News Dow bouncing around -1000

[kitkat22]

Exactly. I hate it when they report points and not percentages, a common media error.

I don't know if percentage entirely works. Nor does point swings per se. Back in the 80s, the Dow was a much smaller number and small changes in point meant large percentage changes. For example, 1985 - the Dow was roughly 1300 points. Even a drop of 100 points at the time would have been crazy - 7-8%. Fast forward to now, 1200 may not be a large percentage, but it does convey that a lot of money moved quickly. I don't think one is necessarily better than the other. I think it is more important to understand the context of the change. 1190 points becomes an interesting factoid that will likely be replaced in another 20-30 years when the Dow hits 50000.

It's like movies making the most of all time. Of course, it has nothing to do with ticket prices, inflation or market saturation compared to the 30s-40s.

 

[ivwshane]

I don't know if percentage entirely works. Nor does point swings per se. Back in the 80s, the Dow was a much smaller number and small changes in point meant large percentage changes. For example, 1985 - the Dow was roughly 1300 points. Even a drop of 100 points at the time would have been crazy - 7-8%. Fast forward to now, 1200 may not be a large percentage, but it does convey that a lot of money moved quickly. I don't think one is necessarily better than the other. I think it is more important to understand the context of the change. 1190 points becomes an interesting factoid that will likely be replaced in another 20-30 years when the Dow hits 50000.

It's like movies making the most of all time. Of course, it has nothing to do with ticket prices, inflation or market saturation compared to the 30s-40s.

Uh... That's exactly why you would use percentages. 10% is 10% whether it's a 10 point drop in a 100 point bucket or a 1000 point drop in a 10000 point bucket.

 

[NWRMidnight]

Exactly. I hate it when they report points and not percentages, a common media error.

Percentages wouldn't work because 1 point gain or drop equals different percentages based on the stock/share value. example. a stock worth $100 per share, a 1 point drop would equal a 1% drop. However, a stock that is worth $50 per share, a 1 point drop would equal a 2% drop. Then you also have stock splits etc that have happened over time, so 1 share 10 years ago, could have split and that 1 share could now be 2 or more shares today. So a point in the Dow Jones 10 years ago as an example could be worth $10,000 per point. today 1 point value could be $100,000 or $1,000,000 (considering we lost over $3 trillion this week from the crash, 1 point is obviously worth much, much more). In the end, percentages are no indication of value.

 

[NWRMidnight]

Uh... That's exactly why you would use percentages. 10% is 10% whether it's a 10 point drop in a 100 point bucket or a 1000 point drop in a 10000 point bucket.

That wouldn't work because the stocks that make up the Dow Jones, or for that matter, the stock market in general fluctuate independently on value, and the companies that make up the Dow Jones and the Market are always changing. The Companies that make up the Dow Jones has changed 54 times since it's inception.

Unless you believe that 10% of $100 equals the same value as 10% of $1000.

 

[ivwshane]

That wouldn't work because the stocks that make up the Dow Jones, or for that matter, the stock market in general fluctuate independently on value, and the companies that make up the Dow Jones and the Market are always changing. The Companies that make up the Dow Jones has changed 54 times since it's inception.

I think you are over thinking this.

 

[Muse]

Percentages wouldn't work because 1 point gain or drop equals different percentages based on the stock/share value. example. a stock worth $100 per share, a 1 point drop would equal a 1% drop. However, a stock that is worth $50 per share, a 1 point drop would equal a 2% drop. Then you also have stock splits etc that have happened over time, so 1 share 10 years ago, could have split and that 1 share could now be 2 or more shares today. So a point in the Dow Jones 10 years ago as an example could be worth $10,000 per point. today 1 point value could be $100,000 or $1,000,000 (considering we lost over $3 trillion this week from the crash, 1 point is obviously worth much, much more). In the end, percentages are no indication of value.

