Are people really this dumb? RE: Stock market rally today

[TheFarseer]

The official explanation I read was there were some pretty bad economic numbers. So bad that alot of people thought it was a sure thing the Fed would cut rates again. This caused people to buy into the market and the Dow jumped to a record high.

May I just say, so the f*ck what if the Fed cuts rates? Our economy will still suck and our currency will be garbage. Yeah, happy days are here again! India and China will still be graduating more engineers than we will be. Jobs will still be going overseas. The American auto industry will still be losing money. We will still be sending a huge portion of our cash to the Middle East for energy thus funding the enemy in our war on terror which is costing us perhaps a Trillion dollars. But our stock market is going up on the strength of BAD economic numbers. Can a nation with people this stupid running the economy survive?

[Redstone]

1. I got nothing in the way of an answer for you. That's why my investments consist of

cash stashed in a fireproof safe and gold coins buried in that back yard (just joking; they're in the safe as well).

No fucking way I'd bet MY money on an irrational thing like the Stock Market.

Redstone

[TheFarseer]

6. dang, I was just about to go digging in your backyard

gold is not a bad idea. I'm not sure Euros or something isn't an even better idea. Personally, I've just got most of my cash in CDs at the bank.

[MadMaddie]

2. Yea...they are that dumb and they keep listening to the bullshit

after 6 years you would think they would learn...

[MarianJack]

3. Our Beloved media,...

...whom, as I'm being lectred in another thread, should not be held accountable for the horseshit they pander, insists on reporting corporate profits as good economy.

[scarletwoman]

4. Yes. People are really that dumb. (nt)

[silverojo]

5. Shhhhhh!

You're making too much sense!

[TheFarseer]

8. LOL nice picture n/t

[TahitiNut]

7. It's not called "The Greater Fool Theory" for nuthin' ya know.

:shrug:

[lpbk2713]

9. It's all a shell game run by the evil BushCo regime.

About a year from now BushCo won't have any further need to manipulate Wall Street and a lot of people are going to lose their asses.

[nadinbrzezinski]

10. Yes

next question

[nightrider767]

11. The Market has nothing to do with the economy

It's a lie. The market is going up, because with the FED rate cut and promise of more to come, there will be more money to spend for investors. In the end the market doesn't give a crap about fundamentals or the economy, it just wants people with money to buy stocks. All that stuff you hear on CNBC is crap. Housing is bad, gold is going up, oil is going down... It's all psychological. Means nothing. People who want to buy and people who want to sell. that's what drives it.

And you might say, "well doesn't it help mom and pop with their 401k plan"?

I'd say Nooooo. Sure in the short term it looks like they'll be making money, but when we're hit with hyper-inflation and the markets fall on their collective asses, the fat cats will have bailed out long ago and mom and pop, who have been told to stay the course, will be left holding the bag. Alpo anyone?

The stock market is legalized gambling, the government only adds volativity to it.

Leave it alone.

[TahitiNut]

12. Don't forget that the pension funds are the ever-ready buyers once the fat cats climb off the pump.

Pump and dump. Pump and dump. There's NEVER a problem finding a pension fund buyer on the downside. After all, where else are the fund managers (obedient servants to wealth that they are) going to put the reserves? A mayonaisse jar? (Same goes for the insurance company reserves.)

[charlie]

19. Yup

And I notice lately the Social Security Cassandras are starting to squeal again. They're hopping in place to keep from wetting themselves in desperation. That fat motherlode of liquidity outside the casino, it's killing them.

[TahitiNut]

20. Well, I think corporate stock would be a great way to fund part of OASDI/HI.

Just enact a 2% sales tax on the sale or trade of corporate stock. The right wing wants a national sales tax? Start there.

:shrug:

[nightrider767]

23. The Difference Between The Fat Cats and

Mom and Pop 401k investors, is the Fat Cats understand the principal of selling the stock when things go bad. "Markets tanking in a big way? Screw it, sell it all" Why not?

I mean, I know tons of people who have 401k's. But they don't watch them or the markets very closely. The guys with the big money watch it every day like hawks and are ready to pull out or invest in another sector at a moments notice. It's an incredibly imbalanced playing Field.

ANd Bush,, Yeah baby, he wanted so to inject billions into the market through social security. Horrible idea.

Like you said. "Pump, Pump, find a chump". A day traders mantra. Long term traders are exactly the same, the game just plays out on a longer scale......

[Captain Angry]

13. There is a reason that people continue to invest.

Where else will a 401k go?

BILLIONS of dollars are invested every day by 401k plans into the funds that the plan carries.

Millions of workers can either turn down free money from their employer, and the tax break that comes from having the deposits tax-deferred.

Since there are automatically billions going into the market constantly, some people will ride along. It doesn't matter what happens to the economy, even if half the companies fail, there will still be cash going into these plans that needs a home.

Furthermore, there is an undercurrent of feeling that some companies will be bailed out. The last rate cut was explained as (paraphrasing) "It's more important to stimulate the housing market than to punish the people who over-reached."

Based on the vast amounts of money that are automatically withdrawn from paychecks and deposited into the market, there will always be momentum.

Will some people lose everything? You bet. Will some people reap incredible profit? You bet. For every share sold by a panicking investor, there HAS to be a buyer. Somebody believes that the stock has more upside than the seller did. Some will be right. Some will be wrong.

Long term thinking is a long dead art. Earnings announcements are quarterly. If you make enough profit in a short time frame, it will even offset the tax hit for selling early.

Something to keep in mind as well, with all of the leveraged buyouts that have been happening, a LOT of people are still buying companies in the hopes that the company will be bought out at a premium.

So, a lot of stuff going on, but due to the constant inflows from 401ks and pensions, a lot of people feel that those inflows will push the market up.

