Don't Panic!

[jcountry]

With all the stories floating around, I have more than a couple of friends hearing "worst december since the great depression" and blah and such and so.....

Total BS. Point drops mean nothing. Percentage drops are what matter. As such, this is nowhere near as bad as the great depression.

Don't panic and cash out! People are stupid, and stupid people find ways to be poor.

The market is going through a normal correction. This is a buying opportunity. I can see it dipping below 20k-which would create a REAL GOOD buying opportunity!

-Best investing advice ever (from Warren Buffet

'Be fearful when others are greedy... Be greedy when others are fearful."

 

[medium187mph]

If it’s tanking then why the heck are mortgage interest rates keep going up....

 

[sparked1]

I’m sitting on mostly cash patiently waiting for a bottom. If the market keeps breaking support though, things could get much uglier before they get better. But I do think they will get better. We might be in bear market territory but nowhere near an economic recession. I think what we’ve seen in 2018 is mostly an implosion of the “trump bump”.

 

[jcountry]

If it’s tanking then why the heck are mortgage interest rates keep going up....

The market now is a very different beast from 15 or 20 years ago.

Much of it's behavior is tied to what a bunch of trading programs are set to do..... Most of those programs place very short-term bets with huge money... We are talking in and out in milliseconds many times.

It's no longer tied to the broader economy.

That's why Obama's crap economy somehow supported a really good market.

I don't worry at all about the day-to-day movements. They mean nothing at all. Over time, capitalism should prevail, innovation should pay off, and everyone should see it rise....

But the day-to day stuff is very much not based in reality.

About interest rates-they do tend to rise as risk rises...... I don't see a whole lot of risk right now, but those rates have been very low for a long time. Essentially punishing people who save. Now that rates are returning to somewhat normal, people who live on fixed incomes (retirees, savers, social security folks) have a chance at keeping up with inflation.

I think the market movements we see now are more related to the trade war and the government shutdown over funding the wall..... Those algorithms control the market, they all still hate uncertainty.

 

[Horsehat]

The market now is a very different beast from 15 or 20 years ago.

Much of it's behavior is tied to what a bunch of trading programs are set to do..... Most of those programs place very short-term bets with huge money... We are talking in and out in milliseconds many times.

It's no longer tied to the broader economy.

That's why Obama's crap economy somehow supported a really good market.

I don't worry at all about the day-to-day movements. They mean nothing at all. Over time, capitalism should prevail, innovation should pay off, and everyone should see it rise....

But the day-to day stuff is very much not based in reality.

About interest rates-they do tend to rise as risk rises...... I don't see a whole lot of risk right now, but those rates have been very low for a long time. Essentially punishing people who save. Now that rates are returning to somewhat normal, people who live on fixed incomes (retirees, savers, social security folks) have a chance at keeping up with inflation.

I think the market movements we see now are more related to the trade war and the government shutdown over funding the wall..... Those algorithms control the market, they all still hate uncertainty.

Stock transactions used to take a day or so to fill. I think it would be better for most investors if it still worked that way. It has become more akin to online gambling in some ways than to investing. Value takes a backseat to movement in today's investors mind.

 

[jcountry]

Stock transactions used to take a day or so to fill. I think it would be better for most investors if it still worked that way. It has become more akin to online gambling in some ways than to investing. Value takes a backseat to movement in today's investors mind.

Yep.

I took macro economics in 89 or 90.... Back then they would tell you all kinds of stuff about how the stock market represented the health of the economy and all... None of that is true anymore. I read somewhere that almost 90% of all trades are automated now. No human intervention whatsoever.

I had no idea any of that was going on until I came across this podcast episode a while back. Very interesting how this stuff started, and insanely fast it spread:

https://www.wnycstudios.org/story/267195-million-dollar-microsecond