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$1 vs. $50,000
Old 07-26-2007, 10:08 AM   #1
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$1 vs. $50,000

On Tuesday, my portfolio took a $50,000 hit. Also on Tuesday, Netflix lowered the price of my plan $1 a month---now $16.99.

Believe it or not, I'm more excited about the Netflix (saving $1 a month, for a whopping $12 a year) than I'm upset about the $50,000 loss in one day.
How insane is that? If anyone could explain me to me, I'd be grateful.
There's gotta be some explanation.....
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Old 07-26-2007, 10:11 AM   #2
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The Netflix savings are real. The portfolio fluctuation isn't real until you sell the portfolio. Also if you have had the portfolio for longer than 6 months or so you are still way ahead.

Also percentage wise maybe your portfolio dropped 1-2 %, however your Netfix savings are on the order of 5-6%
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Old 07-26-2007, 10:27 AM   #3
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Not sure of the numbers Vs %s but my portfolio went down $5K on Tuesday. Now if that means that your portfolio is 10X mine, that would be a good reason for me not to worry, maybe yours is large enough for you not to worry?
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Old 07-26-2007, 11:27 AM   #4
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because you are frugal?
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Old 07-26-2007, 11:45 AM   #5
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Considering what's going now, Tuesday did not look too bad.
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Old 07-26-2007, 11:52 AM   #6
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Oh, did something happen on Tuesday? I didn't even notice. :-)
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Old 07-26-2007, 11:59 AM   #7
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Originally Posted by tangomonster View Post
On Tuesday, my portfolio took a $50,000 hit. Also on Tuesday, Netflix lowered the price of my plan $1 a month---now $16.99.
Believe it or not, I'm more excited about the Netflix (saving $1 a month, for a whopping $12 a year) than I'm upset about the $50,000 loss in one day.
How insane is that? If anyone could explain me to me, I'd be grateful.
There's gotta be some explanation.....
The $1/month is a "real" gain while the $50K loss is Monopoly money unrealized cap losses.

I've read that investors will avoid $1 in losses for every $2 in gains. The pain of losing hurts twice as much as the pleasure of winning. In other words losing the first dollar is no problem, but at the second dollar we're talking real money.

Although if your portfolio's in Netflix then you should be worried... based on the market at 1PM EDT Thursday, it looks like they're going to have to reduce their plan prices another $2-$3/month.

Hey, CFB, is that blue light flashing yet?
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Old 07-26-2007, 12:20 PM   #8
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Let us know how you feel after today! LOL!

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Old 07-26-2007, 12:25 PM   #9
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A week ago, I sold some assets to take some profits in my "play money" account, and transferred them to my conservative steady-eddie retirement portfolio.

It boosted my retirement portfolio by 1% - sweet!

But within just a few days, that 1% has vanished into thin air! Of course, the retirement portfolio is being clobbered big time right now.

That's kind of a let down.

Oh well!

It'll be back ....... one of these days.

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Old 07-26-2007, 12:36 PM   #10
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Old 07-26-2007, 12:39 PM   #11
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Oh, did something happen on Tuesday? I didn't even notice. :-)
Yes, it did and it's being repeated now.
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Old 07-26-2007, 12:43 PM   #12
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Yes, it did and it's being repeated now.
OOF!!! I hadn't looked until I read this. (sigh) Here we go again!
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Old 07-26-2007, 12:51 PM   #13
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Oh cool...another buying opportunity!
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Old 07-26-2007, 01:11 PM   #14
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The $1/month is a "real" gain while the $50K loss is Monopoly money unrealized cap losses.
Nords, thanks for a good laugh !

I have been in a similar situation. I have had "unrealized capital losses" (boy does that sound cool !) in that range and was happy to get a good deal on a $20 item on eBay !!
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Old 07-26-2007, 02:44 PM   #15
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The $1/month is a "real" gain while the $50K loss is Monopoly money unrealized cap losses.
I don't think I can get exited because of $1/month (or even $10) gain. But a 5% loss in 3 days, realized or not, certainly hurts. I'm definitely not in this camp.
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Old 07-26-2007, 03:31 PM   #16
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But a 5% loss in 3 days, realized or not, certainly hurts. I'm definitely not in this camp.
It's a great buying opportunity for some of the ETFs I've been tracking, and we're taking advantage of it.

As CFB says, the stock market is the only business where they throw blue-light sales specials and the customers run screaming for the exits...
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Old 07-26-2007, 04:05 PM   #17
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As CFB says, the stock market is the only business where they throw blue-light sales specials and the customers run screaming for the exits...
This is so true. Unfortunately, I'm out of ammunitions at this time. But at least I'm not running for the exits, yet.
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Old 07-26-2007, 04:26 PM   #18
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This is so true. Unfortunately, I'm out of ammunitions at this time. But at least I'm not running for the exits, yet.
I guess I am too. I have everything all planned out, and I think I'll just stick to my plan.

I know one thing for sure - - I am really lousy at market timing. If I tried to buy today, the Dow would plunge another bazillion points right after I bought and it would stay there.

We don't want that, now do we? So I think I'll just ignore this blue-light special.
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Old 07-26-2007, 04:54 PM   #19
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Hmm...I have a rather large six figure amount of cash I'd like to do something with some day, so please BUY! I'd loooove a bazillion point drop. After all, unless you're selling...low prices are our friends!
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Old 07-26-2007, 06:01 PM   #20
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As CFB says, the stock market is the only business where they throw blue-light sales specials and the customers run screaming for the exits...
That's certainly true, and I have done well at keeping that in mind. When days like we've had this week happen, I just don't bother to check my balance. I know it's down a bit, and seeing it won't do anything but worry me.

However, psychology aside, there's a difference between a blue-light special in the stock market and one at K-Mart. Your 5 oz shampoo bottle isn't going to be embroiled in a scandal involving a cover up by the shaving cream, thereby eroding confidence in its ability to cleanse your hair and ultimately leading to a loss of 4 of those ounces and the firing of half the ingredients!

While the bottom isn't going to just fall out of the stock market, the "sale price" can keep going down and down on individual stocks until it hits rock bottom. Lucent stock, anyone?
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