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Old 02-10-2018, 08:49 AM   #561
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I was in France and really enjoyed the exchange rate Unless I need to pull it out, it doesn't affect me. It'll matter more in 4 yrs but right now it's like waiting for an impending sale. Never too sure when it'll have 'close out' or 'end of season' pricing. Like a skirt that was $50 marked down 25% then finally 50%.
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Old 02-10-2018, 08:57 AM   #562
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I think the point here is that sometimes emotions come into the market-play. We may be a more analytical group than typical. How one feels about things matters, especially when the machines seem to be in control.

DW keeps reminding me about her co-worker who called Fidelity's 401k department once a week and berated them about the stock market. (Early 2000's) This guy also wrote a letter to Alan Greenspan. Yes, emotions sometimes get people going a little crazy.
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Old 02-10-2018, 09:04 AM   #563
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Don't forget that it is those naive people who piled into the stock market that drove the stocks up for us to enjoy, and now we berate them for selling.

Something I read on the Web:

Why is it that when the market is climbing by improbable leaps and bounds month after month we are supposed to take that as a genuine reflection of the fundamentals, but when the market is in a free fall, we are supposed to write that off as momentary fits of irrationality?

The truth is that the market is just as irrational and divorced from fundamentals on the way up as it is on the way down.
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Old 02-10-2018, 09:10 AM   #564
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This ride was interesting to me because it is the first big downdraft since I shifted to a "retirement" AA of ~55/45. I was essentially 100% equities when I rode down '87, '90, '00, '08, and '11.

So I did the math this morning and my portfolio is down from the [unrealized] peak by only 5.4%. Pretty good with stocks at -10% and bonds down too. I'm liking this AA thing

Also, Yardeni has updated his bull/bear report - I think he does it weekly - showing the current correction https://www.yardeni.com/pub/sp500corrbear.pdf
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Old 02-10-2018, 09:49 AM   #565
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Exactly! Absolutely nuts!

Yet people made “easy” money on these inverse VIX vehicles for well over a year. Thus the piling in.

When the markets get overextended, we often find out later how much of it was driven by buying on margin and dangerous investment vehicles.
Cramer's piece intrigued me, so I did some more digging and found this https://www.bloomberg.com/view/artic...-almost-worked

In short, it seems no one who held these instruments could tell with certainty what the price really was or how it would react to events in motion. If you think that a certain market move should make your instrument go up and it makes it go down instead, I'd say you don't understand enough to be invested in that instrument in the first place. What a mess these people are making.
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Old 02-10-2018, 10:17 AM   #566
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Earlier, I saw after the fact that XIV was at $99 when its trading stopped for quite a while. When it reopened, it was at $7. I did not know the reason. The above piece explains it.

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Hopefully I am a contrary indicator and we go back to the parabolic rise.
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I don't need parabolas.

A nice 6% slope would be fine...
I don't think anyone would expect parabolas now. Not after they bail out of their 401k and the S&P SPDR index fund en masse.

I would be happy with a boring 6% year-in-year-out, but the market does not work that way.

Some people tune out all the news, either because they are not interested or are scared. I find it fascinating, and always look for ways to profit. Most of the time, I did not even dare, or just made some feeble attempts, but I could not help it. I hate the crazy crowd, and want to bet against them.
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Old 02-10-2018, 10:31 AM   #567
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I think it was Ben Graham who said that long term, the market acts like a weighing machine, while in the short term, it acts as a voting machine.

I think his point was that we should focus on the long term.
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Old 02-10-2018, 10:42 AM   #568
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Also, Yardeni has updated his bull/bear report - I think he does it weekly - showing the current correction https://www.yardeni.com/pub/sp500corrbear.pdf
Just a quick look at his very first chart reveals the low volatility we had until 5 days ago. Starting from 2016, the wiggly little day-to-day variations were a lot less in magnitude than were there earlier. This did not go unnoticed by people. Indeed, because it was taken for granted that these derivatives blew up.

So, it happened, but has anyone seen any explanation for how or why we have such low volatility the last 2 years?
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Old 02-10-2018, 10:45 AM   #569
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So, it happened, but has anyone seen any explanation for how or why we have such low volatility the last 2 years?
My theory is the market was on Valium and the prescription ran out.
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Old 02-10-2018, 11:05 AM   #570
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Stupid question but does anyone actually track the metric of how many points up and down the market went past week. Basically total travel differentials, not just point differences from/at openings and closings.
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Old 02-10-2018, 11:19 AM   #571
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I saw someone actually did that. The total travel was something like 22,000 on the Dow, if I remember correctly.

Man, some good day traders could have captured a sizable portion of that. Hello, Lamborghini and Rimac. At the expense of the other parties of course.

Heck, they got my Lamborghini too. The one that I left unrealized.

PS. Ah, shucks! I still have more fancy cars left unrealized in my accounts. I hope the market will leave them alone.
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Old 02-10-2018, 11:22 AM   #572
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My theory is the market was on Valium and the prescription ran out.
Yeah. Interest rates stayed low even though the Fed was raising the Fed Funds rate and inflation stayed below Fed targets. But a lot of people were drinking some rah-rah koolaid.

But the uber low volatility period did have a lot of market veterans scratching their head. So I don't think anybody knows really.
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Old 02-10-2018, 11:23 AM   #573
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Stupid question but does anyone actually track the metric of how many points up and down the market went past week. Basically total travel differentials, not just point differences from/at openings and closings.
Well if was over 20,000 points on the Dow according to a CNBC headline yesterday.
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Old 02-10-2018, 11:29 AM   #574
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Ever since I used Quicken to track expenses, I was amazed at the money that I spent, living the non-luxurious life that we do. It's a lot more than I initially thought. I think people who are still working do not sit down to count the money that they spend. Why, a professional couple make hundreds of K's a year, and so they spend millions a decade. Where does that money go, and do they have anything left to show for it?

I digress, sorry. What I wanted to say was that I spent a few Lamborghinis since I retired, and that's only 6 years ago. All from the market. Gotta love the market despite its temperament.
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Old 02-10-2018, 12:06 PM   #575
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NW-Bound: you are digressing ... or maybe not.

This is a lot of what drives markets. A lot of people found they had a few Civics in their pocket last year, and started spending. The wealth effect, if you will.

Some of this was consumer goods, some was investing, maybe even bitcoin.

I know I "blew that dough" last month feeling good to buy my retirement laptop that should serve me a few years. Honestly, today I might think twice.

So, getting back to the rest of the USA, many people spend, spend, spend per paycheck. No investment at all. There are plenty of professionals who get a raise, and get a new car lease up to the next level. Or get into the country club.

Is this bad? I don't know, maybe not. It does drive certain sectors of the economy. It certainly is bad for their retirement!
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Old 02-10-2018, 12:15 PM   #576
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Cramer's piece intrigued me, so I did some more digging and found this https://www.bloomberg.com/view/artic...-almost-worked

...If you think that a certain market move should make your instrument go up and it makes it go down instead, I'd say you don't understand enough to be invested in that instrument in the first place.
Sometimes an instrument becomes unpredictable (especially as you age). But so what? Just because you can't predict what market move will make the instrument go up or down you think a person shouldn't be invested in that instrument? What are the options? (I don't really want to know).
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Old 02-10-2018, 12:50 PM   #577
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Random headlines around the interwebs that are funny when juxtaposed to each other:
  • Market sell-off is a temporary fluke
  • VIX blowup is the tip of the iceberg
  • Market volatility can be controlled by regulation
  • Stock market could drop by a third
  • Stock selloff creates bargain blue chips
  • Stock market downturn will be short-lived
  • Investors should have less exposure in the market
  • Blink and you'll miss this market's windows of opportunity
  • The Equity Market Is Giving You A Huge Opportunity
  • History suggests the correction isn't near over
  • This is the stock market crash we needed
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Old 02-10-2018, 01:09 PM   #578
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NW-Bound: you are digressing ... or maybe not.

This is a lot of what drives markets. A lot of people found they had a few Civics in their pocket last year, and started spending. The wealth effect, if you will.

Some of this was consumer goods, some was investing, maybe even bitcoin.

I know I "blew that dough" last month feeling good to buy my retirement laptop that should serve me a few years. Honestly, today I might think twice.

So, getting back to the rest of the USA, many people spend, spend, spend per paycheck. No investment at all. There are plenty of professionals who get a raise, and get a new car lease up to the next level. Or get into the country club.

Is this bad? I don't know, maybe not. It does drive certain sectors of the economy. It certainly is bad for their retirement!


Joe, I just got a letter today notifying me my after tax pension check is being increased $201 a month thanks to the tax cut. No spend spend spend here with that money. Its going in the bank to be used at a later time to pay for the future tax increase to pay for the tax cut!
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Old 02-10-2018, 01:22 PM   #579
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or to pay for Medicare and Social Security which are both unaffordable now that the store has been given away...
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Old 02-10-2018, 01:28 PM   #580
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You are all scaring me. We haven't sold anything, though the gal feels we should have taken profits a week or so ago. I just am paralyzed due to a lack of place to put any sale proceeds. Rentals and loan payments to us more than cover our expenses and getting excited about having years worth of cash earning a whole 1.75% at Ally for the next 9 months seems silly. I want to be selling the rentals and living the carefree passive income life; the last couple years have been rewarding to the funds we invested. Yahoo! - sell the rentals and dump the proceeds into stocks and bonds! Waawaaah. guess it's just life. and it could be worse.
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