OT - Dow plunges 1,175 - worst point decline in history

[verticaldoug]

Originally Posted by MattTuck

I am not sure I'd want to own this market over the weekend as a speculative trade. Yikes! Barring finding a miracle cure, it seems the news could only get worse in the time between Friday and Monday.

I think Italian data is beginning to flatten. I'm optimistic

[Tony T]

Dow soars 1,985 (9.35%) - best point rise in history

[fa63]

Just watched the market go up more than 1% in one minute before close... Hope whoever programmed these algorithms know what they are doing :-)

[MattTuck]

Originally Posted by verticaldoug

I think Italian data is beginning to flatten. I'm optimistic

You could be right. We'll see on Monday morning

[CNY rider]

Originally Posted by MattTuck

I am not sure I'd want to own this market over the weekend as a speculative trade. Yikes! Barring finding a miracle cure, it seems the news could only get worse in the time between Friday and Monday.

Yeah that was thrown out there for those who just absolutely, positively couldn't resist throwing their money down.
Fortunately the entry parameters were not met.
The buying frenzy near the close is disconcerting.
I suspect a wonderful, shortable bounce is unfolding.
There is very likely to be a re-test of the lows in the next few weeks.

[Ken Robb]

I agree that a new 15 year mortgage might make more sense than a home improvement loan with lower rate and more flexibility as to when you pay it back. If I weren't so lazy I might take out a sub-3% loan and invest the proceeds because I'm pretty sure my conservative portfolio will give AT LEAST 5% return over the next 15 years.

[verticaldoug]

Originally Posted by MattTuck

You could be right. We'll see on Monday morning

We will know Sunday. 2 more days of Italian data is all we need.

Versus Italy, USA is T-12, FRANCE T-9 and Spain T-7

US could be in good shape here
Mid April

[Ozz]

Originally Posted by Tony T

Dow soars 1,985 (9.35%) - best point rise in history

What is the opposite of a "dead cat bounce" called?

[verticaldoug]

Originally Posted by Ozz

What is the opposite of a "dead cat bounce" called?

A widow maker. It kills the shorts.

[Burnette]

Instead of "buy the dip" it was more "buy the crater".

[echappist]

Originally Posted by Ozz

What is the opposite of a "dead cat bounce" called?

The percentage increase is still not as high as either of the 10%+ daily increases in October of 2008

We all know what happened after October, as we didnt see the nadir until 2009.

[tomato coupe]

Originally Posted by Ozz

What is the opposite of a "dead cat bounce" called?

Profit taking.

[jimcav]

It looks like USA new cases of COVID19 is doubling at the same rate as Italy or Iran. I really hope that can flatten, but afraid the horses got too far from the barn so to speak for that too happen soon enough to be calming to people's fear/anxiety. I don't think people generally appreciate or understand exponential growth, but once the reality of that hits them, coupled with reports of economic impact, then I suspect the markets may go negative again until we are 40-60 days out from the start of our outbreak.

[MattTuck]

Originally Posted by verticaldoug

We will know Sunday. 2 more days of Italian data is all we need.

Versus Italy, USA is T-12, FRANCE T-9 and Spain T-7

US could be in good shape here
Mid April

So, two unrelated thoughts.

First: Just because we might have figured out how to slow the spread, doesn't mean that economic activity will return to normal in a few weeks. All of these cancellations, social distancing, and focus on hand hygiene are all meant to decrease r0, the contagiousness of the virus. It is not inconceivable that we're in for months or more of these emergency measures. The direct and indirect economic impacts are not yet fully understood. Just saying that we've made the right decisions thus far (from a medical standpoint) doesn't mean we're out of the woods with the economic impact.

Second, and unrelated to Doug's post, the NYSE composite hit a high of around 10,387 in September 2007. It closed today at 10,852. Was actually 10,060 yesterday at close. Meaning, if you had bought that diversified index in September 2007 and just held it, you'd essentially have made no money. That is more than a decade with nothing to show for it.

That is why it is so important to space out your initial investments to prevent that outcome, especially when you are looking at a market that is at all time highs.

We sometimes talk about how great this bull market has been, and indeed it has been great for many, especially when you are looking at it from the low point in 2009. However, if you look at it from the peak in 2007, it isn't as rosy. The same general pattern is true for Russell 2000 and S&P500, but not as dramatic. I think this is probably because tech companies that saw huge run ups during the bull market were more likely to be on NASDAQ than NYSE, and thus not in that composite.

[CNY rider]

Originally Posted by MattTuck

So, two unrelated thoughts.


Second, and unrelated to Doug's post, the NYSE composite hit a high of around 10,387 in September 2007. It closed today at 10,852. Was actually 10,060 yesterday at close. Meaning, if you had bought that diversified index in September 2007 and just held it, you'd essentially have made no money. That is more than a decade with nothing to show for it.

That is why it is so important to space out your initial investments to prevent that outcome, especially when you are looking at a market that is at all time highs.

We sometimes talk about how great this bull market has been, and indeed it has been great for many, especially when you are looking at it from the low point in 2009. However, if you look at it from the peak in 2007, it isn't as rosy. The same general pattern is true for Russell 2000 and S&P500, but not as dramatic. I think this is probably because tech companies that saw huge run ups during the bull market were more likely to be on NASDAQ than NYSE, and thus not in that composite.

Do you know anyone who invests in the NYSE composite?
Is there even a vehicle for doing that?