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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#831

Post by prewett »

A4ET8a8uTh0 wrote: post #198
bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Without going into too much detail, short answer is yes. Most people don't seem to know how far away current setup is from 'free market' touted in school. It is weird given that this information is not hidden. It is just not widely spread.

"Free market" doesn't mean "no government regulation". It means that the market responds purely to supply and demand. Government regulation can distort the response of supply and demand, but so do monopolies and lack of information parity between buyers and sellers. From what I've been reading here, the trade halts help prevent a situation where prices are effectively unknown because there are not enough buyers. Such a system is not a "free market" because information is not communicating between buyers and sellers. It sounds like the timeout helps people who want to buy stop panicking and discover what price they are willing to buy. Effectively it gives time for price information to get transmitted across the system. This actually helps restore free market. (Other government regulation, like trust-busting can also have this effect.)

Re: Trading halted as U.S. stocks plummet

#832

Post by AgentOrange1234 »

chenster wrote: post #821
ganeshkrishnan wrote: post #820

Earlier quoted context omitted.

This makes sense if you have huge quantity of cash where leverage is not an issue. With limited cash, you have to think very different from Warren.

I don't disagree. If you are in it for the long term, there's really nothing to worry about. The market eventually will bounce back. It always does.

Well, so far...

Re: Trading halted as U.S. stocks plummet

#833

Post by coliveira »

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…

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.

Re: Trading halted as U.S. stocks plummet

#834

Post by neomantra »

ct0 wrote: post #645
pgwhalen wrote: post #479

Earlier quoted context omitted.

The market is still very much driven by humans; the computers just help out, to varying degrees. The idea that computers are trading unattended is a myth that I hope would die.

Sure, while humans are critical to maintaining the infrastructure of the various markets, but we are beyond the days where markets were tracked on a chalk board. The NASDAQ is very much running on servers from an undisclosed data center off route 95 in New Jersey.

Not undisclosed, primary is Equinix NY11:

https://www.nasdaqtrader.com/Trader.aspx?id=POPs

Re: Trading halted as U.S. stocks plummet

#835

Post by bawolff »

dnadler wrote: post #748
_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…

What led you to the conclusion that the market will not behave as it has historically over the long-term?

The same thing that lead me to the conclusion that the sun will rise tomorrow.

I don't really know for sure, but it seems to fit the pattern and that's the best i can hope for in absence of other data.

Re: Trading halted as U.S. stocks plummet

#836

Post by jliptzin »

munk-a wrote: post #548
in_cahoots wrote: post #522

Earlier quoted context omitted.

That’s only true under current conditions. If we move to social distancing themselves the doubling rate may slow down significantly, which would actually increase the time to burnout.

It seems unlikely that will happen in the US due to the executive branch messaging very much being "Everything is fine folks - oh please don't stop going to work!"

It is comically right out of the plot of every pandemic-type movie where no one in charge takes it seriously enough at the beginning and it therefore spreads wildly out of control.

Re: Trading halted as U.S. stocks plummet

#837

Post by AgentOrange1234 »

btilly wrote: post #787
dnadler wrote: post #748

Earlier quoted context omitted.

What led you to the conclusion that the market will not behave as it has historically over the long-term?

Over the long term. Let's go back 150 years and invest in a random stock market wherever you happened to live. If you lived in the USA or England, this was a great idea and worked out brilliantly. If you lived in countries like Italy, Germany and Russia, you lost everything when those stock markets were closed down in the first half of the 20th century. You can't say "historically over the long term" then project for…

This is very interesting. I never heard about these other stock markets. Going to have to look into this.

Re: Trading halted as U.S. stocks plummet

#838

Post by skybrian »

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,…

Even if you are a value investor and in it for the long haul, you may have some opinion about what's a good price versus a bad price. You don't know tomorrow's price but on rare occasions it may be that a solid company's stock looks particularly cheap for a reason you know. Should you ignore bargains entirely?

Also, for many retail investors, transaction costs are now zero. Maybe the conventional advice needs an update?

Re: Trading halted as U.S. stocks plummet

#839

Post by nostrademons »

hosteur wrote: post #796
8ytecoder wrote: post #468

Earlier quoted context omitted.

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?

Discover's offering 1.6%.

More generally, bankrate.com offers comparison shopping for banks, and includes online-only high yield savings. It has a bunch listed at 1.9%, and a few dozen at 1.6% or better:

https://www.bankrate.com/banking/savings/rates/

Re: Trading halted as U.S. stocks plummet

#840

Post by scottlegrand2 »

AgentOrange1234 wrote: post #832
chenster wrote: post #821

Earlier quoted context omitted.

I don't disagree. If you are in it for the long term, there's really nothing to worry about. The market eventually will bounce back. It always does.

Well, so far...

And if it doesn't hopefully you stocked up on toilet paper and purell to trade in the new hellscape economy...
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