What are you drinking? If my stock goes down 12% today I lose 12% of its value, period. Stock splits notwithstanding. Stocks don't go down points, they go down dollars. You can have all the points you want, I want $$$ in my account. DOW loses 1000 points. I'm not interested. If I have 1 share of DIA, I want to know how much it's value has changed in $$$, period. That is DIRECTLY PROPORTIONAL to the % change.

 

[MomentsofSanity]

That wouldn't work because the stocks that make up the Dow Jones, or for that matter, the stock market in general fluctuate independently on value, and the companies that make up the Dow Jones and the Market are always changing. The Companies that make up the Dow Jones has changed 54 times since it's inception.

Unless you believe that 10% of $100 equals the same value as 10% of $1000.

As a collective percentages is the only measure of value. We communicate in dollars or points because it’s what people understand. We measure impact in percentages because it’s the only thing that matters.

 

[NWRMidnight]

I think you are over thinking this.

Or you are under thinking it.

What are you drinking? If my stock goes down 12% today I lose 12% of its value, period. Stock splits notwithstanding. Stocks don't go down points, they go down dollars. You can have all the points you want, I want $$$ in my account. DOW loses 1000 points. I'm not interested. If I have 1 share of DIA, I want to know how much it's value has changed in $$$, period. That is DIRECTLY PROPORTIONAL to the % change.

Do you own all the stocks in the Dow Jones as well as equal amounts of each? NOPE, the only way that the 12% Dow Jones can determine what you lost is if you answered yes to that question. There are 30 different stocks that make up the Dow Jones. If you want to know what value YOUR stock gained or lost, then pay attention to the gain or loss of those stocks and not the dow Jones because it is impossible to determine what your individual stock, or anyone else's stock lost or gained by what the Dow Jones combined value is. Which is exactly why I said percentages won't work because of the individual fluctuations of each stock that makes up the Dow Jones, as well as each point value also changes based on the value of all those stocks.

Let me expand, and make a correction in what I stated earlier. Every point drop in the Dow jones is 1 dollar PER share. But due to the vast amount of shares, that 1 point value wise to the market equals Billions. Now, the Dow Jones is the Industrial average of multiple stocks. Using percentages really means nothing because the individual stocks that make up the Dow Jones do not gain or lose equally. In fact, some of the companies that make up the Dow Jones Stock increased in value when other's where losing value. That's why percentages really have no accuracy on what individual stocks are doing. The best way I can demonstrate that is the Dow Jones lost 12% value, but my individual stocks combined only lost 7%, which means the 12% loss isn't close to accurate in determine individual stock value. Heck, even my 7% isn't accurate because I have some stocks that lost more, and some that lost less.

 

[NWRMidnight]

As a collective percentages is the only measure of value. We communicate in dollars or points because it’s what people understand. We measure impact in percentages because it’s the only thing that matters.

False. Percentages don't mean anything unless you are referring to individual stocks, unless you believe losing 10% of $100 is equivalent to losing 10% of $1000, as each stock's value is different. The value matters, not the percentage losing 10% of $100 is a loss of $10, but losing 10% of $1000 is a loss of $100. In other words, 10% of 100 is only 1% of 1000, 2 different percentages, same amount of money.

 

[snoopy7548]

Exactly, 10% of 100 is different than 10% of 1000, so percentages make sense.

 

[Exterous]

Or you are under thinking it.
Do you own all the stocks in the Dow Jones as well as equal amounts of each? NOPE, the only way that the 12% Dow Jones can determine what you lost is if you answered yes to that question.

Many people actually do own matching weights of Dow stocks such that any change in Dow stocks is reflected by an equivalent change in their Dow holdings.

