Branigan Posted October 4, 2011 Share Posted October 4, 2011 -3% Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted October 4, 2011 Share Posted October 4, 2011 -3% Down down, deeper and down. Quote Link to comment Share on other sites More sharing options...
FIGGY Posted October 4, 2011 Share Posted October 4, 2011 Down down, deeper and down. Yep, just went SUB 4900!!!! Quote Link to comment Share on other sites More sharing options...
nmarks Posted October 4, 2011 Share Posted October 4, 2011 Down down, deeper and down. I like the way a crisis brings out the music on this website. Quote Link to comment Share on other sites More sharing options...
CleverBear Posted October 4, 2011 Share Posted October 4, 2011 Come on US factory data and berdanke speech at 2pm. Give me a bump Quote Link to comment Share on other sites More sharing options...
jaspers Posted October 4, 2011 Share Posted October 4, 2011 Bad day for BDEV Good day for Greggs Sell houses. Buy steak bakes. Quote Link to comment Share on other sites More sharing options...
200p Posted October 4, 2011 Share Posted October 4, 2011 (edited) Small nitpick - if something goes down 10%, then up 10% then you've lost money! e.g. start at 100, down 10% (of 100) is 100 - 10 = 90, up 10% (of 90) is 90 + 9 = 99. THANKS for the correction The volatility went up again today. Keep your powder dry, until it settles down and not a day before. We've saved you 3% already in one trading session. Edited October 4, 2011 by Money Spinner Quote Link to comment Share on other sites More sharing options...
_w_ Posted October 4, 2011 Share Posted October 4, 2011 THANKS for the correction The volatility went up again today. Keep your powder dry, until it settles down and not a day before. We've saved you 3% already in one trading session. I like the logic of this but it contradicts Ben Graham's advice though. He calls 'Mr Market' a manic depressive and celebrates those depressive phases (high VIX?) that give an investor a chance to buy shares at a good price. What is your thought on that? Quote Link to comment Share on other sites More sharing options...
conflict Posted October 4, 2011 Share Posted October 4, 2011 US opens and does a nice small crash - down 2% and still going. The S&P 500 is now an offical bear market, as the fall is 20% below the high. The DOW has been an official bear since September. FTSE now approaching 4% down. Quote Link to comment Share on other sites More sharing options...
200p Posted October 4, 2011 Share Posted October 4, 2011 I like the logic of this but it contradicts Ben Graham's advice though. He calls 'Mr Market' a manic depressive and celebrates those depressive phases (high VIX?) that give an investor a chance to buy shares at a good price. What is your thought on that? It is impossible to pick a bottom, fear breeds more fear. Only after fear phase has passed (Volatility is back down to normal levels), then and only then, a clear direction of the market can be establised. I heard from one source close to Benjamin Graham, that he died a broke man. Quote Link to comment Share on other sites More sharing options...
_w_ Posted October 4, 2011 Share Posted October 4, 2011 It is impossible to pick a bottom, fear breeds more fear. Only after fear phase has passed (Volatility is back down to normal levels), then and only then, a clear direction of the market can be establised. I heard from one source close to Benjamin Graham, that he died a broke man. Did he ????? Aren't you talking about Livermore? Quote Link to comment Share on other sites More sharing options...
A.steve Posted October 4, 2011 Share Posted October 4, 2011 I like the logic of this but it contradicts Ben Graham's advice though. He calls 'Mr Market' a manic depressive and celebrates those depressive phases (high VIX?) that give an investor a chance to buy shares at a good price. What is your thought on that? I know you didn't ask me - but I've been thinking about this. I think there are (at least) two distinct answers - and they're not mutually incompatible - though they are contradictory, on the surface. In the long term, assuming capitalism survives, you want to be long tangible assets - they will eventually be "worth" more than they are today - though you may not remain either solvent or alive for long enough to see that outcome. For a 'buy and hold' strategy, you want to wait for low volatility; low prices; high interest rates. We're a long way from seeing this, IMHO, decades - at least. In the shorter term, high volatility may well offer spectacular trading opportunity... all that is required is to forecast weighted sentiment. If you're prepared to sell your assets once they've risen in value - you shouldn't take high volatility to be a reason to be out of the market. If prices rise rapidly in price, this corresponds to high volatility - yet this is exactly what you want as a speculator. This brings me to a non-rhetorical question... I'm putting on my 'maths hat' and I'm asking for clarification... I understand subjectively what volatility is... and I have a statistical definition for the concept (i.e. the square of standard deviation... or the mean square of the deviation of a sequence from its mean.) My 'problem' with this is that it makes volatility a concept that is only well defined over a given (preferably cyclical) time period. This makes an utter nonsense of saying 'the volatility at the moment is X' - it has no well-founded interpretation. So, the question: How exactly is market volatility defined in practice. How much history is considered 'now'? More rigorously, what would be the step-response of the volatility metric? I.e. If the market price of widgets had been £X for eternity, and, in one instant, they rose to £Y and remained at that price for the rest of eternity... what would the graph of volatility look like around the transition? Quote Link to comment Share on other sites More sharing options...
_w_ Posted October 4, 2011 Share Posted October 4, 2011 (edited) I know you didn't ask me - but I've been thinking about this. I think there are (at least) two distinct answers - and they're not mutually incompatible - though they are contradictory, on the surface. In the long term, assuming capitalism survives, you want to be long tangible assets - they will eventually be "worth" more than they are today - though you may not remain either solvent or alive for long enough to see that outcome. For a 'buy and hold' strategy, you want to wait for low volatility; low prices; high interest rates. We're a long way from seeing this, IMHO, decades - at least. In the shorter term, high volatility may well offer spectacular trading opportunity... all that is required is to forecast weighted sentiment. If you're prepared to sell your assets once they've risen in value - you shouldn't take high volatility to be a reason to be out of the market. If prices rise rapidly in price, this corresponds to high volatility - yet this is exactly what you want as a speculator. Graham's philosophy was to buy stocks that were undervalued so it is definitely a long terms approach, not speculation. His main assessment was that the market would go through phases in which it would buy at any price (the time to sell) or sell at any price (during phases of extreme fear, the time to buy). He used to make very thorough assessments of companies' values by analysing their books to death, something that is impossible today (Enron accounting) so he had a fair idea of companies' intrinsic values. This brings me to a non-rhetorical question... I'm putting on my 'maths hat' and I'm asking for clarification... I understand subjectively what volatility is... and I have a statistical definition for the concept (i.e. the square of standard deviation... or the mean square of the deviation of a sequence from its mean.) My 'problem' with this is that it makes volatility a concept that is only well defined over a given (preferably cyclical) time period. This makes an utter nonsense of saying 'the volatility at the moment is X' - it has no well-founded interpretation. So, the question: How exactly is market volatility defined in practice. How much history is considered 'now'? More rigorously, what would be the step-response of the volatility metric? I.e. If the market price of widgets had been £X for eternity, and, in one instant, they rose to £Y and remained at that price for the rest of eternity... what would the graph of volatility look like around the transition? I deal a lot with options for hedging and speculation but unfortunately I still have a lot to learn. IIUC the VIX is derived from the at the money - near month option premiums, so it's a supply - demand driven measure. Edited October 4, 2011 by _w_ Quote Link to comment Share on other sites More sharing options...
