U.S. stocks in free fall

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princetontiger
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Re: U.S. stocks in free fall

Post by princetontiger » Wed Dec 19, 2018 8:01 pm

Put $100K into $IJR today... ~1,500 shares...

S&P small caps back to late 2016.

All of this negativity is amazing. From Greenspan to Dalio. If you look back a year ago, everyone was so positive.

I also like SCZ... small caps in Europe/Japan. Back to the 2014-2016 area. The "Trump Bump" retraced.
Last edited by princetontiger on Wed Dec 19, 2018 8:02 pm, edited 1 time in total.

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ginmqi
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Re: U.S. stocks in free fall

Post by ginmqi » Wed Dec 19, 2018 8:02 pm

princetontiger wrote:
Wed Dec 19, 2018 8:01 pm
Put $100K into $IJR today... ~1,500 shares...
Haha, nice.

I'm still waiting, maybe it'll continue to dip?

2 more trading days to go this week....

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princetontiger
Posts: 39
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Re: U.S. stocks in free fall

Post by princetontiger » Wed Dec 19, 2018 8:03 pm

ginmqi wrote:
Wed Dec 19, 2018 8:02 pm
princetontiger wrote:
Wed Dec 19, 2018 8:01 pm
Put $100K into $IJR today... ~1,500 shares...
Haha, nice.

I'm still waiting, maybe it'll continue to dip?

2 more trading days to go this week....
Not concerned. I remember 2015-2016 very well. I kept adding. I don't know the catalyst that reverses the negativity, but hiring is strong and my business is doing well. Markets are disconnected from main street right now.

I stand by my theory that 2014-2015 was a mini recession. That mini bear market was warranted. Regardless, S&P 600 is on sale today... woot woot.

long_gamma
Posts: 420
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Re: U.S. stocks in free fall

Post by long_gamma » Wed Dec 19, 2018 8:05 pm

nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Well. There was major market moving event at 2pm
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

long_gamma
Posts: 420
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Re: U.S. stocks in free fall

Post by long_gamma » Wed Dec 19, 2018 8:08 pm

Wakefield1 wrote:
Wed Dec 19, 2018 7:50 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
I wonder where these traders and institutions are putting this money that they are pulling?
Image

Short term interest rate products
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

Grogs
Posts: 620
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Re: U.S. stocks in free fall

Post by Grogs » Wed Dec 19, 2018 8:38 pm

nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
I used to get upset back in 2008-9 when nothing had changed, but it seemed like one little spot of worry would multiply into an avalanche of panic and the market would drop 5% in one day over nothing. I've since come to realize that over the course of 10, 20, or more years it won't have any meaningful impact. Like someone said a few posts ago, as long as companies continue to increase their earnings, the stock values will eventually grow and reach new highs. The fundamental growth is what matters, not the day-to-day speculation.

Grogs
Posts: 620
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Re: U.S. stocks in free fall

Post by Grogs » Wed Dec 19, 2018 8:39 pm

long_gamma wrote:
Wed Dec 19, 2018 8:08 pm
Wakefield1 wrote:
Wed Dec 19, 2018 7:50 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
I wonder where these traders and institutions are putting this money that they are pulling?
Image

Short term interest rate products
Except in Asia. Looks like they're backing up the truck. :sharebeer

columbia
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Re: U.S. stocks in free fall

Post by columbia » Wed Dec 19, 2018 8:53 pm

gilgamesh wrote:
Wed Dec 19, 2018 5:38 pm
columbia wrote:
Wed Dec 19, 2018 3:11 pm
ge1 wrote:
Wed Dec 19, 2018 3:07 pm
I'm not the trading expert, but the fact that the market is not able to snap back after the recent losses is a very bearish sign... and the magnitude of the losses today after the expected rate hike is even more worrying.

For those of you who keep talking about "loading up the truck" you may want to take it easy for a while, seems likely to me that the market will go significantly lower from here.
Staying the course (a good move) is one thing; pretending that all signs aren’t pointing towards a continued decline is...baffling.
Are these signs actionable for you? What’s preventing you from cashing it all out now, and entering when it’s declined?
Nothing is preventing me: it happened on Monday October 8 (which I believe was 1.8% off the all time S&P500 high).

The (re-)entering part is TBD.

I’ve been investing since 1996 and that sort of thing never entered my radar in the past. Then again, I’m older and now have far more to lose.

