About those big one day stock market rallies
11-17-2008, 12:46 PM
#1
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About those big one day stock market rallies
Wikipedia lists the 20 biggest one day rallies:
List of largest daily changes in the Dow Jones Industrial Average - Wikipedia, the free encyclopedia
17 of them occurred in the worst years of Great Depression (1929-33).
2 of them (#5 and #6) happened in October, 2008.
Lesson: These one day rallies are traps. The worst is yet to come.
List of largest daily changes in the Dow Jones Industrial Average - Wikipedia, the free encyclopedia
17 of them occurred in the worst years of Great Depression (1929-33).
2 of them (#5 and #6) happened in October, 2008.
Lesson: These one day rallies are traps. The worst is yet to come.
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11-18-2008, 12:49 AM
#12
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It might be more accurate to liken it to a non-zero-sum game, such as The Prisoner's Dilemma. (Yes, I admit it, I'm a sociology geek- I love game theory.)
All else being equal, assume that there are two possible actions: sell and short, or stay long.
If everyone (including yourself) remains long, then the market remains relatively stable.
However, if some people sell and short the market, then the market will likely decline. Those who remained long will suffer.
Therefore, because it is likely that some people will sell and short, it is in your best interest also to sell and short, because even though this will cause greater harm overall, it is likely to cause less harm to you than if you were to remain long.
Is that clearish?
All else being equal, assume that there are two possible actions: sell and short, or stay long.
If everyone (including yourself) remains long, then the market remains relatively stable.
However, if some people sell and short the market, then the market will likely decline. Those who remained long will suffer.
Therefore, because it is likely that some people will sell and short, it is in your best interest also to sell and short, because even though this will cause greater harm overall, it is likely to cause less harm to you than if you were to remain long.
Is that clearish?
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11-18-2008, 12:53 AM
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Therefore, because it is likely that some people will sell and short, it is in your best interest also to sell and short, because even though this will cause greater harm overall, it is likely to cause less harm to you than if you were to remain long.
Is that clearish?
Is that clearish?
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11-18-2008, 11:13 AM
#16
Jason,
#1 I'm personally getting kinda tired of these "financial" BS posts so I suggest you take your opinions to a more specific forum say like Yahoo finance or elsewhere where you can have all the fun you want.
#2 Getting tired of the comparisons to 1929 and the panic mongering. Granted, anything can happen. Hell, a presidential assassination or terrorist attack in the next few months could change anything, BUT the current fundamentals versus the depression of 1929 are so different, AND there is DATA (not people/expert opinions) to back that up. What really amazes me is that when it comes to car stuff, you are very analytical with DATA vs. opinions, but when it comes to financial stuff you often solicit the opinions of so called experts and very loose data. Take this post for example, volatility does not = downturn, in fact if you look at the data, there is volatility almost before any moves both upside and downside. And financial opinions are like political spin, you can make arguments either way, BUT there are certainly reassuring data that the economy is stabilizing a bit and as said before the market moves before the economy. As an example, some of the data I am referring to are the recent stabilization of home sales in the state of CA which is often 2-3 months ahead of the rest of the nation in terms of economic cycles AND Walmart's recent quarterly results. Hell, if Walmart posted terrible results, I certainly would be much more scared than now.
Anyway, SHORT version ----> Save your financial BS for a financial forum please. Thanks.
#1 I'm personally getting kinda tired of these "financial" BS posts so I suggest you take your opinions to a more specific forum say like Yahoo finance or elsewhere where you can have all the fun you want.
#2 Getting tired of the comparisons to 1929 and the panic mongering. Granted, anything can happen. Hell, a presidential assassination or terrorist attack in the next few months could change anything, BUT the current fundamentals versus the depression of 1929 are so different, AND there is DATA (not people/expert opinions) to back that up. What really amazes me is that when it comes to car stuff, you are very analytical with DATA vs. opinions, but when it comes to financial stuff you often solicit the opinions of so called experts and very loose data. Take this post for example, volatility does not = downturn, in fact if you look at the data, there is volatility almost before any moves both upside and downside. And financial opinions are like political spin, you can make arguments either way, BUT there are certainly reassuring data that the economy is stabilizing a bit and as said before the market moves before the economy. As an example, some of the data I am referring to are the recent stabilization of home sales in the state of CA which is often 2-3 months ahead of the rest of the nation in terms of economic cycles AND Walmart's recent quarterly results. Hell, if Walmart posted terrible results, I certainly would be much more scared than now.
Anyway, SHORT version ----> Save your financial BS for a financial forum please. Thanks.
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11-21-2008, 04:19 PM
#19
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Read what Roubini says, one of the guys who was right lots of times, about this recession. He explains why this market has a long way down. The unraveling of the hedge funds:
FT.com / Comment / Opinion - The shadow banking system is unravelling
FT.com / Comment / Opinion - The shadow banking system is unravelling
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