U.S. stocks in free fall

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H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Thu Oct 04, 2018 11:59 am

DanMahowny wrote:
Sun Sep 23, 2018 11:31 am
MotoTrojan wrote:
Tue Sep 18, 2018 2:58 pm
Market drops 35% over the next week, what do you do?
I will waste lots of time reading this thread.
Lol... I'll be busy buying and find a way to get more cash to buy. A man can be creative.

2-5% drop a day... we'll get there by next Friday.

Whakamole
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Re: U.S. stocks in freefall

Post by Whakamole » Thu Oct 04, 2018 12:04 pm

Time to take more TLH in international, and my short-term bond fund for that matter.

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nedsaid
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Re: U.S. stocks in freefall

Post by nedsaid » Thu Oct 04, 2018 12:11 pm

I think there are things going on under the radar. On October 4, 2018, an "up" day for the markets, my portfolio went down. Have noticed the last few days that despite a "record" new highs for the market averages that my portfolio value kept ticking down. This hints that relatively few stocks are driving the averages higher.

So it seems that stocks were starting to correct even as the market averages were ticking higher. Today, it has showed up in the averages, the indexes are down about 1% today.

Another factor in my portfolio value going down is that bonds are getting hit a bit. One day, I saw my bond fund values down by 0.50%, fairly volatile by bond standards. We are seeing interest rates rise and not just on the short end of the yield curve.

So the market is in a mini-correction. Don't know how long or how far down. For all I know, the markets could rebound with a vengeance tomorrow.
A fool and his money are good for business.

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walletless
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Re: U.S. stocks in freefall

Post by walletless » Thu Oct 04, 2018 12:23 pm

Time for bears to come out of their hiding!

yousha
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Re: U.S. stocks in freefall

Post by yousha » Thu Oct 04, 2018 12:28 pm

Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.

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corn18
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Re: U.S. stocks in freefall

Post by corn18 » Thu Oct 04, 2018 12:31 pm

yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about.
That's what bogleheads do, we take ups and downs in stride and make no changes because of it.
Don't do something, just stand there!

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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Thu Oct 04, 2018 12:57 pm

yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
That's barely a correction. As always, a core principle of my investing plan is that I have NO talent for market timing. So I don't worry about trying to predict the markets.

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ReformedSpender
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Re: U.S. stocks in freefall

Post by ReformedSpender » Thu Oct 04, 2018 1:07 pm

nedsaid wrote:
Thu Oct 04, 2018 12:11 pm
I think there are things going on under the radar. On October 4, 2018, an "up" day for the markets, my portfolio went down. Have noticed the last few days that despite a "record" new highs for the market averages that my portfolio value kept ticking down. This hints that relatively few stocks are driving the averages higher.

So it seems that stocks were starting to correct even as the market averages were ticking higher. Today, it has showed up in the averages, the indexes are down about 1% today.
That is correct. Specifically, Apple, Microsoft and some of FANG have doing the heavy pushing

Timely article:
https://www.zerohedge.com/news/2018-10- ... y-new-high

:beer
Last edited by ReformedSpender on Thu Oct 04, 2018 1:30 pm, edited 1 time in total.
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Thu Oct 04, 2018 1:15 pm

Call me an optimist, but this seems like the same song and dance we went through earlier this year. Stocks drop for no apparent reason despite solid economic fundamentals, only to then spring forward even further (i.e. one step back, two steps forward). I certainly don't buy the pundits' claim that it's due to bond yields going up a tiny bit.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

kaeltor
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Re: U.S. stocks in freefall

Post by kaeltor » Thu Oct 04, 2018 1:28 pm

willthrill81 wrote:
Thu Oct 04, 2018 1:15 pm
Call me an optimist, but this seems like the same song and dance we went through earlier this year. Stocks drop for no apparent reason despite solid economic fundamentals, only to then spring forward even further (i.e. one step back, two steps forward). I certainly don't buy the pundits' claim that it's due to bond yields going up a tiny bit.
Let's hope you are right, just bought VTSAX today. Was waiting until a small drop to buy this week.

WhiteMaxima
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Re: U.S. stocks in freefall

Post by WhiteMaxima » Thu Oct 04, 2018 1:34 pm

Stay put.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Thu Oct 04, 2018 1:42 pm

willthrill81 wrote:
Thu Oct 04, 2018 1:15 pm
Call me an optimist, but this seems like the same song and dance we went through earlier this year. Stocks drop for no apparent reason despite solid economic fundamentals, only to then spring forward even further (i.e. one step back, two steps forward). I certainly don't buy the pundits' claim that it's due to bond yields going up a tiny bit.
A drop is a drop is a drop. It doesn't matter who call it what.

TLH here we go.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Thu Oct 04, 2018 1:50 pm

nedsaid wrote:
Thu Oct 04, 2018 12:11 pm
I think there are things going on under the radar. On October 4, 2018, an "up" day for the markets, my portfolio went down. Have noticed the last few days that despite a "record" new highs for the market averages that my portfolio value kept ticking down. This hints that relatively few stocks are driving the averages higher.
Or was it because of dividend distribution?

goblue100
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Re: U.S. stocks in freefall

Post by goblue100 » Thu Oct 04, 2018 1:53 pm

I see the US stocks in freefall thread and the bonds in freefall thread. Where is the everything is in freefall thread? :oops:
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

rudeboy
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Re: U.S. stocks in freefall

Post by rudeboy » Thu Oct 04, 2018 1:55 pm

goblue100 wrote:
Thu Oct 04, 2018 1:53 pm
I see the US stocks in freefall thread and the bonds in freefall thread. Where is the everything is in freefall thread? :oops:
Maybe that's the 'Sky in Freefall' thread?

Whakamole
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Re: U.S. stocks in freefall

Post by Whakamole » Thu Oct 04, 2018 2:00 pm

goblue100 wrote:
Thu Oct 04, 2018 1:53 pm
I see the US stocks in freefall thread and the bonds in freefall thread. Where is the everything is in freefall thread? :oops:
Gold is up. By 0.01% but it is up.

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Thu Oct 04, 2018 2:07 pm

Whakamole wrote:
Thu Oct 04, 2018 12:04 pm
Time to take more TLH in international, and my short-term bond fund for that matter.
However we don't have an unrealized capital loss in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MJW
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Re: U.S. stocks in freefall

Post by MJW » Thu Oct 04, 2018 2:07 pm

goblue100 wrote:
Thu Oct 04, 2018 1:53 pm
I see the US stocks in freefall thread and the bonds in freefall thread. Where is the everything is in freefall thread? :oops:
Your Internet service will likely have already been disrupted by the time that thread would become relevant. :wink:

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Thu Oct 04, 2018 2:11 pm

walletless wrote:
Thu Oct 04, 2018 12:23 pm
Time for bears to come out of their hiding!
No, bears come out of hibernation in late winter.

Oh :oops: , you mean a different type of bear.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Thu Oct 04, 2018 2:13 pm

Earl Lemongrab wrote:
Thu Oct 04, 2018 12:57 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
That's barely a correction. As always, a core principle of my investing plan is that I have NO talent for market timing. So I don't worry about trying to predict the markets.
I don't see a reason to predict a 10-15% drop.

A 10% drop is pretty routine.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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nedsaid
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Re: U.S. stocks in freefall

Post by nedsaid » Thu Oct 04, 2018 3:02 pm

H-Town wrote:
Thu Oct 04, 2018 1:50 pm
nedsaid wrote:
Thu Oct 04, 2018 12:11 pm
I think there are things going on under the radar. On October 4, 2018, an "up" day for the markets, my portfolio went down. Have noticed the last few days that despite a "record" new highs for the market averages that my portfolio value kept ticking down. This hints that relatively few stocks are driving the averages higher.
Or was it because of dividend distribution?
That was one heck of a dividend distribution, but I don't see all that new cash in my accounts.
A fool and his money are good for business.

