Author Topic: What just happened??? Anyone else freaked out about the markets???  (Read 26773 times)

iamlindoro

  • Handlebar Stache
  • *****
  • Posts: 1520
    • The Earth Awaits
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #100 on: April 17, 2014, 08:27:30 PM »
So the market goes down about 5% over the course of a few days (which has now been erased) and we get a thread with 6 (SIX!!!!!!) exclamation points in the title.  I am being completely honest and not condescending at all when I say the OP not only does not have the right mindset, but may never have the right mindset for long-term investing.

In fairness, they're question marks.

I think it's pretty unfair to pass judgement on the OP for having an extremely common new-investor reaction to market volatility.  If all the OP needs is some reassurance, which he or she has received, and modifies his or her outlook, I see no reason they cannot develop the right mindset.  What would bother me is if the OP read the above and felt "Oh, maybe investing isn't for me..." and gave up.

SnackDog

  • Handlebar Stache
  • *****
  • Posts: 1284
  • Location: Latin America
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #101 on: April 18, 2014, 04:18:30 AM »
The markets will plunge. The next plunge may be like previous plunges or it could be totally unique.  We've never been in this situation before. Every plunge before from about 1900-2000, the market over-corrected below the trend line.  Starting in 2000, the US govt has arrested each major bubble deflation by going wildly into debt.  Luckily, the Chinese were on hand to buy it all as their economy bloomed.  As we leverage into higher debt levels, this "lever" on the markets gets weaker and weaker and will eventually break. When it does, we may deflate all that air in the market from the last several bubbles which we never let out.  That could be quite a plunge.  If the Chinese decide they don't need our bonds any more or can no longer afford them as their economy slows, around the same time, it will be the financial zombie apocalypse. And it could be a plunge which we don't recover from for 10 years or more.   Certain tech stocks have lead the charge with crazy P/Es which have recently correctly.   This is a preview.  The market will need to go up a bit more to get everyone invested fully, then, Ka-Pow! I wish it would happen now rather than when I plan to retire.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28013
  • Age: -999
  • Location: Seattle, WA
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #102 on: April 18, 2014, 04:21:46 AM »
So the market goes down about 5% over the course of a few days (which has now been erased) and we get a thread with 6 (SIX!!!!!!) exclamation points in the title.  I am being completely honest and not condescending at all when I say the OP not only does not have the right mindset, but may never have the right mindset for long-term investing.

In fairness, they're question marks.

I think it's pretty unfair to pass judgement on the OP for having an extremely common new-investor reaction to market volatility.  If all the OP needs is some reassurance, which he or she has received, and modifies his or her outlook, I see no reason they cannot develop the right mindset.  What would bother me is if the OP read the above and felt "Oh, maybe investing isn't for me..." and gave up.

Yeah.  It's good for the OP to get some practice with market swings.  A little freak out when you first start is okay.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Ohio Teacher

  • Stubble
  • **
  • Posts: 127
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #103 on: April 18, 2014, 06:19:29 AM »
In fairness, they're question marks.


I changed it a minute before you posted :) 

I admit I was unduly harsh.  I blame it on the fact that I had just gotten home from my bowling league and I hadn't yet come down from the intense high of competition (and the beers helped, too).
« Last Edit: April 18, 2014, 06:29:37 AM by Ohio Teacher »

hodedofome

  • Handlebar Stache
  • *****
  • Posts: 1211
  • Age: 39
  • Location: Texas
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #104 on: April 18, 2014, 10:02:56 AM »
The markets will plunge. The next plunge may be like previous plunges or it could be totally unique.  We've never been in this situation before. Every plunge before from about 1900-2000, the market over-corrected below the trend line.  Starting in 2000, the US govt has arrested each major bubble deflation by going wildly into debt.  Luckily, the Chinese were on hand to buy it all as their economy bloomed.  As we leverage into higher debt levels, this "lever" on the markets gets weaker and weaker and will eventually break. When it does, we may deflate all that air in the market from the last several bubbles which we never let out.  That could be quite a plunge.  If the Chinese decide they don't need our bonds any more or can no longer afford them as their economy slows, around the same time, it will be the financial zombie apocalypse. And it could be a plunge which we don't recover from for 10 years or more.   Certain tech stocks have lead the charge with crazy P/Es which have recently correctly.   This is a preview.  The market will need to go up a bit more to get everyone invested fully, then, Ka-Pow! I wish it would happen now rather than when I plan to retire.

