Days Like This

[DFW_M5]

I have to admit that when I see days like yesterday, my faith in the market gets shaken :P. Good economic news, good earnings; now the market is nervous about potential for raising rates = big dump. Seems like the market timers/day traders outweigh the investors!!!

Doug

[unclemick]

A 2-3000 point drop in one day would be really nice. Then I could back up the truck and go 100% stock like I did after the 22% one day air pocket in 1987.

[cute fuzzy bunny]

Well a lot of folks thought the interest rate situation was already priced into the market.

I didnt really feel that strongly about it. Drops and jumps of 30% and less seem like a big fat so-what after the 1997-2003 ride.

I'll take up Buffets mantra on this: price drops are great things unless you're selling, and price jumps are bad news if you're buying.

I aint selling anything for at least a couple of years, if ever, so it can do what it wants.

[cute fuzzy bunny]

Eh, these short term movements (I consider under 5 years "short term") are purely speculative.

I got my first bloody taste of that when I was a kid and bought a lot of my company's stock when I knew we were going to announce high record results and the stock immediately dropped like a rock. So the next time I compensated by selling like crazy when we were about to announce further record results and got to watch the stock fly through the roof.

[BunsGettingFirm]

Presently the market is way overvalued. The PE listed for the Vanguard Total Market is 24. A P/E of 14 has been the historic norm, so I don't think we can count on the P/E growth to fuel further stock market growth.