Are You Correct??

[bad hammy]

The stock markets are now:

As of early Thursday afternoon, all three major gauges have fallen over 10 percent from the 2007 highs hit in mid July, the formal definition of a market correction.

http://money.cnn.com/2007/08/16/markets ... tm?cnn=yes

[Mennisco]

Same thing happening up here:

http://tinyurl.com/22ujo9

[eldrick]

it's calmed down a bit now & dji recovered all it's intra-day losses & it's possible we may have bounced off a temporary bottom

fundamentally, earnings are good, but in these times, investors are ignoring this & more interested in sub-prime, which isn't as big part of economy as it is made out to be
( it's concerned with people who can't afford "conventional" mortgages & in effect are going to "unscrupulous" banks who are acting as little more than legalised loan-sharks - i have no sympathy for either ( as fund manager on bloomberg said :

they allow a $30k/year grape-picker to buy a $600k house

) )

but more worried a "catastrophe" may occur wih a major bank going belly-up or similarly, a big hedge-fund ( which may have $25 - 50 billion in leveraged positions ( i e no money to pay up ) does same - that finishes confidences in latter firms & god knows, makes people have a "run on" the former - all your citibanks, wachovias, bank of new yorks, etc all have customers withdrawing all their money - problem is, most banks invest depositors money in "money-making" ventures ( i e hedge funds ( after all, how are they going to pay 4%+ yield & still have yearly share-price rises above basic fed interest rate ? ) ) & can't pay all the depositors money back immediately if you want to withdraw all your savings ( for "run on the bank", there was a jimmy stewart film, but this one came up recent on our tv : http://www.imdb.com/title/tt0048130/ )

but at least it looks like things are a bit better today...

[Per Andersen]

Same thing happening up here:

http://tinyurl.com/22ujo9

But worse and why is that? MJD, please enlighten us!

[Kevin Richardson]

I partially blame the apparent increase in market volatility to the presence of "day traders" and those who manage their own portfolios on that internet-thing. Professional market players are more likely to scrutinize the fine details of the market, while casual players respond more quickly and with less concern for secondary effects.

[eldrick]

I partially blame the apparent increase in market volatility to the presence of "day traders" and those who manage their own portfolios on that internet-thing. Professional market players are more likely to scrutinize the fine details of the market, while casual players respond more quickly and with less concern for secondary effects.

you can't stop people trying to make money !

there are absolute huge amounts of money to be made ( or lost ) buying or selling the dji future & you'll never stop people trying to get a piece of the pie

but i have to admit, that the past 3 or 4 days have been the most stressful trading time i've had in 7y ( since tech bubble gradually burst around the millenium ) & probably aged me by a few months

still, that's just greed - if you play it conservatively, doing just 1 or 2 conservative trades/month, you become an "investor" rather than a "trader", which people find a more palatable description - but that's just nomenclature

[Kevin Richardson]

Eldy, I am all for people making money, myself included. But the guys at the top of the food chain (like Warren Buffet) do not sell off or buy based on a single index or hint of a problem. They are more thoughtful of what they are doing, not necessarily more conservative.

My comment on their impact on the markets reflects not just their semi-informed decisions, but their ability to turn those decisions into actions in mere seconds over the internet. In the "old days" you would have to phone up your broker, which would give him the ability to explain other facts to you, if warranted.

[eldrick]

Eldy, I am all for people making money, myself included. But the guys at the top of the food chain (like Warren Buffet) do not sell off or buy based on a single index or hint of a problem. They are more thoughtful of what they are doing, not necessarily more conservative

kev

he is the archetypal "value" investor who looks for "undervalued", solid companies, with businesses/products he understands, good yields & good growth prospects & re-invests most of the dividends in them for many, many years

after 30 or 40y, you are lkely to have a very good portfolio with the above criteria ( providing you pick the right companies ) & you just normally ride the vagaries of the market

your pension fund is supposed to be managed by similar minded guys on your behalf, so at least leave the "value" investing to them & you can try something "different"

[Kevin Richardson]

Eldy, I believe you have put your finger on the reason I am still working. I am not one with a bent for managing my money very aggressively. Sure I will end up working a few years longer to make my retirement savings last, but the truth is that I am a civil servant in the USA. By the time I reach retirement age, it will probably be difficult to tell if I am retired or still working. :wink: