Financial Markets

The Atheist · 15th August 2007, 11:48 AM

Hello, fellow businessmen & women.

If you're in business, I imagine you'll be watching at least one of the world's financial markets and I thought I'd have a try at having a markets thread. This kind of thing works really well in sports.

Come on in, pour yourself an Earl Grey tea [coffee, if you must], take a seat at the boardroom table and put your feet up.

I have an interest in the majority of markets - shares, FX, commodities and finance and have strong contacts in all of them, so should be able to answer, or find the answer, to any technical questions.

This has certainly all come online at an appropriate time - the world's markets are in more than just a little turmoil!

I see the Dow testing the 13,000 level today, but supported above that after the first half-hour which went as low as 12,970. 13,000 is really important psychological barrier and the market bounced off it twice this morning.

Anyone have details of how much the Fed's spent to date on liquidity?

Rika · 15th August 2007, 12:35 PM

I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans?

The Atheist · 15th August 2007, 01:04 PM

Wow!

That 13,000 support has gone, gone, gone.

Market down 172 to 12,856.

Grimoire · 15th August 2007, 01:30 PM

Originally Posted by Tokorona

I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans?

I suspect it will affect all credit, not just mortgages. The markets are becoming very credit wary, and many of the lenders are pulling back or even out. Those that remain will likely increase their rates due to perceived higher risk.

In other words, borrowing money will be more expensive for everyone.

The Atheist · 15th August 2007, 02:21 PM

Originally Posted by Tokorona

I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans?

As Grimoire has noted, the crash is starting to affect all areas of finance and business. The situation at the moment is highly complex and I don't think there's an easy answer as to what happens next. We won't really know until the rout is over, but at the moment, the debt crisis has spread like wildfire and is being a bit self-fulfilling with every market dragging down all the others.

Interesting days ahead.

Borrowing may not necessarily be more expensive - the Fed may have to ease rates to attempt stimulating the economy - but you can guarantee that credit will be harder to obtain.

To give you an idea of the scope of what's going on, these are the latest headlines on Bloomberg:

U.S. Stocks Drop, Erasing S&P Index's Gain This Year on Debt-Market Rout

That's a highly euphemistic way of putting the scenario that S&P is at a low for the year.

Countrywide Shares Fall as Merrill Analysts Say Lender May Face Bankruptcy

Bankruptcy? Won't be the last.

Three-Month Treasury Yield Drops Most Since 1989 as Investors Avoid Risk

Remember the recession and bond crash of the late '80s? I certainly do! That flight to safety shows that the sub-prime crash is already a bigger financial crisis than both 9/11 and the Asian market "flu" of the 1990s.

U.S. Home Sales Drop to Four-Year Low, Prices Fall in Third of U.S. Cities

Tropical Storm Erin Forms Over Gulf of Mexico, Bears Down on South Texas

The housing market is self-explanatory, while a tropical storm - if it causes widespread damage - will put further squeezes on the money supply.

Watch this space!

Rika · 15th August 2007, 05:36 PM

Thank you for your response. I have to admit I am not really up on finance, but as I am currently applying for a federal (unsubsudized) loan, I was curious if it to was affected as well (And, uh.. we just got a loan to buy a house, because the loan was before the crash and the company agreed to honor their agreements) But!

I suppose now is a good time to look up how it works beyond what I know (And I was barely old enough to know the Asian market "Flu", but hey, the internet is a wonderful thing.)

The Atheist · 15th August 2007, 05:43 PM

Just count yourself lucky to be in USA, where the ride so far has only been bumpy, the NZ dollar's in free-fall and the sharemarket is off another couple of % today. The current track looks like it fell off the north face of Mt Everest!

boloboffin · 16th August 2007, 12:29 AM

Boy, did I pick the wrong year to open a 403(b).

The Atheist · 16th August 2007, 02:33 AM

Originally Posted by boloboffin

Boy, did I pick the wrong year to open a 403(b).

It ain't over yet, either!

Asia; open 2% down, Dow futs showing -125 on opening tomorrow, The Mighty Kiwi, worst one-day loss in 21 years, worst two-day tumble in Asia for over a year, MCSI world down 11% off its highs.

A gem:

Originally Posted by Bloomberg

We're in the eye of the cyclone,'' said Salah Seddik, who helps oversee about $5 billion at Richelieu Finance in Paris.

SezMe · 16th August 2007, 02:47 AM

Well Salah Seddik is wrong. We're at the outer edge of the cyclone and there's truckloads of increasingly bumpy weather before the illusiory calm of the eye before heading back into the full blow again. Stuffing the mattress is looking like a smart investment strategy.

boloboffin · 16th August 2007, 02:50 AM

Originally Posted by The Atheist

It ain't over yet, either!

Asia; open 2% down, Dow futs showing -125 on opening tomorrow, The Mighty Kiwi, worst one-day loss in 21 years, worst two-day tumble in Asia for over a year, MCSI world down 11% off its highs.

Did anyone here read Jurassic Park? It's times like these that remind me of the Malcolm Effect.

(Actually, if the notion of investment success is to buy low and sell high, this is the perfect time to open a 403(b), right? Right?

Hooboy.)

The Atheist · 16th August 2007, 03:33 AM

Buying at the bottom is indeed the answer. It's picking the bottom that's the hard part!

roger · 16th August 2007, 05:02 AM

No one can predict the bottom (I assert). I can't think of anyone who makes serious money in the market (by serious I don't mean a few hundred million) that even makes the attempt. Most buy before the bottom is reached, and sell before the top is found. All that is required is to find value. Suppose I offered to sell you a dollar for 50cents. You'd buy every one you could, wouldn't you. Now suppose I offer to sell my dollars for 35 cents to the next person. While it sure would have been great to get that offer, you still made out like a bandit. Since you can't read my mind, you would have been crazy to try to predict what my next offer would have been, and refused the 50 cent offer. After all, my next offer might have been 5cents, 80cents, or 5 dollars. You have no way of knowing, but you recognize a bargain, and scoop it up.

Now, if somebody can counter my assertion that we can't time bottoms, I'd sure like to hear the emperical evidence. I haven't run across it yet.

Personally, I love the market like ths. Almost everything I've bought recently is in the red. So I just keep buying more. I'd be an idiot to complain about a sale. I don't get scared when the safeway puts milk on sale. So long as I don't need this money for the duration of a market cycle (which could be as long as 10 years or so, maybe longer if things go truly bad), I don't care. I can't predict the future, so I'm not going to act like I can.

The Atheist · 16th August 2007, 01:14 PM

Originally Posted by roger

No one can predict the bottom (I assert).

I agree.

What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down.

At the moment, there could be a lot further to go, or all the bargains may be gone. The sharemarket's been way overheated on fundamentals for years anyway.

Pretty happy with yesterday, though. I sold short across the board and they all came down!

No selling today - if there's gonna be a dead cat about, today's the day. Buy small early & get ready for another big sell on Monday. The rally on Wall St at the end of the day had a smack of a desperate attempt by the banks to shore the market up. This is a very dangerous game they're playing - if the market beats them, it will only add to the spiral.

Another interesting couple of days in prospect.

roger · 16th August 2007, 01:22 PM

Okay.

How do you know the market is 25% down, as opposed to 80% down?

The Atheist · 16th August 2007, 05:37 PM

Originally Posted by roger

Okay.

How do you know the market is 25% down, as opposed to 80% down?

Well, obviously, you don't!

That's where the reading of fundamentals comes in - a company with heavy market investment is obviously going to see its own assets eroded, while a sound manufacturer will retain similar profitability and therefore become more attractive when the price drops.

For instance - anyone even remotely connected to the housing market at the moment is going to get hammered, while debt collectors are a great buy!

bpesta22 · 16th August 2007, 06:06 PM

Look at LEND

The Atheist · 16th August 2007, 06:28 PM

I am. They seem to be bucking the trend, or maybe we've turned the corner.

roger · 17th August 2007, 07:32 AM

Originally Posted by The Atheist

Well, obviously, you don't!

Right. So what does "What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down." How can anyone follow that advice?

My contention - you can't. So, like you said, look at the fundamentals. Buy a dollar for 50cents.

The Atheist · 17th August 2007, 11:15 AM

And there it went; again, in a move unprecedented since 9/11, the Fed has cut mid-way through its schedule.

Seems to be working. Dow back up over 13k, Europe up.

If this stops the rot, we'll look back at just another blip. If, on the other hand, the markets turn to slush next week, then we are in for some extended pain - a prospect I'd see as unlikely now, given the selling pressure which has come on the US$.

Latest market update shows the Dow supported at 13k, with a dip back under the line to 12,997 on what looks to be some solid profit-taking by those who had the cojones to buy earlier in the week. Five minutes later, buyers coming back at 13k.

The Atheist · 17th August 2007, 11:23 AM

Originally Posted by roger

Right. So what does "What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down." How can anyone follow that advice?

Ok. The current market is a great example.

You would have seen value somewhere yesterday and bought, because you saw the value. I would have looked at the market and been prepared to risk a bargain in case the market dropped another 2% today. Today, with apparent support at crucial levels, I'd be looking for those bargains you got yesterday and I'd be paying maybe a 1% premium to where you were.

This time, you win. If the market dropped for another month, I win. I guess I'm probably arguing for a conservative apperoach, even with what seems to be a bargain.

Originally Posted by roger

My contention - you can't. So, like you said, look at the fundamentals. Buy a dollar for 50cents.

Dealing with physical shares, that's right, but I've always got margins to look at and nothing grieves me more than getting closed by 3 points before a 50 point movement. I think I was probably talking my book!

ThunderChunky · 18th August 2007, 10:58 PM

I read somewhere that you need to be right 3/4 of the time to beat someone that just invests in regular intervals (dollar cost averaging).

Assuming that is correct, for you to "win" long term you would have to be right not just about the bottom here, but about 3/4 of all the bottoms.

The Atheist · 19th August 2007, 01:27 AM

Originally Posted by ThunderChunky

I read somewhere that you need to be right 3/4 of the time to beat someone that just invests in regular intervals (dollar cost averaging).

Not quite sure how that works, I'm afraid. You need to find the article so we can see what it actually means, because the comment doesn't tell us anything on its own.

An example would be a small investor who may lose 80% of the time, but hits gold every so often with a big enough scoop to get well in front. Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong.

Wolfman · 19th August 2007, 01:36 AM

Originally Posted by The Atheist

Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong.

You're wrong.

Horribly so.

ThunderChunky · 19th August 2007, 08:50 PM

Originally Posted by The Atheist

Not quite sure how that works, I'm afraid. You need to find the article so we can see what it actually means, because the comment doesn't tell us anything on its own.

An example would be a small investor who may lose 80% of the time, but hits gold every so often with a big enough scoop to get well in front. Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong.

It was a comparison of dollar cost averaging vs market timing. I can't find the article where I heard about that 3/4 rule but this seems like a decent report: www[dot]uwlax.edu/BA/fin/Research/Dollar%20Cost%20Edited.pdf

The Atheist · 19th August 2007, 10:03 PM

Originally Posted by ThunderChunky

It was a comparison of dollar cost averaging vs market timing. I can't find the article where I heard about that 3/4 rule but this seems like a decent report: www[dot]uwlax.edu/BA/fin/Research/Dollar%20Cost%20Edited.pdf

Cheers, you're right, it is an interesting read.

It actually pinpoints that a single market entry at the start will out-perform DCA most of the time, even to the extent of borrowing to invest initially.

Pinguey · 20th August 2007, 02:22 AM

I'm surprised to find this thread on a sceptical forum - I always thought of economics as having slightly less scientific credibility than astrology (being from the UK I am also sceptical about spelling 'sceptical' with a 'k').

The Atheist · 20th August 2007, 02:31 AM

Originally Posted by Pinguey

I'm surprised to find this thread on a sceptical forum - I always thought of economics as having slightly less scientific credibility than astrology

Eh? Given that global financial markets and economics affect every person on the planet, while astrology affects none, I'm not sure how you arrive at that conclusion.

Originally Posted by Pinguey

(being from the UK I am also sceptical about spelling 'sceptical' with a 'k').

Now, that's far more like it!

Pinguey · 20th August 2007, 02:51 AM

Originally Posted by The Atheist

Eh? Given that global financial markets and economics affect every person on the planet, while astrology affects none, I'm not sure how you arrive at that conclusion.

Now, that's far more like it!

The fact that astrology is bunk doesn't mean that the sun and moon have no effect on our lives, just that it does a poor job of explaining how and why this should be and invents forces and principles for which there is no scientific basis to do so. My scepticism arises not from any doubt about the importance of the world economy but from the persistent failure of economics to explain and predict its behaviour. I think it's important to remember that money was invented by people for their convenience - it has no meaning outside this context and so studying it as if it were a force of nature will always produce spurious results.

The Atheist · 20th August 2007, 03:32 AM

Originally Posted by Pinguey

I think it's important to remember that money was invented by people for their convenience - it has no meaning outside this context and so studying it as if it were a force of nature will always produce spurious results.

Does anyone do that?

The Central Scrutinizer · 21st August 2007, 02:30 PM

Originally Posted by The Atheist

Hello, fellow businessmen & women.

If you're in business, I imagine you'll be watching at least one of the world's financial markets and I thought I'd have a try at having a markets thread. This kind of thing works really well in sports.

You'll imagine wrong.

I'm in business (and an investor) and I have no interest in any financial market. I see no reason why I would.

The Central Scrutinizer · 21st August 2007, 02:31 PM

Originally Posted by roger

No one can predict the bottom (I assert). I can't think of anyone who makes serious money in the market (by serious I don't mean a few hundred million) that even makes the attempt. Most buy before the bottom is reached, and sell before the top is found. All that is required is to find value. Suppose I offered to sell you a dollar for 50cents. You'd buy every one you could, wouldn't you. Now suppose I offer to sell my dollars for 35 cents to the next person. While it sure would have been great to get that offer, you still made out like a bandit. Since you can't read my mind, you would have been crazy to try to predict what my next offer would have been, and refused the 50 cent offer. After all, my next offer might have been 5cents, 80cents, or 5 dollars. You have no way of knowing, but you recognize a bargain, and scoop it up.

Now, if somebody can counter my assertion that we can't time bottoms, I'd sure like to hear the emperical evidence. I haven't run across it yet.

Personally, I love the market like ths. Almost everything I've bought recently is in the red. So I just keep buying more. I'd be an idiot to complain about a sale. I don't get scared when the safeway puts milk on sale. So long as I don't need this money for the duration of a market cycle (which could be as long as 10 years or so, maybe longer if things go truly bad), I don't care. I can't predict the future, so I'm not going to act like I can.

As usual, give that man a cigar.

The Central Scrutinizer · 21st August 2007, 02:33 PM

Originally Posted by The Atheist

For instance - anyone even remotely connected to the housing market at the moment is going to get hammered...

Wrong. http://www.marketwatch.com/quotes/brk.b

The Central Scrutinizer · 21st August 2007, 02:39 PM

Originally Posted by The Atheist

Ok. The current market is a great example.

You would have seen value somewhere yesterday and bought, because you saw the value. I would have looked at the market and been prepared to risk a bargain in case the market dropped another 2% today. Today, with apparent support at crucial levels, I'd be looking for those bargains you got yesterday and I'd be paying maybe a 1% premium to where you were.

Huh??? This only applies if you buy the entire "market". Who does that?

The Atheist · 21st August 2007, 03:12 PM

Originally Posted by The Central Scrutinizer

You'll imagine wrong.

I'm in business (and an investor) and I have no interest in any financial market. I see no reason why I would.

Funny you'd be in a thread about them then.

Originally Posted by The Central Scrutinizer

Wrong. http://www.marketwatch.com/quotes/brk.b

Or have opinions on them?

Originally Posted by The Central Scrutinizer

Huh??? This only applies if you buy the entire "market". Who does that?

Everyone in futures, options and other derivatives. Hardly anyone, really, only about 99% of all broking shops, I guess.

The Central Scrutinizer · 21st August 2007, 03:20 PM

Originally Posted by The Atheist

Funny you'd be in a thread about them then.

Just to correct those who follow them.

Originally Posted by The Atheist

Or have opinions on them?

Just to correct those who have incorrect opinions.

Originally Posted by The Atheist

Everyone in futures, options and other derivatives. Hardly anyone, really, only about 99% of all broking shops, I guess.

So which "markets" do they own?

Pinguey · 21st August 2007, 03:33 PM

Still think it's just people jerking each other around - don't suppose that socialism is too popular on this forum...

The Atheist · 21st August 2007, 03:35 PM

Originally Posted by The Central Scrutinizer

Just to correct those who follow them.

That's great. As soon as you see any misconceptions, you can correct them. I find it odd that someone who claims not to follow any markets would have an opinion on them though.

If you don't know anything about the markets, how on earth would you be able to correct anything.

I confess to being a touch confused.

Maybe you could explain what you actually mean.

English/French/Maori, I don't mind.

Originally Posted by The Central Scrutinizer

So which "markets" do they own?

Ah, I see your confusion.

In the sharemarket, traders will say, or type the word "BUY", followed by a certain commodity, share, index or interest rate. When they transact that BUY, they haven't actually bought ALL of it.

If for instance, a share trader says, BUY Microsoft, he isn't bidding for Bill Gates' billions, he is buying a certain number of shares/options/etc.

In the same way, if I BUY an NZX future, I am not offering to BUY the entire NZX at some future date, I am buying a futures contract based upon whether the market as a whole goes up or down.

Cheers.

The Atheist · 21st August 2007, 03:38 PM

Originally Posted by Pinguey

Still think it's just people jerking each other around - don't suppose that socialism is too popular on this forum...

You're right, the whole market is a giant gambling arena, but with a little different odds to casinos or racetracks. Like a good poker player will beat a bad one over a prolonged time, a good trader will beat a bad one.

Socialism can't be too unpopular - there's a sort of pseudo/nouveau-communism business thread over the way which is touching on it.

The Central Scrutinizer · 22nd August 2007, 05:51 AM

Originally Posted by The Atheist

If for instance, a share trader says, BUY Microsoft, he isn't bidding for Bill Gates' billions, he is buying a certain number of shares/options/etc.

You seem very confused. If you're interested in buying Microsoft, why are you tracking the entire market? Odd, that.

15th August 2007, 11:48 AM	#1
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Financial Markets Hello, fellow businessmen & women. If you're in business, I imagine you'll be watching at least one of the world's financial markets and I thought I'd have a try at having a markets thread. This kind of thing works really well in sports. Come on in, pour yourself an Earl Grey tea [coffee, if you must], take a seat at the boardroom table and put your feet up. I have an interest in the majority of markets - shares, FX, commodities and finance and have strong contacts in all of them, so should be able to answer, or find the answer, to any technical questions. This has certainly all come online at an appropriate time - the world's markets are in more than just a little turmoil! I see the Dow testing the 13,000 level today, but supported above that after the first half-hour which went as low as 12,970. 13,000 is really important psychological barrier and the market bounced off it twice this morning. Anyone have details of how much the Fed's spent to date on liquidity?
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

15th August 2007, 12:35 PM	#2
Rika Guardian of the Setting Sun Join Date: Feb 2007 Location: Graham, WA Posts: 3,743	I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans?
	__________________ Stop Sylvia Browne! "It matters not how many men you throw at me, I will fell them all!" "And what if I threw kittens, Tadakatsu? Would you kill them too?" Tu Quoque is a very common fallacy in which one attempts to defend oneself or another from criticism by turning the critique back against the accuser

15th August 2007, 01:04 PM	#3
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Wow! That 13,000 support has gone, gone, gone. Market down 172 to 12,856.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

15th August 2007, 01:30 PM	#4
Grimoire Critical Thinker Join Date: Apr 2005 Posts: 382	Originally Posted by Tokorona I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans? I suspect it will affect all credit, not just mortgages. The markets are becoming very credit wary, and many of the lenders are pulling back or even out. Those that remain will likely increase their rates due to perceived higher risk. In other words, borrowing money will be more expensive for everyone.
Grimoire Critical Thinker Join Date: Apr 2005 Posts: 382	__________________ "Those who can make you believe absurdities, can make you commit atrocities." -Voltaire 09f911029d74e35bd84156c5635688c0

15th August 2007, 02:21 PM	#5
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by Tokorona I actually do have a question, but this is out of curosity. When the mortage bubble burst, did it affect other loan sources, such as educational loans? As Grimoire has noted, the crash is starting to affect all areas of finance and business. The situation at the moment is highly complex and I don't think there's an easy answer as to what happens next. We won't really know until the rout is over, but at the moment, the debt crisis has spread like wildfire and is being a bit self-fulfilling with every market dragging down all the others. Interesting days ahead. Borrowing may not necessarily be more expensive - the Fed may have to ease rates to attempt stimulating the economy - but you can guarantee that credit will be harder to obtain. To give you an idea of the scope of what's going on, these are the latest headlines on Bloomberg: U.S. Stocks Drop, Erasing S&P Index's Gain This Year on Debt-Market Rout That's a highly euphemistic way of putting the scenario that S&P is at a low for the year. Countrywide Shares Fall as Merrill Analysts Say Lender May Face Bankruptcy Bankruptcy? Won't be the last. Three-Month Treasury Yield Drops Most Since 1989 as Investors Avoid Risk Remember the recession and bond crash of the late '80s? I certainly do! That flight to safety shows that the sub-prime crash is already a bigger financial crisis than both 9/11 and the Asian market "flu" of the 1990s. U.S. Home Sales Drop to Four-Year Low, Prices Fall in Third of U.S. Cities Tropical Storm Erin Forms Over Gulf of Mexico, Bears Down on South Texas The housing market is self-explanatory, while a tropical storm - if it causes widespread damage - will put further squeezes on the money supply. Watch this space!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

15th August 2007, 05:36 PM	#6
Rika Guardian of the Setting Sun Join Date: Feb 2007 Location: Graham, WA Posts: 3,743	Thank you for your response. I have to admit I am not really up on finance, but as I am currently applying for a federal (unsubsudized) loan, I was curious if it to was affected as well (And, uh.. we just got a loan to buy a house, because the loan was before the crash and the company agreed to honor their agreements) But! I suppose now is a good time to look up how it works beyond what I know (And I was barely old enough to know the Asian market "Flu", but hey, the internet is a wonderful thing.)
	__________________ Stop Sylvia Browne! "It matters not how many men you throw at me, I will fell them all!" "And what if I threw kittens, Tadakatsu? Would you kill them too?" Tu Quoque is a very common fallacy in which one attempts to defend oneself or another from criticism by turning the critique back against the accuser

15th August 2007, 05:43 PM	#7
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Just count yourself lucky to be in USA, where the ride so far has only been bumpy, the NZ dollar's in free-fall and the sharemarket is off another couple of % today. The current track looks like it fell off the north face of Mt Everest!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

16th August 2007, 12:29 AM	#8
boloboffin Guest Join Date: Aug 2006 Location: Dallas, TX Posts: 5,005	Boy, did I pick the wrong year to open a 403(b).

16th August 2007, 02:33 AM	#9
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by boloboffin Boy, did I pick the wrong year to open a 403(b). It ain't over yet, either! Asia; open 2% down, Dow futs showing -125 on opening tomorrow, The Mighty Kiwi, worst one-day loss in 21 years, worst two-day tumble in Asia for over a year, MCSI world down 11% off its highs. A gem: Originally Posted by Bloomberg We're in the eye of the cyclone,'' said Salah Seddik, who helps oversee about $5 billion at Richelieu Finance in Paris.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

16th August 2007, 02:47 AM	#10
SezMe Philosopher Join Date: Dec 2003 Location: Santa Barbara, CA Posts: 9,504	Well Salah Seddik is wrong. We're at the outer edge of the cyclone and there's truckloads of increasingly bumpy weather before the illusiory calm of the eye before heading back into the full blow again. Stuffing the mattress is looking like a smart investment strategy.

