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07-26-2007, 05:04 PM
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#21
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Recycles dryer sheets
Join Date: Aug 2003
Posts: 481
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 Quote:
Originally Posted by tangomonster
I'm more excited about . . . saving $1. . .than I'm upset about the $50,000 loss. How insane is that? If anyone could explain me to me, I'd be grateful.
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Mental Accounting
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07-26-2007, 05:13 PM
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#22
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Moderator Emeritus
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,873
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Even I have a time getting pepped up over the one buck but wait a minute, it does reduce your monthly expenses by $1, thus getting that 25X number all the closer.
Maybe you are an optimist, looking on the small savings rather than the big (unearned?) loss.
I'm still stuck in the retro idea the a market over 10,000 is high.
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07-26-2007, 05:15 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,641
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Quote:
Originally Posted by NinjaPigeon
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!
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maybe not, but (based on recent events) your 40 lb bag of dog food might suddenly
have some small chance of killing a pet, leading to a loss of all 40 lbs of dog food.
__________________
learn, work, save, invest, fire
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07-26-2007, 05:59 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 2,155
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Quote:
Originally Posted by Want2retire
If I tried to buy today, the Dow would plunge another bazillion points right after I bought and it would stay there.
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For you sake and mine, please don't buy!!!
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07-26-2007, 06:27 PM
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#25
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 44,599
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Quote:
Originally Posted by Sam
For you sake and mine, please don't buy!!!
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LOL!!! Well, that is why I just have to stick to my plan to just keep DCA'ing at the same rate as I always do.
Wouldn't want to leave you guys in the lurch. 
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07-26-2007, 06:50 PM
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#26
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Recycles dryer sheets
Join Date: Sep 2005
Posts: 93
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I've read the mental accounting paper and I have also been intrigued about the perceived value of monetary amounts.
The other day I was wondering if the perceived value could sometimes be correlated with one's net worth.
For example, what about an amount of .01% of net worth? Sounds very small. So for someone with $1 million, then this would be $100.
How much would a millionaire "care" if he or she lost $100 even if his or her portfolio fluctuated up or down by $1000 that day.
What does the perceived value of $100 mean to someone who has $1000 in the bank versus someone who has $1 million or $10 million?
For me personally, as my net worth has grown year to year, the occasional $200 car repair seems less and less impacting each year.
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07-27-2007, 12:06 AM
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#27
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Full time employment: Posting here.
Join Date: Dec 2005
Posts: 565
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I lost over 8K today in my brokerage accounts but made 52 cents interest on checking. The 8K isn't real it comes and goes I can't really spend my invested money because then I would be even worse off so I didn't give up a vehicle or vacation or something because I lost money. The 52 cents a day is real in 2 days it is enough to buy something from the vending machine, it feels like something for nothing, over $15 a month I could go to MCD of course MCD went down to 48.50 today so I lost hundreds on it today but I paid 27.55 for it so I still have some profit. I like my 52 cents a day of spendable profit it cheers me up to go look to see what I got today.
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07-27-2007, 01:16 AM
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#28
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by tangomonster
On Tuesday, my portfolio took a $50,000 hit.
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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Easy. Denial.
Ha
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07-27-2007, 01:21 AM
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#29
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by NinjaPigeon
While the bottom isn't going to just fall out of the stock market,
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Speaking as an old dummy without your confidence, how do you know this?
Ha
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07-27-2007, 02:22 AM
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#30
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Dryer sheet aficionado
Join Date: Jun 2007
Posts: 45
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Down about 4% today in HK. This is about 8 months of salary.
Does it mean I am underpaid? 
__________________
Many people die at twenty five and aren't buried until they are seventy five.
Benjamin Franklin
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07-27-2007, 03:00 AM
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#31
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,401
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07-27-2007, 11:16 AM
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#32
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Full time employment: Posting here.
Join Date: Jun 2007
Posts: 567
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Down 4% across all accounts as of last night. No major reallocation shift.. bonds are a larger relative piece of the pie now, but not enough to want me to rebalance yet.
Basically, so far we've only wiped out half of our earnings for the year.
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07-27-2007, 12:46 PM
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#33
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Dryer sheet aficionado
Join Date: Jul 2007
Posts: 47
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Perhaps you felt the Netflx change was unjustified and not part of what you'd expect when you signed the contract. But the stock market fluctuation was expected if you are in it long enough.
After yesterday's stock plunge, I felt a little foolish about fretting over a $10 rebate the night before.
Have to keep reminding myself, I am still way ahead YTD.
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07-27-2007, 04:44 PM
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#34
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Recycles dryer sheets
Join Date: Jan 2006
Posts: 330
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Quote:
Originally Posted by haha
Speaking as an old dummy without your confidence, how do you know this?
Ha
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Nobody knows if it's true. But if it does happen, does it matter? It's like worrying about death. If it happens, there's not a thing you can do about it but hop in the soup line with the other former millionaires 
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07-27-2007, 05:04 PM
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#35
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Thinks s/he gets paid by the post
Join Date: Aug 2002
Posts: 1,322
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I've got ten years of cash assets, so this week is a nonevent for me.
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07-27-2007, 06:40 PM
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#36
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
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Quote:
Originally Posted by me_no_boss
I am still way ahead YTD.
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I'm way ahead LTD.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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07-28-2007, 10:43 AM
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#37
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Thinks s/he gets paid by the post
Join Date: Jul 2004
Posts: 1,474
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You could save another $16.99 and use the library for your DVDs - that would save you ~$200/yr which could reduce your required portfolio by $5K :-) Just practicing my math.....
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
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07-28-2007, 12:03 PM
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#38
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 2,155
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Your math is fine, but your assumption could be off. What if the OP's swr is only 2%? ;-)
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07-28-2007, 02:24 PM
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#39
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Full time employment: Posting here.
Join Date: Mar 2006
Posts: 757
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May I retract this post? The first $50,000 on one day didn't faze me, but $120,000 over three days does!
Bongo, the mental accounting link was interesting. Fascinating how we play mind games with money.
__________________
“It is not a sign of good health to be well adjusted to a sick society”.------Krishnamurti
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07-28-2007, 03:10 PM
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#40
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by tangomonster
May I retract this post? The first $50,000 on one day didn't faze me, but $120,000 over three days does!
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Obviously you are quite well off, or you have heavily invested in calls. If a 5% fallback costs you $120,000, 20% would cost $480,000. So if you are experiencing run of the market results, you have an equity portfolio of $2.5 million or so. If you have another million in fixed income, or a good pension you are still in very good shape.
But if you don't have a pension, and you are fully invested in equities, I hope you will keep posting your reactions if stocks should continue down from here.
Personally, I have no clue what might happen. But I know that I would notice going from $2 1/2 mm down to $2mm. And of course if that should happen there is no way to know or to have confidence that the bottom will have been reached.
I have observed much greater drawdowns in the years that I have been investing.
Good luck and good management to you!
Ha
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