So many ppl made a lot of money at COVID dip in Mar-2020, I wonder how many more will make $$$ in this dip.
Stocks trampled as Nikkei crashes 13%
71–80 of 107 posts
Re: Stocks trampled as Nikkei crashes 13%
#72Earlier quoted context omitted.
My media's telling me that US recession fears are affecting US stocks. And when US stocks are affected, the effect on cryptocurrencies is generally magnified since cryptocurrency is viewed as a risk asset, so one of the first to be sold off in a panic.
Do you have a view on which president candidate is causing the biggest recession fears, if any?
I think it's just the numbers causing the fear.
I actually haven't thought about it in terms of presidential candidate selection. But to engage in conjecture, I'd very uncontroversially say that it's precisely split down party lines - if you're going to vote Democrat then you're going to thing the Republicans are more likely to make recession worse, and vice versa.
Personally, I think parties and politicians are somewhat leaves on the stream of momentum and world events. They may have some control of variations in speed and direction, but nowhere near what they're blamed / given credit for.
This recession is a predictable outcome of the global shake up caused by COVID, and particularly the money printing / incentive cheques, which was a political decision. But not doing it could have had a worse result, who knows?
Japan's situation, Ukraine, and now Israel and Iran, those destabilising forces are going to do more to world economics than any individual politician or country (although the US's influence is outsized).
Re: Stocks trampled as Nikkei crashes 13%
#73Does this have anything to do with the Japanese Yen going up almost 13% relative to the USD in the last 30 days? https://i.imgur.com/vBKuj9n.png
The BoJ put interest rates up last week, which surprised everyone because they've been an outlier for a long time in having negative interest rates and then a 0% rate. That strengthened the currency even more.
If the yen strengthens, then it means the goods sold by Japanese companies become more expensive for foreign buyers, so they'll sell less and earn less. Along with fears of the US economy starting to struggle (worse than expected job figures last week) it's a perfect storm. Gains up to this year have been good so for many firms wanting to de-risk they can still sell now and still make a profit.
Re: Stocks trampled as Nikkei crashes 13%
#74It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…
I think you’re right, and even though it scares me a lot seeing my portfoilio down like this, I still try to see it as an opportunity to buy at a discount. It means I have to hold onto some more liquid funds, but i think it can turn out to be well worth it if you’re long term.
You can only buy at a discount if you are holding cash to start with....
Re: Stocks trampled as Nikkei crashes 13%
#75It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…
I wonder if it's by design.
Re: Stocks trampled as Nikkei crashes 13%
#76Does this have anything to do with the Japanese Yen going up almost 13% relative to the USD in the last 30 days? https://i.imgur.com/vBKuj9n.png
One story doing the rounds: the Japanese central bank was lending at roughly 0%. So the carry trade involved borrowing Yen, buying foreign currency, letting it appreciate (or investing it?) and paying back. Now the central bank has raised interest rates, so this trade is unwinding: the Yen is rising, and Japanese firms are selling their foreign investments to cover. (I hope I have this right.)
Re: Stocks trampled as Nikkei crashes 13%
#77Why would a high amount of trades trigger circuit breakers? That is just network traffic not power load, no?
Japanese markets limit the maximum amount stock can move in single day. These limits are known as circuit breaks, basically when you get over current that is too much drop it shuts off.
Not sure if there is same for other direction too.
Re: Stocks trampled as Nikkei crashes 13%
#78Why might this be affecting BTC?
Markets move together, even when they're not "supposed" to.
I don't find it at all surprising that "tech" "gold" would be correlated with other tech stocks. And tech stocks being so big dominating most of the market. Leading to general correlation between everything.
Bitcoin is probably lot less safe heaven than most people invested in it think.
Re: Stocks trampled as Nikkei crashes 13%
#79It’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy wa…
Japan is notable because they're one of the clearest indicators that 'stocks always go up' is simply not true. This [1] is the Japanese stock market (Nikkei225) inflation adjusted. It reached its highest point in December 1989. It's unfortunate that that table ends in 2013 because obviously a huge amount has changed since then, but even in unadjusted currency [2], its current price is lower than in 1989. For those wh…
From an investor point of view, this is a wrong way of looking at it.
Companies can do 2 things with their revenues: reinvest into the company (stock price grows), or take it out as profit (dividends, value of company stays the same).
Only looking at stock price is too narrow minded. Maybe companies don't want to grow and just take the profit.
For the case of Japan, let's take a look at stock price + dividend reinvestments: Nikkei 225 Total Return (N225TR) https://www.investing.com/indices/nikkei-225-total-return-hi...
And what do you know, it grows.
Re: Stocks trampled as Nikkei crashes 13%
#80Earlier quoted context omitted.
Things get really out of hand when there's a big move outside of the US trading hours because liquidity is so thin. Usually it recovers of course, the scary thing is when it degenerates into a 2020 covid style selloff - 10% down day followed by a number of 10% down days.
2020? go check out 1929-1932
Those times are not coming back. We need to stop looking at market behavior 100 years ago. Modern markets and society function very-very differently. Even looking at 2008 as a model for how modern crises happen is very likely to give you incorrect conclusions.
Everything has sped up drastically. Information (whether valid or invalid) is priced in vastly faster. In 2008 you had a month to buy various crisis insurance products (e.g. variance swaps), in 2020 you had days. The next crisis you might only have hours.
Sure, fundamental human behavioral patterns stayed the same, but these are things like herding behavior (monkey see price go up, monkey buy, monkey see price go down, monkey sell), panics, various interests fanning the flames one way or another, etc. But the interconnectedness and the speed at which information travels across that interconnect has increased orders of magnitude just over the last decade.
It's important to recognize that the increased processing speed has a non-linear impact on the system as a whole. New kinds of failure modes and boundary conditions arise that never happened before. New feedback loops get amplified and old ones stop working as they operated on different time scales.