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

[Louis]

Originally Posted by 54ny77

Damn I hate it when program traders use algorithms that feed off each other and create an endless negative feedback loop.

Kinda like Shimano vs. Campy vs. SRAM thread.

What about Simplex and Suntour?

[54ny77]

Those are the equities in Dallas of bike parts.

Originally Posted by Louis

What about Simplex and Suntour?

[rounder]

We need someone like 1Centaur to explain all this stuff, at a time like this.

[Tickdoc]

Everybody calm down. I’m about to finish my Florida vacation and then everything will go back to normal.

[Louis]

Originally Posted by Tickdoc

Everybody calm down. I’m about to finish my Florida vacation and then everything will go back to normal.

While on vacation you stopped buying, so the market came crashing down?

[1centaur]

Originally Posted by rounder

We need someone like 1Centaur to explain all this stuff, at a time like this.

Common sense says that not a lot of people have decided that the world is a much worse place today than it was a week ago. The numbers that suggest economic strength are pretty good globally at this point. So why does the market drop like this?

There is a lot of automatic trading in this world, trades that happen because of patterns or because ETFs just don't care what something is worth. Momentum begot momentum on the way up so it had to happen on the way down. Trading without human judgment begs for greater volatility than was true historically, and the historically low volatility of the last year was ALSO because a lot of trading was trend-following a good trend.

Anecdotally, actual people seem to think this is a buying opportunity. That probably means they'll start buying as soon as the out-tide looks weak. And then the automatic trading will pick up on that momentum. There will come a day when machines/ETFs/people all want to sell, and that will feel really bad, but it does not seem likely that this pattern is setting up that way today. The market used to "know" because it was the consensus of people making judgments (wisdom of crowds). We're not exactly in that world anymore.

I'm not a stock guy, professionally, so take this for what it's worth.

[joosttx]

Originally Posted by 1centaur

Common sense says that not a lot of people have decided that the world is a much worse place today than it was a week ago. The numbers that suggest economic strength are pretty good globally at this point. So why does the market drop like this?

There is a lot of automatic trading in this world, trades that happen because of patterns or because ETFs just don't care what something is worth. Momentum begot momentum on the way up so it had to happen on the way down. Trading without human judgment begs for greater volatility than was true historically, and the historically low volatility of the last year was ALSO because a lot of trading was trend-following a good trend.

Anecdotally, actual people seem to think this is a buying opportunity. That probably means they'll start buying as soon as the out-tide looks weak. And then the automatic trading will pick up on that momentum. There will come a day when machines/ETFs/people all want to sell, and that will feel really bad, but it does not seem likely that this pattern is setting up that way today. The market used to "know" because it was the consensus of people making judgments (wisdom of crowds). We're not exactly in that world anymore.

I'm not a stock guy, professionally, so take this for what it's worth.

Completely disagree. The world has decided that the world is healed from 2008-9 and those policies that caused it to heal plus a few news ones have made it too hot. Therefore, the market needs to cool down and policies will be put in place to slow it which lessens the $$$ in the future.

I still believe in the efficient market hypothesis

[rounder]

Originally Posted by 1centaur

Common sense says that not a lot of people have decided that the world is a much worse place today than it was a week ago. The numbers that suggest economic strength are pretty good globally at this point. So why does the market drop like this?

There is a lot of automatic trading in this world, trades that happen because of patterns or because ETFs just don't care what something is worth. Momentum begot momentum on the way up so it had to happen on the way down. Trading without human judgment begs for greater volatility than was true historically, and the historically low volatility of the last year was ALSO because a lot of trading was trend-following a good trend.

Anecdotally, actual people seem to think this is a buying opportunity. That probably means they'll start buying as soon as the out-tide looks weak. And then the automatic trading will pick up on that momentum. There will come a day when machines/ETFs/people all want to sell, and that will feel really bad, but it does not seem likely that this pattern is setting up that way today. The market used to "know" because it was the consensus of people making judgments (wisdom of crowds). We're not exactly in that world anymore.

I'm not a stock guy, professionally, so take this for what it's worth.

Thanks!

I was listening to Bloomberg on the way in this morning and they were saying something similar. The economic signs look good and a lot of the decline was due to indexed trading. They viewed it as a market correction, and that there did not seem to be much turmoil in the other investment markets.

But they said that if the time comes where the economic signs do not look good and something like this happens, then look out.

[Tony T]

Today we had the 2nd worst point decline in history: -1,033

Ugly 5 day chart:

[soulspinner]

Another correction. Hang in. Its way up over the last year.

[NYCfixie]

Long term it does not matter.

As of Monday, all upside since 12/1/17 was wiped out. Now it appears we are going farther back. Buy in now - for the long term - peeps while the gettin is good.

[Tony T]

NYT: Don't worry:
Few Americans Own Stocks, So Few Are Affected by Slump

The riotous market swings that have whipped up frothy peaks of anxiety over the last week have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

“For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter,” said Edward N. Wolff, an economist at New York University

Fake News! (really, this can't be true)

[kppolich]

again, bought a little more today

[echappist]

Originally Posted by kppolich

again, bought a little more today

as i have a pension, i'm buying on the dip now. Somewhat more palatable when the "security" I sell is the appreciating one (TSP G-Fund).

Harder to do is to sell bond index fund on the decline to buy more in my Roth account

[oldpotatoe]

Originally Posted by Tony T

NYT: Don't worry:
Few Americans Own Stocks, So Few Are Affected by Slump

The riotous market swings that have whipped up frothy peaks of anxiety over the last week have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

“For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter,” said Edward N. Wolff, an economist at New York University

Fake News! (really, this can't be true)

LOTSA 401ks and other pension plans are effected by this..