U.S. stocks in free fall

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alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider » Wed Dec 19, 2018 3:41 pm

ge1 wrote:
Wed Dec 19, 2018 3:19 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.
Yes exactly. I'm not advocating that people react on this but for those of us who experienced the deep declines in 2000/1 and 2008/9, it's very difficult not to see the similarities. And once the decline escalate, market tend to drop very quickly. We are nowhere near "fire sale" territory.
Yes, if I were a betting man I would probably bet we will hit bear territory before this all shakes out. But I'm not a betting man, I'm an investing man. All I will do is stay the course and keep up my regular contributions to my accounts.

At the same time, I don't think this looks quite the same as 00/01 or 08/09. By the time the markets really got started on the decline in 2008, there had already been over a year of talk about a brewing subprime default crisis. Bear Stearns failed almost half a year before the bottom dropped out. On the flipside, I never saw the irrational exuberance leading up to the 00/01 downturn. Back then, I vividly remember quitting their day jobs to trade stocks and saying things like "[X tech stock] is going to put my kids through college!." This time around, there's certainly a great deal of unease, and some genuine cause for concern, but we've seen neither the insane runup of the .com era Nasdaq nor the credit crunch of the financial crisis. Instead, we have a lot of fear and concern underpinned mostly by the fear and concern of others rather than an underlying cause. What that means, I don't know, but I think a 25% drop from the highs is more likely than a 50%.

alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider » Wed Dec 19, 2018 3:42 pm

ginmqi wrote:
Wed Dec 19, 2018 3:37 pm
ge1 wrote:
Wed Dec 19, 2018 3:07 pm
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.
For sure.

If we are truly entering a bear market then I'll be eagerly awaiting with my truck and back it up as the equity market discount/sale continues!

So the truck is simply waiting to be unloaded...but let's hope it goes even lower! :twisted:
(disclaimer I am not advocating for any loss of jobs or such, simply that I am an early career investor with long investment horizon, the current fall in market prices is a HUGE relief and a very happy sign for early investors like me with a long-term horizon)
Where is the truck coming from? Have you been sitting in cash the whole time?

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Hawaiishrimp
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Re: U.S. stocks in free fall

Post by Hawaiishrimp » Wed Dec 19, 2018 3:43 pm

Scooter57 wrote:
Wed Dec 19, 2018 11:40 am

With treasury yields considerably higher than that dividend yield, investors whose portfolio has made enormous gains over the past 10 years could well justify taking a lot of their money out of the market and stashing it in treasuries.

Obviously, this is not what the confirmed Boglehead would do, but it is what a lot of other investors would do and that will greatly influence stock prices going forward. The investors most likely to take their money out are those in retirement who have incomes low enough that the tax hit on the treasuring income is the same as it would be on dividends.
Scooter57, you Sir, has spoken a lot of wisdom here. That's exactly my point of view as well. My biggest worry is not a sudden huge drop in 2008/2009, but a slow and steady soft landing for a prolonged period of time like it did in 2000s. I believe what's happening right now is closer to the scenario in 2000s than in 2008/2009. Hence, by end of September, I had sold 65% of my stock index and put that in a combination of short term treasury and fixed income. Yes, guilty as charge, I timed the market. I don't trust 2018 will keep on climbing and looks like I guess it right this time. A few more trading days left in 2018. Let's see how it goes. As always, it's gonna be interesting.
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MDCrab
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Re: U.S. stocks in free fall

Post by MDCrab » Wed Dec 19, 2018 3:45 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.
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.

minimalistmarc
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Re: U.S. stocks in free fall

Post by minimalistmarc » Wed Dec 19, 2018 3:49 pm

I just want to say I love this thread. It's probably my favourite thread on the whole internet.

We have a great mix of market timers, catastrophisers, level headed folk and pure bogleheads.

Every time there is a blip the market timers are very vocal, and it is very rewarding to see them learn the error of their ways with time.