 

[kitkat22]

Wow, all I was trying to get across is percentage by itself, without context, has no meaning. A point on a grid, by itself, has no meaning. I suspect everyone here is actually probably adding context, but by themselves the number don't carry much weight. you all correct. 1190 by itself doesn't have a lot of meaning unless you look at percentage and vice versa. Even putting them together doesn't carry much weight until you add historical context. So, 1190 point drop is the largest daily point drop, but not the largest intraday swing. Nor is it the largest percentage drop. This change was -4.42%. In historical context, the largest percentage drop was 10.19.1987 which was 22.61%. The actual point drop of that day was 508. Yet, keep in mind the market at the time was only trading in the 1700s. You need both at a minimum, but in all honesty, we also need to add more context to have clearer meaning.

Having said that, we aren't out of the woods yet either. I love the idea the central banks around the world are going to try to work this one out with monetary policy. </s> Unfortunately, the swell in illness is going to be crazy. I am already starting to see it at our hospital in Washington. This is going to be a crazy month.....

 

[Muse]

Or you are under thinking it.
Do you own all the stocks in the Dow Jones as well as equal amounts of each? NOPE, the only way that the 12% Dow Jones can determine what you lost is if you answered yes to that question. There are 30 different stocks that make up the Dow Jones. If you want to know what value YOUR stock gained or lost, then pay attention to the gain or loss of those stocks and not the dow Jones because it is impossible to determine what your individual stock, or anyone else's stock lost or gained by what the Dow Jones combined value is. Which is exactly why I said percentages won't work because of the individual fluctuations of each stock that makes up the Dow Jones, as well as each point value also changes based on the value of all those stocks.

Let me expand, and make a correction in what I stated earlier. Every point drop in the Dow jones is 1 dollar PER share. But due to the vast amount of shares, that 1 point value wise to the market equals Billions. Now, the Dow Jones is the Industrial average of multiple stocks. Using percentages really means nothing because the individual stocks that make up the Dow Jones do not gain or lose equally. In fact, some of the companies that make up the Dow Jones Stock increased in value when other's where losing value. That's why percentages really have no accuracy on what individual stocks are doing. The best way I can demonstrate that is the Dow Jones lost 12% value, but my individual stocks combined only lost 7%, which means the 12% loss isn't close to accurate in determine individual stock value. Heck, even my 7% isn't accurate because I have some stocks that lost more, and some that lost less.

What you evidently missed is that I referred there to the DIA (read my post again!), which is the DOW index fund. If the DOW goes down 12%, the DIA does too. I am invested in an index fund, have no individual stocks whatsoever. So, I'm interested in the gain/loss in my index fund, not the point drop. If the DOW Jones industrial average loses 12%, so does its associated index fund.

 

[Muse]

Many people actually do own matching weights of Dow stocks such that any change in Dow stocks is reflected by an equivalent change in their Dow holdings.

And the easiest way to do that is to buy the index fund, the DIA.

 

[Jhhnn]

Very few Americans own stocks per se. What money they have is in their 401K's & IRA's, invested in mutuals or ETF's. Those in turn hold financial instruments like stocks & bonds. Fund value fluctuates with the value of he instruments held.

 

[TheVrolok]

Very few Americans own stocks per se. What money they have is in their 401K's & IRA's, invested in mutuals or ETF's. Those in turn hold financial instruments like stocks & bonds. Fund value fluctuates with the value of he instruments held.

Most Americans don't have 401ks or IRAs, either.

 

[NWRMidnight]

What you evidently missed is that I referred there to the DIA (read my post again!), which is the DOW index fund. If the DOW goes down 12%, the DIA does too. I am invested in an index fund, have no individual stocks whatsoever. So, I'm interested in the gain/loss in my index fund, not the point drop. If the DOW Jones industrial average loses 12%, so does its associated index fund.

