Crazy markets

[five40]

This -500, +300, -400, -400, +900 is just not normal. I know the economy is up in the air but do you guys think that our over exposure to news/data is a major cause for the craziness? I haven't really watched the news for years now and I just get info by going to yahoo and reading headlines. It keeps me somewhat informed and it keeps me out of the irrational ups/downs that come along with the sensationalism in news. In the early 1900's people where lucky to get updates once a week, let alone every 5 minutes. In the great depression it took stocks months and months to lose a large amount of their value, today it's done in less than a week. Getting updates every 5 minutes can lead to wild swings due to the human psyche of flight/fight and "missing the bus". Also the emergence of "do it yourself" trading (aka etrade, ameritrade, scottrade, etc...) takes away the knowledge and advice of an experienced broker. Instead of getting advice from a professional before buying/selling, people can just do it themselves which can also help cause wild ups/downs. Also, I'm not saying just because someone has passed their series 7 or other securities exams that their opinion is golden or they are always right, but in most cases those people know much more than some random person sitting at home wanting to buy and sell stocks. So I guess I was wondering everyone's opinion on being too "plugged in" and how it affects our financial markets.

 

[moparacer]

"some random person sitting at home wanting to buy and sell stocks."

There is your -500 +300, -400, -400, +900, right there....

STAY WITH CRAMER!!!!!

pfffft.

 

[hiromizu]

Yea I've been buying and selling recently. I didn't mean to cause any harm.

 

[IHateMyJob2004]

I am buy and hold, but I have to admit wit hall this craziness that I am trading fairly successfully. jsut buy at DOW near 8000 and dump when it breaks 9500. Wait for more "bad news" for market to tank. Repeat.

 

[Eeezee]

Originally posted by: hiromizu
Yea I've been buying and selling recently. I didn't mean to cause any harm.

I did. That's the only way to win. You buy low and sell high. This hopefully screws others, such that you're taking more money from everyone else than they're taking from you

 

[sactoking]

The average investor trading shares in their personal account or mutual fund has 0% correlation to the market as a whole. Even taken together, the sum of all activity from average private investors probably accounts for <1%.

The wild swings we're seeing are a result of the large corporate traders being douchebags. Some of them are completely irrational. Others are looking for a quick buck. Some of them are *shudder*.... chartists.

What you saw today was a >900 point increase because 'investors are banking on a Fed rate drop on Wednesday'. In other words, there was NO valid reason other then speculation. If the Fed rate doesn't drop tomorrow, the market will tank. If the Fed rate does drop tomorrow, the market will still probably tank. They'll say it's because the rate drop wasn't as big as hoped for, or investors are 'taking profits' or some other BS reason.

The cycle will continue unabated. This "Castle in the Sky" mentality is exactly why you should be in stocks for the long term and rarely, if ever, take investment advice from a 'professional'.

 

[five40]

Originally posted by: sactoking
The average investor trading shares in their personal account or mutual fund has 0% correlation to the market as a whole. Even taken together, the sum of all activity from average private investors probably accounts for <1%.

The wild swings we're seeing are a result of the large corporate traders being douchebags. Some of them are completely irrational. Others are looking for a quick buck. Some of them are *shudder*.... chartists.

What you saw today was a >900 point increase because 'investors are banking on a Fed rate drop on Wednesday'. In other words, there was NO valid reason other then speculation. If the Fed rate doesn't drop tomorrow, the market will tank. If the Fed rate does drop tomorrow, the market will still probably tank. They'll say it's because the rate drop wasn't as big as hoped for, or investors are 'taking profits' or some other BS reason.

The cycle will continue unabated. This "Castle in the Sky" mentality is exactly why you should be in stocks for the long term and rarely, if ever, take investment advice from a 'professional'.

I would love to see actual numbers on private investors. I agree that there was some speculation today on the rate drop, but that was in the news last week and I'm sure corporate traders knew about it, so why wait until today?