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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#401

Post by axaxs »

thedance wrote: post #340
zyang wrote: post #258

Earlier quoted context omitted.

Please don't shuffle your retirement investments based on market volatility. Best thing is just do nothing and ride it out.

This advice is both common and crazy. Each individual does not live the average life. Being able to recognize once-in-a-lifetime events, and act on them, is a rational strategy, even if it seems like it is not the optimal strategy for the perfectly spherical portfolio belonging to a person with infinite lifetime.

I agree with this. I'd never touched my 401k until now, well, a few weeks ago. Anyone who couldn't see that this virus was a world-changing event wasn't paying attention. I did 'time' my way out of the market, but not so much back in. Even if I miss some gains, I just want things to stabilize some before going back in long.

Re: Trading halted as U.S. stocks plummet

#402

Post by Frost1x »

1121redblackgo wrote: post #365
Frost1x wrote: post #348

Earlier quoted context omitted.

>Bear markets are paved with the blood of optimists. I'm going to shamelessly borrow this.

I wonder if the inverse rings true as well. Bull markets are paved with the blood of pessimists.

So do the meager realists get to avoid bloodshed? Or, better yet, capitalize on the blood of pessimists and optimists?

Re: Trading halted as U.S. stocks plummet

#403

Post by allovernow »

twblalock wrote: post #362
allovernow wrote: post #279

Earlier quoted context omitted.

What? That's how you minimize risk because there's a good chance the markets will continue to slide. It's literally why the markets are down - because investors are pulling out and parking their cash in safer havens.

> What? That's how you minimize risk because there's a good chance the markets will continue to slide. You don't minimize risk by reacting to daily market fluctuations. You minimize risk by choosing an asset allocation that allows you to ignore those fluctuations.

The market has been dropping for a week. Indicators across the board are long term negative. We are well past the realm of daily market fluctuations.

Re: Trading halted as U.S. stocks plummet

#404

Post by sgc »

tasuki wrote: post #387
sgc wrote: post #265

Earlier quoted context omitted.

Don't buy after the first big city is quarantined. Maybe after the second or third... But know you are taking an incredible risk unless you are using funds you can hold in that position for years.

> But know you are taking an incredible risk unless you are using funds you can hold in that position for years. Isn't that the case whenever one buys equities? Why is now special? It's definitely less risky to buy now than it was in January.

Yes, but I don't want to be the source of somebody doing something stupid.

Re: Trading halted as U.S. stocks plummet

#405

Post by sg47 »

CWuestefeld wrote: post #133
dd36 wrote: post #121

Earlier quoted context omitted.

Trump running massive deficits and forcing rate cuts when times are good is Trump’s shaky ground.

Trump's shaky ground? Or everybody since at least the turn of the century? (Also, note that Trump doesn't get to run deficits. That's Congress's territory.)

Wait what? The administration decides the spending that Congress can approve or reject. Trump was absolutely pushing for the tax cuts when Repubicans had control of the House. Why is no Republican harping about the deficit now? I can understand if the deficit was due to infrastructure spending but giving Zuckerberg a tax cut is not going to help the economy.

Re: Trading halted as U.S. stocks plummet

#406

Post by SubiculumCode »

Frost1x wrote: post #383
_se wrote: post #186

Earlier quoted context omitted.

"They" don't do anything - this is called a circuit breaker, and is automatically triggered. There are three breakers: L1 - 7% down before 3:25pm - 15 minute halt L2 - 13% down before 3:25pm - 15 minute halt L3 - 20% down - halted for the remainder of the day Only a single L1 and a single L2 breaker can occur in a single day, e.g. the market falling below 7%, rising, then falling again will not trigger a second L1 br…

To address OPs point, someone did do this. Someone (or more accurately, a lot of people) stepped in and introduced an artificial construct that constrains trading under certain conditions. It's not intrinsically a "bad" thing per se and it was something already established long before the current set of conditions arose. But none the less, it's an artificial constraint introduced on trade systems that is likely benef…

To those who believe that all markets are rational and efficient, that interventions cause more harm than good, y, an enforced halt seems to be anti-capitalist.

But we are not rational actors. We can get into panics. Panics can stir more panic. Forced breaks allow for the market to reassess data for a few minutes without fear of loss for not acting immediately.

Re: Trading halted as U.S. stocks plummet

#407

Post by OscarCunningham »

neural_thing wrote: post #339
cletus wrote: post #315

So, children of summer (there are many here who have only known the longest bull market in the last century), let me give you some free advice. If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. Some points to consider: - If your time horizon is 10+ years out probably none of this ma…

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

EDIT: This is wrong.

There's no reason to ignore dividends. If you look at total return then it's above the high.

Re: Trading halted as U.S. stocks plummet

#408

Post by throwsprtsdy »

rafiki6 wrote: post #316
_se wrote: post #186

Earlier quoted context omitted.

"They" don't do anything - this is called a circuit breaker, and is automatically triggered. There are three breakers: L1 - 7% down before 3:25pm - 15 minute halt L2 - 13% down before 3:25pm - 15 minute halt L3 - 20% down - halted for the remainder of the day Only a single L1 and a single L2 breaker can occur in a single day, e.g. the market falling below 7%, rising, then falling again will not trigger a second L1 br…

I thought these circuit breakers actually existed to stop algo's from going haywire?

They exist to stop any participant, human or electronic, from going haywire.

Re: Trading halted as U.S. stocks plummet

#409

Post by jahlove »

jcape wrote: post #369
bluGill wrote: post #330

Earlier quoted context omitted.

They have existed since the crash of 1929. There were no algorithms in place then. The goal was just to force human traders caught up in the moment to take a break and stop panicking. I assume they have been tweaked since 1929, but they started with the crash back then. Edit: someone else is claiming 1987 as the start. My memory says 1929. If this matters do your own research.

https://www.investopedia.com/terms/c/circuitbreaker.asp

> Regulators put the first circuit breakers in place following the market crash of October 19th 1987, when the Dow Jones Industrial Average (DJIA) shed 508 points (22.6%) in a single day. The crash, which began in Hong Kong and soon affected markets worldwide, came to be known as Black Monday.

Re: Trading halted as U.S. stocks plummet

#410

Post by joosters »

dannylandau wrote: post #341
cletus wrote: post #315

So, children of summer (there are many here who have only known the longest bull market in the last century), let me give you some free advice. If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. Some points to consider: - If your time horizon is 10+ years out probably none of this ma…

With zero or negative growth looming both in China and Germany in the coming quarter, it is a safe assumption that this market has much lower to go to reflect those new realities.

You: 1) think know better than the rest of the market, and 2) are sure of yourself (‘it is a safe assumption...’)

Please don’t go trading!

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