Yep...I committed the cardinal sin. :o
If you leave your head in the sand for too long, you might get run over by a Jeep.

finite_difference
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Re: U.S. stocks in free fall

Post by finite_difference » Wed Dec 19, 2018 9:12 pm

willthrill81 wrote:
Wed Dec 19, 2018 5:47 pm
Flymore wrote:
Wed Dec 19, 2018 5:42 pm
MotoTrojan wrote:
Wed Dec 19, 2018 3:16 pm
corpgator wrote:
Wed Dec 19, 2018 3:14 pm
Flymore wrote:
Wed Dec 19, 2018 3:04 pm
I still don't get why they're raising rates.
Powell's not saying there's inflation.
To tamp down on bubbles before they explode. They are probably too late though.
Read an interesting piece the other day saying the argument that the Fed needs to build up higher rates so they have ammo to reduce them in the future is flawed logic.
+1 Agree with that.
'Hurting' the economy by imposing a higher cost of capital so that you can 'help' it later by reducing that cost back to where it was doesn't make sense to me either. It would only seem to work if the economy is robust enough that the rate hikes don't have much of an effect on it, but that seems unlikely.
That’s part of it. But it’s also about preventing the market from overheating too much and to keep a lid on inflation.

Theoretically there is probably some optimal, stable rate they would have it set to, if only the market would be at its optimal, stable growth rate too. Instead it’s more of a pull/push type of relationship.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

vwgrrc
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Re: U.S. stocks in free fall

Post by vwgrrc » Wed Dec 19, 2018 9:42 pm

So... is it time to buy some small cap :confused

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nedsaid
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Re: U.S. stocks in free fall

Post by nedsaid » Wed Dec 19, 2018 10:47 pm

long_gamma wrote:
Wed Dec 19, 2018 8:05 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Well. There was major market moving event at 2pm
The Fed announced a rate hike, which the market expected. The market wanted guidance for one maybe zero rate hikes in 2019 and the Fed said two rate hikes in 2019 rather than three. So the markets didn't get what they wanted and had a cow. At the same time, the Fed said that economic data would drive their interest rate decisions going forward. So some nuance here, maybe not nuanced enough and the markets didn't like it.

Seemed like hair splitting on the language but markets often parse comments from key government officials. Sort of like Kremlin watching, you didn't go by so much by what was said but what wasn't said.

In any case, I thought this was an overreaction over not much.
A fool and his money are good for business.

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nedsaid
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Re: U.S. stocks in free fall

Post by nedsaid » Wed Dec 19, 2018 10:47 pm

Grogs wrote:
Wed Dec 19, 2018 8:38 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
I used to get upset back in 2008-9 when nothing had changed, but it seemed like one little spot of worry would multiply into an avalanche of panic and the market would drop 5% in one day over nothing. I've since come to realize that over the course of 10, 20, or more years it won't have any meaningful impact. Like someone said a few posts ago, as long as companies continue to increase their earnings, the stock values will eventually grow and reach new highs. The fundamental growth is what matters, not the day-to-day speculation.
Yes. Thank you.
A fool and his money are good for business.

Elena
Posts: 372
Joined: Mon Nov 21, 2016 5:42 pm

Re: U.S. stocks in free fall

Post by Elena » Wed Dec 19, 2018 10:49 pm

Artful Dodger wrote:
Mon Dec 17, 2018 4:16 pm
Elena wrote:
Mon Dec 17, 2018 3:31 pm
Mostly stocks here as well. Implementing what I did in 2007- not look at the balance and keep saving and buying as usual, if not a tad more. Now I have to figure out how to check my c. card balance at Fidelity (Elon) without looking at the retirement plans. They all come up on the same screen, but there must be a way to pull the c. card as a standalone acct.
Rice in the pantry, all is good.
Fidelityrewards.com will take you to just the CC account. You may have to set up a different login / password for the site.
Thank you!!! Now, I will only have to see the retirement accts. balance once more, to write down the year-end asset balance, which I incidentally do every Dec. 31st.

long_gamma
Posts: 420
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Re: U.S. stocks in free fall

Post by long_gamma » Wed Dec 19, 2018 11:10 pm

nedsaid wrote:
Wed Dec 19, 2018 10:47 pm
long_gamma wrote:
Wed Dec 19, 2018 8:05 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Well. There was major market moving event at 2pm
The Fed announced a rate hike, which the market expected. The market wanted guidance for one maybe zero rate hikes in 2019 and the Fed said two rate hikes in 2019 rather than three. So the markets didn't get what they wanted and had a cow. At the same time, the Fed said that economic data would drive their interest rate decisions going forward. So some nuance here, maybe not nuanced enough and the markets didn't like it.

