it's the crash of October 2014 all over again

Momentous, 2B! I wish you all the best.


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Looking4Ward said:
Crash? Watch what happens today.
Click to expand...
What we have right now is known as a short squeeze.

By late Tuesday, so many shorts had piled on that when oil stopped going down, and stocks started to rise a little, they had to cover. That can drive a big "whoosh" to the upside.
 
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Yes, that's how my energy stocks jumped 6-8% yesterday. But even as these shorts cover today, they still make big money if they sold a month ago. Not so much the wannabes who joined them too late.

Market timing can be so lucrative, but I am not good at it hence only play with a bit of money for fun.

PS. By the way, one of my active MFs dropped -12% yesterday instead of going up 2% like everybody else. As I thought, it distributed cap gains yesterday, and it was a big distribution. This guy was trading much! Good thing I have it in an IRA, else there's tax to pay.
 
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audreyh1 said:
What we have right now is known as a short squeeze.

By late Tuesday, so many shorts had piled on that when oil stopped going down, and stocks started to rise a little, they had to cover. That can drive a big "whoosh" to the upside.
Click to expand...

Exactly. I've come to consider these events as simply the way career investors/day traders make their money. It goes down so that it can go up.
 
NW-Bound said:
Market timing can be so lucrative, but I am not good at it hence only play with a bit of money for fun.
Click to expand...

I'm not very good at it either, I just prefer to think of it as common sense to buy more when something like energy or healthcare drop substantially because it's just a matter of time before they go back up. Over history my buy decisions have proven to be better then my sell decisions.
 
Looking4Ward said:
Exactly. I've come to consider these events as simply the way career investors/day traders make their money. It goes down so that it can go up.
Click to expand...
On an average day, only 1 or 2% of stock shares change hand. Yet, the price they trade at sets the valuation for the entire market. It's not any different than the settled price for one home in the neighborhood setting the comp for the entire block.

The active traders set the market price and drive it. I'd rather buy and hold, but I am constantly looking to see if I can piggy back on those swings to make a bit extra. Some call it rebalancing, but as I do it with smaller amounts, incrementally, and with an eye towards short-term potential profits, I call myself a market timer. There's no shame in it.

Looking4Ward said:
I'm not very good at it either, I just prefer to think of it as common sense to buy more when something like energy or healthcare drop substantially because it's just a matter of time before they go back up. Over history my buy decisions have proven to be better then my sell decisions.
Click to expand...

It is because over a long time, stocks tend to go up. Most of what you buy eventually makes you money. So, people in the accumulation phase can just buy, buy, buy every month with their savings and they most likely will be OK as it has been in the past. But for retirees with no more income, you've got to sell at some point to have free cash to buy during dips. This makes it more difficult. People who are still working may not appreciate this.
 
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And talk about selling, Gerald Loeb, a cofounder of the old E.F. Hutton firm, pointed the following out in his book. It is that once you buy a stock, you need to think about it constantly. Do you keep it or sell it? It's like growing a garden. You need to weed, then to harvest.

The above is hard to do with individual stocks, so most just buy an MF, ETF, or an index. There's nothing wrong with it, and a prudent thing to do too. But one still has to weigh stocks against bonds and other assets. So, a balanced fund where more work has been done for you is not a bad deal for people who do not want to see what goes into a sausage.
 
Here we go right back on up......WHEEEE.......Come on W2R........WHEEEE.
 
NW-Bound said:
On an average day, only 1 or 2% of stock shares change hand. Yet, the price they trade at sets the valuation for the entire market.
Click to expand...


This is a really good point. So when your portfolio ends the day up or down $50K it really doesn't unless you sell the entire kitten kaboodle that day.


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Looking4Ward said:
Exactly. I've come to consider these events as simply the way career investors/day traders make their money. It goes down so that it can go up.
Click to expand...

Some days it's just mindless "algos", i.e. computerized trading programs run amok causing all the volatility.
 
I hate that when the market drops like this, and I send $7k bucks to TDameritrade (401k), that it takes 5 days to post, and I miss the ride back up.
 
"I'll take 2050, going once, going twice...2055...going once, going...2060...going once....2061....going once, going twice....SOLD!

See you tomorrow!


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I rebalanced earlier this week to bring my cash position back up to target. Bad timing I guess. :facepalm: I should have waited until next week.
 
It is kind of nice when one of the few individual stocks I own (Oracle), a stock I have owned for almost 20 years, gains enough in one day to more than cover our Holiday shopping expenses (including capital gains). Now that is a personal Santa Claus rally. :)
 
EastWest Gal said:
NW-Bound said:
On an average day, only 1 or 2% of stock shares change hand. Yet, the price they trade at sets the valuation for the entire market.
Click to expand...

This is a really good point. So when your portfolio ends the day up or down $50K it really doesn't unless you sell the entire kitten kaboodle that day.
Click to expand...

That's right that it does not count unless you sell. And I want to buy-low/sell-high/rinse/repeat to get more and more money. If I know how.

You see, when the market goes down and people get scared, I myself wish I have more cash to buy. I always have cash on hand, but I am not that stupid to throw it all in the ring. And in order to have more cash, I need to be able to sell high to raise cash in advance.

Once you do one thing right, then it is easier to do the next right thing. Buy, sell, buy, sell... Just thinking of the money that can be made bring tears to one's eyes.
 
NW-Bound said:
That's right that it does not count unless you sell. And I want to buy-low/sell-high/rinse/repeat to get more and more money. If I know how.

You see, when the market goes down and people get scared, I myself wish I have more cash to buy. I always have cash on hand, but I am not that stupid to throw it all in the ring. And in order to have more cash, I need to be able to sell high to raise cash in advance.

Once you do one thing right, then it is easier to do the next right thing. Buy, sell, buy, sell... Just thinking of the money that can be made bring tears to one's eyes.
Click to expand...

i don't buy into the old saying it is only a paper loss for one second and that it does not count unless you sell. selling only creates a taxable event if in a taxable account but your net worth at any given moment is your balance.

ask yourself this, lets suppose at the end of the day you sold after a down day and bought another investment the next opening morning . lets suppose you rode that new investment back up ,is that any different than keeping the money in play in the same investment over night if they went up the same?


of course it isn't . in either case the money stays in play in the risk pool and is just as much your balance at any time.


it has nothing to do with selling or not , it just has to do with keeping the money in play so you can possibly recover from a drop.

it can be the same investment or a shift to a different one but results are the same and it has nothing to do with selling or not..
 
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