Thank goodness that the US continues to line the pockets of the fat cat managers, CEOs, investment bankers, etc.! After all, Mr. Bush’s Treas. Secy. (a big-time Wall St. Insider) just pumped BILLIONS of taxpayer money into the banks….and has still allowed the ‘derivatives market’ free rein! (Oh, they are slowed, due to the credit crunch, but there is still NOT ONE LINE OF REFORM in the Bushies’ bail-out for Wall St. fat-cats). Once the market recovers a bit, they are free to continue their buccaneering ways. Until there is true reform of the unregulated markets which make money by slicing and dicing ‘mortgage-backed’ securities and trading them with each otyher, the GOP, Mr. Paulson & Co. will continue to rob the working people of America.
The market will yo-yo for awhile-part of its natural reaction to being unsure. Eventually it will adjust back to a reasonable level. Day by day market watching and panicking is not really helpful.
#7 The market will yo-yo for a while. Eventually it will slowly fall, yo-yoing all the way to below 6,000 sometime between now and 2012. After that it will stay there for a while. I do not anticipate sustained improvement that is not due to the onset of hyperinflation due to money printing or war before 2016, and if the government continues as it has there may be no significant improvement before 2020. If there is hyperinflation, then, yeah, we’ll have a bull market real soon. Zimbabwe’s stock market is doing great.
Remarkable how much attention the Dow Jones Industrial Average continues to get—as though it were the definitive gauge of the stock market.
On the contrary, the DJIA reflects only 30 stocks and uses a bizarrely simple-minded system for weighting each stock: the higher the price of the stock, the more weight it carries in the index. Thus if the largest company in the index has a share price of $15 and the smallest company has a $150 share price, then (as I understand it) the smallest company will carry 10 times as much weight as the largest. (Pass the stash, please.)
Moreover, more than a few news reports cite the index to two decimal points 8577.91. Makes even modest fluctuations sound important, eh?
We’d lose clutter and gain information if business reporters would lose the DJIA and give more attention to:
— the S&P;500 (500 largest U.S. firms, weighted by market capitalization); and
— the Dow Jones Wilshire 5000 Total Market Index (all 7000+ firms publicly traded in the United States, weighted by market capitalization).
The index are far broader and more rationally calculated than the hoary DJIA.
The panic is the baby boomers whose retirement plans are going back to 1998 levels, and folks who may lose their jobs because businesses can’t get a line of credit for payroll, and large corporations whose stock is deflating and so their capital for growth. Sure, the market may level out, but it might be at 6500 when it does it.
Irenaeus is dead on in #9. The DJIA isn’t terribly useful to watch. It’s more or less correlated with the S&P;500 lately, but why not just look at the 500 directly? I work with about 90 institutional clients, only 2 even want the DJIA in their reports, and then alongside the S&P;500 and the Russell 3000.
I also find it more useful to look at movements in percentage terms as well as points. Helps when looking across several indices, as we really ought.
“I also find it more useful to look at movements in percentage terms as well as points” —Andrew717 [#12]
I wish radio news reports would do the same.
The portentious announcement that “the Dow Jones Industrial Average today fell 37.91 points in heavy trading today” sounds much less portentious as “fell 0.4%.”
We’re back to Friday’s close, more or less.
No, DOW is back to Friday, but we’re in debt another trillion dollars.
Thank goodness we had the bailout! We’d really be in the tank without that!
Don
thank goodness Speaker Pelosi wants another $300 billion:
http://online.wsj.com/article/SB122402768546534409.html?mod=article-outset-box
What we had on Monday was a “suckers rally”. I hope none of you bit the apple.
Thank goodness that the US continues to line the pockets of the fat cat managers, CEOs, investment bankers, etc.! After all, Mr. Bush’s Treas. Secy. (a big-time Wall St. Insider) just pumped BILLIONS of taxpayer money into the banks….and has still allowed the ‘derivatives market’ free rein! (Oh, they are slowed, due to the credit crunch, but there is still NOT ONE LINE OF REFORM in the Bushies’ bail-out for Wall St. fat-cats). Once the market recovers a bit, they are free to continue their buccaneering ways. Until there is true reform of the unregulated markets which make money by slicing and dicing ‘mortgage-backed’ securities and trading them with each otyher, the GOP, Mr. Paulson & Co. will continue to rob the working people of America.
The market will yo-yo for awhile-part of its natural reaction to being unsure. Eventually it will adjust back to a reasonable level. Day by day market watching and panicking is not really helpful.
#7 The market will yo-yo for a while. Eventually it will slowly fall, yo-yoing all the way to below 6,000 sometime between now and 2012. After that it will stay there for a while. I do not anticipate sustained improvement that is not due to the onset of hyperinflation due to money printing or war before 2016, and if the government continues as it has there may be no significant improvement before 2020. If there is hyperinflation, then, yeah, we’ll have a bull market real soon. Zimbabwe’s stock market is doing great.
“Dow Jones Industrial Average loses 8%”
Remarkable how much attention the Dow Jones Industrial Average continues to get—as though it were the definitive gauge of the stock market.
On the contrary, the DJIA reflects only 30 stocks and uses a bizarrely simple-minded system for weighting each stock: the higher the price of the stock, the more weight it carries in the index. Thus if the largest company in the index has a share price of $15 and the smallest company has a $150 share price, then (as I understand it) the smallest company will carry 10 times as much weight as the largest. (Pass the stash, please.)
Moreover, more than a few news reports cite the index to two decimal points 8577.91. Makes even modest fluctuations sound important, eh?
We’d lose clutter and gain information if business reporters would lose the DJIA and give more attention to:
— the S&P;500 (500 largest U.S. firms, weighted by market capitalization); and
— the Dow Jones Wilshire 5000 Total Market Index (all 7000+ firms publicly traded in the United States, weighted by market capitalization).
The index are far broader and more rationally calculated than the hoary DJIA.
Irenaeus, S&P;and the others dropped, also.
The panic is the baby boomers whose retirement plans are going back to 1998 levels, and folks who may lose their jobs because businesses can’t get a line of credit for payroll, and large corporations whose stock is deflating and so their capital for growth. Sure, the market may level out, but it might be at 6500 when it does it.
Irenaeus is dead on in #9. The DJIA isn’t terribly useful to watch. It’s more or less correlated with the S&P;500 lately, but why not just look at the 500 directly? I work with about 90 institutional clients, only 2 even want the DJIA in their reports, and then alongside the S&P;500 and the Russell 3000.
I also find it more useful to look at movements in percentage terms as well as points. Helps when looking across several indices, as we really ought.
“I also find it more useful to look at movements in percentage terms as well as points” —Andrew717 [#12]
I wish radio news reports would do the same.
The portentious announcement that “the Dow Jones Industrial Average today fell 37.91 points in heavy trading today” sounds much less portentious as “fell 0.4%.”
And today we’ve gained back about half what was lost yesterday. The markets are extremely volatile lately.
Dead cat bounce?