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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#791

Post by NeoBasilisk »

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…

Yep, anyone that started investing in 2012 or later is about to learn the true meaning of "Past performance is no guarantee of future results."

Re: Trading halted as U.S. stocks plummet

#792

Post by FabHK »

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…

> […] that spending power will be transferred to a younger generation. Except for what the government steals via a death tax

FWIW, it’s most definitely not stealing.

Re: Trading halted as U.S. stocks plummet

#793

Post by _7fvc »

peisistratos wrote: post #771
carc wrote: post #749

Earlier quoted context omitted.

Lots of bold, unsubstantiated claims. I think every time there is a big peak, or a big valley, some percentage of people are always peddling "but this is different"

> I think every time there is a big peak, or a big valley, some percentage of people are always peddling "but this is different" When stocks crashed in 1929, it was different. In the US we got the New Deal, which still exists in some form. In Germany we got fascism and then a divided Germany for decades. The 1929 crash had effects felt to this day. The DJIA did not recover its 1929 level (not inflation adjusted) unti…

It's useful to read the history of the stock market prior to WW2. It was a casino back then. Our experience post WW2 probably creates a bias. We're used to the stock market stability. But it has some serious structural problem now (e.g. low/0 interest rate). I would not be surprised if it is heading back into casino mode.

Re: Trading halted as U.S. stocks plummet

#794

Post by btilly »

arcticbull wrote: post #781
allovernow wrote: post #696

Earlier quoted context omitted.

China shut down it's economy for two months. Mecca is closed. 8% of Iranian parliament was infected as of last week and two were dead. Democratic nations are putting millions of people on lockdown overnight (see Lombardy, Italy and the 2AM press conference). This isn't the god damn flu and its irresponsible to say so at this point.

It is the flu, what's different is not the threat but our response to it. So far there have been 95,000 flu deaths since October and just shy of 4,000 nCoV-19 but nobody's shutting down China, Mecca or Italy over influenza A.

It is the flu, what's different is not the threat but our response to it.

At current mortality rates, if this infects a good chunk of the world then we are talking about as many people dying worldwide as died during WW II.

Making future projections based on past deaths without considering the appropriate epidemiological model is like being in a car hurtling at a brick wall and saying, "We will be fine, none of us are hurt yet!" It is literally the same category of mistake.

Re: Trading halted as U.S. stocks plummet

#795

Post by vecter »

raydev wrote: post #555
1121redblackgo wrote: post #365

Earlier quoted context omitted.

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

Maybe I'm misunderstanding, but there's no blood from the pessimists since they don't really lose what they have. They just miss out.

People do short or buy put options.

Re: Trading halted as U.S. stocks plummet

#796

Post by hosteur »

8ytecoder wrote: post #468
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…

It's unfortunate to ignore the sentimental nature of markets. In the history of market there has always been either a discount or a premium over fair value. As if by coincidence, I'm reading the intelligent investor and a lot of what Graham said remains true to this date. There's almost always a premium/discount to the fair value of the stock market as a whole. The last few years have been extraordinarily good. Every…

> keep a buffer in cash/high-interest savings account

Where do you find such an account?

Re: Trading halted as U.S. stocks plummet

#797

Post by btilly »

notJim wrote: post #587
badfrog wrote: post #492

Earlier quoted context omitted.

For reference, there have been 3,000 deaths out of 11,000,000 people in Wuhan. That's 0.03% of the population dead and the number of new deaths per day is declining. If the rest of the world comes even close to being as good at quarantine as Wuhan, we'll be way under 2%. Source: https://en.wikipedia.org/wiki/2019%E2%80%9320_coronavirus_ou...

Meanwhile in the US, the CDC appears to be resisting testing people, and as far as I can tell, quarantines are barely even being considered. Washington state is in the top 3 of cases in the country, but 30k people attended a soccer game on Saturday. I hate to contribute to the panic and tinfoil-hat conspiracies, but I'm really concerned about the US response so far.

Meanwhile in the US, the CDC appears to be resisting testing people...

They know something that you don't. Which is that the test has both a high false negative and a high false positive rate. Which means that its effectiveness as a decision making tool is limited.

That said, the longer you wait to start quarantine, the longer you have to keep quarantine measures in place. But on the flip side, if extreme responses are too good, then you increase the risk that on the next serious threat, people will yawn and fail to comply.

Public health has a wicked problem here. The more effective it is, the less that people feel it is needed.

Re: Trading halted as U.S. stocks plummet

#798

Post by [deleted] »

theincredulousk wrote: post #558
the_gastropod wrote: post #466

Earlier quoted context omitted.

Maybe you really are more clever than the rest've us, and have beat the market. Or maybe you got lucky. Or maybe we're only hearing about the winning trades, and you've got some losers we're not hearing about... I suspect it's option 2 or 3. Regardless, this is bad advice.

It isn't bad advice to hedge your position with options, although doing it short term as suggested here is an active trading strategy and inherently more risky. Contrary to popular belief that options = gambling, this is the #1 real utility of them. If 90% of your investments are tied up in S&P 500, it makes sense to hedge that with put options which provide a clearly defined max-loss over the contract duration of th…

[deleted]

Re: Trading halted as U.S. stocks plummet

#799

Post by kortilla »

senordevnyc wrote: post #570
kortilla wrote: post #526

Earlier quoted context omitted.

That’s not optimism. That’s options pricing driven by implied volatility and the current price.

One of us is thinking about implied volatility wrong. My understanding is that it's not a measure of actual volatility, of either the underlying security or the option itself. Rather, it's a measure of how much the price reflects expected volatility in the underlying security. So in a security with ultra-low expected volatility (IV), options that are far out of the money will have much lower premiums than those where…

It’s still not optimism because it doesn’t imply direction. A low implied volatility just means lower expectation of big moves in either direction.

A stock that has gone up like a rocket ship will have a high implied volatility despite no crashes or expectations of declines.

Re: Trading halted as U.S. stocks plummet

#800

Post by nl »

manigandham wrote: post #731
santoriv wrote: post #704

Earlier quoted context omitted.

Very few active fund managers can consistently beat their indexes. Why do you believe you would be better over a long period of time? Vanguard Study of Actively Managed Funds vs Index Performance: https://personal.vanguard.com/pdf/ISGIDX.pdf

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.

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