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-- Stock's Fall - How Bad Was It For You?

Stock's Fall - How Bad Was It For You?

I lost about 2-3% on Tuesday. About $1-2000. I wasn't worried though, as I was kind of paranoid about a correction, but already prepared for it by selling off the more expensive stocks (capitalization-wise), like JOYG.

How did everyone else do?


Article 1: What happened?
Article 2: Why it happened?

Worldwide sell-off follows Chinese stock plunge

quote:

Worldwide sell-off follows Chinese stock plunge By Floyd Norris and Jeremy W. Peters Published: February 27, 2007 NEW YORK: Stock markets around the world plummeted Tuesday in a wave of selling set off by a plunge in China that was reinforced by worries of weakening economies. The falling prices continued in early Asian trading Wednesday. While China was the first market to tumble, it was not clear what set off the selling. But once it began, it spread first to other Asian countries, then to Europe and the United States.

What caused Tuesday's stock market plunge?

quote:

What's Behind the Stock Market Plunge By Paul J. Lim Posted 2/28/07 Q: What caused Tuesday's stock market plunge? A: Many investors are blaming yesterday's sell-off on China's market meltdown. On Tuesday, the Shanghai stock index lost nearly 9 percent of its value, as the government hinted that it wanted to find ways to curtail the huge amount of speculation in its stock market. This explains why some are referring to yesterday's stock slide as the "China Syndrome" or "the Shanghai Surprise." Related News * Stock Market Sell-off: Tremor or Quake? * More from Money & Business But China was only one of many drivers that pushed stocks lower. After weeks of stabilizing, oil prices are again marching higher. Yesterday, crude oil prices climbed back above $61 a barrel. Meanwhile, the Commerce Department reported that new orders for durable goods fell a surprising 7.8 percent in January�signaling that the economy many not be as resilient as some think. This seemed to support fears that former Federal Reserve Chairman Alan Greenspan raised this week, when he hinted that the U.S. economy could still slip into recession sometime this year. Finally, adding to the selling was another round of geopolitical uncertainty, as reports emerged that Vice President Dick Cheney may have been the target of an unsuccessful suicide bombing attack this week during his trip to Afghanistan.

Are we heading for another recession ? God damn, that's a worrying prospect.

China smells, looks and acts a lot like the U.S. markets of the late 90's. Rampant speculation, record margin debt, markets have gone parablolic, yet China is nowhere near as transparent as other global markets. It's boring, low-risk and unsexy, but right now from a personal standpoint I'm extremely cautious and defensive which argues for treasuries, gold and solid consumer non-cyclicals with decent yields. Better safe than sorry for now. I have the luxury of time. Again, that's just me.

quote:

Originally posted by Omega_M Are we heading for another recession ? God damn, that's a worrying prospect.

It's a good question. Current thinking is that we're headed for a significant slowdown/soft-landing that will not result in a recession, though that call is becoming more tenuous by the day. The thinking is that if it's just a slowdown at hand, then it would actually be bullish for the stock market. However, if a recession is coming, all bets are off and you should clear the decks. We are currently positioned essentially net-neutral, though on a beta-adjusted basis we are certainly net-short.

There are experts going both ways. I'm on the side of slowed growth rather than a recession. The Fed should lower interest rates later this year, FINALLY, letting go off the brakes a little bit.

I punched out end of Jan, it was just getting a bit 'too good' and when things start getting too good it's time to start getting wary. China was interesting simply because it was just rampant speculation that there was going to be a bit of an inquiry into some sectors of business.
They didn't do it, but it was enough to have obviously frightened the living crap out of enough people who where perhaps not paying as much attention as they perhaps should have.
Big fuss over nothing... which turned into a big loss over nothing.

Likewise, wouldn't worry too much about recessions, China is a big economy but it's still only about 1/5th the size or so of the US's and the US is more than capable of looking after itself.
If you're looking for something long term, take advantage of the known businesses out there which have a depressed share price and hop on for the ride, preferably some of the finance institutions but they seem to be weathering it better than most.
Short term, really rather not go there...
Commodities, gold, oil and energy, all ripe for some rampant speculation because they're going out the door at the proverbial firesale prices.

I've been saying it before long ago and will say it again - considering the America's weakening dollar and world instability, sharp rising prices of fuel and electricity followed by sluggish economies, and such scares as the one in China in my opinion will result in some serious economic ice ages this century, in proper english - basically I think the world economy will crash, there's too much pressure on it ... dont forget the American currency problems, environmental issues, oil/gas issues, and possible conflicts coming up. Turmoil.

quote:

Originally posted by Magnetonium dont forget the American currency problems, environmental issues, oil/gas issues, and possible conflicts coming up. Turmoil.

Uh, it's been like that for as long as I can remember, turmoil is what makes it work.
Picking through it is the risk you take for making money, if you don't want in on it, no one's making you put money into stockmarkets and you can continue on doing whatever it is you do.

quote:

Originally posted by Magnetonium I've been saying it before long ago and will say it again - considering the America's weakening dollar and world instability, sharp rising prices of fuel and electricity followed by sluggish economies, and such scares as the one in China in my opinion will result in some serious economic ice ages this century, in proper english - basically I think the world economy will crash, there's too much pressure on it ... dont forget the American currency problems, environmental issues, oil/gas issues, and possible conflicts coming up. Turmoil.

typical fearfulness of someone who knows nothing, and therefore, is afraid of everything

quote:

Originally posted by Dopey typical fearfulness of someone who knows nothing, and therefore, is afraid of everything

Selling and arguing doom and gloom is possibly the worlds oldest industry 2nd to prostitution and a close runner with killing one another for social activities.
The great thing about predicting something bad happening is that eventually, it will happen and then you can jump up and down looking oh so very clever with yourself saying "I told you so!".
The great difference between the average doomsayer and becoming the messiah is whoever gets it the closest to the actual date when the martians, thetans, angels... asteroids? come down and cart off the chosen to heaven, hell, nirvana... wherever.

