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Benihana
05-06-2010, 03:14 PM
Down as much as 900 points as of 2:45 ET on Greek-debt concerns.


Crazy.

bucksfan2
05-06-2010, 03:19 PM
Lost some serious money today.

oneupper
05-06-2010, 03:20 PM
Market had been rising without much money flowing into it.

That will produce air-pockets such as this.

Cyclone792
05-06-2010, 03:21 PM
I've been expecting a correction, but I didn't expect one to happen as quickly as what we've seen this week.

There's much more to say about all this, but it likely belongs in the Peanut Gallery.

bucksfan2
05-06-2010, 03:33 PM
Market had been rising without much money flowing into it.

That will produce air-pockets such as this.

Can you explain without getting too technical and not breaking any rules?

oneupper
05-06-2010, 04:10 PM
Can you explain without getting too technical and not breaking any rules?

Sure. Investors haven't been committing a lot of new money to the stock market, but it has been grinding higher. The same cash was just being recirculated. The market kept on going higher because of the expectations that it was going to continue higher. (side note)

Once that expectation was broken, there wasn't a steady incoming flow of cash ready to buy the dip generated by a little selling pressure. And it escalated...like this week and particularly today. Lack of buyers rather than excess of sellers.

(side note - Investors buy for two main reasons: because they think its cheap or because they think its going up)

Nothing textbook here. Just many years watching the markets.

jredmo2
05-06-2010, 04:10 PM
Can you explain without getting too technical and not breaking any rules?

I think what he basically means is that the stock market had been steadily rising faster than actual GDP growth, resulting in overvaluation and then a correction today.

While that's true I wouldn't ignore widespread fears that we are on the precipice of an international debt crisis. A very scary and unknown chain of events would transpire should a major international default occur. That's not exactly what is happening here, but it's frighteningly close.

BuckeyeRed27
05-06-2010, 04:19 PM
Details are still coming, but it sounds like this had a lot more to do with trading error and incorrect electronic pricing of P&G stock than anything else.

Will M
05-06-2010, 04:28 PM
I think what he basically means is that the stock market had been steadily rising faster than actual GDP growth, resulting in overvaluation and then a correction today.

While that's true I wouldn't ignore widespread fears that we are on the precipice of an international debt crisis. A very scary and unknown chain of events would transpire should a major international default occur. That's not exactly what is happening here, but it's frighteningly close.

FYI - the earnings of large cap stocks can rise faster than GDP growth because there are a lot of multinationals in the S&P 500. they can benefit from the current growth in foreign 'emerging markets' (think China) that is greater than the US growth. they are also currently 'tightening the belt' so to speak by doing things like layoffs, cutting excessive salaries & getting their debts in better shape. some of these latter issues are one offs in terms of profitability but the exposure to higher growth markets is not.

muddie
05-06-2010, 04:34 PM
If you're in for the next 5-10 years this is good stuff. The market has been moving up on fairly light volume and that has concerned me. There is a ton of money sitting in bonds, money market, and pillow cases that will eventually find its way back to the market.

It does look like there was some screw up creating the plunge.

Blimpie
05-06-2010, 05:12 PM
Greece might have started the economic death spiral due to their contribution to the European debt, but it will likely end up being the messes in Spain and Portugal that seal the deal.

bucksfan2
05-07-2010, 08:35 AM
Yikes! One big error led to a 600 point sell off. The mistrade of PG for $39 produced a spiral of events that led to some S&P 500 stocks going to $.0.

Kingspoint
05-07-2010, 06:05 PM
Lost some serious money today.

You can only lose if you sell.

Did you sell?

If not, you didn't lose anything.

bucksfan2
05-12-2010, 10:18 AM
You can only lose if you sell.

Did you sell?

If not, you didn't lose anything.

No I didn't sell anything. More of a shock to see the market plunge nearly 1000 points. Reminded me of 2008 for a second. Actually I wish I had more funds available to double down.

redsfandan
05-20-2010, 05:39 PM
I'm really glad that my investments have been (for the most part) pretty conservative the last few months. Just not a stable market right now.

SeeinRed
05-20-2010, 06:10 PM
I know a financial advisor who gave some pretty sound advice whenever someone would call him freaking out about the market. The first advice was about taking the long view about it, which I think is the automatic response for just about everyone in the business. The second piece of advice was turn off your tv, stop looking at the paper, and don't worry about what everyone else is saying.

I really think everyone would be a lot better off without some of the 24/7 stream of information that they get. Especially when they really have no idea what it all means. Everyone is a financial expert it seems anymore. Everyone can tell you what is wrong, and how to fix it even without any basic knowledge of the economy.

I know a couple people who work with 401k's at a large company who say you wouldn't believe the amount of people who call to get out of the stock market when it shoots down. These people actually believe they are doing the right thing by selling when it is falling. Then they wonder why they are always losing money instead of making it! These are the same people who hear that a company hit an all time high and then want to get onboard. I'm no expert, but even I see the flaw in that line of thinking.

I for one think that the excess in information is not always a good thing if you don't know how to deal with it. People who look up everything on the internet now think they are experts in whatever field they can look up. I see it every day.

