The stock market is tanking, we should be happy right????

User Forum Topic
Submitted by Coronita on February 6, 2018 - 8:46am

I remember there were a lot of folks here banking on a large correction to allow them to come out financially ahead versus everyone else....The rational was to sit out the market for a very long time, maybe years, and then when the market correct , jump right in and do much better than everyone else.

I am just curious, now that we have a 1500+ pt Dow plunge, are you folks hoping for that crash now jumping in or are you waiting for an additional 1500pt plunge on top of another 1500pt plunge, just like waiting for real estate to correct 40-50% after previously correcting during the last meltdown.

....or were you a bear that finally capitulated after seeing the markets going up week after week, and jumped right into the market head and toe, when the markets were high..
and are now part of this market correction just like most everyone else?

it just seems like there are no cheerleaders of the market correction here, which is sort of surprising....because I thought this is exactly what some folks wanted... things seem really quite...

What says you spdrun?

Submitted by harvey on March 20, 2018 - 3:38pm.

I still don't have clear guidance about whether we should be happy.

Submitted by Coronita on March 22, 2018 - 6:59am.

futures down big on trump's new china tariffs

Good timing. close to the end of the month, time make the monthly index purchases and 529 contribution

Submitted by harvey on March 22, 2018 - 8:03am.

flu wrote:
futures down big on trump's new china tariffs

Good timing. close to the end of the month, time make the monthly index purchases and 529 contribution

And ignore the loss on last month's contribution.

Dollar-cost-averaging is a gimmick invented by investment "advisors" to get you to keep putting money into the market without thinking.

It's the stock market equivalent of the fruit of the month club.

Submitted by henrysd on March 22, 2018 - 12:54pm.

harvey wrote:

Dollar-cost-averaging is a gimmick invented by investment "advisors" to get you to keep putting money into the market without thinking.

Only true in small degree. dollar cost average has mathematical law behind to back it to be a better way for long term investors.
Harmonic mean >= arithmetic mean >= geometric mean

Harmonic Mean = n/(1/a1 + 1/n2 +... + 1/an)
Arithmetic mean = (a1 + a2 + ...+ an)/n
Geometric mean = nth root of (a1 x a2 x ... x an)

Cost cost average is using harmonic mean, so in the long run produces better return. The volatility actually more benefit harmonic mean. Geometric mean is the effective annualized return for the holding period.

The there means are equal only when a1, a2 ..., an are all equal when no volatility in stocks at all.

Submitted by Coronita on March 22, 2018 - 1:08pm.

henrysd wrote:
harvey wrote:

Dollar-cost-averaging is a gimmick invented by investment "advisors" to get you to keep putting money into the market without thinking.

Only true in small degree. dollar cost average has mathematical law behind to back it to be a better way for long term investors.
Harmonic mean >= arithmetic mean >= geometric mean

Harmonic Mean = n/(1/a1 + 1/n2 +... + 1/an)
Arithmetic mean = (a1 + a2 + ...+ an)/n
Geometric mean = nth root of (a1 x a2 x ... x an)

Cost cost average is using harmonic mean, so in the long run produces better return. The volatility actually more benefit harmonic mean. Geometric mean is the effective annualized return for the holding period.

The there means are equal only when a1, a2 ..., an are all equal when no volatility in stocks at all.

worked fine for me for the past 20 years. better than trying to actively manage and put all my eggs in one shot at the wrong time. especially like if I put all my eggs all at once right before a market correction.

worked fine for my kids 529 too. no student loan needed for 4 years or 6 years of public in state school. whohoo. of course I won't tell them that. lol.

Submitted by Coronita on March 22, 2018 - 1:37pm.

Dow down 700+ pts lol.

Submitted by Coronita on March 22, 2018 - 5:34pm.

China just slapped a $3billion tariff on us goods partly from trumpland.... grab your popcorn boys and girls...... the fun is just getting started.

Dow futures off another 100....lol

Submitted by FlyerInHi on March 22, 2018 - 8:53pm.

Whenever Trump Is cornered he doubles down by doing something that rallies his base. Like always his base applauds at his badass moves although they always end up hurting them.

There is no deliberate thinking in any of this. Billions of dollars of wealth evaporated away really smart, really.

Submitted by spdrun on March 22, 2018 - 9:33pm.

Much as I loathe Trump and the small-minded authoritarianism that he stands for, I'm not entirely against the tariffs on electronics and other Chinese/Far Eastern made trinkets.

(1) They're a consumption tax on discretionary items like electronics and cars. Lower income tax + consumption tax that hits wealthy people who buy everything new isn't a bad way to go. In some ways, it's the equivalent of a VAT that exists in Europe and Canada, but only on foreign-made goods. Less wealthy people (read, us poors) can get around it by buying used or keeping things longer.

