What's worse than a stock crash?
- Thread starter marketsurfer
- Start date
no kidding, "The 21st Century started out relatively well and everybody believed the government could control interest rates."
What's worse than a stock crash is a Bull Market. This grind higher has been sick.
I think what's worse is missing out on the preceding bull phase.
I'm a trader, not a stock trader. John Persons tells a great story about meeting John Murphy on the streets of Chicago and razzing him because he abandoned commodities for stocks. Murphy gave it right back to him, saying "I'm sorry John, but I'm just smarter than you. I went where the money is."
We are traders. The money never leaves the Casino. If stocks are dead for a decade, your skills will work just fine in other markets.
Follow the money.
We are traders. The money never leaves the Casino. If stocks are dead for a decade, your skills will work just fine in other markets.
Follow the money.
Unfortunate, because equities have a definite bullish bias to them. All the big players, the Fed, the Treasury, the banks, Big Money, and the financial press have a vested interest in squeezing the shorts and keeping the party going. The institution of shorting was invented to provide a ready pool of suckers to squeeze. They are there to be thrown like sandbags out of the hot air balloon and make it go up.
Given these facts, I still short, but I am very selective when I do. When this thing bursts wide open, the rallying will be tremendous and there will be plenty of money to be made on both sides, but I'd be careful about picking tops and watch the leverage.
John Kenneth Galbraith, author of 1929 - The Great Crash, described the pattern of the 1929-1932 bear market as follows:
'The worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few people as possible escape the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. The bargains then suffered a ruinous fall. Even the man who waited for volume of trading to return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next 24 months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.
It's not true you have to lose a lot of money to really understand trading. The risk intollerant pay their dues in seeing everyone else make money. Either way, you've gotta pay your dues, so if this was you, cheer up and stay away from those perma bear sites so the lesson sticks. I'm risk adverse, so every day I seek out some bull tards like on CNBC to keep my head straight and balanced, neither bull nor bear.