Stock market correction in October ?

Discussion in 'Stock Market Forum' started by Fredrick Jones, Jun 3, 2015.

  1. AtlantaSports

    AtlantaSports Senior Investor

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    I had no idea you had a book. Link?
     
  2. Onionman

    Onionman Senior Investor

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    I'm not saying that we'll see a collapse in the market on the same level but a lot of investors got very hurt buying the banks on dips in the financial crisis. In other words, in most cases it makes a lot of sense to buy when the market starts to collapse, but it's not a guarantee that you'll be making easy money. The fact that we're in a very strange environment, given the long period of cheap money, suggests that some of our assumptions are going to be challenged this time.
     
  3. crimsonghost747

    crimsonghost747 Senior Investor

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    So basically you are predicting that the day of the default both the Athens stock exchange as well as pretty much all the major world indexes will just have an average day with the default having pretty much no effect? Because that is what you are saying.

    I agree on Greece having very little effect on global economy. I also agree that EU is much better off without giving and giving and giving more and more money to Greece. But that is NOT to say that the markets will act rationally.

    You are, in my opinion, completely underestimating the effect of bad news. Bad news, incertainty, almost always has a negative effect on the markets. (short term)
    Look at 9/11 for example. What did it do to the economy? Well two towers collapsing certainly had less of an effect than an entire country collapsing... we both agree on that right? And if you look at what followed, I would argue that the increased defence spending etc was actually good for the US economy. More jobs, more sales for several companies... not to mention all the companies that made absolutely insane profits from rebuilding in Afghan/Iraq afterwards.

    So... overall we had something that stimulate the US economy in the long run... however the DJIA still dropped over 7% after 9/11. Not sure about the S&P500 but a wild guess would also be some red numbers across the board. Why? It's not because two buildings were destroyed, it's because people panicked. Bad news is always bad news. And people sell on bad news. I'm not saying it's smart, I'm just saying that it happens.
     
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  4. petesede

    petesede Guest

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    It was a joke. ´ The intelligent Investor´ is probably the biggest must-read book ever written about investing. It was written by Benjamin Graham, who was the mentor of Warren Buffett. Basically Buffet got rich by putting all of Grahams principles in action... which is why I named my fake book ´the more intelligent investor´.. kinda a nod to the Buffett quote.... was also thinking of making a margaritaville joke, but that would have been way too much.
     
  5. petesede

    petesede Guest

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    My absolute prediction is that the day Greece defaults will have no real effect on the US, German or UK markets. They could end up having a down day, but nothing beyond what is normal. Of course there will be some journalists that will tie the daily drop to Greece, but the actual drop will not be anything above what normally has already occurred in the last few weeks.

    My hope is that certain Greek companies like TNP that really are good international companies that just happen to be from Greece get hammered a bit early in the day so I can buy in cheap. I do think all the major markets will dip early, but then the buyers will move in to buy cheap stuff and they will end the day normally.

    Just watching the news... do you see any investors who don´t already think Greece is going to default? You have some politicians and bankers who still talk with some hope, but for the most part, everyone has already resigned themselves that it is going to happen.

    Oh, and completely different than stuff like 9/11.. as I´ve said countless times in this thread, the reason I don´t think the markets are going to drop on D-day is because the damage is already priced into the market and has been over the past few months. If the markets knew 9-11 was going to happen 4 months in advance, they would have dropped gradually over those 4 months in anticipation.
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    The markets were actually closed for several days after 9-11. They had peaked a year or so earlier before the tech bubble popped, and went down quite a bit more over the next year or so after 9-11. But yes, the resulting defense industry boom and the real estate and financial bubbles that also occurred led to lots of prosperity over the next 5 years, before these even bigger bubbles popped.
     
  7. crimsonghost747

    crimsonghost747 Senior Investor

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    Well Greece and EU have once again failed in negotiations on Sunday, so I guess we will see if the markets open/close higher or lower on Monday morning. My guess would be lower, which would point to a conclusion that even though this outcome was VERY probable, it still wasn't factored in 100%. If we start in green then I was wrong. We will know more in a few hours. Of course this is still not even close to them defaulting, they still have about 3 days to figure it out.

    I do think that pretty much everything in Athens will get hammered (some more, some less of course) when the default comes. You are absolutely right, good buying opportunity. Just keep in mind that after the default they might switch currencies, which brings the whole currency game into play. And unstable countries with poor finances... there is some risk of very high inflation which would hurt foreign investors.

    And I also agree that most investors think that Greece will default. But thinking it will happen and knowing it for a fact are two different things.

    As for the 9/11 being different, yes in the way that it came as a surprise whereas the Greek default won't. I do agree about the gradual decline in this Greece situation... but I don't think it has been factored in 100% because we don't know it for a 100% certainty. The point was... 9/11 was in fact GOOD news for the economy. But that didn't stop people from panicking and causing one of the biggest 1 day sell offs that I can remember. The markets are not always rational, fear and panick jump in when bad news happen.
     
  8. Taki

    Taki Active Member

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    Greece would do better doing what Iceland did....throwing all the banks out, jailing the criminals, and writing off the debt. It worked great for them and they are stronger than ever.
     
  9. manoharb

    manoharb Senior Investor

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    after analysis, my view is, Dow30 is already in correction mode, Correction will come before October, In September, FED rate hike expected, Global cues also in favor of correction until September . correction in DAX, FTSE100 already started . so, correction will come in next 3 months. maximum downside expected near 16500-16700. this is view based on current situation. If any Political instabilities in next 2 months, View can change.
     
  10. manoharb

    manoharb Senior Investor

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    If we check here gaps in 5-10-20-50-100-200 SMA and EMA (Investing.com) , 20SMA-20EMA gap is bigger than others, High Volatility expected for short term. Dow30 is sell on rise, from 17500-17550 bounceback expected, In (next 10-15 sessions) Choppy market for next 2 months.
     

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