a symptom. I have a runny nose and was told by the ER on the phone in British Columbia not to worry unless I get a fever.

Re: Trading halted as U.S. stocks plummet

#790

Post by chii »

thedance wrote: post #388
neural_thing wrote: post #339

Earlier quoted context omitted.

The Nikkei is still ~50% below its 1989 high. Hasn't even approached that level since. Downturns can go on for decades.

Another good example of long-term decline is gold. In real dollars gold has never returned to its 1980 price. It went up 10x in the decade to 1980 and some people thought it would just go up forever. If you bought the dip after gold peaked, you're _still_ underwater.

The reason is that gold is itself a useless piece of metal (electronics and jewellery notwithstanding). Its only use is as a hedge against the gov't issued currency. Therefore, to bet that gold increases in value means you're betting against the country you're in doing well.

But in that case, you're better off buying a bunker and bullets and long life stored goods. because gold is useless if the country you're in fails!

The only other use for gold as far as i see is to dodge a country's foreign exchange restrictions, to launder money discretely, and to dodge inheritance taxes (if that's even possible with gold jewellery...).

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