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goodenyou
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Re: U.S. stocks in free fall

Post by goodenyou » Wed Dec 19, 2018 3:49 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.
Some trucks do carry dung.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

Grogs
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Re: U.S. stocks in free fall

Post by Grogs » Wed Dec 19, 2018 3:50 pm

Other than my 401k contribution on the 26th (which is all bonds/international) and a small contribution to my HSA on the 27th, I don't have any more purchases planned for the year. I plan to fund at least half of my 2019 IRA contributions in January, so I'm OK if it's still down, or down more then. The interesting thing looking at my AA is that it was around 79% in September at the highs, but with all the drops it's still just above 76%. My AA target is 75%, and with stocks tanking I might hit that before too long. I don't plan plan to sell any stocks to rebalance until things have recovered significantly and I start approaching a 5% band again.

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

Post by J G Bankerton » 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

alfaspider
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Re: U.S. stocks in free fall

Post by alfaspider » Wed Dec 19, 2018 3:53 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
Then it isn't really an emergency fund is it?

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

Post by J G Bankerton » Wed Dec 19, 2018 3:54 pm

alfaspider wrote:
Wed Dec 19, 2018 3:53 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
Then it isn't really an emergency fund is it?
Only little people have "emergencies". :annoyed

Scooter57
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Re: U.S. stocks in free fall

Post by Scooter57 » Wed Dec 19, 2018 3:55 pm

Retired savers like me who don't want to gamble with the assets we have that need to get us through old age want rates to go up to a normal range so we can invest in fixed income and CDs for income. The Fed saved the economy (if they did, longterm) by forcing people dependent on yield into much riskier investments.

The Fed forced rates down to levels artificially low for so long that people now think they are how rates should be. But the low rates were to spur investments in products and services, not the financial engineering that mopped up so much of it. Companies that used the extremely cheap money foolishly or to satisfy the greed of their execs will be punished. Investors who let them get away with it because they only looked at share prices, not company health, will too.

The Fed is acting wisely but yes, perhaps too late.

And the now-billionaires who soaked up so much of that very cheap money are turning into an oligarch class that may dominate the world for decades to come. Income inequality has soared thanks to the way companies used cheap money.

bi0hazard
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Re: U.S. stocks in free fall

Post by bi0hazard » Wed Dec 19, 2018 3:59 pm

Hawaiishrimp wrote:
Wed Dec 19, 2018 3:43 pm
Scooter57 wrote:
Wed Dec 19, 2018 11:40 am

With treasury yields considerably higher than that dividend yield, investors whose portfolio has made enormous gains over the past 10 years could well justify taking a lot of their money out of the market and stashing it in treasuries.

Obviously, this is not what the confirmed Boglehead would do, but it is what a lot of other investors would do and that will greatly influence stock prices going forward. The investors most likely to take their money out are those in retirement who have incomes low enough that the tax hit on the treasuring income is the same as it would be on dividends.
Scooter57, you Sir, has spoken a lot of wisdom here. That's exactly my point of view as well. My biggest worry is not a sudden huge drop in 2008/2009, but a slow and steady soft landing for a prolonged period of time like it did in 2000s. I believe what's happening right now is closer to the scenario in 2000s than in 2008/2009. Hence, by end of September, I had sold 65% of my stock index and put that in a combination of short term treasury and fixed income. Yes, guilty as charge, I timed the market. I don't trust 2018 will keep on climbing and looks like I guess it right this time. A few more trading days left in 2018. Let's see how it goes. As always, it's gonna be interesting.
:oops:

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Doom&Gloom
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Re: U.S. stocks in free fall

Post by Doom&Gloom » Wed Dec 19, 2018 4:03 pm

munemaker wrote:
Wed Dec 19, 2018 3:34 pm
Fed took away the punch bowl.
I can not be the only one here who is visualizing "Dandy" Don Meredith singing Turn Out the Lights ...

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

Post by J G Bankerton » Wed Dec 19, 2018 4:04 pm

Scooter57 wrote:
Wed Dec 19, 2018 3:55 pm
Retired savers like me who don't want to gamble with the assets we have that need to get us through old age want rates to go up to a normal range so we can invest in fixed income and CDs for income.
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.

veggivet
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Re: U.S. stocks in free fall

Post by veggivet » Wed Dec 19, 2018 4:05 pm

Added to ITOT in my HSA at $56.50...just another day in the market. Stay calm and carry on.
If you watch your pennies, your dollars will take care of themselves.

