I have always considered this comparison, and I do think the S&P 500 is immune from what the Nikkei experienced. The reason is that we're talking about U.S companies and the U.S economy. Warren Buffett always says invest in U.S. businesses with confidence. When he says that, I believe him.
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Buckle up Guys its starting
- Thread starter propwarrior
- Start date
OK. So you're saying that the sample size for the fact that September is historically the market's worst month is not large enough to warrant consideration. You would lean toward it being not much more than a statistical oddity. Again, I disagree. I submit to you that the demand for stock purchases generally wanes in September, for a host of reasons, and since it is demand that produces higher prices, the market has an uphill battle the month of September.My illustration was about sample sizes and drawing conclusions from them. Obviously a coin flip doesn't model a market. Gotta love ET lol
But, hey. No reason to let history be your guide. Few people believe in that. Only wise people pay any attention to that. Just go with your gut.
The rest of your post was sensible, in that the natural long-term trend of the market is up. But I will heartily dispute the above comment. The market ALWAYS corrects. That's what makes it efficient. Also, we were discussing the market...not an individual stock. If you have all the right reasons to buy a stock, and you have done your due diligence, anytime is a good time.
Of course the market will correct. That is certainly a given. What I mean is that for any given price P, of an interesting stock S, at a time T when you have cash, you have no way to be certain that S will produce a p < P, after T. You only have a probability greater than 0 where you alone select the rules that determine that probability.
For example: Many consider the current state of the S&P index to be irrational. It has risen too quickly. However, none of us really know this for certain. It could realistically double again before it finally corrects ( -10%) or becomes a bear ( -20% or more). In neither case, correction or bear, are we guaranteed to return to the price that it is right now.
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No reason to let history be your guide. Few people believe in that. Only wise people pay any attention to that. Just go with your gut.
au contraire. Most retail suffer from such Gamblers Fallacy.
L
lovethetrade
Eventually, but not yet. You see, the machines are programmed to buy buy buy in an non obvious manner after EVERY sell off. To beat the machines, you need to know the machines. Chido knows the machines.
It's definitely a major part of trading, knowing how all the manipulation works. The big players are always looking for a better price if achievable via exploitation.
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It could "realistically double" before a 10% correction? Realistically, that's not realistic. In fact, put me on record as guaranteeing that will not happen.Many consider the current state of the S&P index to be irrational. It has risen too quickly. However, none of us really know this for certain. It could realistically double again before it finally corrects ( -10%)
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It could "realistically double" before a 10% correction? Realistically, that's not realistic.
Ok, fine. However, do you see my point? The market could double and never correct back down to your preferred buying price.
It could "realistically double" before a 10% correction? Realistically, that's not realistic. In fact, put me on record as guaranteeing that will not happen.
While it may not be realistic to expect that, there's nothing that tells us that it absolutely won't happen. You might have a good case for arguing that; but at the end of the day it's a conclusion which stems from inductive reasoning. And to place a guarantee on something like that is not a behavior common among consistently successful traders, at least that I've seen.
I think Simple has the much better worldview for trading profitably here. Although he might have misspoke labeling the possibility as realistic, it's a healthy practice to acknowledge the possibility of highly unlikely scenarios coming to pass. The briefest overview of market history should drive that point home.
I'd caution anyone reading this against projecting your own expectations, well-reasoned as they may be, as an absolute in regards to reality. Especially in this business, that particular flaw has led to eventual catastrophic failure for a good number of traders.
In fact, put me on record as guaranteeing that will not happen.
You may be right, but I believe that over the last few years we did go through a doubling without ever reverting back into bear territory.