The market today

1. Feb 27, 2007

Greg Bernhardt

anyone invest here? what a horrific day eh? I ended up getting hammered and sold most to wait out a few days.

2. Feb 27, 2007

turbo

Yes, I invest, but I invest long term, stay diversified, and ride out dips like this. Selling into a down market locks in losses, and I just can't afford to do that when I'll need the money for my retirement. Eventually, my portfolio recovers from these events and continues to grow. The official news is that the markets are concerned about cool-offs in the US and Chinese economies, but a more relevant concern is what will happen to the global economy if Bush orders bombing strikes on Iran. The insurance companies will not allow tankers to operate in the Gulf if he does that, and the price of crude will skyrocket, killing any potential for growth in manufacturing and transportation for the duration of the hostilities. When the financial reports come in tonight, it will be interesting to see which stocks took the hardest falls. I predict that companies with the most energy-intensive manufacturing lines will take some impressive nose-dives.

3. Feb 27, 2007

Greg Bernhardt

DJ hit -500pts at one pt, wow! seems to be bouncing back a bit though

4. Feb 27, 2007

turbo

Rapid market swings like this seem to be standard these days with so many trading programs designed to trigger on certain market conditions. The best bet for a short-term investor today would have been to hold and buy stocks in companies that dropped in "sympathy" with energy-intensive industrial companies and those making pricey consumer goods, but are themselves relatively less exposed to fluctuations in energy prices. Those stocks will bounce back pretty readily, and the savvy investors will have made a lot of money today.

5. Feb 27, 2007

FredGarvin

My worth in stocks is only valid when I choose to sell. Since I am holding on for a loooong time, I am with Turbo. I just ride them out. If I were close to retirement and pulling out of my 401k, I'd be in a fret.

6. Feb 27, 2007

BobG

If you're in long term, especially with 401k's where you're investing a certain amount no matter what, you can pretty much count on a steady gain. Dips are good because you're getting a discount for at least a little while. Of course, if you're in long term, those get cancelled out by the periods where the market is higher than the long term gain - you're paying higher prices for a while.

If you're in short term, you should have sold as soon as China's market dropped about 9%.

7. Feb 27, 2007

Staff: Mentor

Whoa.

I had some personal stuff up until a year ago when I sold all but one stock for the down payment on my house. The stock I kept....Toll Bros. D'oh. [so maybe I should buy some right now...] Now all I have is a little IRA in an S&P index fund, so it doesn't really hurt me any since I won't be taking any of it out for about 30 years...

8. Feb 27, 2007

BobG

It always comes back up. Even in the depression, when the Dow dropped from the $370's to about$50 in a little over 2 years. Sure enough, the price went right back up to the \$370's .... about 22 years later. :rofl:

9. Feb 27, 2007

Staff: Mentor

The time to get out was last Friday.

Most of my investments are in the 401K which is doing quite well. A chunk of that is gas leases which have been doing well even with the drop in gas prices.

10. Feb 27, 2007

turbo

Well, if Toll Brothers can stay viable during the housing slump (not a problem, since they can avoid fixed costs by dumping employees) they will be in a great position when the housing market rebounds. Everyone needs to live somewhere, and new-home construction will rebound after the real-estate bubble. That stock would not be a bad one to buy while it is depressed - housing is quite cyclical and in the short term (1-2 years) they will probably riding high again.

11. Feb 27, 2007

grant9076

Not for someone who uses put options or someone who uses delta neutral strategies with positive gammas.

12. Feb 27, 2007

gravenewworld

ahh the first signs of the consequences of carrying massive budget deficits. this is only a tip of the iceberg, where is this great economy now bushies???

13. Feb 27, 2007

twisting_edge

In a much better place than it was in the year 2000.

Who was president then? I forget.

14. Feb 27, 2007

Ivan Seeking

Staff Emeritus
Something else that you seem to be forgetting
Dot-com bubble

If we get to blame Clinton for the fall, then we get to blame him for the phenomenal wealth generated as well. Then of course there is the deficit.

15. Feb 27, 2007

twisting_edge

You mistake me. I hadn't forgotten that at all.

But, in parallel, have you noticed the market was up a great deal this past year, a great deal more than the 5% it lost so far?

My point is the original poster in that case was exercising a clearly partisan and rather dumb point.

P.S.: As it happens, I do not approve of deficits and cannot stand Bush. I find both his policies and his personal attributes vile.

16. Feb 27, 2007

gravenewworld

Try doing some research on budget deficits and how they relate to the twin deficit and foreign currency exchange rates. With the massive budget deficits Bush has accrued, something like this was bound to happen. Massive budget deficits also slow long term economic growth for a host of reasons (people write entire books on this), which we are already starting to see signs of.

17. Feb 28, 2007

Gokul43201

Staff Emeritus
And where are the massive budget deficits and the Bushes in the rest of the world, to explain why the CAC and the DAX dropped 3%, the FTSE dropped 2.3%, the SMI fell by 3.4%, and the Madrid, Australian and Toronto indexes, all shed 3%, and virtually every major index in the world dropped by about the same fraction as the DOW or the S&P yesterday?

18. Feb 28, 2007

Staff: Mentor

It seems that in the global market, when one sneezes, everyone catches a cold.

Actually, all those markets are tied to the Chinese markets either directly or indirectly. The concern is how the downturn in China might affect the US economy, which then would affect all other major industrial countries.

Anyway - the markets have rebounded slightly today - but watch out.

What's he going to do - say that he expects a downturn?

Tech investors: Ignore history at your peril
Commentary: Why stocks are likely to move lower over next 6 months
http://www.marketwatch.com/news/sto...x?guid={C5950FA7-77FC-488F-BDA7-072DD1359187}

19. Feb 28, 2007

gravenewworld

Gokul, the global economy is extremely intertwined, when the US markets fail, the world economies go into recession. The WTO has repeatedly warned the US to control its deficit spending because of the effects it could have on the global economy. For crying oout loud, when Greenspan was in office, just a few words out of his mouth at congressional meeting would always cause large fluctuations in overseas markest in places like Britain and Japan.

Notice what Bernanke also said today:

clearly the budget deficit is on the FEDs mind.

20. Mar 2, 2007

Gokul43201

Staff Emeritus
Yes, and when markets in China go down, the rest of the world takes a dive too.

But the cause here is not the US markets going down. If that were the case, how did the European markets experience their dip before US markets?