Seemed like hair splitting on the language but markets often parse comments from key government officials. Sort of like Kremlin watching, you didn't go by so much by what was said but what wasn't said.

In any case, I thought this was an overreaction over not much.
It is all about positioning of traders before the report. Events like these always create volatility on both directions because of these leveraged traders positions.

So yes those nuance you cited matters. From the reaction it was obvious that traders were expecting much more dovish stance from FED and didn't get it. Slide in oil prices, moderation in inflation expectations may be warranted dovish stance but wasn't there. Coupled along this with technical break of going below recent Feb low in SPX worsened the situation.
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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sergeant
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Location: The Golden State

Re: U.S. stocks in free fall

Post by sergeant » Wed Dec 19, 2018 11:11 pm

Scooter57 wrote:
Wed Dec 19, 2018 6:12 pm
J G Bankerton wrote:
Wed Dec 19, 2018 4:04 pm
One has to out of debt to live off CDs. My father lived off CDs wile I paid 16.8% on a fixed 30 year mortgage. Inflation was 13.55% so real returns on CD were about what they are now.
I had one of those 16% mortgages for my first home. I refinanced it at 13% a bit later and sold it when the price doubled and put the profits onto a 10% CD right before our local RE market cratered in 1989. Then I rented until I could buy a house with cash. There were very nice properties for rent cheaply because no one was buying.

The 3% difference from inflation then was more normal it was better than the 1+% we can get now. Inflation is close to 2% but the best 5yr rate is only 3.55% or so.
Not sure Mr. Math agrees that CD's were better in the good old days than now.
AA- 20+ Years of Expenses Fixed Income/The remainder in Equities.

letsgobobby
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Re: U.S. stocks in free fall

Post by letsgobobby » Wed Dec 19, 2018 11:14 pm

Deleted
Last edited by letsgobobby on Mon Apr 22, 2019 2:26 pm, edited 1 time in total.

Scooter57
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Re: U.S. stocks in free fall

Post by Scooter57 » Wed Dec 19, 2018 11:33 pm

letsgobobby wrote:
Wed Dec 19, 2018 11:14 pm
2008 earnings are about to drop out of the PE10 calculations, suggesting in about 2 weeks PE10 will drop by over 10%, from 27.7 today to ~ 24.5 then. That's within the range of "long term average". Stocks certainly aren't grossly overpriced.

On the other hand, real earnings on the S&P were in the mid 40s in the 1960s. Fifty years later they've basically tripled to the 130 range. Yet the stock market has gone up far more than that in real terms - the multiple has really exploded. This isn't about fundamentals. It's about psychology. Psychology has nothing to support it and can turn on a time.
Isn't the long-term median P/E ratio closer to 16?

But in the 60s people were not trading millions of shares a day at light speed based on algorithms, so there was a more fundamentally based price discovery mechanism involved. The market has become more solipsistic with little real relationship beyween the businesses underlying the ticker and the price. Is there any other way to explain how Amazon could maintain a P/E in the multihundreds--or no earnings at all--for decades and still be a top stock in the indexes? Over and over we see stocks with no earnings trading at levels that would require impossible earnings to justify.

The ease of trading, unimaginable in the '60s, has turned the market into an exploitable gambling game for big money rather than a method of providing capital to allow real growth in productive businesses.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Wed Dec 19, 2018 11:53 pm

letsgobobby wrote:
Wed Dec 19, 2018 11:14 pm
2008 earnings are about to drop out of the PE10 calculations, suggesting in about 2 weeks PE10 will drop by over 10%, from 27.7 today to ~ 24.5 then. That's within the range of "long term average". Stocks certainly aren't grossly overpriced.
And then in 2020, once 2009's low earnings drop off, CAPE will fall even further.
“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

letsgobobby
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Re: U.S. stocks in free fall

Post by letsgobobby » Wed Dec 19, 2018 11:54 pm

Deleted
Last edited by letsgobobby on Mon Apr 22, 2019 2:26 pm, edited 1 time in total.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Wed Dec 19, 2018 11:56 pm

Scooter57 wrote:
Wed Dec 19, 2018 11:33 pm
letsgobobby wrote:
Wed Dec 19, 2018 11:14 pm
2008 earnings are about to drop out of the PE10 calculations, suggesting in about 2 weeks PE10 will drop by over 10%, from 27.7 today to ~ 24.5 then. That's within the range of "long term average". Stocks certainly aren't grossly overpriced.

On the other hand, real earnings on the S&P were in the mid 40s in the 1960s. Fifty years later they've basically tripled to the 130 range. Yet the stock market has gone up far more than that in real terms - the multiple has really exploded. This isn't about fundamentals. It's about psychology. Psychology has nothing to support it and can turn on a time.
Isn't the long-term median P/E ratio closer to 16?
CAPE has been above that average almost continuously since 1992. It only briefly touched that level during the 2008/2009 debacle. It seems pretty safe to say at this point that unless we experience something even worse than that, a CAPE of 16 won't occur again any time soon, but no one knows for sure. Larry Swedroe has discussed several reasons why CAPE should be higher today than it was historically.
“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

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nedsaid
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Re: U.S. stocks in free fall

Post by nedsaid » Wed Dec 19, 2018 11:57 pm

long_gamma wrote:
Wed Dec 19, 2018 11:10 pm
nedsaid wrote:
Wed Dec 19, 2018 10:47 pm
long_gamma wrote:
Wed Dec 19, 2018 8:05 pm
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Well. There was major market moving event at 2pm
The Fed announced a rate hike, which the market expected. The market wanted guidance for one maybe zero rate hikes in 2019 and the Fed said two rate hikes in 2019 rather than three. So the markets didn't get what they wanted and had a cow. At the same time, the Fed said that economic data would drive their interest rate decisions going forward. So some nuance here, maybe not nuanced enough and the markets didn't like it.

Seemed like hair splitting on the language but markets often parse comments from key government officials. Sort of like Kremlin watching, you didn't go by so much by what was said but what wasn't said.

In any case, I thought this was an overreaction over not much.
It is all about positioning of traders before the report. Events like these always create volatility on both directions because of these leveraged traders positions.

So yes those nuance you cited matters. From the reaction it was obvious that traders were expecting much more dovish stance from FED and didn't get it. Slide in oil prices, moderation in inflation expectations may be warranted dovish stance but wasn't there. Coupled along this with technical break of going below recent Feb low in SPX worsened the situation.
Yep, it is expectation vs. reality. Today, reality wasn't what the traders wanted and they reacted negatively. As they said during World War II, a slip of the lip can sink a ship. Not a perfect analogy, the Fed Chairman didn't slip his lip, he said what he wanted to say, it was that the traders didn't hear what they wanted to hear. They sank the market. So you are not at all wrong. I get frustrated over the volatility. But then again, if my investments were leveraged, my attitude would be different.
A fool and his money are good for business.

fennewaldaj
Posts: 950
Joined: Sun Oct 22, 2017 11:30 pm

Re: U.S. stocks in free fall

Post by fennewaldaj » Thu Dec 20, 2018 12:01 am

nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.

User avatar
nedsaid
Posts: 13469
Joined: Fri Nov 23, 2012 12:33 pm

Re: U.S. stocks in free fall

Post by nedsaid » Thu Dec 20, 2018 12:04 am

fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
A fool and his money are good for business.

MotoTrojan
Posts: 9952
Joined: Wed Feb 01, 2017 8:39 pm

Re: U.S. stocks in free fall

Post by MotoTrojan » Thu Dec 20, 2018 12:14 am

applejack123 wrote:
Wed Dec 19, 2018 6:08 pm
What I don’t understand is the djia was around 16k two years ago. It has climbed up to 26k in literally two years. Why do most people on this thread think that’s where it was supposed to be? I mean, it was climbing since the 08 crash and hasn’t stopped. The high around 08 was only 13k. I just don’t get the people on here who think the market was supposed to be at 26k?
What is it supposed to be? Doubling since the high a decade again is a 7% nominal return; sounds about right.

