Black Monday - Apparently

Graham_Devon

Wild_Rover wrote: »

FTSE up 2.4% at time of writing....... or is this a 'dead cat bounce'.?

WR

The only reason I can think of is that adults have stopped buying colouring books.

As a commentator said earlier. The market is completely irrational at the moment. Fundamentals are being completely ignored rather than simply forgotten now... and as he said, that's a risky place to be, but time it right and theres money to be made.

Graham_Devon

Seems China is becoming it's own worst enemy.

It's today cut interest rates and again reduced the reserve ratios at banks, making it easier for banks to lend.

The hope is that the banks will lend more to people who will then plough it into the stock market (as they have been doing). Need to remember that the chinese people on the ground are heavily invested.

But, this leaves even more risk. Firstly for the banks who have already had several interventions in order to provide riskier lending, and secondly people are simply ploughing money in to chase losses. So the banks are lending more to people to chase their existing losses. I can't possibly think what may go wrong.

The FTSE however, seems to like it. Seems Merkel also got what she wanted after calling for this sort of intervention yesterday.

Should a responsible world economy not be looking at this and condeming it? Instead it appears "our" spokespeople (Merkel and Hollande) are actively encouraging it. It's providing huge risk for us all. Or are the chinese people simply cannon fodder?

michaels

Seems to me unless you have inside information that betting on equities short term is no different to roulette.

And for everyone else who holds equities long term that short term fluctuations are totally irrelevant.

So why all the excitement? Could it be that it is very easy cheap to cover 'news' and some people get caught up in the excitement because big numbers are being banded about without thinking about what impact it might actually have?

chucknorris

michaels wrote: »

Seems to me unless you have inside information that betting on equities short term is no different to roulette.

And for everyone else who holds equities long term that short term fluctuations are totally irrelevant.

So why all the excitement? Could it be that it is very easy cheap to cover 'news' and some people get caught up in the excitement because big numbers are being banded about without thinking about what impact it might actually have?

Yeah you shouldn't invest if you might need the money in the next ? (10?) years.

wotsthat

Graham_Devon wrote: »

As a commentator said earlier. The market is completely irrational at the moment. Fundamentals are being completely ignored rather than simply forgotten now... and as he said, that's a risky place to be, but time it right and theres money to be made.

I think the irrationality is not in the markets but commentators trying to explain movements on an hour by hour basis.

Humans don't seem to cope very well with things just happening and need a narrative whether it's right or wrong.

lisyloo

Yeah you shouldn't invest if you might need the money in the next ? (10?) years.

10 seems quie long to me.
All the financial advisors and pensions companies I've dealt with recommend moving your money to safe options in the last 5 years.
Is there a reason you quote 10 or was it just off the top of your head? (My reason for asking is I'd want to know if I'm wrong).

wotsthat

michaels wrote: »

So why all the excitement? Could it be that it is very easy cheap to cover 'news' and some people get caught up in the excitement because big numbers are being banded about without thinking about what impact it might actually have?

I'd hazard a guess that much of the money made in the markets is made on trading costs. People buying and holding aren't very profitable.

chucknorris

lisyloo wrote: »

10 seems quie long to me.
All the financial advisors and pensions companies I've dealt with recommend moving your money to safe options in the last 5 years.
Is there a reason you quote 10 or was it just off the top of your head? (My reason for asking is I'd want to know if I'm wrong).

Whatever anyone else tells you, there is an element of their opinion (not just facts) in it. But the FTSE took an awful long time to get back to its 1999 price. I think your age and whether you intend to eventually buy a house (and when) is relevant too. I did originally type 5-10 years, but then changed it to a ? with 10 years in brackets, simply because 10 years is my personal time frame.

chucknorris

wotsthat wrote: »

I think the irrationality is not in the markets but commentators trying to explain movements on an hour by hour basis.

Humans don't seem to cope very well with things just happening and need a narrative whether it's right or wrong.

Plus the markets often defy logic, so trying to explain it (or deciding when to invest), isn't that easy, hence the old saying 'time in the market' rather than 'timing the market'.

Graham_Devon

michaels wrote: »

So why all the excitement? Could it be that it is very easy cheap to cover 'news' and some people get caught up in the excitement because big numbers are being banded about without thinking about what impact it might actually have?

Could be - but why didn't you say this yesterday? With hindsight you say it after seeing the "impact".