Record Dow! Whee!

[unclemick]

Greed is good. Now another quick 5-6000 point drop and I'll back up the the truck - maybe take a Heloc on on the house, go higher than 65% stocks, etc, etc.

Or not. Might just watch a little football, buy a couple Norwegian widow stocks, and let my lifecycle fund auto rebalance.

Geaux Saints!

heh heh heh -

 

[Achiever51]

My portfolio dropped 1.2% -- but from the media hoopla all day yesterday, you would have thought the bottom had fallen out completely. I wonder a bit about how much of the market is driven by these "skies are falling" stories.

 

[Razor]

Just a few short weeks ago the market was plummeting with no bottom in site. The FED bailed it out by pumping billions into the economy and cutting interest rates. There definately is a major problem and the FED can not manipulate the market forever. Eventually the housing bust, weak dollar, out of control government spending, credit crunch and high oil prices will catch up to us. It is not doom and gloom, it is just facing reality. The only reason the market had been going up the last few weeks is that the economy is so bad that another interest cut is expected.

 

[Nords]

Interesting my portfolio also dropped 1.8% today...

Both our portfolios are probably contaminated with too much Intel stock...

... and I'm also looking at buying.

... and that's probably the cause of the Intel problem.

If I ever drop off the internet for several months (like sailing the South Pacific) I know who I want to keep an eye on my portfolio.

Inquire about our low low rates! No service charges will be applied if bad things happen to your portfolio while I happen to be [-]out surfing[/-] temporarily unavailable.

I am curious is anybody else spooked that this dropped happened 20 years to the day after the 1987 crash. Is this a pure coincidence or a self-fullfilling prophesy?

Friday's market drop was pure coincidence.

This coming Monday's meltdown will be the self-fulfilling prophesy...

 

[Razor]

This coming Monday's meltdown will be the self-fulfilling prophesy...

Monday will be real interesting. It could go either way unless there is some really bad news.

 

[ladelfina]

It's the FOX Business Channel Effect:

IS FOX BUSINESS NEWS BAD FOR THE MARKET?

Network began on Monday. Market since Monday:

Eschaton

 

[calmloki]

Hey! Our gold stock BGEIX gained almost exactly what our Hewlett-Packard lost. Pretty cool! Ended up loosing just as many dollars for the day as the number of points the Dow lost. Can you tell we don't have a great wad in the market? If tomorrow brings another crummy day i may actually splurge and buy something boring.

Errr - just took a Saturday look at our stuff - was going to have this great post about how one of the virtues of having low gaining stocks was the slow losing - no such luck. The above post was inaccurate. We are down for the day as of 10/20 1.35%, red top to bottom... I know BGEIX updates once a day, looks like some of the others do as well. Or the pony carrying the latest news from the outside just made it into town.

 

[Gumby]

Down 1.9% yesterday. Still up 16.1% YTD. Currently sitting tight.

 

[brewer12345]

Monday will be real interesting. It could go either way unless there is some really bad news.

I would expect a rebound, personally. If not, the slide will be short lived.

 

[Razor]

I would expect a rebound, personally. If not, the slide will be short lived.

Only if the Fed cuts interest rates again. If not, the fall could last a while.

 

[brewer12345]

Only if the Fed cuts interest rates again. If not, the fall could last a while.

Because?

Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.

 

[ziggy29]

Because?

Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.

Like most times, for this quarter there are some companies reporting blowout earnings and some reporting weak earnings.

It's just that in an "optimistic" market, the bad earnings are ignored while the bulls ride the blowouts to new highs. In nervous Nellie markets, the blowouts are ignored and each bad earnings report is evidence that the sky is falling.

 

[Razor]

Because?

Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.

Have you been following the economy at all? Earnings are mediocre and don't have as big an impact as interest rates and FED policy anymore, the housing bust is becoming more and more relevant, the value of the dollar is heading for an all time low and energy prices seem to be heading to an all time high. The market is overvalued and a major adjustment is in the near future.
Earnings drove market prices in the past, but speculators drive the prices now adays.

The internet drove the economy of the 90's and government spending, low interest rates, refinancing, and the home building boom fueled the economy of the first half of this decade. I see nothing in the immediate future that will boost the economy like those factors.

CNNMoney.com Market Report - Oct. 19, 2007

 

[Darryl]

Okay took another 5% of cash and placed an order for some mid cap value. My move should place a floor for Monday and set up a nice rally.

 

[brewer12345]

Have you been following the economy at all? Earnings are mediocre and don't have as big an impact as interest rates and FED policy anymore, the housing bust is becoming more and more relevant, the value of the dollar is heading for an all time low and energy prices seem to be heading to an all time high. The market is overvalued and a major adjustment is in the near future.
Earnings drove market prices in the past, but speculators drive the prices now adays.

The internet drove the economy of the 90's and government spending, low interest rates, refinancing, and the home building boom fueled the economy of the first half of this decade. I see nothing in the immediate future that will boost the economy like those factors.

CNNMoney.com Market Report - Oct. 19, 2007

I think its safe to say that I am a far more astute observer of the economy that most any journalist working for CNN, Fox "News", CNBC, etc. They are journalists trying to make sense of the economy. I am an economist studying what I was trained to study.

You been paying attention to what the BRIC(K) countries have been up to? The German banks may have been dumb enough to get wrapped up in US subprime paper, but the BRICK companies don't give a fig about all that. That is what has been driving the global economy in the last few years.

 

[Running_Man]

One day a woman went for a walk in her neighborhood and came across a boy with some puppies. "Would you like a puppy? They aren't ready for new homes quite yet, but they will be in a few weeks!"

"Oh, they're adorable," the lady said. "What kind of dogs are they?"
"These are economists."
"OK. I'l tell my husband."
So she went home and told her husband. He was very interested to see the puppies. About a week later he came across the lad; the puppies were very active. "Hey, Mister. Want a puppy?"
"I think my wife spoke with you last week. What kind of dogs are these?"
"Oh. These are decision analysts."
"I thought you said last week that they were economists."
"Yeah, but they've opened their eyes since then."

 

[Razor]

I think its safe to say that I am a far more astute observer of the economy that most any journalist working for CNN, Fox "News", CNBC, etc. They are journalists trying to make sense of the economy. I am an economist studying what I was trained to study.

You been paying attention to what the BRIC(K) countries have been up to? The German banks may have been dumb enough to get wrapped up in US subprime paper, but the BRICK companies don't give a fig about all that. That is what has been driving the global economy in the last few years.

You're joking. Right?

 

[laurence]

You're joking. Right?

Which part? He really is trained and paid to do this for a living.

 

[73ss454]

You're joking. Right?

Razor pay attention, he knows.

 

[twaddle]

Here's a puzzle for all the economists in the house. What does this graph tell us?

 

[73ss454]

I think it's a bad cardiogram reading.

 

[twaddle]

I think it's a bad cardiogram reading.

I agree. I don't think the patient will make it.

 

[FIREd]

Here's a puzzle for all the economists in the house. What does this graph tell us?

I am not an economist and don't pretend to be one, but I find this graph interesting for several reasons:

1) If history is any guide, the chance of a recession are fairly high right now, though drops in YOY returns have not always been followed by a recession.
2) In the past 25 years the frequency and length/severity of recessions has decreased quite dramatically.
3) In the past 25 years, the volatily of YOY percent change has decreased notably.

Let's face it, my interpretation of this graph is as good as anyone's... But it looks like something happened in the past 25 years which makes it difficult to extrapolate from these historical data what's going to happen this time around...

 

[Spanky]

Not an economist. This chart seems to indicate that residential investment tends to be sporadic. Other factors, such as consumer spending and commercial real estate investments, will have to considered before making any prediction about where the economy is heading.

 

[haha]

Looks like only 1951 and 1967 showed a strong downward deflection in residential construction spending that did not come to a recesion. '67 of course was the eve of Mr. Johnson's ramp-up of the Viet-Nam war on top of the War On Poverty, the apogee of guns and butter. 1951 was coming out of the post WW2 recession, and was benefitted by enormous demand built up during the war years. So in each case there were very special circumstances and underlying strengths.

It is hard for us today to even imagine the sheer joy of consuming that people felt in the early fifties. The population was making good money, babies were everywhere, and families needed and had the means to pay for lots of things. Also, interest rates were quite low, and the economy was highly liquid.

From my vantage point, today we are running on hope and a prayer.

Ha