Your correct, I missed the part of the DIA, but that doesn't change what I said for the majority, as your DIA is only a share in a EFT trust which only makes up 22.8 Billion of the Trillions that are in the Dow Jones and requires brokers to sell/purchase identical portions of all 30 stocks in the Dow Jones, and that can't be done simultaneously. So, All though your DIA is close to the Dow Jones average, it is still not identical. At the close of the day, your DIA gain loss can be as much just a fraction off of what the Dow Jones change is, or as much as 1 or 2% off,, depending on when stock transactions go thru. So, yes, for you, it is a good indicator, but means nothing to the majority of the stock holders. The Dow Jones is the general indicator of the health of the stock market. The Majority of investors don't have DIA's they have individual stocks or group of stocks that are only a part of the Dow Jones, if any.

 

[Bitek]

Most Americans don't have 401ks or IRAs, either.

This always blows my mind.

I know it's true, bit holy shit that's scary. Wife and I both put a lot away and still worry it's enough.

 

[hal2kilo]

This always blows my mind.

I know it's true, bit holy shit that's scary. Wife and I both put a lot away and still worry it's enough.

Some people make bad decisions, some people end up in situations out of their control.
There will always be Grasshoppers and Ants.

 

[Bitek]

Going in! ... Bought some AAPL to add to my position

I ended up doing a decent amount of buying today. God only knows if we're at a bottom, but looking long term there were some good prices. We'll see where this goes

Bought in AAPL between $260-265 on Friday when shit was down 1000pts.

Market closed today +1200 pts AAPL closed at $290. Had some other orders that filled.

TSLA was up over 11%.

This worked out well so far. We'll see

 

[Bitek]

Some people make bad decisions, some people end up in situations out of there control.
There will always be Grasshoppers and Ants.

Yeah it's tough. I feel like you got to make a lot just not to be broke.

 

[hal2kilo]

Yeah it's tough. I feel like you got to make a lot just not to be broke.

I can't figure out how half the people live in this country. I'm feel I'm just mid middle class. Still got to watch the pennies. Never took a destination vacation to Disney World or anything close to that. Rent a cheesy cabin on the La Push Indian reservation for a week a few times.

 

[Bitek]

I can't figure out how half the people live in this country. I'm feel I'm just mid middle class. Still got to watch the pennies. Never took a destination vacation to Disney World or anything close to that. Rent a cheesy cabin on the La Push Indian reservation for a week a few times.

I have aunties and uncles who barely saved anything for retirement now just trying to scrape by on ss and Medicare. OMG they scare me... Otoh... They seem to make it work.

I know ppl my age (35-45) barely saving anything. Some just cause they have too many other bills. Others just spending too much on fancy crap. (iPhones, expensive suvs, house remodels, expensive toys.)

Wife and I both work and both have been lucky to grow a lot in our careers, but we try to not live too much above what we did when we were in our 20s and made way less. There is still def some lifestyle creep, don't get me wrong, but try very hard to funnel a lot of the raises into savings and not leave it in our pocket to try and burn holes.

 

[fleshconsumed]

I can't figure out how half the people live in this country. I'm feel I'm just mid middle class. Still got to watch the pennies. Never took a destination vacation to Disney World or anything close to that. Rent a cheesy cabin on the La Push Indian reservation for a week a few times.

You can do it if, and that's a big if, if you make median or better salary, if you do not have any debt, and if you keep your lifestyle in check. That is not buying new cars every 5-8 years, not buying the biggest house you can afford, and keeping things until they break. That will give you "middle class" lifestyle - not poor or scrambling from paycheck to paycheck, but not living it up either, in essence a middle lifestyle. Of course, given that many people do have student debt, given the job insecurity and gig economy, and outrageous health care expenses, it is no surprise that median wage no longer provides middle class lifestyle it's supposed to.

 

[TheVrolok]

This always blows my mind.

I know it's true, bit holy shit that's scary. Wife and I both put a lot away and still worry it's enough.

Yep. My wife and I max both of our 403b's, 457b's (for now), backdoor Roths, and then some cash savings, and I put a little in my personal brokerage account that I play with and I still don't feel like we save enough. I don't wanna work forever (or perhaps more accurately I want the freedom to do what I want when I want).