JMHO

Rojo
05-20-2010, 06:19 PM
Actually I wish I had more funds available to double down.

The gambler's credo.

Of course it's not wise to sell after a plunge and it might be a good time to buy.

Truly, I'd only look at the market as something recreational, like craps.

redsfandan
05-21-2010, 09:49 AM
Noticed that the Dow started under 10,000 today. Kinda wondering when I should move the money that I already had on the sidelines back into stocks. Maybe next week.

bucksfan2
05-21-2010, 09:59 AM
The gambler's credo.

Of course it's not wise to sell after a plunge and it might be a good time to buy.

Truly, I'd only look at the market as something recreational, like craps.

Not really a gambler's credo. Actually my dad considers the stock market educated gambling.

A couple of years ago I bought some stock in BAC around the 44.50 mark. It paid a very nice dividend and had gotten as high as 55. I watched go all the way from $55 to $4. When it got to $4 I considered buying back but was talked out of it because of nationalization fears. Even after his 10% pull back it sat around $15.

There is a lot of value out there right now, its just such a shaky market right now its tough to make any type of buys.

edabbs44
05-21-2010, 10:48 AM
Noticed that the Dow started under 10,000 today. Kinda wondering when I should move the money that I already had on the sidelines back into stocks. Maybe next week.

I moved 50% of my 401k into cash after the big rebound last Monday.

Hoosier Red
05-21-2010, 11:04 AM
My investment professor brought up the story of a mutual fund(he gave the name and we looked it up to verify but I forget what it was)which had returned some good percentages for something like 10-15 years, I believe in the 15-20% annual return. But the average investor in the fund had lost money because they sold in the down times and bought when the fund had a good quarter/month/week and made the news.

forfreelin04
05-21-2010, 11:12 AM
I know a financial advisor who gave some pretty sound advice whenever someone would call him freaking out about the market. The first advice was about taking the long view about it, which I think is the automatic response for just about everyone in the business. The second piece of advice was turn off your tv, stop looking at the paper, and don't worry about what everyone else is saying.

I really think everyone would be a lot better off without some of the 24/7 stream of information that they get. Especially when they really have no idea what it all means. Everyone is a financial expert it seems anymore. Everyone can tell you what is wrong, and how to fix it even without any basic knowledge of the economy.

I know a couple people who work with 401k's at a large company who say you wouldn't believe the amount of people who call to get out of the stock market when it shoots down. These people actually believe they are doing the right thing by selling when it is falling. Then they wonder why they are always losing money instead of making it! These are the same people who hear that a company hit an all time high and then want to get onboard. I'm no expert, but even I see the flaw in that line of thinking.

I for one think that the excess in information is not always a good thing if you don't know how to deal with it. People who look up everything on the internet now think they are experts in whatever field they can look up. I see it every day.

JMHO

That is good advice and I'm certified to tell you that.

The best thing you can do is rely on an adviser you trust. The market will have its ups and downs, but good people are hard to find. Find someone that will take care of you and live your life.

redsfandan
05-21-2010, 11:26 AM
My investment professor brought up the story of a mutual fund(he gave the name and we looked it up to verify but I forget what it was)which had returned some good percentages for something like 10-15 years, I believe in the 15-20% annual return. But the average investor in the fund had lost money because they sold in the down times and bought when the fund had a good quarter/month/week and made the news.
They have investment professors now? Hell, I had to learn what I know on my own. lol

Yeah, I agree that moving money in and out of mutual funds isn't a good idea. I've had money on the sidelines for awhile though and have just been waiting for something to buy and the time to do the research. By the end of this month I'll probably have moved most of it into some funds with good track records and moved on to whatever is next on the to do list.

Unassisted
05-21-2010, 12:36 PM
If you're retiring soon, it matters that your retirement fund lost thousands in a downturn. If you're not retiring soon, you're likely to regret tinkering with your retirement funds' investment mix more than once a year to out-smart a downturn, because you'll put yourself at risk of missing the big gains. JMHO, of course.

Hoosier Red
05-21-2010, 01:02 PM
They have investment professors now? Hell, I had to learn what I know on my own. lol

Yeah, I agree that moving money in and out of mutual funds isn't a good idea. I've had money on the sidelines for awhile though and have just been waiting for something to buy and the time to do the research. By the end of this month I'll probably have moved most of it into some funds with good track records and moved on to whatever is next on the to do list.

Yeah it was a class for my MBA. It moved a little bit into corporate investments but mainly the guy just wanted to teach how to be good individual investors.

oneupper
05-21-2010, 04:23 PM
My investment professor brought up the story of a mutual fund(he gave the name and we looked it up to verify but I forget what it was)which had returned some good percentages for something like 10-15 years, I believe in the 15-20% annual return. But the average investor in the fund had lost money because they sold in the down times and bought when the fund had a good quarter/month/week and made the news.

This doesn't make sense. The funds' return IS the average return for the investors (minus loads and whatnot). By definition.

I've seen this statement before. I think somewhere someone is defining "average investor" in a way that supports the conclusions they wish to make.