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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Thu Oct 04, 2018 3:14 pm

I did get a couple of notices of dividends paid recently.

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oldzey
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Re: U.S. stocks in freefall

Post by oldzey » Thu Oct 04, 2018 3:14 pm

walletless wrote:
Thu Oct 04, 2018 12:23 pm
Time for bears to come out of their hiding!
You rang? :P

Image
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bgf
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Re: U.S. stocks in freefall

Post by bgf » Thu Oct 04, 2018 3:31 pm

Earl Lemongrab wrote:
Thu Oct 04, 2018 3:14 pm
I did get a couple of notices of dividends paid recently.
i of course used most of mine to buy emerging markets YESTERDAY. of course.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Thu Oct 04, 2018 4:13 pm

bgf wrote:
Thu Oct 04, 2018 3:31 pm
Earl Lemongrab wrote:
Thu Oct 04, 2018 3:14 pm
I did get a couple of notices of dividends paid recently.
i of course used most of mine to buy emerging markets YESTERDAY. of course.
Life comes at you fast.

yousha
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Re: U.S. stocks in freefall

Post by yousha » Thu Oct 04, 2018 5:07 pm

It's a rough life if you don't weaken!

GoldenFinch
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Re: U.S. stocks in freefall

Post by GoldenFinch » Thu Oct 04, 2018 6:54 pm

oldzey wrote:
Thu Oct 04, 2018 3:14 pm
walletless wrote:
Thu Oct 04, 2018 12:23 pm
Time for bears to come out of their hiding!
You rang? :P

Image
He is kinda cute, but does he have to stick around?

EnjoyIt
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Re: U.S. stocks in freefall

Post by EnjoyIt » Thu Oct 04, 2018 9:37 pm

My precious US stocks in freefall thread is back. I get nervous when I do not see it coming to the top of my list.
Last edited by EnjoyIt on Thu Oct 04, 2018 9:47 pm, edited 1 time in total.

tj
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Re: U.S. stocks in freefall

Post by tj » Thu Oct 04, 2018 9:39 pm

I wonder what stocks got hit hard today?

Vanguard Equity Income is only down 0.09%. Berkshire was up 1% today.

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Doom&Gloom
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Re: U.S. stocks in freefall

Post by Doom&Gloom » Thu Oct 04, 2018 9:44 pm

EnjoyIt wrote:
Thu Oct 04, 2018 9:37 pm
My precious US stocks in freewill thread is back. I get nervous when I do not see it coming to the top of my list.
May be the wrong thread :)

EnjoyIt
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Re: U.S. stocks in freefall

Post by EnjoyIt » Thu Oct 04, 2018 9:47 pm

Doom&Gloom wrote:
Thu Oct 04, 2018 9:44 pm
EnjoyIt wrote:
Thu Oct 04, 2018 9:37 pm
My precious US stocks in freewill thread is back. I get nervous when I do not see it coming to the top of my list.
May be the wrong thread :)
Nice catch. I will edit that.
Thanks

sreynard
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Re: U.S. stocks in freefall

Post by sreynard » Thu Oct 04, 2018 10:36 pm

GoldenFinch wrote:
Thu Oct 04, 2018 6:54 pm
oldzey wrote:
Thu Oct 04, 2018 3:14 pm
walletless wrote:
Thu Oct 04, 2018 12:23 pm
Time for bears to come out of their hiding!
You rang? :P

Image
He is kinda cute, but does he have to stick around?
How can you not love that face? I could do without those long claws though. Ouch! I wouldn't mind him about more if he didn't keep shredding my portfolio.