16th August 2007, 02:50 AM	#11
boloboffin Guest Join Date: Aug 2006 Location: Dallas, TX Posts: 5,005	Originally Posted by The Atheist It ain't over yet, either! Asia; open 2% down, Dow futs showing -125 on opening tomorrow, The Mighty Kiwi, worst one-day loss in 21 years, worst two-day tumble in Asia for over a year, MCSI world down 11% off its highs. Did anyone here read Jurassic Park? It's times like these that remind me of the Malcolm Effect. (Actually, if the notion of investment success is to buy low and sell high, this is the perfect time to open a 403(b), right? Right? Hooboy.)

16th August 2007, 03:33 AM	#12
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Buying at the bottom is indeed the answer. It's picking the bottom that's the hard part!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

16th August 2007, 05:02 AM	#13
roger Philosopher Join Date: May 2002 Location: Golden CO, USA Posts: 8,382	No one can predict the bottom (I assert). I can't think of anyone who makes serious money in the market (by serious I don't mean a few hundred million) that even makes the attempt. Most buy before the bottom is reached, and sell before the top is found. All that is required is to find value. Suppose I offered to sell you a dollar for 50cents. You'd buy every one you could, wouldn't you. Now suppose I offer to sell my dollars for 35 cents to the next person. While it sure would have been great to get that offer, you still made out like a bandit. Since you can't read my mind, you would have been crazy to try to predict what my next offer would have been, and refused the 50 cent offer. After all, my next offer might have been 5cents, 80cents, or 5 dollars. You have no way of knowing, but you recognize a bargain, and scoop it up. Now, if somebody can counter my assertion that we can't time bottoms, I'd sure like to hear the emperical evidence. I haven't run across it yet. Personally, I love the market like ths. Almost everything I've bought recently is in the red. So I just keep buying more. I'd be an idiot to complain about a sale. I don't get scared when the safeway puts milk on sale. So long as I don't need this money for the duration of a market cycle (which could be as long as 10 years or so, maybe longer if things go truly bad), I don't care. I can't predict the future, so I'm not going to act like I can.
	__________________ May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey Climb the mountains and get their good tidings. Nature's peace will flow into you as sunshine flows into trees. The winds will blow their own freshness into you, and the storms their energy, while cares will drop off like autumn leaves. - John Muir

16th August 2007, 01:14 PM	#14
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by roger No one can predict the bottom (I assert). I agree. What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down. At the moment, there could be a lot further to go, or all the bargains may be gone. The sharemarket's been way overheated on fundamentals for years anyway. Pretty happy with yesterday, though. I sold short across the board and they all came down! No selling today - if there's gonna be a dead cat about, today's the day. Buy small early & get ready for another big sell on Monday. The rally on Wall St at the end of the day had a smack of a desperate attempt by the banks to shore the market up. This is a very dangerous game they're playing - if the market beats them, it will only add to the spiral. Another interesting couple of days in prospect.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

16th August 2007, 01:22 PM	#15
roger Philosopher Join Date: May 2002 Location: Golden CO, USA Posts: 8,382	Okay. How do you know the market is 25% down, as opposed to 80% down?
	__________________ May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey Climb the mountains and get their good tidings. Nature's peace will flow into you as sunshine flows into trees. The winds will blow their own freshness into you, and the storms their energy, while cares will drop off like autumn leaves. - John Muir

16th August 2007, 05:37 PM	#16
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by roger Okay. How do you know the market is 25% down, as opposed to 80% down? Well, obviously, you don't! That's where the reading of fundamentals comes in - a company with heavy market investment is obviously going to see its own assets eroded, while a sound manufacturer will retain similar profitability and therefore become more attractive when the price drops. For instance - anyone even remotely connected to the housing market at the moment is going to get hammered, while debt collectors are a great buy!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

16th August 2007, 06:06 PM	#17
bpesta22 Cereal Killer Join Date: Jul 2001 Posts: 3,980	Look at LEND
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16th August 2007, 06:28 PM	#18
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	I am. They seem to be bucking the trend, or maybe we've turned the corner.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

17th August 2007, 07:32 AM	#19
roger Philosopher Join Date: May 2002 Location: Golden CO, USA Posts: 8,382	Originally Posted by The Atheist Well, obviously, you don't! Right. So what does "What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down." How can anyone follow that advice? My contention - you can't. So, like you said, look at the fundamentals. Buy a dollar for 50cents.
	__________________ May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey Climb the mountains and get their good tidings. Nature's peace will flow into you as sunshine flows into trees. The winds will blow their own freshness into you, and the storms their energy, while cares will drop off like autumn leaves. - John Muir

17th August 2007, 11:15 AM	#20
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	And there it went; again, in a move unprecedented since 9/11, the Fed has cut mid-way through its schedule. Seems to be working. Dow back up over 13k, Europe up. If this stops the rot, we'll look back at just another blip. If, on the other hand, the markets turn to slush next week, then we are in for some extended pain - a prospect I'd see as unlikely now, given the selling pressure which has come on the US$. Latest market update shows the Dow supported at 13k, with a dip back under the line to 12,997 on what looks to be some solid profit-taking by those who had the cojones to buy earlier in the week. Five minutes later, buyers coming back at 13k.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