fennewaldaj
Posts: 950
Joined: Sun Oct 22, 2017 11:30 pm

Re: U.S. stocks in free fall

Post by fennewaldaj » Thu Dec 20, 2018 12:23 am

nedsaid wrote:
Thu Dec 20, 2018 12:04 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
masteraleph wrote:
Wed Dec 19, 2018 5:03 pm
That's probably not algorithms, actually (or not exclusively).
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
I certainly have trouble/can't really accept that the market is actually worth 2% less than yesterday. To me it seems like I get to buy more of the same thing for less money.

flyingaway
Posts: 2721
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Re: U.S. stocks in free fall

Post by flyingaway » Thu Dec 20, 2018 12:28 am

fennewaldaj wrote:
Thu Dec 20, 2018 12:23 am
nedsaid wrote:
Thu Dec 20, 2018 12:04 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm
J G Bankerton wrote:
Wed Dec 19, 2018 5:11 pm
The speed of the drop was 90% or more high speed
trade. Retail investors aren't sitting around watching CNBC or reading every tweet. Even the pundits don't have a clue but I do.
That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
I certainly have trouble/can't really accept that the market is actually worth 2% less than yesterday. To me it seems like I get to buy more of the same thing for less money.
Could it be overvalued yesterday?

fennewaldaj
Posts: 950
Joined: Sun Oct 22, 2017 11:30 pm

Re: U.S. stocks in free fall

Post by fennewaldaj » Thu Dec 20, 2018 12:31 am

flyingaway wrote:
Thu Dec 20, 2018 12:28 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:23 am
nedsaid wrote:
Thu Dec 20, 2018 12:04 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm


That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
I certainly have trouble/can't really accept that the market is actually worth 2% less than yesterday. To me it seems like I get to buy more of the same thing for less money.
Could it be overvalued yesterday?
Yes. Given valuations even 20% more drop would be reasonable in a way. I was more saying I don't think they real delta in what partial ownership of these companies is worth really changed 2%.

drk
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Re: U.S. stocks in free fall

Post by drk » Thu Dec 20, 2018 12:34 am

fennewaldaj wrote:
Thu Dec 20, 2018 12:31 am
Given valuations
As was discussed above, give it two weeks. 8-)

justsomeguy2018
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Re: U.S. stocks in free fall

Post by justsomeguy2018 » Thu Dec 20, 2018 12:42 am

flyingaway wrote:
Thu Dec 20, 2018 12:28 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:23 am
nedsaid wrote:
Thu Dec 20, 2018 12:04 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am
nedsaid wrote:
Wed Dec 19, 2018 7:41 pm


That was fast! Markets were up smartly and then went to a 352 loss on the Dow. This is ridiculous and frankly irrational. The professional investors and traders ought to be ashamed of themselves. They chide the individual investors as being emotional and irrational but it is the big institutions that are doing all of this.
Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
I certainly have trouble/can't really accept that the market is actually worth 2% less than yesterday. To me it seems like I get to buy more of the same thing for less money.
Could it be overvalued yesterday?
This goes back to a question I posed on another thread - how do we know what the actual value of all these assets is supposed to be? Be it equities or real estate, if there is a 20% drop going forward, you may say - "Wow, it's 20% cheaper!" but what if it is still overvalued? Seems like its all just gambling at this point.

casualflower
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Re: U.S. stocks in free fall

Post by casualflower » Thu Dec 20, 2018 12:47 am

finite_difference wrote:
Wed Dec 19, 2018 9:12 pm
willthrill81 wrote:
Wed Dec 19, 2018 5:47 pm
'Hurting' the economy by imposing a higher cost of capital so that you can 'help' it later by reducing that cost back to where it was doesn't make sense to me either. It would only seem to work if the economy is robust enough that the rate hikes don't have much of an effect on it, but that seems unlikely.
That’s part of it. But it’s also about preventing the market from overheating too much and to keep a lid on inflation.

Theoretically there is probably some optimal, stable rate they would have it set to, if only the market would be at its optimal, stable growth rate too. Instead it’s more of a pull/push type of relationship.
The Fed's mission doesn't have anything to do with the stock market. Inflation and unemployment are its measuring sticks for the economy.

The fundamentals of the economy are strong and it's a perfect time to raise rates, so they can be lowered later.

