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36 comments:
I put my stop loss on my UYG this morning because I figure GW will blow it. What's he thinking?
Here he comes ... brace yourself
anyone else smell burning metal?
What that commercial? The one where the kid stand up during the speech ... and says "The End". That was me the last 3 minutes
Roger,
Off topic here, what are your thoughts on some exposure to IShares Africa (EZA)?
been a while since i last checked in with SA.
there are commodity based economies on much surer footing.
So are these multi hundred point swings over the course of minutes because we have major players repositioning themselves or are there 2 or 3 people total on the exchange floor setting the prices minute by minute to get a charge out of everyone? :)
Capitulation "DE" style:
I don't care anymore. I can't do anything about it, I have a solid AA {although that is fluctuating all over the place} and still a fair amount of net worth.
I haven't liked the feel of the markets for years so have pulled out big chuncks on upticks and paid off my house finishing up last July (7 years). Thus, these idiots can kill my entire portfolio but as long as I can pay the taxes, insurance and buy some food, gas, etc., they can't touch me.
I always hoped to retire in my 50's and maybe I won't ever retire now, but I am confident that the greedy SOB's and idiot politicians will get theirs in the end.
DE = pissed but that rant helped me feel better, thanks for listening. :)
DE, have at it
DE, congrats on getting the house paid off. I'm nearly there (10 years). I was thinking about getting one of those old bumper stickers, popular in the 80's that you'd see on junkers that said "Don't laugh, it's paid for" and stickering up my front door when the house gets paid off :)
I haven't seen it mentioned anywhere, but S&P 775 seems like a possible level for support as that was the bear market bottom in 2003. Also S&P of 834 represents a 50% retracement of the entire bull market from 1982 to last year. Finally, S&P 725 would be the long term trend line from 1982 to present. Maybe these are silly lines on the chart, however perhaps others may like to comment?
Roger, how does this market 'feel' when compared to the bear 2000-3? I can get all the stats etc online and via Bloomberg but I wasn't nearly as involved then as I am now.
From where I'm sitting the markets are crashing and the possibility of a horrendous recession is being counted in.
Either that or capitalism is being stress-tested to check for weak links? (ie it's all choreographed by 'the powers that be' so it never happens for real)
Any thoughts?
two answers from my perspective.
on one hand it is worse because of the 25% (or whatever) in 2 weeks.
one the other hand not as bad now because in a way we are all just stunned but the velocity of the decline. in a way the size of the decline in the last couple of weeks until it ends doesn't matter because of the craziness of it.
the other was two years of slow bleed this is fast, fast decline.
historically fast declines are scary, see 1997 & 1998, but bounce back quickly. 1997 was the one time the circuit breaker was triggered.
I'd take this market any day over the 00-03 bear for points that Roger already made.
Indians scattered on dawn's highway bleeding
Ghosts crowd the young child's fragile eggshell mind
Maybe too esoteric but hey, it's my reality. Lot's of fear-and-loathing here in Silicon Valley, now. Up to now, we have been fairly insulated from the bear.
holding steady with my 300 SPY puts, this ain't the bottom folks.
Holding steady with my 100 SPY puts, this aint the bottom.
Roger,
I see you mentioned the term "circuit breaker" of which I have read elesewhere however am not certain what the term implies. for example, it is my understanding that the DOW circuit breaker is 7,400. Does this mean that if we breach below this level to get the heck out?
Hi Mr. Nusmaum- my family has been 100% long the market during this severe decline and am truly hitting the panic button now. Is it time?
circuit breaker=trading curbs at the NYSE to stop trading after a decline of X.
From FT Alphaville;
Level 1 Halt
A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
Level 2 Halt
A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
Level 3 Halt
A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
anon who is 100% long, time for what? i do not believe the market goes to zero, if you do believe that....
I'm sorry i don;t know what to say to 100% long all the way down.
Well, I suppose the good news is we are not at '82 or '75 levels down yet, not even particularly close in the latter case.
The bad news is that a failure of global leadership over the next week could very easily send us into worse territory than either.
I'm assuming there is sufficient appreciation of the possibility that measures will be taken and the puts I have sold which subsequently closed will give me some nice appreciating assets instead of a new set of auger bits.
We shall see; scaling in (oh so gently) and keeping fingers crossed.
I'm buying all kinds of stuff. Heck, even the kids picked-up some more CA bonds today, at a 25% "discount" - yielding 8% tax free - LOL! They've bounced a bit since then, but still yielding 7%.
Thanks Roger. Yeah the speed of these declines have been dizzying and looking at Yahoo's S&P chart over 10 years doesn't look real for the last few weeks, like watching it in a movie.