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watchnerd
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Re: U.S. stocks in freefall

Post by watchnerd » Thu Oct 04, 2018 11:42 pm

yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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ruralavalon
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Re: U.S. stocks in freefall

Post by ruralavalon » Fri Oct 05, 2018 10:18 am

watchnerd wrote:
Thu Oct 04, 2018 11:42 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Yesterdaysnews
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Re: U.S. stocks in freefall

Post by Yesterdaysnews » Fri Oct 05, 2018 11:36 am

Yeah, something about this drop feels a little different. :confused

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Fri Oct 05, 2018 11:38 am

ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.

Pelerus
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Re: U.S. stocks in freefall

Post by Pelerus » Fri Oct 05, 2018 12:44 pm

MotoTrojan wrote:
Fri Oct 05, 2018 11:38 am
ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.

And a 40-50% drop can be a portfolio killer, depending upon one’s particular life circumstances.

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Earl Lemongrab
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Re: U.S. stocks in freefall

Post by Earl Lemongrab » Fri Oct 05, 2018 12:50 pm

Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.
Uh, what? You could argue on momentum grounds that further drop is more likely, but what you state makes no sense. Every streak of coin flips that yields five heads in a row starts with four heads in a row. That doesn't mean that getting four heads makes it more probable for a fifth.

lukestuckenhymer
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Re: U.S. stocks in freefall

Post by lukestuckenhymer » Fri Oct 05, 2018 12:58 pm

Earl Lemongrab wrote:
Fri Oct 05, 2018 12:50 pm
Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.
Uh, what? You could argue on momentum grounds that further drop is more likely, but what you state makes no sense. Every streak of coin flips that yields five heads in a row starts with four heads in a row. That doesn't mean that getting four heads makes it more probable for a fifth.
The probability of a 10-15% decline and a 40-50% decline on any given day are two different probabilities. The coin flip/gambler's fallacy is not a good comparison.

Broken Man 1999
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Re: U.S. stocks in freefall

Post by Broken Man 1999 » Fri Oct 05, 2018 1:02 pm

Kinda funny seeing my sea of red, with one little green island holding...GE! I was hoping to buy some more, expecting a good drop, nope. Not yet.

We could be in for a bumpy ride. Return items to overhead bins, secure tray holders, and fasten your seatbelt. Just a little bit of turbulence, we will be back in clear skies soon.

If not, might be time to show your love for your bonds. Boring, sometimes unappreciated, often questioned, even derided... until they are not.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

JBTX
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Re: U.S. stocks in freefall

Post by JBTX » Fri Oct 05, 2018 1:03 pm

lukestuckenhymer wrote:
Fri Oct 05, 2018 12:58 pm
Earl Lemongrab wrote:
Fri Oct 05, 2018 12:50 pm
Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.
Uh, what? You could argue on momentum grounds that further drop is more likely, but what you state makes no sense. Every streak of coin flips that yields five heads in a row starts with four heads in a row. That doesn't mean that getting four heads makes it more probable for a fifth.
The probability of a 10-15% decline and a 40-50% decline on any given day are two different probabilities. The coin flip/gambler's fallacy is not a good comparison.
If he is saying a 40% cumulative drop in a day, if it is already down 10-15%, at the beginning of the day, the probability that it ends up 40% lower for the day would seem to be higher than when you started out the day.

H-Town
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Re: U.S. stocks in freefall

Post by H-Town » Fri Oct 05, 2018 1:05 pm

Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
MotoTrojan wrote:
Fri Oct 05, 2018 11:38 am
ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.

And a 40-50% drop can be a portfolio killer, depending upon one’s particular life circumstances.
And what would follow a 40-50% drop?

Last time this happened, the longest (and likely the strongest) bull market in history followed right after. For many people, it will help push them through the finish line.

pete1983
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Re: U.S. stocks in freefall

Post by pete1983 » Fri Oct 05, 2018 1:14 pm

Quick question about what is going on in the stock market. New to the investing scene and trying to learn as much as I can. I am not planning on making any changes as a result of a down day on the stock market, but I would like to understand why others are selling today.