One reason the government likes to have a higher inflation rate is because it's a stealth tax. The higher the inflation rate the cheaper its existing loan obligations. Too much inflation though and people get furious.

casualflower
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Re: U.S. stocks in free fall

Post by casualflower » Thu Dec 20, 2018 12:52 am

justsomeguy2018 wrote:
Thu Dec 20, 2018 12:42 am
This goes back to a question I posed on another thread - how do we know what the actual value of all these assets is supposed to be? Be it equities or real estate, if there is a 20% drop going forward, you may say - "Wow, it's 20% cheaper!" but what if it is still overvalued? Seems like its all just gambling at this point.
What is the value of anything? It's whatever someone is willing and able to pay for it. Today is no different than any other day, it's all "gambling" if you define "gambling" as "not a sure thing". Which you can do and your guaranteed to get 2% in a high interest savings account by doing that.

All I know is that historically, stocks rise roughly 7% per year over the long term. Could they drop 5% tomorrow? Sure. Could they rise 7% tomorrow? Sure. I don't know. But if today is 10% cheaper than a month ago...I'd say it's more likely to rise than go down, so I'll buy.

MisterMister
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Re: U.S. stocks in free fall

Post by MisterMister » Thu Dec 20, 2018 1:13 am

At this point DOW futures are predicting a start down 183 points. Of course futures aren't a good indicator of how they day will end, but given the fact that of late we've started the day with positive futures yet ended with a big downturn (and given what happened with the Fed), it could be a rough day.

Hold on.

drk
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Re: U.S. stocks in free fall

Post by drk » Thu Dec 20, 2018 1:23 am

MisterMister wrote:
Thu Dec 20, 2018 1:13 am
At this point DOW futures are predicting a start down 183 points. Of course futures aren't a good indicator of how they day will end, but given the fact that of late we've started the day with positive futures yet ended with a big downturn (and given what happened with the Fed), it could be a rough day.

Hold on.
S&P 500 futures are down 0.76%, and Russell 2000 futures are down 0.49%. Of course, they were up yesterday at this time. :mrgreen:

WanderingDoc
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Re: U.S. stocks in free fall

Post by WanderingDoc » Thu Dec 20, 2018 2:30 am

justsomeguy2018 wrote:
Thu Dec 20, 2018 12:42 am
flyingaway wrote:
Thu Dec 20, 2018 12:28 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:23 am
nedsaid wrote:
Thu Dec 20, 2018 12:04 am
fennewaldaj wrote:
Thu Dec 20, 2018 12:01 am


Its weird that this reaction seems to be in response to Powell doing literally exactly what he said he would do in November. Maybe people thought he would succumb to pressure from Trump and the stock market.
It does seem like Unicorns and Fairy Dust doesn't it?
I certainly have trouble/can't really accept that the market is actually worth 2% less than yesterday. To me it seems like I get to buy more of the same thing for less money.
Could it be overvalued yesterday?
This goes back to a question I posed on another thread - how do we know what the actual value of all these assets is supposed to be? Be it equities or real estate, if there is a 20% drop going forward, you may say - "Wow, it's 20% cheaper!" but what if it is still overvalued? Seems like its all just gambling at this point.
If a real asset such as a rental property produces a given income year after year, this determines the strength of the asset. Things like fixed income and rental income are more reliable than valuations. Also, if property values drop, a real estate investor is still paid in 4 additional ways.

Paper assets don't have this characteristic. If valuations drop 20 or 30% you are screwed. In my opinion, a strong investment is one that produces income now and later, not just decades later.

Evaluating a real asset is much easier since we evaluate it based on the income it produces. This is similar to evaluating a business. However, take a look at some big stocks on the S&P 500. Many don't even produce a positive cash flow. This should worry us if we are smart.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

minimalistmarc
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Re: U.S. stocks in free fall

Post by minimalistmarc » Thu Dec 20, 2018 4:47 am

Just bought £10k vanguard all world in taxable this morning. I’m 100% equities but usually wait till I’ve hit 20k before investing to cut trading costs.

Actually I’m not 100% equities because I have about 15% NW tied up in illiquid investments/mistakes which will hopefully come back to me in 2019 and will be going into all world - so cheers to a crash!

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » Thu Dec 20, 2018 7:21 am

columbia wrote:
Wed Dec 19, 2018 8:53 pm
gilgamesh wrote:
Wed Dec 19, 2018 5:38 pm
columbia wrote:
Wed Dec 19, 2018 3:11 pm
ge1 wrote:
Wed Dec 19, 2018 3:07 pm
I'm not the trading expert, but the fact that the market is not able to snap back after the recent losses is a very bearish sign... and the magnitude of the losses today after the expected rate hike is even more worrying.