17th August 2007, 11:23 AM	#21
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by roger Right. So what does "What I'm saying is that you need to time the entry. if the market's going down, that's all well and good, but you don't want to buy when it's only 25% of the way down." How can anyone follow that advice? Ok. The current market is a great example. You would have seen value somewhere yesterday and bought, because you saw the value. I would have looked at the market and been prepared to risk a bargain in case the market dropped another 2% today. Today, with apparent support at crucial levels, I'd be looking for those bargains you got yesterday and I'd be paying maybe a 1% premium to where you were. This time, you win. If the market dropped for another month, I win. I guess I'm probably arguing for a conservative apperoach, even with what seems to be a bargain. Originally Posted by roger My contention - you can't. So, like you said, look at the fundamentals. Buy a dollar for 50cents. Dealing with physical shares, that's right, but I've always got margins to look at and nothing grieves me more than getting closed by 3 points before a 50 point movement. I think I was probably talking my book!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

18th August 2007, 10:58 PM	#22
ThunderChunky Scholar Join Date: Jul 2007 Posts: 64	I read somewhere that you need to be right 3/4 of the time to beat someone that just invests in regular intervals (dollar cost averaging). Assuming that is correct, for you to "win" long term you would have to be right not just about the bottom here, but about 3/4 of all the bottoms.
ThunderChunky Scholar Join Date: Jul 2007 Posts: 64

19th August 2007, 01:27 AM	#23
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by ThunderChunky I read somewhere that you need to be right 3/4 of the time to beat someone that just invests in regular intervals (dollar cost averaging). Not quite sure how that works, I'm afraid. You need to find the article so we can see what it actually means, because the comment doesn't tell us anything on its own. An example would be a small investor who may lose 80% of the time, but hits gold every so often with a big enough scoop to get well in front. Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

19th August 2007, 01:36 AM	#24
Wolfman Chief Solipsistic Autosycophant Join Date: Jan 2007 Location: Dongguan, China Posts: 8,963	Originally Posted by The Atheist Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong. You're wrong. Horribly so.
	__________________ Click here to learn about a unique culture where the women are in charge, and there is no marriage. Learn more about the Mosuo, one of China's least known minorities. And click here to read my blog.

19th August 2007, 08:50 PM	#25
ThunderChunky Scholar Join Date: Jul 2007 Posts: 64	Originally Posted by The Atheist Not quite sure how that works, I'm afraid. You need to find the article so we can see what it actually means, because the comment doesn't tell us anything on its own. An example would be a small investor who may lose 80% of the time, but hits gold every so often with a big enough scoop to get well in front. Anytime someone makes a hard and fast rule about investment strategies, they're open to being horribly wrong. It was a comparison of dollar cost averaging vs market timing. I can't find the article where I heard about that 3/4 rule but this seems like a decent report: www[dot]uwlax.edu/BA/fin/Research/Dollar%20Cost%20Edited.pdf
ThunderChunky Scholar Join Date: Jul 2007 Posts: 64

19th August 2007, 10:03 PM	#26
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by ThunderChunky It was a comparison of dollar cost averaging vs market timing. I can't find the article where I heard about that 3/4 rule but this seems like a decent report: www[dot]uwlax.edu/BA/fin/Research/Dollar%20Cost%20Edited.pdf Cheers, you're right, it is an interesting read. It actually pinpoints that a single market entry at the start will out-perform DCA most of the time, even to the extent of borrowing to invest initially.
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

20th August 2007, 02:22 AM	#27
Pinguey New Blood Join Date: Aug 2007 Posts: 5	I'm surprised to find this thread on a sceptical forum - I always thought of economics as having slightly less scientific credibility than astrology (being from the UK I am also sceptical about spelling 'sceptical' with a 'k').
Pinguey New Blood Join Date: Aug 2007 Posts: 5

20th August 2007, 02:31 AM	#28
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by Pinguey I'm surprised to find this thread on a sceptical forum - I always thought of economics as having slightly less scientific credibility than astrology Eh? Given that global financial markets and economics affect every person on the planet, while astrology affects none, I'm not sure how you arrive at that conclusion. Originally Posted by Pinguey (being from the UK I am also sceptical about spelling 'sceptical' with a 'k'). Now, that's far more like it!
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

20th August 2007, 02:51 AM	#29
Pinguey New Blood Join Date: Aug 2007 Posts: 5	Originally Posted by The Atheist Eh? Given that global financial markets and economics affect every person on the planet, while astrology affects none, I'm not sure how you arrive at that conclusion. Now, that's far more like it! The fact that astrology is bunk doesn't mean that the sun and moon have no effect on our lives, just that it does a poor job of explaining how and why this should be and invents forces and principles for which there is no scientific basis to do so. My scepticism arises not from any doubt about the importance of the world economy but from the persistent failure of economics to explain and predict its behaviour. I think it's important to remember that money was invented by people for their convenience - it has no meaning outside this context and so studying it as if it were a force of nature will always produce spurious results.
Pinguey New Blood Join Date: Aug 2007 Posts: 5

20th August 2007, 03:32 AM	#30
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by Pinguey I think it's important to remember that money was invented by people for their convenience - it has no meaning outside this context and so studying it as if it were a force of nature will always produce spurious results. Does anyone do that?
	__________________ Jeff Wagg, Communication and Outreach Manager for the James Randi Educational Foundation posted: It is my job to inform other JREF employees about people who wish to do the JREF harm, and you [The Atheist] are one of those.