You can either work in religion selling doom to the unenlightened and make yourself the prophet of millions if you get it right or just start trading shares and predict the doom there and make a profit of millions.

It's a good industry either way! Infinite growth and chance of doom with every passing second, statistically something is going to happen

quote:

Originally posted by Magnetonium I've been saying it before long ago and will say it again - considering the America's weakening dollar and world instability, sharp rising prices of fuel and electricity followed by sluggish economies, and such scares as the one in China in my opinion will result in some serious economic ice ages this century, in proper english - basically I think the world economy will crash, there's too much pressure on it ... dont forget the American currency problems, environmental issues, oil/gas issues, and possible conflicts coming up. Turmoil.

Concerns are well-founded, but yeah, you're probably a little more dour than necessary. Hell, I'm usually too negative but you're making me look like a raging bull!

quote:

Originally posted by Lilith prophet of millions...profit of millions

Don't worry guys, I am not afraid to turn on the news to see if the world economy has crashed. I am living it day to day, enjoying whatever is present, though I have a feeling - not a fear - that the world economy is going into some serious shit. I believe that some people intentionally want to crash the world economy for their own benefit, but that my opinion so no point bringing tinfoil hats here. Anyhow, we'll see, we'll see - economics is not my area of interest anyhow.

In honour of your ever so specific feelings and pertinent examples on the matter, I think it's time for some James Brown... no, not him, it's not funny to make fun of JB.

It's time for some Hoff.

Whether or not you believe they exist, these guys are having a busy week!

http://en.wikipedia.org/wiki/Plunge_Protection_Team

quote:

Plunge Protection Team, was originally the headline for an article in The Washington Post by staff writer Brett D. Fromson, published on Sunday, February 23, 1997. He did not invent the term. It was added later by a copy desk editor as a sensational nickname for the subject of the article, the President's Working Group on Financial Markets in the United States. It includes the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the Securities and Exchange Commission and the chairman of the Commodity Futures Trading Commission. Founded in 1988 after the 1987 stock market crash, it theoretically ensures the stability of the financial markets, prevents liquidity problems, and ensures that stock market hiccups do not cause bank runs. Some Wall Street bears believe that it buys stock index futures or uses other methods to help keep the American stock markets afloat. Upon that suspicion, Plunge Protection Team or PPT for short, has become a catch phrase for those who warn about the danger of monetary inflation being used as a tool to more or less directly support stock market prices.[citation needed] In reaction to the poor reasoning of extremists of that suspicion, others have called it a conspiracy theory or an urban legend.[citation needed] The term, Plunge Protection Team, has also been used to include high ranking private bank officials. Private bank risks have increased with growth in the use of derivatives. Trying to prevent a sudden drop in stock prices might be a way to alleviate some of those risks without cutting back on the derivative contract sales that certain banks make a large percentage of income from. So they, especially those banks associated with the Counterparty Risk Management Policy Group of 1999 and the more recent CRMPG II, have also been suspected of conspiring as part of a broader PPT. Please see the article on derivatives for further explanation.

There's not much the plumbers, err plungers, can do if everyone decides to sell.

Gets that bad they put in a trading curb so people can settle the hell down, was introduced in 1987 to control the volatility and stop panic sell offs from people and automated systems.

quote:

Originally posted by Lilith Gets that bad they put in a trading curb so people can settle the hell down, was introduced in 1987 to control the volatility and stop panic sell offs from people and automated systems.

communist style trading ftw

In Soviet Russia, stocks sell YOU

quote:

Originally posted by Magnetonium Don't worry guys, I am not afraid to turn on the news to see if the world economy has crashed. I am living it day to day, enjoying whatever is present, though I have a feeling - not a fear - that the world economy is going into some serious shit. I believe that some people intentionally want to crash the world economy for their own benefit, but that my opinion so no point bringing tinfoil hats here. Anyhow, we'll see, we'll see - economics is not my area of interest anyhow.

Go on Iam listening. What do "people" want to do? Do they want to create a one world government? Are they all Jews?

quote:

Originally posted by Shakka Whether or not you believe they exist, these guys are having a busy week! http://en.wikipedia.org/wiki/Plunge_Protection_Team

Basically looks like a system designed to protect the profits of these rich guys. I mean, there is no cap to stop huge increases in values, is there? LOL

I guess its not as scary. My logic was that if some shady people own large amounts of important commodities like oil, gold, silver, etc. they can made huge money by a crash or devaluation of the world economy so that the commodities become more expensive. They obtain more power out of this. Then by the time the world economy stabilized again, these guys will become verypowerful. Does this make sense? I am not into economics, so dont bother laughing at this if its silly.


EDIT:

Will all the mounting US government debt, wouldnt it be better for them to devaluate the world economy so that they can use their large gold supplies to pay off the debt or something like that?

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