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

I’m Still Going Long and Hoping the Markets Go Down

blogmaverick.com

Post reply on HN
Print view View original

31–40 of 69 posts

Re: I’m Still Going Long and Hoping the Markets Go Down

#31

Post by alecco »

steveplace wrote: post #3
timcederman wrote: post #2

I hate being such a sook about the markets. I want to sell now and buy when it's lower, but I'm worried we're at bottom. That said, I thought we'd hit bottom yesterday. And the day before that. And the day before that.

If you didn't have a risk management plan in place, for shame. Anyways, here's some stuff that will take the fear out of you. http://bigpicture.typepad.com/comments/2008/10/10-bullish-si...

What? That is hocus pocus. And based on what? Zero analysis of what were the measures taken. And many other things unaccounted like shadow finances, global trade block, insurance chaos, etc.

Their anecdotal analysis is bad. They didn't check recent crisis in other countries, for example. The Asian crisis and the Japanese stagflation are certainly more similar to the current situation than US 1929, 1973 or even 2002.

It all depends on the next steps. Bailouts failed, inter-bank credit is still dead. There wasn't yet deleveraging.

I can do many [better] things with my cash than put in stupidly risky stocks at the moment.

Re: I’m Still Going Long and Hoping the Markets Go Down

#32

Post by alecco »

maurycy wrote: post #26

Good entrepreneur does not necessarily means a good investor.

Indeed!

And even good investors can miss the mark bad in volatile times. Like Buffett with Goldman Sachs if they don't pick up and if more and more of the bailout money goes to recapitalization, covering a bit on swaps (directly or indirectly), and bailing out real companies (like GE, GM, and Ford.)

Re: I’m Still Going Long and Hoping the Markets Go Down

#33

Post by 13ren »

nostrademons wrote: post #23
davidw wrote: post #12

Earlier quoted context omitted.

Here's a question for the quant-minded: > So I'd be looking for value stocks that have a P/E ratio that's overly low The thing that makes me nervous about that kind of thing is that there are people who have written code that knows a lot more than my sum total knowledge of the stock market to look for those sorts of factors. Given actors like that, is there any reason to invest in anything but broad index funds?

I worked for a financial software startup from 05-07, and in my spare time there, wrote one of those programs that scans the whole market for stocks with low P/Es and consistent earnings. I found that nearly everything was fairly valued. When a stock had a low P/E, it was nearly always for a reason, like it being a homebuilder or financial or having a shaky economic position. No way was I going to invest in those. Wh…

Another constraint on institutional investors is short-term profitability: they need to report annually, to compete for customers; whereas an individual is free to invest for the long-term.

Re: I’m Still Going Long and Hoping the Markets Go Down

#34

Post by astine »

alecco wrote: post #29
astine wrote: post #25

Earlier quoted context omitted.

Well, the Great Depression had both the New Deal and the WWII to suffer through. Even if you support the former, you still have to admit that the later was a downer. Hopefully, we won't have to worry about either of those for time being.

...Now that there's no "world police" around?

Huh?

Re: I’m Still Going Long and Hoping the Markets Go Down

#35

Post by nandemo »

kingkongrevenge wrote: post #20
davidw wrote: post #15

Earlier quoted context omitted.

> The effect of the sun seems to have been quite big. For shares traded in New York, for instance, annualised returns on perfectly sunny days averaged 24.8%, compared with 8.7% on perfectly cloudy days. Moreover, unlike some stockmarket “anomalies” discovered by economists, investing by the sun would have been more profitable than simply investing in the market index, even after subtracting trading costs. Alas, this…

> What hope does an individual have? A whole lot of people support themselves by trading successfully. The thing is, making decent money by trading is a full time job, not an after-hours hobby. You CAN make money designing trading strategies. People do it. The question is simply whether the EV returns on your time will be higher than working on an actual job or businesses. Someone smart enough to make a winning tradi…

People who support themselves by trading successfully are likely working for a company (bank or hedge fund, etc). Often they are dealers, who make money on the bid-ask spread, so they don't bear as much risk as (say) traders working on prop desks. These depend more on the success of their trades for their income, but even so they get a non-negative income. Now, independent day traders working in their underwear is a different story. Not only they bear all the risk of their trades, they're likely "losers" (in the game theory sense) in average.

Re: I’m Still Going Long and Hoping the Markets Go Down

#36

Post by nandemo »

kingkongrevenge wrote: post #7
DanielBMarkham wrote: post #4

It's a great time to buy. I haven't been in the market for a couple years, but I'm salivating over this downturn. Sorry for all those losing money, but in my opinion this is a buying opportunity like there never was before.

The markets will probably bounce in the next week or two, so there's a trading opportunity, but the historical record says you're a fool if you buy to hold now. Ignoring that stocks probably have more to fall, the behavior of falling markets is that they bottom and then stay at the bottom for a long time. Things trade sideways for a long time before any secular bull kicks off. You do not have to worry about missing t…

You do have to worry about missing the boat. Historically, there are a few days in the year for which the daily return is huge, say 4 or 5%. You cannot guess in advance. If you miss a couple of very good days, your return might be much lower than the market's.

Re: I’m Still Going Long and Hoping the Markets Go Down

#39

Post by mattmaroon »

rtf wrote: post #11
josefresco wrote: post #9

Earlier quoted context omitted.

The 'going back up' part is where all the money is made.

Exactly. If you invested in the index, you break even over that period. But if you invest in big winners(taking Apple and Microsoft for known examples in tech) you come out way ahead.

Everyone sets out to invest in the big winners. It's so hard to do with any sort of accuracy as to be nearly impossible.

Re: I’m Still Going Long and Hoping the Markets Go Down

#40

Post by mattmaroon »

astine wrote: post #25
davidw wrote: post #5

http://economix.blogs.nytimes.com/2008/10/10/how-long-before... > Some may also wonder how long it will take the market to “recover.” It depends exactly what is meant by “recover,” of course, but one measure might be when the market returns to its pre-crash peak. The historical data is somewhat more distressing in this context. > After the Great Depression, it took 29 years — until 1958 — for the market to reach its…

Well, the Great Depression had both the New Deal and the WWII to suffer through. Even if you support the former, you still have to admit that the later was a downer. Hopefully, we won't have to worry about either of those for time being.

I think you've got your history wrong. WWII was what ended the Great Depression. From Wikipedia:

"The end of the depression in the U.S. is associated with the onset of the war economy of World War II, beginning around 1939."

Also from War Economy entry:

"On the supply side, it has been observed that wars sometimes have the effect of accelerating progress of technology to such an extent that an economy is greatly strengthened after the war, especially if it has avoided the war-related destruction. This was the case, for example, with the United States in World War I and World War II."

It didn't suffer through it at all, it got fixed by it.

Post reply on HN