Down goes the Dow

Maserati,

I am pessimistic on the ultimate direction of this market >-50%. I believe it will likely be a process that frustrates investors for sometime, perhaps 6-24 months. The global economy has been inflated with so much excessive liquidity and that will require time to rebalance.

Igy

QED MFER wrote:

CIarification wrote:

Those in the market do not lose their shirts. That only happens when you get out of the market.

.

I rest my case. This guy actually thinks he loses no money when the value of his equity holding tank.

Yet I suspect he believes he makes money when it goes up.

You rest your case? What case was that? As far as I can tell, that was your first post.

You are correct that I believe no money is lost when stocks fall. You are incorrect to suspect I believe money is made when their value rises. Money can only be made, or lost, when the stocks are sold.

Genie Us wrote:

Faith No More Guy wrote:

[quote]Genie Us wrote:

"Will there be sell-offs (are we allowed to use this particular term?)? Sure. Will some of them be "massive" (allowed term?)? Undoubtedly. But all in all the markets will go up because we live in a capitalist society and capital making more capital is kind of the point. Owning shares puts one on the winning side which is generally preferable (to me at least).

."

Oh yeah, and try to avoid misquoting people. Unless you care to point out where exactly I said markets "will always go up".

I copied and pasted your own words "all in all the markets will go up"

You then accuse me of misquoting you! And then state that you "try to avoid misquoting people" will stating I claimed you said the "markets "will always go up". -- by the way, what's with all the "s and s?

Ah, the irony. Or should I say self delusion?

Genie Us wrote:

[quote]Faith No More Guy wrote:

[quote]Genie Us wrote:

Why will markets always go up? What time frame is required for this to be true?

Do you seriously have no understanding of capitalism? What in the world are you doing playing around here then? Well, to get you started, try reading Adam Smith. Then try Malkiel. Move on to Lynch and Bogle. Come back when you have at least some small inkling of what this whole thing is about.

Seems as if someone cannot answer a simple question.

Expand a bit please wrote:

Genie Us wrote:

[quote]Faith No More Guy wrote:

[quote]Genie Us wrote:

Why will markets always go up? What time frame is required for this to be true?

Do you seriously have no understanding of capitalism? What in the world are you doing playing around here then? Well, to get you started, try reading Adam Smith. Then try Malkiel. Move on to Lynch and Bogle. Come back when you have at least some small inkling of what this whole thing is about.

Seems as if someone cannot answer a simple question.

I see. New name - same shtick.

OK, so reading Smith was too much to ask. How about try to avoid misquoting and start from there.

"How about try to avoid misquoting and start from there."

How can you misquote someone by copying and pasting their comments?

And surely you do believe the market will always rise given a sufficient time period? Otherwise why do you gave such faith that being in the market ?

"But all in all the markets will go up because we live in a capitalist society and capital making more capital is kind of the point. Owning shares puts one on the winning side"

But when I ask for a simple explanation as to why this is the case, you cannot answer it. Instead dissembling with pablum like "Do you seriously have no understanding of capitalism? What in the world are you doing playing around here then? Well, to get you started, try reading Adam Smith. Then try Malkiel. Move on to Lynch and Bogle. Come back when you have at least some small inkling of what this whole thing is about."

Let's be honest. You believe in the markets because you have been told to think that way. It is an article of faith with you, not a rational stance.

vix 24/25

this is the most fearful moment since 2011!

agip wrote:

vix 24/25

this is the most fearful moment since 2011!

check that - since May 2012

sort of

if the vix closes above 24 today.

lots of qualifiers there

"since May 2012"

You say that as though it were a long span of time.

That's like in track when they say in August "the fastest performance since May".

I don't manage other people's money, but people seem to think I know what I am doing. I have already fielded calls from 10 or so friends who want to know if this is the big one, or what this means.

Is this because it's a Friday?

I have told everybody that I don't know, but that I haven't bought in yet.

Yes agip, they seem scared, and fear can be a powerful motivator--most of the time, to do something regrettable or stupid.

Down around 400 to around 16.6k. Funny, I think it's now down to around the same level at which I got out, I can't remember exactly. I will check.

Meantime, I hope the bleeding accelerates.

Here's a theory: if the markets tank, the economic numbers are sluggish, and unemployment doesn't get better, they won't raise rates; and if they don't raise rates, the markets will bounce back quickly because of the low cost of money. IF that's true, there will be a lot of money to be made in a relatively short span of time. Memories are short. I could see myself getting in, and then getting back out again not too far in the future.

Maserati,

Your theory that a hold on interest rates or more QE may be a correct one. There is another theory, that the Fed goes back to QE or backs off an interest rate move and market fall further. At some point feeding the beast does not generate the positive result.

Igy

You forgot to mention inflation. That's the real key to whether or not the Fed will raise rates.

A month or two back I was widely criticized for suggesting that bond may be a wiser investment than the S&P 500. Interestingly enough the TLT (IShares Barclays 20+ Treasury ETF) is positive on the year.

Igy

US down 7.8% from its highs now

the ferocity of this is remarkable.

or actually it's not - we just are out of shape for this sort of thing.

it's not even a correction yet, definign that as a 10% fall.

Are there not also bonds that are negative on the year?

Steve,

According to Morningstar Bond Index only long term corporate bonds are negative on the year. In my original comments I was talking about high quality bond instruments.

Igy

agip, I think you got it.

Like I said, memories are short--REALLY short. I have been lucky/skillful to have gotten out and back in, and avoided the really big drops, but while I was in, there were 10% drops.

10%! Who cares! I mean, if you are in, who cares! So some average joe has a 250k account, that's only 25k, and the drop is often only temporary, and the property still pays the same dividends. You would think the sky is falling.

Unfortunately we do not hear from the average shmuck with $250k or $500k, we hear from the managers who experience much greater magnitudes. For some of them, the sky may indeed fall, but why listen to that stuff?

The ONLY reason I find this interesting is because I am on the lookout for a buying opportunity.

Down about 445 now, still some time until close.

So some are positive, some are negative. Kinda like stocks.

How does one wrote:

"How about try to avoid misquoting and start from there."

How can you misquote someone by copying and pasting their comments?...

OK, let's give you a fair trial here. Show me how you produced this: "Why will markets always go up?..." by "copying and pasting my comments.

Ready...go!

My sense is that a bunch of this is people closing positions for the weekend over the situation in Asia. There is minor S&P chart support around 1970, and assuming we have a test of that support early Monday, that would be approximately the same level of correction that we had last October, and the question then will be, "now what?"

We have a full-scale retest in place in Shanghai, but thus far we have positive RSI divergence:

http://www.investing.com/indices/shanghai-composite-chart

The question going forward is this "the thing" or is this "the start of the thing"? I wouldn't overthink this to much just yet. Right now we don't have anything of longer term significance like weekly EMA crosses.

One thing that should be said perhaps is that something really might be different this time. Flagpole might say that he doesn't care if the market drops a ton (like 50%) but a lot of individuals DO care. From what I've read at various times since 2000, something like $1-2 TRILLION has been withdrawn from US equity funds, and most of that has gone into bonds, not stocks. If you are a contrarian, you would look at this and say that the bond market rather than the stock market is going to crash this time. But if this money does not mostly go back to the stock market, you might not get a P/E extreme like we had in 2000, but, rather, you might get a more normal bull market correction of 25%: All those people looking for a 50% massacre might not get it, and they will get caught out, just like they did in 2009.