Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Trading halted as U.S. stocks plummet

axios.com

Post reply on HN
Print view View original

811–820 of 1001 posts

Re: Trading halted as U.S. stocks plummet

#811

Post by thekyle »

brazzy wrote: post #763
bytematic wrote: post #646

Earlier quoted context omitted.

Most people don't seem to understand that you don't pull all your retirement out at once, so the market going up or down doesn't really affect that

But whether you start your retirement at a time the market is down a lot or up a lot can make a surprisingly big difference on how long your money lasts, if you don't adjust your spending.

Ideally, shouldn't someone planning to retire have already moved more of their money to bonds? Then they could just withdrawal from the bonds portion of the portfolio (which is likely up right now) while the stock market recovers.

Re: Trading halted as U.S. stocks plummet

#812

Post by bumby »

jfengel wrote: post #581
bumby wrote: post #283

Earlier quoted context omitted.

Take this with a train of salt because I’m not an economist, but one of the most often touted general points of the need for a correction is the cyclically adjusted price to earnings ratio being elevated [1]. In other words, stocks are more “expensive” and thus ripe for a correction https://www.multpl.com/shiller-pe

Note that that's the Shiller P/E ratio, which (even after today) is still at 26, which is quite high. The regular P/E is still only around 20, which is at the upper limit of reasonable. The whole point of the Shiller ratio is that it's supposed to do a better job predicting overheated markets, and it may well be doing that here. The regular ratio is based on recent earnings, which will be uncharacteristically high du…

Correct. I deliberately chose the longer CAPE terminology because I thought it was more descriptive than the term Shiller PE. But thank you for adding a better explanation

Re: Trading halted as U.S. stocks plummet

#813

Post by tomp »

malandrew wrote: post #521
mensetmanusman wrote: post #390

Earlier quoted context omitted.

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

I'm wondering if what 2% dies matters. This disease is mostly going to kill people past their prime working years. There are going to be tons of sociological changes. Just speculating here: - Social security could have it's date of insolvency extended. It's currently predicted to be insolvent by 2037. Most pension programs in the world will be relieved of pressure if many of those over 60 years of age die. Many state…

> Except for what the government steals via a death tax

Good comment overall but this is just unnecessary. I'm guessing you prefer the heirs stealing via birthchance tax? Either way, zero net change in spending (the governments also spend).

Re: Trading halted as U.S. stocks plummet

#814

Post by MuffinFlavored »

tempsy wrote: post #342
fsloth wrote: post #296

Earlier quoted context omitted.

Or just buy index decade after decade... this of course does not work if you attempt to beat the index or have timespan that is short.

The index has become a bubble in of itself. It's also not as diversified as you would think when Microsoft makes up 5-6% of the S&P and over 10% of Nasdaq.

500 of the top American companies is good enough for me. (S&P500)

Re: Trading halted as U.S. stocks plummet

#815

Post by MuffinFlavored »

anm89 wrote: post #618
pureagave wrote: post #33

Earlier quoted context omitted.

Correct. 7% decline is a pause. If it drops 13% it will pause for another 15 minutes. If it drops 20% it will end trading for the day.

It's up what, 30 % over the last few months? The real economy didn't grow nearly that much. In terms of real value, the only way for the economy to take that degree of a hit in a day would be a natural disaster. But these numbers are mostly speculation, so yeah they can go up and down very fast minus techinal restrictions like these halts.

S&P500 has wiped out all growth from 2019 at the moment and is headed lower.

Re: Trading halted as U.S. stocks plummet

#816

Post by samsonradu »

nl wrote: post #800
manigandham wrote: post #731

Earlier quoted context omitted.

Note that report is Vanguard marketing material and most managed funds have specific mandates (like maintaining a certain volatility or investing in certain securities) other than maximizing gains. This is why hedge funds underperform indexes in bull markets but beat them in turbulent times.

This is why hedge funds underperform indexes in bull markets but beat them in turbulent times. Hedge funds have only outperformed the market twice since 2008. Once was during the financial crisis of 2008 (-19% vs -37%) and once was 2018 (-4.07 vs -4.38). It's unclear what benefits you are getting here.