It's inducing panic amongst even my non-investing friends/family when history tells us that things will bounce back eventually. Maybe this is a financial crisis in the midst (or at the end) of a correction? Thank goodness I won't be retiring for a long time.
I wish I had a copy of all the Headlines and Alerts from money.cnn.com today.
Watching money.cnn.com today has been awesome. Everytime I go, the entire headline and usually a bar across the top in red is radically different.
"DOW plunges nearly 700 points!"
"DOW recovers completely after 700 point plunge and stabilizes!"
"DOW not doing anything!"
"DOW drops 200 points after recovering!"
"DOW recovers after dropping after recovering!"
"DOW plunges to 400 which isn't as bad as the 700 but couldn't really be considered a recovery!"
"Oops! 450!"
"700 one way or the other! You pick!"
"DOW surges up at day's end"
"No wait!"
"Oh shit!"
"Nevermind."
Just a ho-hum day on the markets, nothing to see ... only dropped 30 or 40 points. Pretty much a snoozer .. yup.
I forget the timeframe (90's through 2003?), but I remember somebody used stock market data to create a 3d video of a rollercoaster ride. Someone should do that again with the data from the last few weeks.
Roger,
I have to ask you about your SDS trades...and would be interested if Trader Dick is out there, to hear his take...
With the VIX trading in the 60s and 70s today, did you consider selling some SDS calls with high premia value in them.
For awhile, the Dec 125s were trading at 15+. 30 points of time value! And what is/was the risk? That SDS trades above 140 in December (another 10% drop below where we are at now), (or anywhere above 125, and you get called away: deliver your shares while keeping the excess premia). Remember, they're double inverse, so approx 10% further down on SPY.
The trades I'm trying to line up are as follows, and I'd love an objective (anyone?) opinion:
1. Long SDS (from WAY WAY BACK...)
2. Sell OTM calls, roll forward as SDS rises. (Ideally for a credit, or small loss if at all...)
3. At the painful bottom (which it seems is up for discussion now...), volatility is at its peak (as seen with extreme extrinsic value. Easy to sell for credits, effectively lowering your basis in the position.
4. As the market stabilizes, the premia (and VIX) return to more normal levels; trader is free to "roll down" or take profits and exit.
It's been "fun" trying to keep the options out of the money in the past 5 days... headroom has its costs... but if you and the other rationally minded folk are right, the VIX will be fixed, and this panic will settle down.
Seems like it may be preferable to simply exiting the SDS (and leaving all that juice laying about...)
Thoughts?
R in NY
Bill B said "I'd take this market any day over the 00-03 bear for points that Roger already made."
For me, Ill let you know which Bear I prefer in another 5 years :-)
Tim,
Point taken.
have not used options. as Adam Warner has said many times over, increasing vol is not the best time for call writing
not sure how many people have gone thru the pain of looking at their 401ks, but thought I'd share this interesting fact....
I started working in 2000 and have been contributing 6% of by salary ever since. Invested in diversified stocks. Last Oct, moved about 25% into bond funds, left the remaining in stock funds.
I ran the inception to date activity on the 401k today, and the account is now worth slightly less then ALL my contributions (incl my employer match) for 8 years of investing.
Unbelievable, it really makes you question why on earth someone should actually do the responsible thing like invest for your future.
Anon 3:17 I sense you may be asking the question somewhat rhetorically but, regardless, the short answer is that over a 50+ saving and investing time span this past decade won't loom so large.
I started investing semi-seriously in 1979-80 and over the next three years lost nearly everything in a bear market that was somewhat worse than what we've seen so far in terms of bottom range (but not as bad as 1972-75).
I'll avoid preaching and just say that I'm glad I didn't stop, particularly after what stocks and bonds began to do a year or so later, but it was damned close.
anon 3:17, unfortunately you might sound like someone who started investing in 1928, but I would listen to the wisdom of rw. The thing to remember is that you're getting returns that outpace inflation due to the risk you're incurring. As a result, the road is painful, but hopefully the reward is fruitful. I'm no financial adviser, but I'm of the mind that my pain now will result in reward later. The important thing to do is to diversify. Even if you believe the best days of the U.S. are gone, you have a wonderful market which allows you to invest in the world without much effort. As the world prospers, so will you.
At least this is what I tell myself as my available cash goes into the ETFs of the world :)
Hang in there, I think things will turn out OK.
Anon 3:17
yes it looks bad at times like these, but how does 2+ million sound in your early 50's. Of course I did have to move from 6% to 15% later in life, but trust me your 401k is your best friend
It certainly appears like the government purchased equities this afternoon in their attempt to keep investors calm going into the weekend.
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