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

Post by J G Bankerton » Wed Dec 19, 2018 4:12 pm

veggivet wrote:
Wed Dec 19, 2018 4:05 pm
Added to ITOT in my HSA at $56.50...just another day in the market. Stay calm and carry on.
The algorithms are confused. Two point swing in an hour for no reason. VTI is selling at a premium. Smart money says buy.

letsgobobby
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Re: U.S. stocks in free fall

Post by letsgobobby » Wed Dec 19, 2018 4:13 pm

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Last edited by letsgobobby on Mon Apr 22, 2019 2:27 pm, edited 1 time in total.

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corn18
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Re: U.S. stocks in free fall

Post by corn18 » Wed Dec 19, 2018 4:13 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:04 pm
Scooter57 wrote:
Wed Dec 19, 2018 3:55 pm
Retired savers like me who don't want to gamble with the assets we have that need to get us through old age want rates to go up to a normal range so we can invest in fixed income and CDs for income.
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.
But the motherload came when inflation dropped back down below 5% in 2 years and you were holding 17% CD's @ 5 years. That's how my grandfather in law got rich.

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retiringwhen
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Re: U.S. stocks in free fall

Post by retiringwhen » Wed Dec 19, 2018 4:22 pm

Hawaiishrimp wrote:
Wed Dec 19, 2018 3:43 pm
Scooter57 wrote:
Wed Dec 19, 2018 11:40 am

With treasury yields considerably higher than that dividend yield, investors whose portfolio has made enormous gains over the past 10 years could well justify taking a lot of their money out of the market and stashing it in treasuries.

Obviously, this is not what the confirmed Boglehead would do, but it is what a lot of other investors would do and that will greatly influence stock prices going forward. The investors most likely to take their money out are those in retirement who have incomes low enough that the tax hit on the treasuring income is the same as it would be on dividends.
Scooter57, you Sir, has spoken a lot of wisdom here. That's exactly my point of view as well. My biggest worry is not a sudden huge drop in 2008/2009, but a slow and steady soft landing for a prolonged period of time like it did in 2000s. I believe what's happening right now is closer to the scenario in 2000s than in 2008/2009. Hence, by end of September, I had sold 65% of my stock index and put that in a combination of short term treasury and fixed income. Yes, guilty as charge, I timed the market. I don't trust 2018 will keep on climbing and looks like I guess it right this time. A few more trading days left in 2018. Let's see how it goes. As always, it's gonna be interesting.
when you hear old salts like Jack Bogle talk about muted returns for the next decade, they are mostly just doing the math you describe above, at the interest rates of the past 8-10 years, stocks have been priced pretty favorably, if rates continue to rise, then lower risk investments (aka Treasuries) start to look more and more attractive. hence, equity valuations have to go down. that will happen in two ways, increased earnings and lower prices. we will probably get both......

find your risk tolerance, sit back and enjoy the ride. BTW, earnings are still pretty good and rising overall AND the S&P 500 PE has been dropping. so we are getting the secular adjustment everyone knows must happen.

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nedsaid
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Re: U.S. stocks in free fall

Post by nedsaid » Wed Dec 19, 2018 4:26 pm

Well, my theory was that this thread was a contrary indicator. Whenever the thread would pop up, stocks would rally. Worked pretty well except for the August 2015 through February 2016 period, when we briefly hit bear market territory. Hasn't really worked too well in 2018 as the market seems to want a bear market. Indeed, we have seen two corrections this year already. My new theory is that the Mods ruined the indicator when they changed the title from freefall to free fall. So I wouldn't take to much stock in this thread as a market indicator going forward. :wink:

