what will happen Monday?

[DblDoc]

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Originally Posted by W2R I love the above description! I think we can all relate to that.

Just want to remind you that you posted Wheee! TWICE last week.

DD

[73ss454]

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Originally Posted by REWahoo I may put a paper bag over my head tomorrow. I figure that should both hide events from view and reduce the possibility of hyperventilation....

Is that really you REW?

‪The Unknown Comic‬‏ - YouTube

[oldtrig]

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Originally Posted by REWahoo The Dow closed up 400, so you only missed it by 1,000 points. But hey, tomorrow is another day - want to give it another shot?

You love it when I am wrong I see
Ok, here goes. My expert pick for tomorrow is the Dow will be up 98 points. Lets see how close I am. And yours please

[W2R]

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Originally Posted by oldtrig You love it when I am wrong I see

Isn't the subtitle of this thread "Or, I told you so!"

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Originally Posted by DblDoc Just want to remind you that you posted Wheee! TWICE last week. DD

No, I did not! If I had, you'd KNOW it...

[REWahoo]

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Originally Posted by oldtrig Ok, here goes. My expert pick for tomorrow is the Dow will be up 98 points. Lets see how close I am. And yours please

When it comes to predicting what the market will do tomorrow, next week, next month or next year, I freely admit I don't have a clue.

[donheff]

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Originally Posted by REWahoo When it comes to predicting what the market will do tomorrow, next week, next month or next year, I freely admit I don't have a clue.

Amen. My brief excursion into market timing was nothing more than a gamble but T-Al is right, since it worked out well (so far) I may get sucked in.

[TromboneAl]

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Originally Posted by DblDoc Just want to remind you that you posted Wheee! TWICE last week. DD

I posted a translateral inversional whee yesterday here, the direct cause of today's rally.

[Purron]

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Originally Posted by REWahoo The Dow closed up 400, so you only missed it by 1,000 points. But hey, tomorrow is another day - want to give it another shot?

I think T-Al was closer in his prediction of up 1%

[oldtrig]

Let me see if I can make a guess. Many people waited on the Dow to fall and they bought. Today they made a nice profit and put an order to sell in the morning. The market falls again and the fat cats make a big profit. The big money is moving making these wild swings. The little investor who have their life saving cannot afford to move their money and therefore they get the shaft. Make any sense? Its the same way in a poker game. If I am playing against people who have big pockets then sooner or later they get my money. The house that I play at makes their cut. Same way in the market. The financial adviser tells you when you play and when to fold. They get their cut and hope you make a profit. If not then on to someone else. If I ever did buy stocks I would put back money I could afford to lose, not my life saving and then pick what I wanted to buy myself. As a matter of fact I think I would circle the stocks I wanted and then buy the ones next to them

[Hobo]

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Originally Posted by oldtrig Let me see if I can make a guess. Many people waited on the Dow to fall and they bought. Today they made a nice profit and put an order to sell in the morning. The market falls again and the fat cats make a big profit. The big money is moving making these wild swings. The little investor who have their life saving cannot afford to move their money and therefore they get the shaft. Make any sense? Its the same way in a poker game. If I am playing against people who have big pockets then sooner or later they get my money. The house that I play at makes their cut. Same way in the market. The financial adviser tells you when you play and when to fold. They get their cut and hope you make a profit. If not then on to someone else. If I ever did buy stocks I would put back money I could afford to lose, not my life saving and then pick what I wanted to buy myself. As a matter of fact I think I would circle the stocks I wanted and then buy the ones next to them

Yup, I agree. If the stock market were open only one day a week, people who wanted to invest in companies would have time. And companies that were looking for long term investors would get them. And all the day traders would be out looking for an honest job. If you are in the market to gamble and get rich quick, then the big money movers are today's equivalent to riverboat gamblers. They are going to get your money, someday.

[eytonxav]

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Originally Posted by Hobo Yup, I agree. If the stock market were open only one day a week, people who wanted to invest in companies would have time. And companies that were looking for long term investors would get them. And all the day traders would be out looking for an honest job. If you are in the market to gamble and get rich quick, then the big money movers are today's equivalent to riverboat gamblers. They are going to get your money, someday.

Yep, I agree as well, and thats why I refer to it as Casino Wallstreet.

And so it goes!

[teejayevans]

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Originally Posted by DallasGuy The Dow closed lower yesterday than it was back in 1999. How is buy, hold and rebalancing working for you?

Great! Of course I don't invest in just the Dow...
TJ

[donheff]

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Originally Posted by teejayevans Great! Of course I don't invest in just the Dow... TJ

+1. I read an article yesterday about the Georgia State pension system. The system spends $32M/yr on a staff of 170 to "manage" its portfolio. Despite their fiduciary obligations to the State the study found that the pension fund underperformed couch potato style index portfolios to the tune of $1B - $5B over the last decade and since 1984.

The market is predictable over the long term. Or, at worst, the past is not prologue. In the later case, the market may get goosed by unforeseen technology and those of us in it will benefit. Or, the gloom-and-doomers are correct and those of us in the market will lose our shirts. I suspect that in the later event the gloomers will go down the tubes with us, their cash eaten away by inflation or their bonds rendered worthless. If there is a coherent alternative strategy to navigate a 30-40 ER, I have yet to hear it.

[ERD50]

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Originally Posted by oldtrig Let me see if I can make a guess. .... The big money is moving making these wild swings. The little investor who have their life saving cannot afford to move their money and therefore they get the shaft. Make any sense?

No.

The little investor like me, who does B&H&R didn't get shafted during these bumps because I didn't buy/sell anything. And if one did, to re-balance, they sold high and bought low.

I'm glad that my portfolio is higher than a year ago, higher than two years ago, and higher than when I retired.

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Its the same way in a poker game. If I am playing against people who have big pockets then sooner or later they get my money. The house that I play at makes their cut. Same way in the market.

It is not a zero-sum game. Value is added, B&R and you can share in that value increase. I have.

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The financial adviser tells you when you play and when to fold. They get their cut and hope you make a profit.

? I'm my own FA, so I get 'the cut'.

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If I ever did buy stocks I would put back money I could afford to lose, not my life saving and then pick what I wanted to buy myself.

What strategy are you using that has no risk (including inflation risk)? If you have a big enough portfolio to not need to worry about that, good for you. Most of us need to count on future growth not being too much worse than the worst recent history has provided.

-ERD50

[pb4uski]

+1 ERD 50. In the long run stocks tend to grow in value, albeit with volatility. Had I not invested in stocks as a young man I am convinced that I would not be FI today. I have learned to tolerate the volatility and be disciplined in when I rebalance to my AA.

oldtrig seems to be referring to active trading or day trading, which I agree is a fools game for most mortals. Most of us on this board are not active traders so the issues concerning oldtrig do not apply to us - rather, we are long term investors.

[Hobo]

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Quote: Originally Posted by oldtrig Let me see if I can make a guess. .... The big money is moving making these wild swings. The little investor who have their life saving cannot afford to move their money and therefore they get the shaft. Make any sense?

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Originally Posted by ERD50 No. The little investor like me, who does B&H&R didn't get shafted during these bumps because I didn't buy/sell anything. And if one did, to re-balance, they sold high and bought low. I'm glad that my portfolio is higher than a year ago, higher than two years ago, and higher than when I retired.

Just so no one is confused, the long-term trend (say, 5-10 years) of the market is established by long-term factors, such as the health of US companies, their profitability and the stability of the economic environment. There can be medium-term trends which cause bubbles, such as the tech bust, and (theoretically) the housing bubble. And short-term swings that are largely controlled by technical factors. Technical factors is a nice, collective term for people who know and understand market swings through such things as chart reading (or tape reading, if you are older). This technique is used by a relatively small number of people, but people that usually with a lot of money and who have been around the market a long time. They have studied and learned about how the short term swings in the market work.

It is these chart readers who make, manipulate and profit from short term swings. Any one of them who gets interviewed on business news is going too put a spin on the news that temps the average investor to buy or sell stock at the wrong time.

The rating downgrade by S&P was a perfect storm for these professional day traders (and people like you who understand the game). The moment the news comes out, the day traders sell the market short... knowing the market will fall on Monday. And yes, many average investors did sell on Monday; and the market crashed. The day traders won with their short sales.

Most professionals know the market will rebound quickly, but exactly how quickly and to what level depends on other technical factors, such as the trading volume. Is the public buying back in the market? Then traders will start to buy in too - but not so fast as to stop the upward trend. A half-way rebound, accompanied by slow trading volume will likely mean the market wants to drop back and think a little before resuming growth. On and on it goes.

The average investor who tries to trade the market looses money chasing trends. What is actually happening is not gambling, it is a complex kabuki dance that the professionals profit from. But it is the same idea as gambling to the both the amateur and professional gambler. The pro has seen it all many times before and normally will not loose. The amateur gambler will loose just as fast as the amateur investor.

For someone who is sophisticated in the market, like you, can use this opportunity because it is an obvious time to readjust your portfolio when the market is down. "Whee, time to buy" as one poster said. But you must have a lot of money to make big money if you want to buy a new car on a 5% market dip. Those are the pros.

The other strategy is to put your money in the market and don't touch it for 15 or 20 years. That works if you do your homework, and watch the long term trend. IMO, even this "buy and hold" strategy requires that a diversified portfolio to be adjusted from time to time (maybe every year) based on long term trends. Don't forget, 10 years ago Apple was getting beat up by Microsoft and small hand phones were still a rich man's luxury. You've got to readjust for those kind of changes if you want to retire early.