For those of you who keep talking about "loading up the truck" you may want to take it easy for a while, seems likely to me that the market will go significantly lower from here.
Staying the course (a good move) is one thing; pretending that all signs aren’t pointing towards a continued decline is...baffling.
Are these signs actionable for you? What’s preventing you from cashing it all out now, and entering when it’s declined?
Nothing is preventing me: it happened on Monday October 8 (which I believe was 1.8% off the all time S&P500 high).

The (re-)entering part is TBD.

I’ve been investing since 1996 and that sort of thing never entered my radar in the past. Then again, I’m older and now have far more to lose.

Yep...I committed the cardinal sin. :o
when you do decide to re-enter, how would you evaluate your success?...if you are in the accumulating stages, it is not as easy as saying I exited when the stocks were higher (because, if the stocks continued to decline you lose the opportunity to make your periodic purchases at the even lower prices too)...

So, you don't have to catch the absolute bottom (who could), but at least make up for the periodic purchase that could have been had for a lower price, right?

motorcyclesarecool
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Re: U.S. stocks in free fall

Post by motorcyclesarecool » Thu Dec 20, 2018 7:30 am

More TLH yesterday! With Vanguard’s free ETF trades, I have sooo many partners to choose from. It’s the one thing keeping me from making Fidelity my one-stop shop. I love offsetting income. Then, in bull market years, I can donate appreciated shares to meet my charitable goals. No downsides to market movements for this accumulator.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

columbia
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Re: U.S. stocks in free fall

Post by columbia » Thu Dec 20, 2018 7:33 am

A proper response would require discussing certain, shall we say, current events and that would violate board policies. :)
If you leave your head in the sand for too long, you might get run over by a Jeep.

dspencer
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Re: U.S. stocks in free fall

Post by dspencer » Thu Dec 20, 2018 10:25 am

HomerJ wrote:
Wed Dec 19, 2018 5:32 pm
J G Bankerton wrote:
Wed Dec 19, 2018 3:51 pm
MDCrab wrote:
Wed Dec 19, 2018 3:45 pm
I don’t have any trucks to back up, but I do have paychecks. And I plan on buying all the way to the bottom, wherever that is. And then I’ll buy all the way back to the top, as well.
I just dipped into my emergency fund to buy VTI. My last buy is up 0.42%. I'm good at this. :greedy
How many of your 388 posts are this same joke? :oops:
J G Bankerton is a troll/parody account, right?

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J G Bankerton
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Re: U.S. stocks in free fall

Post by J G Bankerton » Thu Dec 20, 2018 10:52 am

dspencer wrote:
Thu Dec 20, 2018 10:25 am
HomerJ wrote:
Wed Dec 19, 2018 5:32 pm
J G Bankerton wrote:
Wed Dec 19, 2018 3:51 pm
MDCrab wrote:
Wed Dec 19, 2018 3:45 pm
I don’t have any trucks to back up, but I do have paychecks. And I plan on buying all the way to the bottom, wherever that is. And then I’ll buy all the way back to the top, as well.
I just dipped into my emergency fund to buy VTI. My last buy is up 0.42%. I'm good at this. :greedy
How many of your 388 posts are this same joke? :oops:
J G Bankerton is a troll/parody account, right?
My last buy is now down 0.04% . Does that make you happy? This entire thread is a parody, joke. Lighten up.

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corn18
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Re: U.S. stocks in free fall

Post by corn18 » Thu Dec 20, 2018 10:54 am

J G Bankerton wrote:
Thu Dec 20, 2018 10:52 am
My last buy is now down 0.04% . Does that make you happy?
[/quote]

Nope. If you are not making money, I am not either. If your next post is that your last buy is up 5%, that would make me happy. :sharebeer
Don't do something, just stand there!

vwgrrc
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Re: U.S. stocks in free fall

Post by vwgrrc » Thu Dec 20, 2018 11:32 am

Looks like a big day for more TLHs and a Buy orders :beer

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mrspock
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Re: U.S. stocks in free fall

Post by mrspock » Thu Dec 20, 2018 11:50 am

vwgrrc wrote:
Thu Dec 20, 2018 11:32 am
Looks like a big day for more TLHs and a Buy orders :beer
I’ve run out of high quality partners for VOO already... having to consider iShares funds :shock: .