The market after 2008 has been on a historically low volatility and a record bull run isn't it?

Re: Trading halted as U.S. stocks plummet

#817

Post by skybrian »

vortico wrote: post #29

Slightly unrelated, but why does the stock market close each night? If trading was open 24/7, we wouldn't have large spikes like this every morning. We'd only have them when certain news is announced.

Then again, why not shorter hours? Matt Levine writes about this occasionally:

> We talk occasionally about proposals to shorten the stock trading day from its current 6.5 hours (in the U.S.) to, say, half an hour. The idea is partly that traders would have more time to spend with their families and dogs and hobbies, but one shouldn’t overestimate that. Really what it means is that you have 23.5 hours a day to ponder information and synthesize it into stock-price views, and then half an hour to trade stocks based on those views. The big advantage is that anyone who might want to buy stocks can pay attention to the stock market for that half an hour, so the liquidity during that half-hour should be pretty good. When the trading day is 6.5 hours, sometimes no one’s around when things happen, and you have to shut the market down for a bit to call everyone back in. But I don’t think that’s quite what happened this morning.

https://www.bloomberg.com/opinion/articles/2020-03-09/stuff-...

Re: Trading halted as U.S. stocks plummet

#818

Post by bumby »

ttul wrote: post #625

I notice that there are many commenters here offering opinions on the future price of equities. Note that nobody has any idea where equity prices will be in one day, never mind one year or ten years' time. As a retail investor (i.e. not extremely rich), you can't gain any advantage over the market that overcomes your transaction costs. So relax. There's nothing to do here. If you're contributing to a retirement fund,…

>you can’t gain any advantage over the market that overcome your transaction costs

I know this is the predominant efficient market adage but is there a case to be made for low volatility portfolios outperforming the market over long periods? [1]

I’m curious especially now that most online brokers have significantly reduced trade costs on ETFs

[1] https://archivefda.dlib.nyu.edu/jspui/bitstream/2451/29593/2...

Re: Trading halted as U.S. stocks plummet

#819

Post by froindt »

madengr wrote: post #777
bytematic wrote: post #646

Earlier quoted context omitted.

Most people don't seem to understand that you don't pull all your retirement out at once, so the market going up or down doesn't really affect that

Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing. She quit near market peak last year (and began re-investing this week), but say she quit this week? It's volatile enough presently that you could lose $$$ of they decide to sell at a low to boost their stock, and you…

>Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing.

What type of a company did your wife work for? I actively learn about personal finance and retirement plans and have never heard of a lockout from a 401k.

> It's volatile enough presently that you could lose $$$ of they decide to sell at a low to boost their stock, and you can't re-invest in time.

Short of working for a privately traded company, or being a very well compensated executive, the shares owned by an individual employee are almost always negligible compared to daily traded volumes. "Selling at a low to boost their stock" wouldn't even move the needle.

Edit: One possibility came to mind after posting. Was your wife's 401k balance under $5,000? If so, the company can force liquidation. And to say doing so would help the stock price would only be meaningfully true on a penny stock.

Re: Trading halted as U.S. stocks plummet

#820

Post by ganeshkrishnan »

Reedx wrote: post #778
ttul wrote: post #625

I notice that there are many commenters here offering opinions on the future price of equities. Note that nobody has any idea where equity prices will be in one day, never mind one year or ten years' time. As a retail investor (i.e. not extremely rich), you can't gain any advantage over the market that overcomes your transaction costs. So relax. There's nothing to do here. If you're contributing to a retirement fund,…

To help adopt a sober approach, it's worth watching this interview with Warren Buffett who shares his thinking re: market and Coronavirus. https://www.youtube.com/watch?v=JvEas_zZ4fM&t=21s One of the points he makes is that you should think about stocks as businesses. Instead of "I bought a stock" think "I bought a business". That puts you in a better frame of mind and perspective for the long term. i.e., You don't b…

This makes sense if you have huge quantity of cash where leverage is not an issue. With limited cash, you have to think very different from Warren.
Post reply on HN