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Old 02-08-2018, 04:30 PM   #361
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A word I have not read here in a long time: capitulation. Anybody venturing a guess as to whether we are there or not?
Capitulation happens when enough people believe their dreams have been crushed by the market. I don't think we are there yet.
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Old 02-08-2018, 04:35 PM   #362
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True. But on the other hand, I do not see anything that will cause the despair equivalent of that in 2008. Unemployment is low, people still have job and money. The only thing that's down is their investment account or 401k.

So, this may be just a correction just like many before. And now that we have breached that 10%, the time to buy may lie just ahead. To be safe, one can just nibble here and there.
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Old 02-08-2018, 05:04 PM   #363
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^ There is only two things you can do in Capitulation. One is hold on and hope that stock recovers in time. 2) you sell and take the loss.

I would hope these stock wouldn't surrender and not be worth nothing.
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Old 02-08-2018, 05:07 PM   #364
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That was a quick fall to correction territory .
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Old 02-08-2018, 05:17 PM   #365
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A word I have not read here in a long time: capitulation. Anybody venturing a guess as to whether we are there or not?

But I scanned the S&P 500. Red everywhere.

Tech stocks: AAPL -2.75%. GOOGL -4.52%. AMZN -4.68%. NFLX -5.47%

Boring stocks: WMT -2.75%. T -3.68%. JNJ -3.85%.

Only a handful of exceptions: Viacom, Philip Morris, Kellogg, plus a few others.
It is hard to read capitulation when you go 9 years without a 20% decline. We are just at 10%, the speed at which we reached this from a point of a year long plus straight up move indicates a strong likelihood most buying has dried up, so this is very likely to be at least a 30% move down before it is over.

Corporations have been buying 500 billion + in the S&P 500 for the past several years, a significant contributor to market demand increasing the market cap of the S&P 500 from the 13 trillion top in 2007 to the 20 trillion top in 2018 outperforming the GDP growth by 18% with the growth in US GDP from 14 to 19 trillion.

A 12% drop gets the S&P 500 back to the same relative value to US GDP as existed at the top of 2007 and world growth has been slower than US growth over that time frame. An additional 10-20% decline on top of the 12% to get to 2007 would not be that large of a move considering the one way nature we arrived here.
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Old 02-08-2018, 05:22 PM   #366
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True. Percentage wise, we had nearly 10% daily drop in 2008. So far, it took several days to drop the same.

But I am still not used to using Audis as a measure of daily loss. I was using Honda Civic before.

And I am still driving Civic.

PS. This kicks me back to the end of Sep 2017. How 'bout y'all?
Sept 2017 for me too. I guess we must all have the standard issue early-retirement.org portfolio
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Old 02-08-2018, 05:29 PM   #367
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A word I have not read here in a long time: capitulation. Anybody venturing a guess as to whether we are there or not?
That word always brings to mind this thread, from 11/19/2008:

http://www.early-retirement.org/foru...ach-40692.html

Many forum members were frightened. My subjective evaluation of it is that forum members today are considerably calmer today than they were back then.

IIRC the market bottom for that recession was almost four months later on 3/9/2009. So, my conclusion is that IF we are on the verge of the market tanking, we still have quite a long way to go.
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Old 02-08-2018, 05:40 PM   #368
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Makes my Cd portfolio look attractive. If interest rates go up, and we get 4% + for 5 year CDs life will be good. I always said to DW. At 3% return we live well (That is what we get now). At 4% we live a lot better, at 5% we live like Kings.

Canada is paying 3.25% now on 5 year CDs. If that is anything to go by, the US should not be far behind. The US is Bleeding cash, if this bill passes, they will be Hemorrhaging cash, so there will be no other choice than to raise cash by raising rates.....
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Old 02-08-2018, 05:41 PM   #369
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PS. This kicks me back to the end of Sep 2017. How 'bout y'all?
Including today's drop, I am back to October 2017, so about the same. Not too bad, really. Could be worse.
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Old 02-08-2018, 05:49 PM   #370
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I guess I might be slightly crazy but I am glad the market is finally going down, since I retire at the end of this year. I would much rather it take its big dip (and hopefully recover) BEFORE I start taking money out of it. Y'all can jump all over me for saying this now.
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Old 02-08-2018, 05:50 PM   #371
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My subjective evaluation of it is that forum members today are considerably calmer today than they were back then.
True, but at the time that thread was posted the market had been declining for more than a year. Might be interesting to check on this thread a year from now and see how things look.
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Old 02-08-2018, 06:00 PM   #372
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Now down a Porcshe and a Lamborghini with all 4 wheels. I didn't need them anyways, as there is no where close around here to drive any of them.
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Old 02-08-2018, 06:02 PM   #373
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Between Cash Stash, dividends and just starting SS at 70, we should be able to weather the storm; plus we can cut back on discretionary spending if push comes to shove.
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Old 02-08-2018, 06:02 PM   #374
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Personally, I welcome this. I'd love another 4% drop tomorrow. That could have something to do with I'm working on the road so I'm getting larger than normal paychecks right now, with larger than normal excess cash flow so I'll have larger than normal 401k contributions tomorrow when I get paid and have more cash than normal to toss into more shares Monday morning though..

Being 5-7 years away from FIRE, I welcome downturns in the market as opportunities to see if I can scrape together some extra cash to buy shares "on sale"...
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Old 02-08-2018, 06:07 PM   #375
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Back to Aug 2017 for me. The beginning of my retirement. We shall see.
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Old 02-08-2018, 06:09 PM   #376
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True, but at the time that thread was posted the market had been declining for more than a year. Might be interesting to check on this thread a year from now and see how things look.
I completely agree - - it's a bit early to be asking about capitulation. If someone is going to capitulate after a bad week, well gosh. Things could be a lot worse, and have been.
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Old 02-08-2018, 06:16 PM   #377
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I just saw a segment on CNBC they went outside and asked random people on the street what they thought, not differnt passerbys said
1) It always goes up in the long term so I am not worried
2) It was a bubble everyone knows the stock market was in a bubble so it will go down but it will come back it always does.
3) you must think of the long term it’s what Warren Buffet always says
4) the majority of people don’t think long term, I do and will not sell

The level of complacency is so high this is going to be a bad downfall, I change my forecast to at least a 50% decline based on the antedotical evidence I see
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Old 02-08-2018, 06:31 PM   #378
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Sept 2017 for me too. I guess we must all have the standard issue early-retirement.org portfolio
No, I do not think so. I own mostly individual stocks. I am not an indexer, nor have much Wellington or Wellesley (about 2 % total).

Although I have some concentrations in a few sectors (semiconductor, EM, material, biotech, industrial, etc...), I am reasonably diversified. The sell-off has been broad across the entire market. So no matter what one owns, there is equal opportunity for pain.

If you own just one stock, then everything is possible. For example, Tesla is down nearly 9% today. Twitter is up 12% today. I own neither.
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Old 02-08-2018, 06:37 PM   #379
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I thought I would post to a great post (from 2011) from Boggleheads. The poster does a much better job than I ever would in terms of market downturns, risk, and the personal evaluation of how one deals with uncertainty: https://www.bogleheads.org/forum/vie...ewpost=3771802
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Old 02-08-2018, 06:41 PM   #380
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That word always brings to mind this thread, from 11/19/2008:

http://www.early-retirement.org/foru...ach-40692.html

Many forum members were frightened. My subjective evaluation of it is that forum members today are considerably calmer today than they were back then.

IIRC the market bottom for that recession was almost four months later on 3/9/2009. So, my conclusion is that IF we are on the verge of the market tanking, we still have quite a long way to go.
The next day after the thread started, on 11/20/2008, the Dow dropped 445 from 7997 to 7552 (-5.6%). From the top of 14,164 on 10/9/2007, that's a loss of 47%.

Yet, true bottom was not found a few months later, at 6547 on 03/09/3009. The total loss was 54%.

Yes, we have nothing like that now after just a few days of decline. But the current economic conditions are not the same as in those days.
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