<p>I say 390 points. Futures have it down 491 at this moment. Lets place our predictions. BOA and Wachovia release earning reports tomorrow as well. Won't be good!</p>
<p>Class of 09 isn't the time to be graduating from the looks of it lol.</p>
<p>Can you give me some background on what's going on? I've been hearing something about the economy is going to the ****s and some people talking about a draft, and other random crap. Is this all related? Recession?</p>
<p>stocks are too unpredictable to say what exactly caused what.</p>
<p>right now the big news is surrounding countrywide and whatever related to that.</p>
<p>DONT SAY THE R WORD!!!!!!!!</p>
<p>i predict 600 pts</p>
<p>do you think they might close early to prevent serious hemorrhaging?</p>
<p>-523</p>
<p>As soon as the clock hits 0930 EST, you're gonna see a free fall.</p>
<p>391 bob! Er Drew. </p>
<p>I THINK ITS TIME TO GRADUATE AT 2010!</p>
<p>What's funny is, before this weekend I was thinking of staying my 5th year and graduating in '10.</p>
<p>
[quote]
stocks are too unpredictable to say what exactly caused what.</p>
<p>right now the big news is surrounding countrywide and whatever related to that.
[/quote]
</p>
<p>Wrong. Stocks are predictable on an individual basis to some degree, but when they are brought together in a market they are very predictable. </p>
<p>It started with the lending crisis, which pretty much equates to lenders giving out loans to people who shouldn't have gotten them. Maybe the family was earning 60k/yr, well they would get a loan for 500k, with only 2% interest. But in the fine print that 2% interest would skyrocket if they missed a payment. Well, since they only make 60k/yr and got such a huge loan of course they are going to miss a payment which leads them down the road to eventaully defaulting on the loan (causing a loss for the lending company. </p>
<p>This coupled with the declining dollar, 03-06 boom whiplash, and a fed that has put the problem off but never really dealt with it. </p>
<p>The "R" word is deff going to happen. On Monday every major international market turned bear. Everything was down 7-11%, which is huge. This was all in reaction to fridays losses on the DJIA, which were a result of the above. </p>
<p>
[quote]
do you think they might close early to prevent serious hemorrhaging?
[/quote]
</p>
<p>I don't think they CAN close early. They had a provision that would allow them to institute breaks once the market changed 190 pts either way, but this was done away with in November of 07. They currently have trading curbs in place, which means once the market goes down 10% there is a cooling off period where no trading can occur. This period only lasts an hour however and then trading begins. The exchange can shut down if 20% losses are reported late in the day, and can be shut down ANYTIME when 30% losses are incurred. However, a 10% loss (which would result in an hour break) would be about 1,000 points and a 30% loss (which would shut down trading) would be about 4,000 points. Either way if that happened it wouldn't be the "R" word we'd be worrying about but rather the "D" word.</p>
<p>Dumbledore?</p>
<p>Latest futures have it down 550, however Europe seems to be rebounding in early trading while Asia was slipping. Too bad I have class tomorrow, I'd really like to stay up and see how this all plays out :(</p>
<p>...get a phone with internet. or the ipod touch ;)</p>
<p>i'm glad i'm 2010 lol. means people will have money to pay me for their psychoanalysis hehe.</p>
<p>The 2009 comment wasn't to be taken seriously. Nobody really has any clue how long the downturn/slowdown will last (it's not tech a recession yet. Need 2 quarters of neg GDP for that).</p>
<p>any post after 1am shouldn't be taken terribly seriously either :)</p>
<p>Fed cut interest rates by 3/4 of a point, tempering losses, however in the long run it's just delaying the inevitable. Will be interesting to see how the rest of the day goes.</p>
<p>Worst exchange rate I've seen in a while : 106Y/$1</p>
<p>LaxAttack,</p>
<p>Your argument depends on how much you buy into efficient markets or not. Either way, I'm looking for a job at a really bad bad time.</p>
<p>The efficient market theory isn't 100% correct but I doubt it's 100% wrong either. Sure, there are a few people here and there who can pick stocks, but there are also a few people here and there who have made a living picking spreads in sports lines. It happens but it's EXTREMELY rare. What gets me is when normal people think they can "pick" stocks, which I personally think is BS. The reason index funds regularly outperform mutual funds is that an index is spread out over the whole market whereas mutual funds are pick and choose funds, this stock, that stock, this stock and bam there's your fund. 95% of mutual funds fail to match the market return, and these funds are run by men and women with 10, 15, sometimes 20 years of experience on Wall Street. What makes you think you're smarter, more in the know than them? More likely then not index funds >>>>mutual funds>>>>>>>>>>>>>normal people picking stocks </p>
<p>It still amazes me that people pick stocks instead of spreading their portfolio out between bonds, index funds --> smallcaps, midcaps, emerging markets. Instead they pick stocks where 99% of the time they'll fail to outperform the market. Instead of pouring $$ into a diverse portfolio for 15-20 years and almost certainly earning 1 million plus they wanna pick that hot stock and make it in a year. If you wanna read an article on diversifying your portfolio, with a gain/risk ratio, check this out: <a href="http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy-and-hold-strategy.html%5B/url%5D">http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy-and-hold-strategy.html</a></p>
<p>LaxAttack09,</p>
<p>Actually, I'm doing investments this quarter... Statistically, what you're doing is reducing the kurtosis. You can, with a properly diversified portfolio, expect around the S&P 500, but most finance profs seem to agree that you can't beat the market in the long run. At least not in any significant way.</p>
<p>The best you can do is reduce the SD of your portfolio and cross your fingers.</p>
<p>I think it depends on what you consider the "long run." In that particular example, from 1970-2006, the "market" was beat by 3%. By "beat" I'm simply talking about 1-2% points, not 10-15 or anything like that, but even beating it by 1-2% adds immense value to your portfolio. In this particular case, $100,000 turned into $3.8 million with a 10.4% return, whereas "beating" the market by an extra 3% produced a $9.6 million return. </p>
<p>I think you CAN beat the market as long as you use a diversified portfolio and shy away from picking particular stocks. The centerpiece for any equity portion of a portfolio should be index funds as many have outperformed the market on 1-3-5-10 year scales. If you're talking 10-20 years I think you can certainly beat the market. A good # of peole "beat" the market over the longrun, they just don't "beat" it in the shortrun, which is nearly all luck.</p>
<p>LaxAttack,</p>
<p>I tend to agree with the efficient market people. Over the course of 20+ years, you'll usually end up around the market return (alpha). Even a well made PF is going to end up at the intercept.</p>
<p>But, with a well-diversified portfolio, you are less likely to lose big and less likely to win big. Nonetheless, you're still going to have a distribution centered around the mean.</p>