(2) They'll encourage Americans to fix their electronics and keep them longer, not make more e-waste when a battery dies or a connector breaks. I've literally picked electronics off the street on curb day where the only problem was a broken prong on the power plug. Electronics are notoriously hard to recycle or dispose of in an environmentally kosher manner.

(3) This might actually encourage production of electronics designed to last longer. Not stuff with glued-in batteries and epoxied cases (Apple, MS, looking at you) as has become the fad recently. Planned obsolescence is an awful trend.

(4) They internalize the cost of buying things made in poor labor conditions and with little environmental oversight. As it is, we're exporting our pollution to countries like China. And ultimately, pollution doesn't stop at national borders. If this makes even a small dent in our consume-and-destroy economy, this will be a good thing for the Earth.

Submitted by henrysd on March 22, 2018 - 9:40pm.

I don't think Trump's tough ball play against China is really intended in a trade war, just a strategy to force concession from China. Ultimately China has more reasons to back down, give up something and enter negotiation. Who is more afraid of losing? of course Chinese side. China had $375 billion trade surplus vs U.S. last year, now U.S. wants a cut, I don't see enough reason China wants to ruin surplus status even the new $275b annual value is not bad at all. The tough mouth talk each side is only in superficial level. U.S. has other trade alternatives to go besides China - Vietnam, Indonesia, Philippine etc.

Submitted by harvey on March 22, 2018 - 10:02pm.

henrysd wrote:
I don't think Trump's tough ball play against China is really intended in a trade war, just a strategy to force concession from China. Ultimately China has more reasons to back down, give up something and enter negotiation. Who is more afraid of losing? of course Chinese side. China had $375 billion trade surplus vs U.S. last year, now U.S. wants a cut, I don't see enough reason China wants to ruin surplus status even the new $275b annual value is not bad at all. The tough mouth talk each side is only in superficial level. U.S. has other trade alternatives to go besides China - Vietnam, Indonesia, Philippine etc.

China is going to back down from what?

Submitted by henrysd on March 22, 2018 - 10:14pm.

harvey wrote:
henrysd wrote:
I don't think Trump's tough ball play against China is really intended in a trade war, just a strategy to force concession from China. Ultimately China has more reasons to back down, give up something and enter negotiation. Who is more afraid of losing? of course Chinese side. China had $375 billion trade surplus vs U.S. last year, now U.S. wants a cut, I don't see enough reason China wants to ruin surplus status even the new $275b annual value is not bad at all. The tough mouth talk each side is only in superficial level. U.S. has other trade alternatives to go besides China - Vietnam, Indonesia, Philippine etc.

China is going to back down from what?


From trade war position

Submitted by FlyerInHi on March 23, 2018 - 1:34am.

As a sinophile, I'm disheartened at how Americans' view of China is so behind the times. There are so many business opportunities we are overlooking. China is moving so fast that China today is not the same as China a mere 10 years ago. Even Chinese people can't keep up with the changes.

Trump's been repeating the same things about trade deficits for the last 30 years. And currency manipulation? The yuan used to be around 8 to USD, It's about 6 now.

First, It's not clear what Trump is negotiating for.

Second, Americans are so addicted to consumption that tariffs many not even lower imports than much. The tariffs could just be a tax that partly offset the recent tax cuts.

Third, Chinese retaliation will hit American agriculture and Boeing.

Fourth, the Chinese are happy to cede cheap productions to countries such as Vietnam and Myanmar so those countries can buy their exports such as high speed trains, telecom, solar, electronics and other infrastructure. Thailand,s prime minister just approved a HSR joint venture. Thailand and other belt and road countries will get HSR before we do.

Fifth, technology transfer is inevitable. American companies complain but they already made the bargain that access to the Chinese market is worth it. Of course, there is opportunity to press China for IP protection and to allow wholly owned American companies to operate in China. Furthermore, by blocking some high tech exports, the US is losing sales. Companies need sales and revenues to keep innovating.

Sixth, China is happy for the US to get fixated on steel, coal, agriculture and old economy stuff. The future is in tech. Their great firewall works very well and they can block American companies while they build their national champions. Some companies like Airbnb are allowed to operate extraterritorially into China for now. That may end.

The pivot to Asia was smart but so far it has been a failure. And whywas there even a need to pivot to Asia? We should have been there all along! Pretty much as the US was busy fighting terorism, China completely transformed itself to be our equal economic rival. China's advantage now is that they know how to build infrastructure fast and cost effectively. They are aiming to export the expertise and building on that advantage with Belt and Road. Trump s isolationism and withdrawal from the international institutions we built is a gift to China. We are going to be the poorer for it

Submitted by Coronita on March 23, 2018 - 7:08am.

even better news is the price of gold is marching towards $1350 again....maybe we will see over $1400 at year end.

Submitted by kev374 on March 26, 2018 - 12:49pm.

Massive rally today, looks like the 200 dma provided solid support for the S&P500 and we may go higher to break out of the correction. Trade concerns which was the main issue are waning.

Submitted by spdrun on March 26, 2018 - 2:24pm.

Up today, hopefully down tomorrow. This is fuuuuuun to watch! Hopefully participants are feeling a nice case of heartburn...

Submitted by kev374 on March 27, 2018 - 3:45pm.

nothing to worry as long as it's over the 200 dma, s&p500 2585.

Submitted by Coronita on March 28, 2018 - 8:21am.

lol

Submitted by FlyerInHi on March 28, 2018 - 10:09am.

If a debt crisis comes, as fiscal conservatives predicted for decades, real estate should be a better hold than stocks.

https://www.washingtonpost.com/opinions/...

Submitted by spdrun on March 28, 2018 - 10:09am.

NASDAQ- lol. Looks like the privacy/cloud chickens are finally coming home to roost with the Facebook call-tracking, etc, etc, etc, scandal.

If it's free... you're the product.

Submitted by carlsbadworker on March 28, 2018 - 11:12am.

FlyerInHi wrote:
If a debt crisis comes, as fiscal conservatives predicted for decades, real estate should be a better hold than stocks.

https://www.washingtonpost.com/opinions/the-debt-crisis-is-on-our-doorstep/2018/03/27/fd28318c-27d3-11e8-bc72-077aa4dab9ef_story.html?utm_term=.b3dd517dbb15

I blame it all on Bernanke. 08-09 was supposed to be the golden opportunity to learn fiscal responsibility, but these guys think bubble burst is a crisis instead of bubble itself as a crisis (that Americans have to spend a large proportion of income on housing, rather than to find more productive use of that capital).

I was actually fine with them buying residential mortgage...but why propping up the stock market so that it was only below the trend line for a few months? It is not FED's responsibility to rescue stock investors.

Submitted by kev374 on March 28, 2018 - 11:43am.

200 dma is holding on the S&P500 despite tech being down, impressive! The bulls are not backing down.

Submitted by Coronita on March 28, 2018 - 12:26pm.

lol

Submitted by carlsbadworker on March 28, 2018 - 4:54pm.

kev374 wrote:
200 dma is holding on the S&P500 despite tech being down, impressive! The bulls are not backing down.

I added some stocks recently but just found that my equity exposure was actually lowered because of the decline, maybe time to a little bit more if tomorrow is still a down market.

Growth stocks are declining more in the past week, which is usually the characteristic of the end of bull market though. However, last 4 times when large growth vastly outperform large values are: 1998, 1999, 2007, 2009. Only two of the events resulted in the start of the bear market, so it is not a sufficient leading indicators for the bear market.

Submitted by kev374 on March 29, 2018 - 1:13pm.

massive rally today! this could be the breakout to the upside that we were waiting for ;)

Submitted by spdrun on March 29, 2018 - 1:24pm.

Up and down we go... WHEEEEEE! Fun ride. Massive rally on Monday as well, then Crashius Cray smacked the markets...
https://www.youtube.com/watch?v=ACQtzWEzWLE

Submitted by carlsbadworker on March 29, 2018 - 2:20pm.

spdrun wrote:
Up and down we go... WHEEEEEE! Fun ride. Massive rally on Monday as well, then Crashius Cray smacked the markets...
https://www.youtube.com/watch?v=ACQtzWEzWLE

It looks like it doesn't matter whether you buckle or unbuckle your seat-belt. Since the title of the movie is Alive, I guess some lucky guys on the plane survived?

Submitted by Coronita on March 29, 2018 - 2:38pm.

still think folks would have been better off buying a home to live in so they don't need to pay rent instead of speculating in the stock market starting in January of this year.

Submitted by carlsbadworker on March 30, 2018 - 7:34am.

flu wrote:
still think folks would have been better off buying a home to live in so they don't need to pay rent instead of speculating in the stock market starting in January of this year.

Rental yield in coastal area is pretty low right now.

If you really just care about the return of your money, I think it would be better to buy multiple properties in the middle of the country and use the rents to pay for a rental house to live in coast area. Trump tax plan sets limit on what is deductible on primary residence, but everything is deductible in rental units.

Therefore, I would think buying a house is more of a lifestyle choice rather than ROI.

Submitted by Reality on March 29, 2018 - 9:30pm.

kev374 wrote:
massive rally today! this could be the breakout to the upside that we were waiting for ;)

Every bubble needs cheerleaders.

"Sis Boom Bah! Rah Rah Rah!"

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