So I have blamed the hedge funds, blamed the arbitraguers, blamed professional portfolio managers, blamed the financial press, blamed that silly "Soar" thread, and finally blamed the Mods. Anything but taking personal responsibility for my own decisions. As the great T-Shirt philosopher said, "If at first you try and don't succeed. . .blame somebody." Now come to think about it, I blame the factors too. Feel better now, but all that didn't change a thing. My portfolio still lost money.
A fool and his money are good for business.

deltaneutral83
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Re: U.S. stocks in free fall

Post by deltaneutral83 » Wed Dec 19, 2018 4:30 pm

nedsaid wrote:
Wed Dec 19, 2018 4:26 pm
Well, my theory was that this thread was a contrary indicator. Whenever the thread would pop up, stocks would rally. Worked pretty well except for the August 2015 through February 2016 period, when we briefly hit bear market territory. Hasn't really worked too well in 2018 as the market seems to want a bear market.
Not sure what the "territory" word meant here but Fall 015/Winter 2016 didn't land us in bear territory, think we were down at worst 12% on the S&P and that included the intra day low which I believe was somewhere in Feb 2016.

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nedsaid
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Re: U.S. stocks in free fall

Post by nedsaid » Wed Dec 19, 2018 4:33 pm

deltaneutral83 wrote:
Wed Dec 19, 2018 4:30 pm
nedsaid wrote:
Wed Dec 19, 2018 4:26 pm
Well, my theory was that this thread was a contrary indicator. Whenever the thread would pop up, stocks would rally. Worked pretty well except for the August 2015 through February 2016 period, when we briefly hit bear market territory. Hasn't really worked too well in 2018 as the market seems to want a bear market.
Not sure what the "territory" word meant here but Fall 015/Winter 2016 didn't land us in bear territory, think we were down at worst 12% on the S&P and that included the intra day low which I believe was somewhere in Feb 2016.
We reached an intra-day low where the market was down 20% as I recall. Didn't even last a day. Could be thinking of the Dow. This was a couple of years ago and the memory does get to be a bit foggy. I do recall the low was in February 2016.
Last edited by nedsaid on Wed Dec 19, 2018 4:34 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 4:34 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:12 pm
veggivet wrote:
Wed Dec 19, 2018 4:05 pm
Added to ITOT in my HSA at $56.50...just another day in the market. Stay calm and carry on.
The algorithms are confused. Two point swing in an hour for no reason. VTI is selling at a premium. Smart money says buy.
Volatility in the absence of new information is indicative of inefficiency (e.g. biases, emotions, faultily programmed computers).
“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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Leif
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Re: U.S. stocks in free fall

Post by Leif » Wed Dec 19, 2018 4:34 pm

munemaker wrote:
Wed Dec 19, 2018 3:34 pm
Fed took away the punch bowl.
I think they are slowly draining the bowl.

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

Post by J G Bankerton » Wed Dec 19, 2018 4:37 pm

willthrill81 wrote:
Wed Dec 19, 2018 4:34 pm
Volatility in the absence of new information is indicative of inefficiency (e.g. biases, emotions, faultily programmed computers).
Computers never cry, that's what got me confused.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » Wed Dec 19, 2018 4:38 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:37 pm
willthrill81 wrote:
Wed Dec 19, 2018 4:34 pm
Volatility in the absence of new information is indicative of inefficiency (e.g. biases, emotions, faultily programmed computers).
Computers never cry, that's what got me confused.
That doesn't mean that they cannot act in ways that we would interpret as being completely irrational, even though they're just following their programming. For instance, the crash in October, 1987, was almost entirely due to computer trading gone awry, and that led to the advent of the 'circuit breakers' that shut down trading if prices fall too quickly.
“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

ge1
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Re: U.S. stocks in free fall

Post by ge1 » Wed Dec 19, 2018 4:39 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:12 pm
veggivet wrote:
Wed Dec 19, 2018 4:05 pm
Added to ITOT in my HSA at $56.50...just another day in the market. Stay calm and carry on.
The algorithms are confused. Two point swing in an hour for no reason. VTI is selling at a premium. Smart money says buy.
I feel like I'm listening to trader talk on CNBC, are you sure you are at the right forum here? Bogleheads, stay the course and all?