This fear of Chinese bond ownership is a little Overrated. The federal Reserve can always step in and buy those bonds with unlimited resources. They are always the buyer of last resort.

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #105 on: April 18, 2014, 12:41:47 PM »
The markets will plunge. The next plunge may be like previous plunges or it could be totally unique.  We've never been in this situation before. Every plunge before from about 1900-2000, the market over-corrected below the trend line.  Starting in 2000, the US govt has arrested each major bubble deflation by going wildly into debt.  Luckily, the Chinese were on hand to buy it all as their economy bloomed.  As we leverage into higher debt levels, this "lever" on the markets gets weaker and weaker and will eventually break. When it does, we may deflate all that air in the market from the last several bubbles which we never let out.  That could be quite a plunge.  If the Chinese decide they don't need our bonds any more or can no longer afford them as their economy slows, around the same time, it will be the financial zombie apocalypse. And it could be a plunge which we don't recover from for 10 years or more.   Certain tech stocks have lead the charge with crazy P/Es which have recently correctly.   This is a preview.  The market will need to go up a bit more to get everyone invested fully, then, Ka-Pow! I wish it would happen now rather than when I plan to retire.

This fear of Chinese bond ownership is a little Overrated. The federal Reserve can always step in and buy those bonds with unlimited resources. They are always the buyer of last resort.

I recently read this post on Social Security from jlcollins which touched on this Chinese bond ownership point, so I thought I'd reinforce hodedofome's point a bit. The post is from 15 months ago and the stats are from nearly 2 years ago, but I've heard people claiming this Chinese debt thing for many years.
http://jlcollinsnh.com/2013/01/29/social-security-how-secure-and-when-to-take-it/

Here's the excerpt I'm referring to:
"The 2.7 trillion dollar surplus is commonly referred to as the Trust Fund and it is held in US Treasury Bonds.  This, by the way, is about 16% of the roughly 16 trillion-dollar US debt.  In a real sense we owe it to ourselves.  In fact, about 29% (4.63T) of our 16T debt is owed to ourselves in this fashion:  Social Security, Medicare and the balance in Military and Civil Service Retirement programs.  Only 1.1T/8.2% is owed to China, the creditor we hear most about.  We owe Japan about the same.  If you’re curious, here’s a breakout:  http://www.mygovcost.org/2012/09/16/who-owns-the-u-s-national-debt-summer-2012-edition/"

So China and Japan combined own about 15% of our government debt, and in total about 30% of our government debt is owned by foreign nations. It's a little scary, but managable I think.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8761
  • Registered member
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #106 on: April 18, 2014, 01:53:27 PM »
The markets will plunge. The next plunge may be like previous plunges or it could be totally unique.  We've never been in this situation before. Every plunge before from about 1900-2000, the market over-corrected below the trend line.  Starting in 2000, the US govt has arrested each major bubble deflation by going wildly into debt.  Luckily, the Chinese were on hand to buy it all as their economy bloomed.  As we leverage into higher debt levels, this "lever" on the markets gets weaker and weaker and will eventually break. When it does, we may deflate all that air in the market from the last several bubbles which we never let out.  That could be quite a plunge.  If the Chinese decide they don't need our bonds any more or can no longer afford them as their economy slows, around the same time, it will be the financial zombie apocalypse. And it could be a plunge which we don't recover from for 10 years or more.   Certain tech stocks have lead the charge with crazy P/Es which have recently correctly.   This is a preview.  The market will need to go up a bit more to get everyone invested fully, then, Ka-Pow! I wish it would happen now rather than when I plan to retire.

This fear of Chinese bond ownership is a little Overrated. The federal Reserve can always step in and buy those bonds with unlimited resources. They are always the buyer of last resort.

I'm pretty sure certain private financial institutions are also obligated to buy bond issues.  But that doesn't mean the interest rate won't rise, just that they will be bought.

Psychstache

  • Pencil Stache
  • ****
  • Posts: 842
Re: What just happened??? Anyone else freaked out about the markets???
« Reply #107 on: April 20, 2014, 12:10:44 PM »
In fairness, they're question marks.


I changed it a minute before you posted :) 

I admit I was unduly harsh.  I blame it on the fact that I had just gotten home from my bowling league and I hadn't yet come down from the intense high of competition (and the beers helped, too).

Oh, well then there's your problem.

Rule #1: NEVER look at your investments unless you are 100% sober   :)