Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
If things are so bad, how come the market is up 900 points today?
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If things are so bad, how come the market is up 900 points today?
I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
"Risk is what’s left over when you think you’ve thought of everything." ~ Morgan Housel
Re: If things are so bad, how come the market is up 900 points today?
Sure.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
You quoted an opinion, not a fact. Not everyone concurs with that particular opinion.
Here's another opinion from Mark Hulbert: "‘Macro’ forecasters are everywhere these days, but they tend to be wrong about investing most of the time"
The market goes up. The market goes down. You can try to explain why if you want. Me, I'll just go along for the ride and not worry about it.
Last edited by JoeRetire on Mon Oct 03, 2022 2:08 pm, edited 1 time in total.
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Re: If things are so bad, how come the market is up 900 points today?
Because someone I follow online said his short term bottom indicator triggered last Friday.
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If only it was that easy
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Re: If things are so bad, how come the market is up 900 points today?
Was there any gloomy news today? That's just a person making a prediction, not news.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
I remember my grandfather once told me that sometimes the stock market goes up on bad news. Maybe there's a reason for that like the bad news wasn't as bad as people thought it would be? Or maybe it's just speculation makes it go up?
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Re: If things are so bad, how come the market is up 900 points today?
Market has been dropping for about a month straight so we're in oversold territory so eventually it'll triggers the technical and quant traders and short-sellers coming in to cover their position. That's why there are many dead cat bounces during a bear market.
Re: If things are so bad, how come the market is up 900 points today?
Because the news is less bad then the news was yesterday.
It is a relative thing.
It is a relative thing.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: If things are so bad, how come the market is up 900 points today?
The market is mostly up today because energy is up big (because of the whole potentially cutting production thing) and is dragging the rest along with it.
https://markets.businessinsider.com/ind ... rs/s&p_500
https://markets.businessinsider.com/ind ... rs/s&p_500
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Re: If things are so bad, how come the market is up 900 points today?
It’s impossible to predict what the market will do.
That’s why stay the course is the best strategy.
And don’t peek.
That’s why stay the course is the best strategy.
And don’t peek.
“When there are multiple solutions to a problem, choose the simplest one.” ― John C. Bogle
Re: If things are so bad, how come the market is up 900 points today?
It looked like interest rates would only continue to go up but they slowed this week. There are more signs of global recession and deflation due to economic weakness so in turn speculators think central bankers won't have to do as much to fight inflation. But always remember: nobody knows nothing.
Re: If things are so bad, how come the market is up 900 points today?
The best explanation is that Billionaire investor Druckenmiller is not paying attention to the economy, because hasn't it already been determined that we have had two negative quarters, which is the definition of a recession?Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
Yules
Re: If things are so bad, how come the market is up 900 points today?
What gloomy news? Get out there and embrace all the good things around you!
Here is one for you: https://www.nytimes.com/2022/10/03/opin ... po-67.html though a bit nostalgic.
Here is one for you: https://www.nytimes.com/2022/10/03/opin ... po-67.html though a bit nostalgic.
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Re: If things are so bad, how come the market is up 900 points today?
To me, if the Fed says they're going to tighten and they're trying to slow down the economy, we should believe them. And I think most people do. I told somebody yesterday, if I'm trying to cause a recession, and I tell you we aren't in one, that tells you all you need to know. It doesn't matter whether you agree with my assessment of the economy today. Because I can make one happen and if I say I am going to do more, you should believe me.
So people do believe this, and as a result, the market is off 25% since all this became common knowledge. Maybe after today it's off 22%. This is noise, within the broader picture of the market trying to find its correct level during various uncertainties. That's how it should be.
So people do believe this, and as a result, the market is off 25% since all this became common knowledge. Maybe after today it's off 22%. This is noise, within the broader picture of the market trying to find its correct level during various uncertainties. That's how it should be.
This time is the same
Re: If things are so bad, how come the market is up 900 points today?
Gloomy news = lower interest rates than previously expected = $$$Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
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Re: If things are so bad, how come the market is up 900 points today?
lol things are so bad? I didn't notice. The sun still rises up and I enjoy every bit of early Fall outdoor. Should I care about what the market does? (it's a rhetorical question).Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
Time is the ultimate currency.
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Re: If things are so bad, how come the market is up 900 points today?
Don't know, don't care. Twenty-five years from now, as I hopefully finish up the front 9 with a sub-40 score, I likely won't remember any particular trading days. I'll probably remember 2008-09, 2020, and probably a few others along the way. None of it will matter.
Re: If things are so bad, how come the market is up 900 points today?
Today was good. Today was fun. Tomorrow is another one.
—Dr. Seuss
Nobody Knows Nothing.
— John Bogle
—Dr. Seuss
Nobody Knows Nothing.
— John Bogle
Re: If things are so bad, how come the market is up 900 points today?
The UK abandoned a tax cut for the wealthy. That's one of the big news events.
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Re: If things are so bad, how come the market is up 900 points today?
The S&P 500 peaked around 3400 in 2020, just before the pandemic crash. It closed last week at 3585. The dow was around 28,800 at the beginning of 2020, and that's approximately where it closed last week. Honestly, I don't know that the markets are quite so bad... it's normal for it to be a rollercoaster ride.
- FreddieFIRE
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Re: If things are so bad, how come the market is up 900 points today?
Why do people use terms like "the market" and talk about changes in terms of points versus percentage?
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Re: If things are so bad, how come the market is up 900 points today?
They are just holding a carrot out in front to keep us invested.
Re: If things are so bad, how come the market is up 900 points today?
Typical bear market rally?
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
Re: If things are so bad, how come the market is up 900 points today?
This isn't just my wallet. It's an organizer, a memory and an old friend.
Re: If things are so bad, how come the market is up 900 points today?
Are we really having this debate again?yules wrote: ↑Mon Oct 03, 2022 2:20 pmThe best explanation is that Billionaire investor Druckenmiller is not paying attention to the economy, because hasn't it already been determined that we have had two negative quarters, which is the definition of a recession?Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
Yules
Re: If things are so bad, how come the market is up 900 points today?
They who?Bronco Billy wrote: ↑Mon Oct 03, 2022 2:40 pm They are just holding a carrot out in front to keep us invested.
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Re: If things are so bad, how come the market is up 900 points today?
Friday was down a fair amount, so it's not overly uncommon to have an up day.
https://en.m.wikipedia.org/wiki/Volatility_clustering
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https://www.nber.org/research/business- ... -questions
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Re: If things are so bad, how come the market is up 900 points today?
Sure. The market is crazy.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
Another way if saying it is "In the short term the market is a voting machine but in the long term it is a weighing machine." --Benjamin Graham
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
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Re: If things are so bad, how come the market is up 900 points today?
Because people still think the DOW is the market not knowing or caring that it's just 30 stocks. And they haven't listened to this planet money episode:FreddieFIRE wrote: ↑Mon Oct 03, 2022 2:36 pm Why do people use terms like "the market" and talk about changes in terms of points versus percentage?
don't believe the hype
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: If things are so bad, how come the market is up 900 points today?
+1JoeRetire wrote: ↑Mon Oct 03, 2022 2:05 pmSure.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
The market goes up. The market goes down. You can try to explain why if you want. Me, I'll just go along for the ride and not worry about it.
I think Joe summed it up well, and has a good response to it.
With that said, one explanation might be what is called window dressing by the big money managers. The big players who get paid based on their performance against various benchmarks, spiff up the appearance of their holdings at quarters end. The game as I recall it is to sell and get the losers off their asset list at quarters end and then get right back in once the new quarter begins. I suppose selling pressure at the end of September, and then buying pressure once the new quarter began today could be part of it.
Investopedia has a description here:
https://www.investopedia.com/terms/w/windowdressing.asp
l2r
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Re: If things are so bad, how come the market is up 900 points today?
Because no one really knows what the market will do on a 1, 3 or even 5 year basis. Short term movements are nothing but noise.
Only those who are full or hubris or ignorance think they can predict where the market will go. D
What I do know is that holding equities (owning the best businesses in America and Internationally) has paid off for decades.
Only those who are full or hubris or ignorance think they can predict where the market will go. D
What I do know is that holding equities (owning the best businesses in America and Internationally) has paid off for decades.
Stay the course!
Re: If things are so bad, how come the market is up 900 points today?
Trying to make sense of short-term moves in the 'market' is an exercise in futility.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
- TomatoTomahto
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Re: If things are so bad, how come the market is up 900 points today?
Yes. It is nice, for a change, to see "green on the screen" for today, but it doesn't say much about tomorrow.
I get the FI part but not the RE part of FIRE.
Re: If things are so bad, how come the market is up 900 points today?
But it's fun, though. Futile fun.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Re: If things are so bad, how come the market is up 900 points today?
One quote does not mean things are bad and one green day does not mean things are good.
Re: If things are so bad, how come the market is up 900 points today?
The market is not the economy.
When I look around me, I don’t see anything bad. I see full employment. I see the shelves are full again. I see people continuing to buy homes even at higher mortgage rates. We do have inflation, but I don’t see people suffering, or worried about their financial situation. To me, things look so much better than they did when I was growing up in the late 70s and 80s.
On the investment side, companies are still reporting huge profits. Their big complaint seems to be labor shortages and supply chain challenges. And they continue to raise prices, and there is evidence is the price hikes are purely driven by increased costs. So earnings should be growing for a lot of them.
When I look around me, I don’t see anything bad. I see full employment. I see the shelves are full again. I see people continuing to buy homes even at higher mortgage rates. We do have inflation, but I don’t see people suffering, or worried about their financial situation. To me, things look so much better than they did when I was growing up in the late 70s and 80s.
On the investment side, companies are still reporting huge profits. Their big complaint seems to be labor shortages and supply chain challenges. And they continue to raise prices, and there is evidence is the price hikes are purely driven by increased costs. So earnings should be growing for a lot of them.
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Re: If things are so bad, how come the market is up 900 points today?
Regarding Druckenmiller...
From May, 2020, "Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse". MarketWatch link
One month later...
"Billionaire Stan Druckenmiller admits he's been humbled by the market rally...[he] revealed on Monday night that while Wall Street has soared 40 percent since March 20, his return has been just 3 percent."
Article link
From May, 2020, "Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse". MarketWatch link
One month later...
"Billionaire Stan Druckenmiller admits he's been humbled by the market rally...[he] revealed on Monday night that while Wall Street has soared 40 percent since March 20, his return has been just 3 percent."
Article link
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Re: If things are so bad, how come the market is up 900 points today?
Big up days are common in bear markets. One of many reasons to stay the course.
Re: If things are so bad, how come the market is up 900 points today?
I bought today: Utilities, Healthcare, Staples, Gold and Infrastructure.
I'm still very pessimistic – but there's a long-term aspect to investing, and buying these cashflows and commodities today is better value than it was a week ago.
I'm still very pessimistic – but there's a long-term aspect to investing, and buying these cashflows and commodities today is better value than it was a week ago.
Re: If things are so bad, how come the market is up 900 points today?
I think it is a mistake to think that the market makes sense in the first place.
Humans seem to have a need to make everything make sense. That does not mean it actually does.
Humans seem to have a need to make everything make sense. That does not mean it actually does.
Link to Asking Portfolio Questions
Re: If things are so bad, how come the market is up 900 points today?
I don't think that's a reason to discredit his perspective on market risk though. He also clocked up several decades of 30% average annual returns (if I remember correctly?), despite the odd bad call, like the Tech bubble.Robot Monster wrote: ↑Mon Oct 03, 2022 3:28 pm Regarding Druckenmiller...
From May, 2020, "Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse". MarketWatch link
One month later...
"Billionaire Stan Druckenmiller admits he's been humbled by the market rally...[he] revealed on Monday night that while Wall Street has soared 40 percent since March 20, his return has been just 3 percent."
Article link
The thing with what he's saying is you'll never time it to the year. I think he was right then, but he didn't forecast the level of stimulus the US would unleash, and now we're paying for that with what may be runaway inflation. Ray Dalio has his opinions handed back to him when he's the wrong side of the market for 6 months, but he's not faring too badly now. A good active call will typically involve being 100% out of the favour with the market at some point.
Last edited by Logan Roy on Mon Oct 03, 2022 3:44 pm, edited 1 time in total.
Re: If things are so bad, how come the market is up 900 points today?
I know, right. The only thing I know for sure is - never bet against the Fed.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
Re: If things are so bad, how come the market is up 900 points today?
The other factor this week is the dollar's fallen quite a bit. So sometimes stocks can just look like the least worst option. There's no real hiding place – just lots of platforms to navigate.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?
Re: If things are so bad, how come the market is up 900 points today?
Thank you so much for sharing that!livesoft wrote: ↑Mon Oct 03, 2022 2:21 pm What gloomy news? Get out there and embrace all the good things around you!
Here is one for you: https://www.nytimes.com/2022/10/03/opin ... po-67.html though a bit nostalgic.
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Re: If things are so bad, how come the market is up 900 points today?
livesoft wrote: ↑Mon Oct 03, 2022 2:21 pm What gloomy news? Get out there and embrace all the good things around you!
Here is one for you: https://www.nytimes.com/2022/10/03/opin ... po-67.html though a bit nostalgic.
That was the first “news” I watched this morning and it was so cute and made me so happy that I closed my computer and quit reading news (until now).
Anyone who didn’t watch it, it’s well worth your time.
Re: If things are so bad, how come the market is up 900 points today?
The market is about fear and greed...craziness. Druckenmiller, for now, is on the fear side.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Re: If things are so bad, how come the market is up 900 points today?
+1. I still have a home. I am still kicking . I have enough money to have my condo painted.H-Town wrote: ↑Mon Oct 03, 2022 2:32 pmlol things are so bad? I didn't notice. The sun still rises up and I enjoy every bit of early Fall outdoor. Should I care about what the market does? (it's a rhetorical question).Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
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Re: If things are so bad, how come the market is up 900 points today?
Not to be overly technical; but, the stock market goes up when it wants to and it goes down when it wants to.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Re: If things are so bad, how come the market is up 900 points today?
For the most part, the "stay the course" crowd, which includes many Bogleheads, isn't trading on the flash headlines. They might buy slowly in their 401k's or sell slowly in their retirement years, but this is already known and probably doesn't affect today's market levels much. That implies that the ones who are trading more often are the twitchier types, hence the swings.
There is one Boglehead-consistent factor that might also contribute, today only: today's upshoot may have had something to do with quarterly rebalancing, bonds to stocks, as long-term investors with a planned allocation rebuild to their planned equity position.
There is one Boglehead-consistent factor that might also contribute, today only: today's upshoot may have had something to do with quarterly rebalancing, bonds to stocks, as long-term investors with a planned allocation rebuild to their planned equity position.
Re: If things are so bad, how come the market is up 900 points today?
This is exactly why Bogleheads choose not to engage in market timing. Because the market most of the time makes absolutely no sense.Fremdon Ferndock wrote: ↑Mon Oct 03, 2022 2:03 pm I don't understand why the market can take off when we have this backdrop of gloomy news, such as:
Can anyone explain this craziness?‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s monetary tightening will push the economy into recession in 2023"
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