Wasn’t the jobs report overall good? I don’t claim to understand the Fed but interest rate increases seem to be something that is expected with unemployment below 4%. Why would the market drop on a good employment figure?

Seems like people wouldn’t want to be looking for safety in bonds with expected rate increases.

Again, new at this and just trying to understand

cj2018
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Re: U.S. stocks in freefall

Post by cj2018 » Fri Oct 05, 2018 1:18 pm

Broken Man 1999 wrote:
Fri Oct 05, 2018 1:02 pm
Kinda funny seeing my sea of red, with one little green island holding...GE! I was hoping to buy some more, expecting a good drop, nope. Not yet.

We could be in for a bumpy ride. Return items to overhead bins, secure tray holders, and fasten your seatbelt. Just a little bit of turbulence, we will be back in clear skies soon.

If not, might be time to show your love for your bonds. Boring, sometimes unappreciated, often questioned, even derided... until they are not.

Broken Man 1999
Yeah this feels like the start of something perhaps?

Either way, as the short-term rates keep going up and yield curve continues to flat, more pressure for capital to flow out of equities and into bonds - it's just mathematical certainty when investors can get almost guaranteed return of 3% or 4% with minimal risk on principles in short duration bonds and this will put downward pressure on equities.

Personally, I have stopped putting my paycheck to taxable (of course still maxing 401k and other tax-deferred vehicles) and started parking my cash warriors in money markets earning attractive 2%-3% risk-free as i build up my cash position so i can deploy in 8-12 month timeframe when the bigger equity sales kick in.

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Doom&Gloom
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Re: U.S. stocks in freefall

Post by Doom&Gloom » Fri Oct 05, 2018 1:32 pm

H-Town wrote:
Fri Oct 05, 2018 1:05 pm
Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
MotoTrojan wrote:
Fri Oct 05, 2018 11:38 am
ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm


I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.

And a 40-50% drop can be a portfolio killer, depending upon one’s particular life circumstances.
And what would follow a 40-50% drop?

Last time this happened, the longest (and likely the strongest) bull market in history followed right after. For many people, it will help push them through the finish line.
What is that old saw of a disclaimer from brokerage firms? "Past performance is no guarantee of future results"?

That certainly may be the way to bet, but there is no guarantee of an ensuing big bull market or the timeline for it.

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vitaflo
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Re: U.S. stocks in freefall

Post by vitaflo » Fri Oct 05, 2018 1:48 pm

pete1983 wrote:
Fri Oct 05, 2018 1:14 pm
Wasn’t the jobs report overall good? I don’t claim to understand the Fed but interest rate increases seem to be something that is expected with unemployment below 4%. Why would the market drop on a good employment figure?
The market tends to be priced based on future expectations. When an event happens (say a jobs report) if the reality is different that the expectations, the market (or stock) can move in ways that seem counterintuitive.

For example, if the expectation was an increase in jobs of 300k, then the market yesterday would have been priced in with that expectation. If the report today ends up being 200k, that's still a good jobs report, but below expectations, and thus the market can move down to match the new reality.

Of course it can be debated wither the jobs report has any real influence on the market at all, but it's these types of things (along with earnings expectations, etc) that make otherwise positive news produce stock declines. It's one reason why picking stocks or guessing future returns is so difficult.

FBN2014
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Re: U.S. stocks in freefall

Post by FBN2014 » Fri Oct 05, 2018 1:53 pm

pete1983 wrote:
Fri Oct 05, 2018 1:14 pm
Quick question about what is going on in the stock market. New to the investing scene and trying to learn as much as I can. I am not planning on making any changes as a result of a down day on the stock market, but I would like to understand why others are selling today.

Wasn’t the jobs report overall good? I don’t claim to understand the Fed but interest rate increases seem to be something that is expected with unemployment below 4%. Why would the market drop on a good employment figure?

