Truly doom and gloom this week:
This week's losses bring us to just 11.8% returns so far this year:
The drop this week has returned us to the dark days of early June. The horror! If stocks weren't "on sale" back in June at these levels, then are they really "on sale" now? Maybe trying to time the market isn't the most effective strategy?
In reply to STM317 :
Yeah, that was pretty much my reaction.
News: "OH MY GOD THE STOCK MARKET IS CRASHING!!!!!" "It DROPPED 1000 POINTS!!!!!!
(look at screen): "holy crap, the Dow market is at 37,000, I can remember when it was at 32,000 not too long ago....."
I really do not know what everyone is in such a panic about. So the stock market went down a couple of thousand points in a couple of days? Big berkeleying deal. Does anyone complain when it goes UP the same amount? I mean its the same acceleration no? Does nobody realize that the stock market no longer has anything to do with the economy?
Its interesting to look at a longer view of the Dow Jones. Anyone know what financial miracle happened around 1995 that seems to have changed the way the game is played? My guess is that it was the point where fundamentals of company value became meaningless and speculation\hype became the new normal for stock valuation. Also would seem to be the point where us boomers decoupled GenZ from the train so we could better launch into our comfy retirements based on market speculation knowing that the ponzi would only have to last long enough for the Boomers to retire.. Thanks GenZ.
A thousand points sounds like a big deal, but when the Dow is near 40,000 it's a relatively small percentage. As of right now it's back up almost 500 points.
NOHOME said:Its interesting to look at a longer view of the Dow Jones. Anyone know what financial miracle happened around 1995 that seems to have changed the way the game is played? My guess is that it was the point where fundamentals of company value became meaningless and speculation\hype became the new normal for stock valuation. Also would seem to be the point where us boomers decoupled GenZ from the train so we could better launch into our comfy retirements based on market speculation knowing that the ponzi would only have to last long enough for the Boomers to retire.. Thanks GenZ.
You've fallen prey to a fallacy here. Any long term chart of the stock market looks like that. Move your dates around and most of the time it looks similar. You see "radical change in 1995," I see "continued compound growth at a relatively consistent rate."
In reply to aircooled :
I can remember when it was 19,000....like in the past 5 years. I am far more worried about hitting 40,000 due to free money policies and rampant inflation than I am a correction.
I added to my S&P 500 index fund on Tuesday morning, and yolo'd a few shares of GME, too. Still keeping some powder dry in case of a bigger fall, but so far, so good.
Wouldn't be surprised if there's a real correction coming, as the carry trade probably has yet to fully unwind. At this point, I'm actually afraid the Fed lowering interest rates in September could be seen as an overly bearish move and trigger a sell off.
Edit: What's really annoying to me is interest rates on CDs in my 401k are dropping. They pay way better than just letting cash sit, but there's the opportunity cost of not being able to buy equities with the money. That cost is getting close enough I'd rather just leave it as available funds.
Flynlow said:In reply to aircooled :
I can remember when it was 19,000....like in the past 5 years. I am far more worried about hitting 40,000 due to free money policies and rampant inflation than I am a correction.
Can you imagine a world where for the last few decades you could borrow Yen at 0% interest, and use it to buy equities that were guaranteed by the US taxpayer to never go down in value?
In reply to STM317 :
Have a look at the previous page of this very thread where that very same graph was at least 20% lower than this a year ago.
Much ado about nothing.
NOHOME said:Flynlow said:In reply to aircooled :
I can remember when it was 19,000....like in the past 5 years. I am far more worried about hitting 40,000 due to free money policies and rampant inflation than I am a correction.
Can you imagine a world where for the last few decades you could borrow Yen at 0% interest, and use it to buy equities that were guaranteed by the US taxpayer to never go down in value?
It's weird. All I see online is that this downturn is driven by the Yen thing, but everything on TV and other MSM sources is blaming it on Friday's jobs report. What gives?
In reply to Tom_Spangler (Forum Supporter) :
One can be tied to domestic hedge funds doing dumb E36 M3 and getting caught with their pants down, one absolves them?
Big money doesn't want any eyes on them.
-or-
One can be tied to domestic politics, one cant?
The Japanese stock market going down 13% spooked the US market ,
But it looks like Japan recovered 10% of that already ,
Tom_Spangler (Forum Supporter) said:NOHOME said:Flynlow said:In reply to aircooled :
I can remember when it was 19,000....like in the past 5 years. I am far more worried about hitting 40,000 due to free money policies and rampant inflation than I am a correction.
Can you imagine a world where for the last few decades you could borrow Yen at 0% interest, and use it to buy equities that were guaranteed by the US taxpayer to never go down in value?
It's weird. All I see online is that this downturn is driven by the Yen thing, but everything on TV and other MSM sources is blaming it on Friday's jobs report. What gives?
The Yen thing is financial mechanics at work doing what mechanical things do; inputs lead to predictable outputs. The jobs report drama is politics cause one side or the other needs the market to go down leading into an election. Its a good combination to pull the market down. Remember, the stock market has nothing to do with the economy, its a self-validating mechanism.
In reply to NOHOME :
Stock options rules changed in ~1995, and quickly after that, Jack Welsh introduced the world to " shareholder value". The explanation to us (the ford jac nasser version) was to keep up with the tech stock boom. The reality was to increase the stock value for those getting paid in stock options. Still a problem as we see Boeing do some very questionable savings measures.
alfadriver said:In reply to NOHOME :
Stock options rules changed in ~1995, and quickly after that, Jack Welsh introduced the world to " shareholder value". The explanation to us (the ford jac nasser version) was to keep up with the tech stock boom. The reality was to increase the stock value for those getting paid in stock options. Still a problem as we see Boeing do some very questionable savings measures.
I remember those days well. Its when the symbiotic employee-employer loyalty relationship came to an end. A good friend of mine was a prominent executive at McCormicks at the time and his assignment was to get rid of as many bodies as possible at all levels so that the stock price would go up and so would the pay for the remaining executives. He lost a lot of his friends.
My theory is that was also the era when the Fed quietly let the word out that there would never be long term drops in the market as long as they could print money. ( Is it a coincidence that Stocks are the main source of income for so many politicians? Nah, that would be cynical thinking) The Fed confirmed this beyond all doubt when they rescued criminal wallstreet enterprises in 2008. they did it again with Covid. Question now is if there is enough hot air left to blow up the current balloon?
In reply to NOHOME :
Since this is economic- it really sucks that the market has so very much influence on jobs and careers, but so very little impact on the overall economy. They risk all of us for what they get. Illustrated so well from 2008 and the actual repercussions.
Anyway, it will come back. Too many fortunes rest on the stock market for it really to collapse.
Relevant to this side discussion, I'm reading a book currently called "The Man Who Broke Capitalism", talking about alot of these themes. Jack Welch and GE have really influenced 20+ years of corporate thinking, and not necessarily for the better.
Quick version (and not surprising): a focus on quarterly performance above all else leads to momentary gains, and long term failure. It also makes corporate environments unhappy places to work. GE (and Welch) got away with it for 20 years theough fraudulent accounting (one step down from Enron) and easy money, until the house of cards finally fell.
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