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corn18
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Re: U.S. stocks in free fall

Post by corn18 » Wed Dec 19, 2018 4:39 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:37 pm
willthrill81 wrote:
Wed Dec 19, 2018 4:34 pm
Volatility in the absence of new information is indicative of inefficiency (e.g. biases, emotions, faultily programmed computers).
Computers never cry, that's what got me confused.
Programmers do.
Don't do something, just stand there!

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

Post by J G Bankerton » Wed Dec 19, 2018 4:42 pm

willthrill81 wrote:
Wed Dec 19, 2018 4:38 pm
J G Bankerton wrote:
Wed Dec 19, 2018 4:37 pm
willthrill81 wrote:
Wed Dec 19, 2018 4:34 pm
Volatility in the absence of new information is indicative of inefficiency (e.g. biases, emotions, faultily programmed computers).
Computers never cry, that's what got me confused.
That doesn't mean that they cannot act in ways that we would interpret as being completely irrational, even though they're just following their programming. For instance, the crash in October, 1987, was almost entirely due to computer trading gone awry, and that led to the advent of the 'circuit breakers' that shut down trading if prices fall too quickly.
The bots that play online poker aren't nearly as dumb. Though they do get dumber in proportion to the number of players and other bots at the table.

With VIT I'm betting with the house and can't lose.

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munemaker
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Re: U.S. stocks in free fall

Post by munemaker » Wed Dec 19, 2018 4:42 pm

Leif wrote:
Wed Dec 19, 2018 4:34 pm
munemaker wrote:
Wed Dec 19, 2018 3:34 pm
Fed took away the punch bowl.
I think they are slowly draining the bowl.
Image

masteraleph
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Re: U.S. stocks in free fall

Post by masteraleph » Wed Dec 19, 2018 5:03 pm

J G Bankerton wrote:
Wed Dec 19, 2018 4:12 pm
The algorithms are confused. Two point swing in an hour for no reason. VTI is selling at a premium. Smart money says buy.
That's probably not algorithms, actually (or not exclusively). Traders were betting that the Fed was going to include language in their statement that made future rate increases significantly less likely, and they didn't. Rise in interest rates on bonds means that stocks are less attractive.

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

Post by J G Bankerton » 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.

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aj76er
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Re: U.S. stocks in free fall

Post by aj76er » Wed Dec 19, 2018 5:15 pm

Here's some perspective: when this massive thread started, on 8/8/11, the Vanguard Total Stock Market ETF (VTI) was ~$60 per share.
Today, the same VTI is at ~$128 per share.
And that's just price (not including dividends along the way).
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

corpgator
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Re: U.S. stocks in free fall

Post by corpgator » Wed Dec 19, 2018 5:25 pm

2 and 5 year are inverted again. 2 and 10 are getting close. 12 month and 5 year are equal.

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HomerJ
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Re: U.S. stocks in free fall

Post by HomerJ » 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:
The J stands for Jay

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » 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?

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gilgamesh
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Re: U.S. stocks in free fall

Post by gilgamesh » Wed Dec 19, 2018 5:39 pm

J G Bankerton wrote:
Wed Dec 19, 2018 3:54 pm
alfaspider wrote:
Wed Dec 19, 2018 3:53 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
Then it isn't really an emergency fund is it?
Only little people have "emergencies". :annoyed
So, you are a little less “little” now - good for you!

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Flymore
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Re: U.S. stocks in free fall

Post by Flymore » 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.

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nisiprius
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Re: U.S. stocks in free fall

Post by nisiprius » Wed Dec 19, 2018 5:43 pm

telemark wrote:
Wed Dec 19, 2018 2:25 pm
Things would be so different, if they were not as they are...

https://www.youtube.com/watch?v=aYCXO_FZj5k
Heard her (Anna Russell) live when I was a student at MIT, very funny. I'm not ready to listen to all sixteen minutes of the clip, though... where does she say "Things would be so different, if they were not as they are?" (Or words to that effect).

(My screen name is a Gilbert and Sullivan reference ("I've Got a Little List," from "The Mikado")).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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willthrill81
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Re: U.S. stocks in free fall

Post by willthrill81 » 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.
“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

applejack123
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Re: U.S. stocks in free fall

Post by applejack123 » 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?

Scooter57
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Re: U.S. stocks in free fall

Post by Scooter57 » 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.

rasta
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Re: U.S. stocks in free fall

Post by rasta » Wed Dec 19, 2018 6:27 pm

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?
markets are driven by fear and greed in the short run (which can last years), but eventually any asset class will be priced based on fundamentals.

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corn18
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Re: U.S. stocks in free fall

Post by corn18 » Wed Dec 19, 2018 6:29 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.
But they are putting in stop loss orders.
Don't do something, just stand there!

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Blimpalot
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Re: U.S. stocks in free fall

Post by Blimpalot » Wed Dec 19, 2018 6:36 pm

aj76er wrote:
Wed Dec 19, 2018 5:15 pm
Here's some perspective: when this massive thread started, on 8/8/11, the Vanguard Total Stock Market ETF (VTI) was ~$60 per share.
Today, the same VTI is at ~$128 per share.
And that's just price (not including dividends along the way).
VTSAX (Vanguard Total Stock Market Admiral Shares) was $27.89 on 8/8/11. It closed today at $62.40. So, yes, I suppose "Free fall" is relative.

Of course, I paid $73.30 in September, so there's that. That's a 15% drop in three months. But most of what I own I bought for less than what it's at today, and I have a lot more shares than when this thread started (several thousand versus literally zero), I expect to have a lot more shares when it climbs back up above that $73.30 peak it hit in September, and even more when I eventually start selling them. So, it's all good.
"Nothing I see can be taken from me."--Tom Marshall

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ginmqi
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Re: U.S. stocks in free fall

Post by ginmqi » Wed Dec 19, 2018 6:39 pm

alfaspider wrote:
Wed Dec 19, 2018 3:42 pm
ginmqi wrote:
Wed Dec 19, 2018 3:37 pm
ge1 wrote:
Wed Dec 19, 2018 3:07 pm
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.
For sure.

If we are truly entering a bear market then I'll be eagerly awaiting with my truck and back it up as the equity market discount/sale continues!

So the truck is simply waiting to be unloaded...but let's hope it goes even lower! :twisted:
(disclaimer I am not advocating for any loss of jobs or such, simply that I am an early career investor with long investment horizon, the current fall in market prices is a HUGE relief and a very happy sign for early investors like me with a long-term horizon)
Where is the truck coming from? Have you been sitting in cash the whole time?
haha, to be fair it's a very small truck. Since I am also young I do not have a huge amount of free cash sitting around. I do have a small amount set in a HY savings account to be ready for my quarterly $30k of estimated tax payment to the IRS - but certainly when compared to the rest of bogleheads, anything less than 50k, IMO, is a small truck.

I am very fortunate to be in an above avg earning job and since doing a full financial audit with tracking last year's spending, we've been VERY good at budgeting and have a healthy sum of money left over each month to do as we please (for now its hitting student loans hard...the rest of majority goes to taxes...)

I will likely have about 20-30k to play with if I decide to "back up my small truck" so to speak. :sharebeer

edit: to be fair, majority of my retirement portfolio is in VTSAX :beer

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Re: U.S. stocks in free fall

Post by nedsaid » 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.
A fool and his money are good for business.

Wakefield1
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Re: U.S. stocks in free fall

Post by Wakefield1 » 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?

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Re: U.S. stocks in free fall

Post by Hatch Batten » Wed Dec 19, 2018 7:52 pm

nisiprius wrote:
Wed Dec 19, 2018 5:43 pm
I'm not ready to listen to all sixteen minutes of the clip, though... where does she say "Things would be so different, if they were not as they are?" (Or words to that effect).
Song starts about 5 minutes in: https://www.youtube.com/watch?v=aYCXO_FZj5k#t=5m21s

columbia
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Re: U.S. stocks in free fall

Post by columbia » Wed Dec 19, 2018 7:55 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?
Treasuries

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