Seems like people wouldn’t want to be looking for safety in bonds with expected rate increases.

Again, new at this and just trying to understand
No one can answer your questions despite what the financial entertainers on Bloomberg, Fox, and CNBC might say. Markets go up and down but over the long term they go up. If you don't have the stomach for that then don't be in the market. One thing I have realized is that gains occur sometimes in spurts over a short period of time and if you are trying to time the market you will miss those gains. That's why its best to be in all the time using the recommended index funds. Too many people will try to invest in funds or stocks that have performed well in the recent past. Remember this, you can't see what's in front of you by looking in your rearview mirror. In other words, past performance is no guarantee of future performance. That's why 80-90% of active managers don't beat the indexes over long time periods. Remember this, if you were boarding a plane and the pilot comes on the loudspeaker and said that there an 80% chance we won't get to our destination, would you stay on the plane? Same with investing. Why invest in funds or stocks that won't beat the indexes 80% of the time. Hope this helps and puts your mind at ease.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

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willthrill81
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Re: U.S. stocks in freefall

Post by willthrill81 » Fri Oct 05, 2018 2:09 pm

pete1983 wrote:
Fri Oct 05, 2018 1:14 pm
Quick question about what is going on in the stock market. New to the investing scene and trying to learn as much as I can. I am not planning on making any changes as a result of a down day on the stock market, but I would like to understand why others are selling today.

Wasn’t the jobs report overall good? I don’t claim to understand the Fed but interest rate increases seem to be something that is expected with unemployment below 4%. Why would the market drop on a good employment figure?

Seems like people wouldn’t want to be looking for safety in bonds with expected rate increases.

Again, new at this and just trying to understand
Some would claim that the jobs report was too good, so good that the Fed will hike rates even further, increasing the cost of capital. But who knows whether that narrative is accurate.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

MotoTrojan
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Re: U.S. stocks in freefall

Post by MotoTrojan » Fri Oct 05, 2018 2:42 pm

Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
MotoTrojan wrote:
Fri Oct 05, 2018 11:38 am
ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm
yousha wrote:
Thu Oct 04, 2018 12:28 pm
Nothing to be matter fact about. We are in a nasty free fall. 10-15% is not out of the question. Hopefully I am mistaken.
I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.

And a 40-50% drop can be a portfolio killer, depending upon one’s particular life circumstances.
With 25-35 years until withdrawal, I’d selfishly welcome a 40-50% drop. Apologies to those later in life.

greenback
Posts: 34
Joined: Fri Jun 29, 2018 2:42 pm

Re: U.S. stocks in freefall

Post by greenback » Fri Oct 05, 2018 2:50 pm

MotoTrojan wrote:
Fri Oct 05, 2018 2:42 pm
Pelerus wrote:
Fri Oct 05, 2018 12:44 pm
MotoTrojan wrote:
Fri Oct 05, 2018 11:38 am
ruralavalon wrote:
Fri Oct 05, 2018 10:18 am
watchnerd wrote:
Thu Oct 04, 2018 11:42 pm


I hope you're not mistaken. I'm still accumulating and would love to buy more at cheaper prices instead of these heady valuations.
Be careful what you wish for.
Why? Harvest some losses, pay less taxes, accumulate more shares, historically result in a better/earlier retirement. 10-15% shouldn’t kill anyone’s well planned retirement either.
I would say one reason is because of basic conditional probability - any time there is a 10-15% drop, a 40-50% drop becomes more likely, simply because every 40-50% drop starts with a 10-15% drop.

And a 40-50% drop can be a portfolio killer, depending upon one’s particular life circumstances.
With 25-35 years until withdrawal, I’d selfishly welcome a 40-50% drop. Apologies to those later in life.
With 35-40 years until withdrawal, I'd second that :beer
You shouldn’t retire until your money starts making more money than you made in your best year.

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