A.steve Posted October 4, 2011 Share Posted October 4, 2011 (edited) Graham's philosophy was to buy stocks that were undervalued so it is definitely a long terms approach, not speculation. His main assessment was that the market would go through phases in which it would buy at any price (the time to sell) or sell at any price (during phases of extreme fear, the time to buy). He used to make very thorough assessments of companies' values by analysing their books to death, something that is impossible today (Enron accounting) so he had a fair idea of companies' intrinsic values. Graham's kind of famous - but he stated his ideas a long time ago. I completely agree that it's effectively impossible to establish an objective value for large companies today... I also think that the value of today's corporates is far more potentially ephemeral than in the past - making objective analysis all but impossible. With balance sheets stuffed with cheap debt, I think the nails are firmly in the coffin of the idea that you can buy at any price and wait until the value exceeds that. With interest rates at near-zero we're in an environment where it's entirely plausible that even long-term solvent companies may never achieve valuations above today's. I deal a lot with options for hedging and speculation but unfortunately I still have a lot to learn. IIUC the VIX is derived from the at the money - near month option premiums, so it's a supply - demand driven measure. Hmmm - yes... re-thinking, I sort-of knew that. So, I think it's fair to say that the VIX reflects volatility expectations not volatility per-se. I suspect it would be very enlightening to graph the VIX against corresponding a posterori measures of volatility over the same period. It also strikes me that there are likely lots of interesting things that can be noticed from the shape of implied volatility curves when graphed against time-horizon into the future. I wonder.. is that sort of information published - or is the VIX the most detailed freely available information? Edited October 4, 2011 by A.steve Quote Link to comment Share on other sites More sharing options...
pl1 Posted October 4, 2011 Share Posted October 4, 2011 DOW roaring up on rumour of huge Euro bank rescue deal. Panic over.... for now... Quote Link to comment Share on other sites More sharing options...
sign_of_the_times Posted October 4, 2011 Share Posted October 4, 2011 DOW roaring up on rumour rumour seems to be the only thing moving markets these days viva capitalism ! Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted October 4, 2011 Share Posted October 4, 2011 That DOW recovery was funny. Quote Link to comment Share on other sites More sharing options...
pl1 Posted October 4, 2011 Share Posted October 4, 2011 Sounds more like preparations for letting Greece go. Any Twitter news on it? Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted October 4, 2011 Share Posted October 4, 2011 IMO people need to do more research on the correlations between the largest stock market crashes, full moons and solar eclipses. Quote Link to comment Share on other sites More sharing options...
libspero Posted October 4, 2011 Share Posted October 4, 2011 That DOW recovery was funny. Surely it can't be time for the rally monkey quite yet.. Quote Link to comment Share on other sites More sharing options...
pl1 Posted October 4, 2011 Share Posted October 4, 2011 (edited) Okay the DOW's late afternoon surge appears to be based on just one story told to an FT journalist by Oli Rehn, EU Monetary Affairs commissioner. The story broke at 3:19 this afternoon New York time, the DOW surged almost immediately afterwards. edit: here's the story EU Ministers Look At Bank Aid Plans Edited October 4, 2011 by pl1 Quote Link to comment Share on other sites More sharing options...
CleverBear Posted October 4, 2011 Share Posted October 4, 2011 The reason I am bullish (for the time being) on the stock market is that surely the stakes are now so high that the eurozone will sort itself out. Necessity is the mother of invention after all. Quote Link to comment Share on other sites More sharing options...
Errol Posted October 4, 2011 Share Posted October 4, 2011 surely the stakes are now so high that the eurozone will sort itself out. How? More debt? A leveraged fund? Don't make me laugh. Quote Link to comment Share on other sites More sharing options...
CleverBear Posted October 4, 2011 Share Posted October 4, 2011 For those interested. Tomorrows important times (london time) include: 8 french and german services pmi 8.30 uk bus investment 8.30 uk current account 8.30 uk gdp final figure 8.30 uk services pmi 9 eur gdp 9 euro retail sales 12.15 adp employment data (key) 2 ism non man index Then thursday we have uk and eu ir decisions, us jobless claims, and friday we have us employment data which will be huge news. Quote Link to comment Share on other sites More sharing options...
CleverBear Posted October 4, 2011 Share Posted October 4, 2011 How? More debt? A leveraged fund? Don't make me laugh. Fiscal integration and reforms in the periphary countires to improve their economies would be nice. But the first step would be a bigger bail out fund and to sure up the banks Quote Link to comment Share on other sites More sharing options...
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