Trading halted as U.S. stocks plummet • Hacker News Board

Re: Trading halted as U.S. stocks plummet

#941

Post by karaterobot » Tue, Mar 10, 2020, 4:53 AM UTC

coliveira wrote: post #833

Reedx wrote: post #778

Earlier quoted context omitted.

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…

Two things make Warren different: (1) he is a professional money manager, which means that he is investing other peoples money. (2) because of (1), he never needed the money he is investing. It is much easier to have long time frames when you're investing money that is not yours.

Even if that were true, he's still completely right, and this advice is still good! What really makes him different is that he consistently follows the common sense advice the rest of us nod along with and then ignore.

Re: Trading halted as U.S. stocks plummet

#942

Post by [deleted] » Tue, Mar 10, 2020, 5:00 AM UTC

pbourke wrote: post #755

_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…

> The US equity market will unlikely to deliver exceptional returns. With each passing day in this crisis, I think you can make the opposite case. Long-term risk in equities is going down, not up, as the market falls and stocks move toward relatively underpriced from relatively overpriced. Or am I missing something? The expected long-term return from investing $1 in the stock market now vs beginning of Feb is higher,…

[deleted]

Re: Trading halted as U.S. stocks plummet

#943

Post by sameerds » Tue, Mar 10, 2020, 5:01 AM UTC

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…

From a retail investor's point of view, both approaches are wrong. The retail investor can neither "play" the game of stocks, nor understand what it means to buy a business. Not because there is anything magical about either, but because the retail investor has a life too, and would rather focus on their own work for their actual income.

The correct way to look at stock investment is to say "I bought a stake in the future of the world's industry". And that makes you realize what a mind-bogglingly large gamble this is with your savings. People simply have faith that human life will keep improving over the long term, and hence the value of the world's industry will also keep going up irrespective of short term rises and falls.

Re: Trading halted as U.S. stocks plummet

#944

Post by [deleted] » Tue, Mar 10, 2020, 5:21 AM UTC

01100011 wrote: post #694

kortilla wrote: post #637

Earlier quoted context omitted.

Tech doesn’t look too rosy if there is a problem with the entire hardware supply pipeline in China.

The entire pipeline isn't in China. Taiwan seems to hold some of it and they're doing just fine. They've apparently managed to contain the virus quite well.

[deleted]

Re: Trading halted as U.S. stocks plummet

#945

Post by csnover » Tue, Mar 10, 2020, 5:22 AM UTC

froindt wrote: post #819

madengr wrote: post #777

Earlier quoted context omitted.

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…

I’m not the OP, but when I left a company where I had a 401(k) and transferred the balance to my preferred brokerage, the source account was frozen for about that long during the approval and transfer process.

Re: Trading halted as U.S. stocks plummet

#946

Post by Itsdijital » Tue, Mar 10, 2020, 5:31 AM UTC

kelnos wrote: post #803

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.

Aside from people needing to sleep (back when computers didn't do our trading for us), there's also the matter of information flow: the reason quarterly earnings announcements happen after market close is to avoid giving slightly-faster people an edge. If you could read and digest an earnings announcement faster than all your peers, you could make trades based on the new information before the price has moved. While…

Markets move more or less instantly on big news nowadays. I mean on the order of seconds. Algos can parse data releases in real time and react in milliseconds.

Good GDP numbers at 2:00:00? It's gaping up at 2:00:01 and near the top of the trend by 2:00:05. I've seen it first hand many times.

Re: Trading halted as U.S. stocks plummet

#947

Post by dcftoapv » Tue, Mar 10, 2020, 6:02 AM UTC

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,…

I don't agree. There are three things that normal investors should be doing right now:

1 - Assess how you feel. Are you upset by the loss of value? Then you make be more risk averse than you thought. It might be wise to reconsider your asset allocation after this emergency is over. However, it's not wise to redo your allocation while the VIX is above 20ish.

2 - Check in with a financial adviser. This is a good reminder that your financial portfolio matters, and it is smart to use this as a prompt to check in on your financial health.

3 - This is the most important one, but you can't do it if you're not good on #1 and #2. REBALANCE YOUR PORTFOLIO. If you are allocated to risky and riskless assets then it is time to make sure that your allocation is still where you want it to be. It probably isn't. If your allocation to riskless assets is higher than you normally would like then you should sell riskless and buy risky.

Why is #3 so important? Because it allows you to collect a liquidity provider premium. Purchasing risky assets in volatile markets a) stabilizes the markets b) takes the advantaged side of the transaction. A lot of research stands behind this idea. Rebalancing in volatile environments is an easy and reliable way to outperform your peers over the long run.

Re: Trading halted as U.S. stocks plummet

#948

Post by asdff » Tue, Mar 10, 2020, 6:33 AM UTC

cryptoz wrote: post #683

IAmEveryone wrote: post #673

Earlier quoted context omitted.

The efficient market hypothesis would like a word with you.

I just googled that to inform myself. > The efficient market hypothesis in financial economics that states that asset prices reflect all available information https://en.wikipedia.org/wiki/Efficient-market_hypothesis The efficient market hypothesis seems easily disproven with a number of modern examples. Climate change for example - there is significant information available, but markets act as though the information…

You are thinking about what is logically efficient, but the market is also concerned about what is emotionally efficient.

A certain proportion of people believe climate change is a hoax, a certain proportion stand to make a lot of money shaping policy as if it were a hoax. With the coronavirus, merited or not the panic is real and the markets are reflecting that panic.

In a world economy driven by consumer spending, how people feel is more real than what is actually real for the market. Therefore, the market is always at its most efficient.

Re: Trading halted as U.S. stocks plummet

#949

Post by asdff » Tue, Mar 10, 2020, 6:47 AM UTC

dzhiurgis wrote: post #934

kelnos wrote: post #803

Earlier quoted context omitted.

Aside from people needing to sleep (back when computers didn't do our trading for us), there's also the matter of information flow: the reason quarterly earnings announcements happen after market close is to avoid giving slightly-faster people an edge. If you could read and digest an earnings announcement faster than all your peers, you could make trades based on the new information before the price has moved. While…

Maybe solution would be freezing certain asset for a week/day/hour after earnings announcement?

Or screw earnings and just have live earnings be something you look up on a website whenever you want for a publicly traded company.

Re: Trading halted as U.S. stocks plummet

#950

Post by asdff » Tue, Mar 10, 2020, 7:05 AM UTC

mars4rp wrote: post #569

tempsy wrote: post #350

Earlier quoted context omitted.

The end game is to save the value of my account without having to sell holdings I want to keep long term for tax reasons. I'm up 8% for the year instead of down 15%.

Your puts are going to expire at some point, what after that? you sell all your holding after expiration? or you buy more puts? puts are expensive, I started 2 weeks ago and paid 7% of my portfolio in premium just as insurance.

You sell them before they expire for profit.