Dead Cat Bounce / Don't try to Catch a Falling Knife
Warrior15
Anywhere there are Titties.
I worked for Wall Street firms for almost 20 years before I quit and started m own businesses. The industry has a lot of funny phrases when talking about the movement of stocks and the stock market.
Dead Cat Bounce - If a stock falls very quickly and a long ways, there is a point where bargain hunters will think they are getting a good deal. Those buyers will support the stock at a certain level and the stock may even rise a bit. This up movement is called a Dead Cat Bounce. When a cat falls off a tall building, it will bounce when it hits the ground. But when stocks fall a long ways very quickly, there is usually some bad news coming which will cause it to fall further. Then the stock goes of the second ledge and falls further. Many novice investors will get hurt by these bounces. Last week, the market had one of these bounces. Was the down movement over, no it was not.
Don't try to catch a falling knife - Similar topic. Stock is falling and falling. You see a stock that was 240, now it's 200, then 170, then 150. Gosh it's a bargain now, right ? But when stocks are falling real fast, you just don't know when that down movement will stop. Any value can get to be a better value.
My Merrill Lynch guy called me this morning. I"m sure he was just calling me to calm my fears. I wasn't worried but I am glad he called. I had forgotten that I had sold a lot of my holdings about a month ago and was sitting at about 35% cash. I would like to say that I saw this down movement coming but that would not be honest. I sold some things to position myself to start a new investment theme. I had been really busy and just hadn't taken the time to give them the green light for the new program. Sometimes you just get Lucky in life. Money went to work this morning. I"m already up several percent.
Now, did I catch the falling knife ? I'm not sure. But I bet I am going to be very happy in about two years that I put that money to work.
Dead Cat Bounce - If a stock falls very quickly and a long ways, there is a point where bargain hunters will think they are getting a good deal. Those buyers will support the stock at a certain level and the stock may even rise a bit. This up movement is called a Dead Cat Bounce. When a cat falls off a tall building, it will bounce when it hits the ground. But when stocks fall a long ways very quickly, there is usually some bad news coming which will cause it to fall further. Then the stock goes of the second ledge and falls further. Many novice investors will get hurt by these bounces. Last week, the market had one of these bounces. Was the down movement over, no it was not.
Don't try to catch a falling knife - Similar topic. Stock is falling and falling. You see a stock that was 240, now it's 200, then 170, then 150. Gosh it's a bargain now, right ? But when stocks are falling real fast, you just don't know when that down movement will stop. Any value can get to be a better value.
My Merrill Lynch guy called me this morning. I"m sure he was just calling me to calm my fears. I wasn't worried but I am glad he called. I had forgotten that I had sold a lot of my holdings about a month ago and was sitting at about 35% cash. I would like to say that I saw this down movement coming but that would not be honest. I sold some things to position myself to start a new investment theme. I had been really busy and just hadn't taken the time to give them the green light for the new program. Sometimes you just get Lucky in life. Money went to work this morning. I"m already up several percent.
Now, did I catch the falling knife ? I'm not sure. But I bet I am going to be very happy in about two years that I put that money to work.
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56 comments
Right now, maybe not even they can predict anything. But eventually things will stabilize and so they will always not more than you and know it sooner, so that your information will always be worthless.
SJG
it took over 350 TRADING DAYS to bottom out in 2008-2009. We are barely into whatever-this-is... Maybe? Who knows.
Or, delude yourself that you are smarter than the market. Jump in. Jump out. Change sectors. Buy an individual stock that your Uncle Mortie’s barber recommends. Brag to everyone about what a savvy investor you are. Then, wonder why you underperformed the market.
For the stupider people here Trump had a golden opportunity to show us, look I’ve come in contact with some folks that are infected and my test is negative calm down people, instead, it’s just more of the same stupidity
I’ve come to the conclusion that Dugan is just sad always looking for a fight, doesn’t care a bit about anyone except for his own ego, decided to turn your thread into his own personal display of jack assert.
Real damage has been and is being done well beyond Wall Street and right now it is disproportionately hitting those most vulnerable on the lower end of the economy - service workers (hotel maids, waitresses etc, etc). They are going to suffer from lack of business and are easily “let go”. I think it will also probably hit a few strippers where it hurts, in the purse.
Long term it will take quite a while to fully recover from this panic which the media is largely responsible IMO. But hey, they get to sell more newspapers and advance their agenda having yet another opportunity not to let a crisis go to waste.
On the positive side for TUSCL mongers I’d like to point out that after this week’s oil market turmoil the Mexican Peso has weakened by about 15% and is now 21.2 to 1 USD. So if you are headed to TJ your dollar will go further.
All of this. As if all of the hoarding and travel cancellations weren't bad enough, now we have whole school systems shutting down. All of this for something that isn't much deadlier than the common flu. This media led hysteria is getting tiresome now.
https://tuscl.net/discussions.php?group_…
It also explains why their demeanor is angry, confrontational, and lacking in humor. Trump’s election, and re-election, calls into question their self view of superiority.
SJG
A lot of this is luck but I'm guessing we're nowhere near a bottom in stocks.
Alan Blinder was out this morning with a common-sense WSJ article about the need for a massive increase of testing kits:
https://www.wsj.com/articles/the-best-st…
He writes about the best stimulus would be the knowledge about the extent of the epidemic. He also thinks the probability of a recession is more like 90% now and we already be in a recession.
TUSCL is always a clueless place for scientific literacy. Covid-19 is not the flu and the rest of you should be listening to MDs and epidemiologists who know what they're talking about. Epidemics like this grow exponentially and we're in the early stages. If we don't have policies that encourage social-distancing, something like half the population will get the virus. And if I had to guess, that is the end game: something like half the population gets the virus and epidemic subsides since half the population has developed an immunity.
Local precautionary measures have been increased.
But we are in the Allergy and Flu season. So people cannot tell if they have Covid.
I guess that eventually everyone develops immunity. So slowing it down of course does help.
The sooner though that that ponzi stock market can crash the better.
No one who has put money into it is innocent. But the sooner it crashes the less the innocent people who lose jobs and businesses. This is why ponzi schemes are illegal, because they do hurt innocent people.
SJG
SJG
SJG
SJG
===> "True in 7 of 11 historical drops it took a year or so either way to regain, the loss; however, the last two took eight and six years respectively. Some of us won't be here then."
Perhaps by "some of us' did you think that he was talking about you? 👍😉
SJG
SJG
SJG
Funny, I hope that I die with a Jack on the rocks in one hand and a stripper's ass in the other. But that's just me. ;)
With that said though, you should be afraid. You're old. Much like the flu, this virus is much more fatal to you than it is to younger folk. If I were you I might bunker down until mid-April.
Stock Market speculation is not logical. The problems start when people try to act like it is, rather than just admitting that it is a serious vice and waste of money.
SJG
>Some of us won't be here then.<
scroll up a few lines
If only it could stay down, but I realistically do not expect that, not until pre-Reagan taxation is restored.
SJG