MotoTrojan
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Re: U.S. stocks in free fall

Post by MotoTrojan » Thu Dec 20, 2018 12:03 pm

mrspock wrote:
Thu Dec 20, 2018 11:50 am
vwgrrc wrote:
Thu Dec 20, 2018 11:32 am
Looks like a big day for more TLHs and a Buy orders :beer
I’ve run out of high quality partners for VOO already... having to consider iShares funds :shock: .
ITOT is fine, no? I’m stuck in a MF though and don’t want to convert. Have used VGs 3 large cap indices already.

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Hector
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Re: U.S. stocks in free fall

Post by Hector » Thu Dec 20, 2018 12:12 pm

mrspock wrote:
Thu Dec 20, 2018 11:50 am
vwgrrc wrote:
Thu Dec 20, 2018 11:32 am
Looks like a big day for more TLHs and a Buy orders :beer
I’ve run out of high quality partners for VOO already... having to consider iShares funds :shock: .
We certainly are helping higher trading volume.

veggivet
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Re: U.S. stocks in free fall

Post by veggivet » Thu Dec 20, 2018 12:14 pm

Could be time to warm up the engine before backing up the truck...NASDAQ officially in bear market territory.
If you watch your pennies, your dollars will take care of themselves.

Mrmetalpole
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Re: U.S. stocks in free fall

Post by Mrmetalpole » Thu Dec 20, 2018 12:22 pm

Adhere to the boglehead philosophy, or I wouldn’t be here, but remember.....Don’t fight the fed. Obvious downtrend till end of year, any rally has been sold off since the fall. January will certainly be an interesting month to see how funds positiin new money, as it was this year. For the first time in a long time, it seems like everyone and their mother is raising cash bc it finally gets something of a return and everyone wants ammo to try and buy near the bottom of the bear, vis a vis any guidance on new fed rate hikes in ‘19. Then we get an economic set-up into the 2020 election. Imagine a mild recession, more rate hikes and what if the market expects Trump to lose in 2020 - new business regs back on?....no politics, but what a ride it will be from Jan to end of 2020. IMO the 9-10 bull is probably over with the preceding in mind. A new one will emerge in a few years after the dust settles on all this fun stuff. Just my opinion!

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Hector
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Re: U.S. stocks in free fall

Post by Hector » Thu Dec 20, 2018 12:27 pm

Mrmetalpole wrote:
Thu Dec 20, 2018 12:22 pm
Adhere to the boglehead philosophy, or I wouldn’t be here, but remember.....Don’t fight the fed. Obvious downtrend till end of year, any rally has been sold off since the fall. January will certainly be an interesting month to see how funds positiin new money, as it was this year. For the first time in a long time, it seems like everyone and their mother is raising cash bc it finally gets something of a return and everyone wants ammo to try and buy near the bottom of the bear, vis a vis any guidance on new fed rate hikes in ‘19. Then we get an economic set-up into the 2020 election. Imagine a mild recession, more rate hikes and what if the market expects Trump to lose in 2020 - new business regs back on?....no politics, but what a ride it will be from Jan to end of 2020. IMO the 9-10 bull is probably over with the preceding in mind. A new one will emerge in a few years after the dust settles on all this fun stuff. Just my opinion!
What action are you taking if any then?

amitb00
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Re: U.S. stocks in free fall

Post by amitb00 » Thu Dec 20, 2018 12:38 pm

Wow NASDAQ in bear. S&P is with in 4% of Bear market. Let us hope fall stops soon . I wonder when will the next post happen on the the SOAR thread. Hope happens sooner than later.

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J G Bankerton
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Re: U.S. stocks in free fall

Post by J G Bankerton » Thu Dec 20, 2018 12:40 pm

Hector wrote:
Thu Dec 20, 2018 12:27 pm
What action are you taking if any then?
How long before the barbarians are at the gate? Soon companies assists will be worth more than the stock price. Buy the entire company and have a fire sale. :twisted:

We should pool our dry powder and buy Verizon. Then we can sell the telephone poles and wire for scrap. Who want's to be the managing partner?

Seriously, a true Boglehead investor isn't aware of the free-fall. They do as I do and invest regularly according to their asset allocation. It is really that simple, so simple there isn't anything to talk about on the macro level.

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