(Am I pessimistic? Hell yeah. But I also know how much money is going into the market. My 401k is in a money market fund, so I'm making a few hundred a month in interest if you will, but I am not losing anything more than anybody else to inflation.)

[Grey]

14. YES.

[pitohui]

15. i think you just don't get it, you're repeating an oversimplification

no matter how shitty the economy, some people have money to invest, a lot of it and they need a relatively safe haven to invest

with interest rates dropping the stock market is usually a pretty good bet -- it's better than putting it under the mattress and letting it lose all value to inflation, or to burglars, or to flood or fire

[Robbien]

18. Now that's the truth.

Heck, the list of the 400 richest people on the planet wasn't big enough for all the new hedge fund billionaires. It is a upsidedown world when a billionaire cannot get on the Forbes 400.

[TheFarseer]

28. actually, I think I do understand

although my OP doesn't demonstrate that. Like someone else said, 401k contributions all go into the market and more an more people are buying mutual funds on their own, thinking that over time there's no way they can lose, and maybe they're right. The increasing value of the stockmarket reflects this increased demand coming from increased capital provided in part by the 2 things I mentioned above and by uber-rich folks who are becoming even more uber-rich as time marches on. Couple this with a slower increase in supply of stocks than this demand and stocks almost have to go up. But isn't this still a pyramid scheme that is bound to fail at some point? I think that's the question that remains unanswered.

[pitohui]

31. the question is answered by another question -- do you believe in the future?

the stock market is a random walk upward, as i said in another post, if you believe in the future, that the world will grow more wealthy over time, because of new discoveries in technology, new ways to extract resources, new discoveries of where resources are, then it's going to get higher and higher over your lifetime

if you don't believe in the future -- if you believe the world will be destroyed by a meteor or nuclear war or global climate change destroying the great cities of the world (which are on water) -- then you have a different view

i would point out that if the world is destroyed and the value of the dollar/euro/etc. completely worthless it doesn't matter what you invested in, if it is not destroyed and in fact DOES grow richer it behooves you to have some investment in the market

my opinion only of course! if you lose your life savings and are vaporized in global thermonuclear war don't come back and yell at me because you didn't blow all your $$ smoking dope in amsterdam while you had the chance

but my view is there is no harm in splitting up your spare funds, yes, spend something today on that bottle of wine, but invest some too just in case the world DOESN'T end

[Swamp Rat]

16. Yes

[renie408]

17. I read this thing once about how they did a study where they asked an equal number of cabbies

and stock market analysts to predict what the market was going to do over the coming year.

There was no difference in the over all accuracy between the cabbies and the analysts.

[Captain Angry]

21. There are apparently only two sources that consistently beat the market.

Warren Buffet and the ValueLine Market Survey.

Everyone else has the same chance of picking the market's behavior as a monkey, a lava lamp or a moldy lump of cheese.

[nightrider767]

25. I'd disagree

There are plenty of people beating the marker. What percentage of small time investors on a consistent basis? I don't know, maybe 10%. Yep,,, one out of ten and that's probably high.

I do know one thing, if you're gonna play, you better be real hungry. It's like playing the violin. Not many casual adept players.

Ever bet on a pool game when you didn't have money to cover?

That's what I'm talking about.

[Captain Angry]

29. Plenty of people beat the market once in a while

Very few people can point to a track record.

The market can be totally irrational sometimes. If you have the information and a strategy that works, you don't have to bet big to win. Buffett's style doesn't strike me as the hungry style. He just gets to know what he knows, finds something he considers undervalued, and goes in.

Normal people have to bet scary to make it worth the returns if they're throwing around money they shouldn't be using in the first place.

And no, I'm so bad at pool that I know better than to bet. :-)

[nightrider767]

33. I think you're right

I'd say overall you're definitely more right than I am on this one. For investing, the Buffet style is probably the best. Find something that is fundamentally very strong and undervalued and buy and .

Seems like t a big fat bore to me. But it certainly is a wise way to go about business.

[pitohui]

22. that book was written by a cabbie, he went bankrupt

i'm just saying -- not 100 percent sure it's been a long time, but i think it was wade davis

[renie408]

24. No, I read this in a book recently...'Blink'?? maybe?

I will try to figure it out. This was an actual study.

[pitohui]

27. i did read "blink" but it went in one ear and out the other

infuriating book, it seemed like more than it was, didn't it? i was hoping to find some secret to making better "instant" decisions but there aren't any real shortcuts are there?

to my understanding --
the dart-throwing chimp or the cabbie doesn't make better (or worse) stock market decisions than the "expert" because the market is not that kind of game, it's a random walk upwards (upwards because you assume the world is steadily growing richer thanks to new discoveries of technology and resources -- therefore education doesn't help you make better decisions about it other than buy and hold) so the "expert" has no edge

i'm not telling you about your study, tho, i don't remember about it, what i'm repeating is pretty old truism about the market

[StrongBad]

26. Nothing out of the ordinary going on here

Fed rate cuts in fact DO (although indirectly) effect the macroeconomy.

By cutting interest rates the Fed is increasing the money supply by making it easier to borrow money. With an increased money supply that injection of now easier borrowed funds has to go somewhere. When people borrow money from a bank, 99% of the time it's for something useful - be it to buy a house, start a business, etc.

So, one could see how the investor class interprets the possibility of another rate cut as good for business.

[whoneedstickets]

30. Its a run up to the 20th aniversary of Black Monday October 19

The guys planning to sell short need a bump now to give them some wiggle room later.

[earth mom]

32. The stock market is up so "everything is fine"=the biggest LOAD of CRAP they are feeding the public!

:puke: