it's the crash of October 2014 all over again

[daylatedollarshort]

Quote:

Originally Posted by NW-Bound This is a book that I knew about and would love to read. However, it is only available as an expensive hard cover, and the local library has it in the Reference section and will not allow it to be checked out.

Here is a link to general summary from a speech by one of the authors:

http://www.econ.uniurb.it/materiale/..._optimists.pdf

[TimSF]

"Here comes Santa Claus, here comes Santa Claus, right down Santa Claus lane ..."

[dallas27]

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.

[EastWest Gal]

"I'll take 2050, going once, going twice...2055...going once, going...2060...going once....2061....going once, going twice....SOLD!

See you tomorrow!


Sent from my iPhone using Early Retirement Forum

[pb4uski]

I rebalanced earlier this week to bring my cash position back up to target. Bad timing I guess. I should have waited until next week.

[jollystomper]

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.

[NW-Bound]

Quote:

Originally Posted by EastWest Gal Quote: Originally Posted by NW-Bound 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. 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.

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]

Quote:

Originally Posted by daylatedollarshort Here is a link to general summary from a speech by one of the authors: http://www.econ.uniurb.it/materiale/..._optimists.pdf

Thanks. I am reading it now.

[audreyh1]

Quote:

Originally Posted by Looking4Ward What do you feel is significant about 2070?

It gets us close to the recent closing all time highs.

[mathjak107]

Quote:

Originally Posted by NW-Bound 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.

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..

[NW-Bound]

Quote:

Originally Posted by mathjak107 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.

I think you misunderstood me.

I believe that a gain is not "real" until you realize it, meaning selling it. Yet, one cannot deny that he has a loss when his investment goes down. How many people hang on to a losing stock until it goes bankrupt, becomes worthless, and stops trading?

Quote:

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..

No, the results are not necessarily the same. Earlier, I told the story of my capitulation, selling my tech stocks and realizing a loss of $600K in 2002 after the tech rout. Had I hanged on to these stocks that languished for years or went bankrupt like Nortel, Global Crossing, WorldCom, I would not be where I am today.

Speaking of Nortel, recently I met another engineer who worked at Nortel. He said that he traded his 401k in/out of Nortel stock in the 90s and early 2000s. When it went up, he sold. When it went down, he bought. But at the last Nortel downturn, after he bought it never went back up. He finally sold his position for $10K. At the highest point, his 401k was worth more than $600K. But the $10K is more than what he would have if he hung on until Nortel went bankrupt.

[mathjak107]

my daily net worth is what it is regardless of whether i am selling , keeping the investments or swapping them out.

like working on commission, each day may be different but as sure as the value of my my bank account those investments are what they are worth at any point in time. i couldn't imagine looking at them any other way.

[NW-Bound]

Yes, that's the way I look at my accounts too. However, I also accept that next day or next month the market may decide that I should be a lot poorer. Stock value, and that of most things for that matter, is fleeting or, as Alan Greenspan put it, ethereal.

[mathjak107]

the market gods give and they take away.. we just hope they give more than they take.

but like we said above the fear now is that even small declines on a dollar basis can be huge when portfolios have grown and after all it is the change in dollars that we are interested in not the percentage down so much.

losing 7 years worth of 401k contributions in a minor correction may be a 7% drop percentage wise but it is years worth in living expenses.

we tend to use different yardsticks in retirement.

[samclem]

Quote:

Originally Posted by mathjak107 . i couldn't imagine looking at them any other way.

If I were similarly afflicted, I would make every effort to just check my balance annually.
Daily fluctuations are just noise, and no reason for glee or sadness.
Viewing wealth as "shares owned" or "claims against future revenue" can be just as valid as a dollar amount.

[M Paquette]

A bear market is an extended period of time during which people who think this time is different sell all their investments to people who understand that this time is never different.

[audreyh1]

When it comes down to it, I only care about the value of my portfolio on Dec 31 of each year.

[dallas27]

My long view is that until population growth is curbed, markets will go up.




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[audreyh1]

Quote:

Originally Posted by Looking4Ward What do you feel is significant about 2070?

Well lookee here, we're above 2075! Might even get a record close. Now that is exciting!

[Looking4Ward]

Quote:

Originally Posted by audreyh1 Well lookee here, we're above 2075! Might even get a record close. Now that is exciting!

LOL! I just saw that and hurried over here to let you know it punched right thru. Hopefully it will stick and we're on our way to 2100!