October 10th Market Plunge

[JustCurious]

Doesn't help all the talking heads on TV are stoking the fires of fear and panic.

I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.

 

[joeea]

I found an AA that seemed to better suit my situation, and my personal risk tolerance.

i guess I hit the sweet spot, because this isn't bothering me.

That's a good sign.

 

[24601NoMore]

I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.

Oh, I don't watch either - but the herd does. And that's excaberating the panic that is most likely driving the dive.

 

[Fedup]

We don’t watch Cramer anymore. Too loud is the reason.

 

[Hamlet]

I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.

Even worse than that, I used to love watching Kudlow's show. Talk about killing brain cells.

 

[NW-Bound]

My TV has not been turned on for a few years. I do not even have it hooked up to over-the-air broadcast.

The only time I watch satellite TV is at my 2nd home, where there's no broadband Internet. And I do not have CNBC with my basic subscription. Only HGTV and FoodTV.

 

[HI Bill]

For every share sold off today, someone was on the other side buying. So someone thinks there's still value to be found.

As I told my wife, every time the market hits a high, I'm certain that it will go higher in the future. I've been buying chunks the past three days, as I don't know where the bottom is. Even if it drops another 10-20%, I still bought some at 5% under the peak value. I know, market timing's a fool's errand, but I just had a cash diffusion into the accounts, and I moved some mutual funds into ETFs.

 

[HI Bill]

watching my net worth drop in $50K+ chunks every day for multiple days in a row is stressful at best

Yes, it is....I was planning to retire in January, and I may now defer that a bit...or not!

 

[24601NoMore]

Yes, it is....I was planning to retire in January, and I may now defer that a bit...or not!

Good luck on that. I already turned in my notice a couple months back, so that ship has sailed.

Not looking forward to retiring into the beginning of a bear market. Glad I am cash heavy and only ~35% stock and bonds but that part of my portfolio is getting crushed - especially since I'm heaving internationals in the equity part.

We'll be "fine" but watching your net worth evaporate on a daily basis is disconcerting. Guess I don't have the stomach for risk any longer that I once did.

 

[Lakewood90712]

Margin calls can be a brutal thing for those leveraged. You live by the Sword, and can be put down by the Sword.

1987 is the way a correction should be IMO, sharp shake out, no crying for government intervention, investors who were not leveraged excessively went back in over the next year or so to a typical bull market run.

IIRC the " Circuit Breakerr " hurriedly instituted by the N.Y.S.E. at the time was not to calm the markets, rather it was to allow the trading systems to catch up with what at the time was considered extreme volume. In those first 2 days it took hours after the markets closed for the trades to be completed. First time the N.Y.S.E. really had to cope with programmed trading IIRC.

If this continues down a few thousand more points , I will get a shopping list. At this time, this is nothing like 1987 which I do remember well. I had recently bought a house and had little in equities.

 

[braumeister]

As I told my wife, every time the market hits a high, I'm certain that it will go higher in the future.

I'm kind of the opposite. When I was still buying individual stocks, I would always get very nervous when something zoomed way up. I got scared that it would crash right back down. As a result, I tended to sell well before the high point when I could have held on and made a good deal more. But that tendency served me well many times. Made a chunk of change on Enron, for example.

I'm in pretty good company there:

I never buy at the bottom and I always sell too soon.
~ Baron Nathan Rothschild

But that's more trouble than I need now, so I'm one of those damn indexers.

 

[audreyh1]

Doesn't that apply to every market, every day?

Yes, so it’s not a particularly useful observation. The fact is, some days the sellers are far more motivated than the buyers, and other days the opposite is true.

 

[HI Bill]

watching your net worth evaporate on a daily basis is disconcerting

Think of it this way...your net worth is only changing 'on paper'...you still own the same number of share, unless you panic and sell!

 

[Free bird]

5% is not a plunge. Points don't matter. % matters.

 

[24601NoMore]

Think of it this way...your net worth is only changing 'on paper'...you still own the same number of share, unless you panic and sell!

Yep - agreed. But it's all mental also. Could take a very long time to recover if the plunge continues, and I'm ER'ing next month. Felt really secure at my portfolio value 2 weeks ago. Still feel secure but not nearly as mentally comfortable with the hit either.