21st August 2007, 02:30 PM	#31
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 25,289	Originally Posted by The Atheist Hello, fellow businessmen & women. If you're in business, I imagine you'll be watching at least one of the world's financial markets and I thought I'd have a try at having a markets thread. This kind of thing works really well in sports. You'll imagine wrong. I'm in business (and an investor) and I have no interest in any financial market. I see no reason why I would.
	__________________ "I got to play with (Michael Goudeau's balls) briefly, and they are primo quality. Heavy, soft, and pliant." - Jeff Wagg "You are always so helpful, rational, and polite." - SaulOhio http://www.stopsylvia.com Last edited by The Central Scrutinizer; 21st August 2007 at 02:40 PM.

21st August 2007, 02:31 PM	#32
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 25,289	Originally Posted by roger No one can predict the bottom (I assert). I can't think of anyone who makes serious money in the market (by serious I don't mean a few hundred million) that even makes the attempt. Most buy before the bottom is reached, and sell before the top is found. All that is required is to find value. Suppose I offered to sell you a dollar for 50cents. You'd buy every one you could, wouldn't you. Now suppose I offer to sell my dollars for 35 cents to the next person. While it sure would have been great to get that offer, you still made out like a bandit. Since you can't read my mind, you would have been crazy to try to predict what my next offer would have been, and refused the 50 cent offer. After all, my next offer might have been 5cents, 80cents, or 5 dollars. You have no way of knowing, but you recognize a bargain, and scoop it up. Now, if somebody can counter my assertion that we can't time bottoms, I'd sure like to hear the emperical evidence. I haven't run across it yet. Personally, I love the market like ths. Almost everything I've bought recently is in the red. So I just keep buying more. I'd be an idiot to complain about a sale. I don't get scared when the safeway puts milk on sale. So long as I don't need this money for the duration of a market cycle (which could be as long as 10 years or so, maybe longer if things go truly bad), I don't care. I can't predict the future, so I'm not going to act like I can. As usual, give that man a cigar.
	__________________ "I got to play with (Michael Goudeau's balls) briefly, and they are primo quality. Heavy, soft, and pliant." - Jeff Wagg "You are always so helpful, rational, and polite." - SaulOhio http://www.stopsylvia.com

21st August 2007, 02:33 PM	#33
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 25,289	Originally Posted by The Atheist For instance - anyone even remotely connected to the housing market at the moment is going to get hammered... Wrong. http://www.marketwatch.com/quotes/brk.b
	__________________ "I got to play with (Michael Goudeau's balls) briefly, and they are primo quality. Heavy, soft, and pliant." - Jeff Wagg "You are always so helpful, rational, and polite." - SaulOhio http://www.stopsylvia.com

21st August 2007, 02:39 PM	#34
The Central Scrutinizer Penultimate Amazing Join Date: Dec 2001 Location: The White Zone Posts: 25,289	Originally Posted by The Atheist Ok. The current market is a great example. You would have seen value somewhere yesterday and bought, because you saw the value. I would have looked at the market and been prepared to risk a bargain in case the market dropped another 2% today. Today, with apparent support at crucial levels, I'd be looking for those bargains you got yesterday and I'd be paying maybe a 1% premium to where you were. Huh??? This only applies if you buy the entire "market". Who does that?
	__________________ "I got to play with (Michael Goudeau's balls) briefly, and they are primo quality. Heavy, soft, and pliant." - Jeff Wagg "You are always so helpful, rational, and polite." - SaulOhio http://www.stopsylvia.com

21st August 2007, 03:12 PM	#35
The Atheist The Grammar Tyrant Join Date: Jul 2006 Location: Within smelling distance of the Grammar Death Camps Posts: 13,928	Originally Posted by The Central Scrutinizer You'll imagine wrong. I'm in business (and an investor) and I have no interest in any financial market. I see no reason why I would. Funny you'd be in a thread about them then. Originally Posted by The Central Scrutinizer Wrong. http://www.marketwatch.com/quotes/brk.b Or have opinions on them? Originally Posted by The Central Scrutinizer Huh??? This only applies if you buy the entire "market". Who does that? Everyone in futures, options and other derivatives. Hardly anyone, really, only about 99% of all broking shops, I guess.