 

[Lakewood90712]

I cancelled cable TV several years ago and stopped watching the financial talking heads. I felt a bit of withdrawal immediately after I did it, but within a short time I got used to not watching it, and now I feel much better and don't miss it at all. Every once in a while I get exposed to the TV talking heads at an office or somewhere else, and I find myself wondering how I was able to watch that before. It feels strange to admit this, but there was a time that I used to look forward to watching Jim Cramer on Mad Money after work, it was entertaining.

I understand CNBC has a tranquilizer dart ready on set in case Jim Cramer has another 2008 style meltdown.

 

[scrabbler1]

Yes, it is....I was planning to retire in January, and I may now defer that a bit...or not!

In my last few months of working back in late 2008, the crashing markets turned out to be a big benefit to not only the start of my ER but the entire first 10 years of it.

All year long, I had been watching closely the NAV of the bond fund I had chosen to produce enough monthly dividends to cover my expenses. It had been fairly stable between $9 and $10 per share. But in September, its NAV began dropping (along with everything else out there!). This was a good sign, I thought.

And at the end of September, my company's ESOP announced its quarterly price. Because the shares were not publicly traded at the time, the stock price was determined once every 3 months. It took only a very small hit on 9/30, down 1.5%.

Then in October, I watched with some glee as the targeted bond fund's price continued to tumble. It fell to $8 and it kept falling. Remember Winthorpe and Valentine in "Trading Places" as they watched the price of FCOJ fall until they were ready to swoop in and buy at rock-bottom prices? That was me in October and early November when I finally received the money from cashing out the ESOP at its frozen 9/30 price.

By the time I bought into the bond fund, its NAV had fallen to $7.46, about 25% less than its August price of $9.30, the last time it had stabilized. Talk about a huge buying opportunity! All those extra shares have earned me an extra $240-$400 per month, every month in the last 10 years. And all because the market tanked and gave me a huge buying opportunity.

My overall portfolio had declined, of course, but that bounced back in 2009 and 2010; those 8,000 extra shares have always been mine.

 

[scrabbler1]

5% is not a plunge. Points don't matter. % matters.

For me it's dividends per share, mainly on the big bond fund, and to a lesser degree the stock fund. Together, they provide me with the income needed to cover my expenses.

 

[pb4uski]

I understand CNBC has a tranquilizer dart ready on set in case Jim Cramer has another 2008 style meltdown.

If you want to have fun sometime, watch Cramer with the volume muted. Much better!

 

[HFWR]

If you want to have fun sometime, watch Cramer with the volume muted. Much better!

I watch with the picture off...

 

[samclem]

I'm about 75% stocks and haven't lost anything in the last two days. I've still got every share I had on Tuesday, I have exactly the same ownership % in thousands of US and foreign companies.

 

[NW-Bound]

I am not panicking, but to say that I still have the same shares of stock is like the Venezuelans saying they still have the same billions of bolivar that they had.

OK, that is an exaggeration, but I try to make a point.

PS. By the way, glad to see fellow posters with the same stock AA that I do.

 

[pb4uski]

Yup, if I need to sell 107 shares today to buy a widget vs 100 shares a couple days ago then having same number of shares as a couple days ago is academic.

 

[samclem]

I am not panicking, but to say that I still have the same shares of stock is like the Venezuelans saying they still have the same billions of bolivar that they had.

OK, that is an exaggeration, but I try to make a point.

I know you are being facetious, but just to drag this out . . .
Each share of stock represents a claim on current and future earnings of a corporation. If we assume that the present and future earnings of those companies aren't affected by what people paid for the stock yesterday, then my shares also haven't changed in their ultimate value.

Of course, the >price< of the stock, today and in the future, is whatever a buyer is willing to pay for that share of future earnings. As of today, that has dipped a bit, so if I need to sell today I'll get less. But, if I don't need to sell today, or soon, it is irrelevant. In a mark-to-market world, I've lost something. In a "what I get when I sell them" world, I haven't.


Those inflating bolivars don't ultimately represent a claim on anything. I see that as the difference.

 

[marko]

Not looking forward to retiring into the beginning of a bear market.

Per Fido's Jurrien Timmer (who I follow only because I know him)

"...But just because a bull market changes and stops going up, that doesn't mean a bear market has started..."

Here's his full article from today: "Fidelity Viewpoints"
https://www.fidelity.com/viewpoints...ights/market-pullback-selloff-october-2018#tw