Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[lewdog]

Does anyone know when options chains get updated? Is it at the end of a day or start of a day? Just curious when looking at numbers after a huge drop like today.

[Buehler445]

Originally Posted by lewdog

Does anyone know when options chains get updated? Is it at the end of a day or start of a day? Just curious when looking at numbers after a huge drop like today.

On the futures they are live. Or 15 M delay whatever you have. I don’t know about stocks.

[petegz28]

Originally Posted by lewdog

Does anyone know when options chains get updated? Is it at the end of a day or start of a day? Just curious when looking at numbers after a huge drop like today.

Your broker should show you option quotes in real time. What you see now should be how they closed.

[petegz28]

China and Japan down almost 3% right now. Think about this...granted we needed a correction and were due, but all of this violent selling and panic started because wage growth picked up just a smidge, jobless claims dropped and interest rates on the 10 year ticked up a whopping .3%

So because more people are working
And
People are making more money
And
Rates ticked up from an already low, low level of 2.5% to 2.8%

The market reacted by having some of the most violent and volatile sell offs, i.e. taper tantrums, in history

You'd think the ****ing world was coming to an end tomorrow

[lewdog]

Originally Posted by petegz28

China and Japan down almost 3% right now. Think about this...granted we needed a correction and were due, but all of this violent selling and panic started because wage growth picked up just a smidge, jobless claims dropped and interest rates on the 10 year ticked up a whopping .3%

So because more people are working
And
People are making more money
And
Rates ticked up from an already low, low level of 2.5% to 2.8%

The market reacted by having some of the most violent and volatile sell offs, i.e. taper tantrums, in history

You'd think the ****ing world was coming to an end tomorrow

The media has been pandering for a "correction" or "bear market" for 1+ years. Get a few days of investors taking profits off the table and people start seeing these selloffs as the peak of the market and the signaling of impending doom. It's a snowball affect. Does anyone think it's partially related to the amount of media and social media affect that so many see today on the markets? I really can't explain how this snowballed so quickly this week so that's just a thought.

The selloff was expected, but not at this type of weekly level. It's pretty crazy to say the least.

[petegz28]

Originally Posted by lewdog

The media has been pandering for a "correction" or "bear market" for 1+ years. Get a few days of investors taking profits off the table and people start seeing these selloffs as the peak of the market and the signaling of impending doom. It's a snowball affect. Does anyone think it's partially related to the amount of media and social media affect that so many see today on the markets? I really can't explain how this snowballed so quickly this week so that's just a thought.

The selloff was expected, but not at this type of weekly level. It's pretty crazy to say the least.

This isn't mere profit taking. This is a mini-crash. This has very little to do with social media and more to do with Wall St. being too smart for it's own good.

Yeah, we were due for a correction. But the violence is being triggered by things like the XIV and other VIX related derivatives that triggered the violence behind the selling.

Those derivatives triggered massive selling because of their piss-poor design. Once that started, that started triggering other selling via stops being hit, etc., etc. I am not a huge Jim Cramer fan but he nails this well on why this is happening the way it is.

There is no fundamental reason for the sell off to be this violent. But now because it has gone on for a few days, people are starting to fish for reasons that there might be some fundamental change. It's like a vicious cycle...it just starts feeding on itself.

More violent selling will trigger retail investors, people like you and me, to start selling which will exacerbate this even more.

And why? Ask yourself what is going on economically to justify such a panic?

[petegz28]

im Cramer, CNBC’s “Mad Money” host and resident “booyah” button pusher, isn’t exactly known for measured takes on the stock market.

And Thursday morning, with the Dow Jones Industrial Average DJIA, -4.15% in full retreat, certainly was no different.

Here’s what’s irking him about it all:

‘What bothers me is the people who have never looked at a stock and don’t know how to analyze it [are] out in full force today. They’ve never been better about not knowing anything about the stocks. They got it all figured out.’
Cramer also touched on the Vietnam war, his father and talking politics at the dinner table, but that’s all beside the point.

As for the wild market action, the former hedge-fund manager blamed a ”group of complete morons” trading leveraged volatility products for “blowing up” everything.

While he didn’t call them out by name, he could have been referring to that guy on Reddit who lost $4 million playing the XIV XIV, -18.14% . Or maybe that former Target TGT, -2.92% manager who is trying to recoup his losses by placing a $600,000 bet against volatility VIX, +20.66% .

Watch the full Cramer rant here:
https://www.marketwatch.com/story/ji...ket-2018-02-08

[petegz28]

Asian markets approaching the -4% levels....this is turning into a world-wide crash right now given the velocity of the selling

[Buehler445]

Originally Posted by lewdog

The media has been pandering for a "correction" or "bear market" for 1+ years. Get a few days of investors taking profits off the table and people start seeing these selloffs as the peak of the market and the signaling of impending doom. It's a snowball affect. Does anyone think it's partially related to the amount of media and social media affect that so many see today on the markets? I really can't explain how this snowballed so quickly this week so that's just a thought.

The selloff was expected, but not at this type of weekly level. It's pretty crazy to say the least.

Looking at a weekly chart, a correction on the weekly is very much due.

[petegz28]

Originally Posted by Buehler445

Looking at a weekly chart, a correction on the weekly is very much due.

Weekly of the SPY closed right at the first Fibonacci retracement (25%). It broke through it but came back and closed at it. The low today, yikes, is probably or at least hopefully an intermediate bottom. I suspect we will see some consolidation over the next couple of weeks. Given the current economic environment I wouldn't expect too much more selling. The economy is strong and one article today tried to say "too strong" in which I call bullshit. We are coming out of the slowest economic recovery in our history. Things that are happening now should have been happening for years.

The one risk is that the Federal Reserve should have started raising rates a long, long time ago so now they may have to play catch up.

That being said, people freaking out over 3% rates on the 10 year bond are idiots.

[lewdog]

How do you guys determine whether to use a stop loss vs stop limit order?

[Cornstock]

Originally Posted by lewdog

How do you guys determine whether to use a stop loss vs stop limit order?

Or if you have a true long term play, whether to use one at all. Like we talked about before, if you sell you're turning a paper loss to a realized loss, and potentially miss out on the recovery.

There has been a lot of talk in the past week about how the broad use of these by the casual investor and metrics based algorithms actually contributed to the decline by making the selloff a self fulfilling prophecy.

Ultimately comes down to whether you anticipate a continued and prolonged drop below previous levels, or if you (as I do) foresee a somewhat expedient recovery.

[Hog's Gone Fishin]

Originally Posted by Cornstock

Or if you have a true long term play, whether to use one at all. Like we talked about before, if you sell you're turning a paper loss to a realized loss, and potentially miss out on the recovery.

There has been a lot of talk in the past week about how the broad use of these by the casual investor and metrics based algorithms actually contributed to the decline by making the selloff a self fulfilling prophecy.

Ultimately comes down to whether you anticipate a continued and prolonged drop below previous levels, or if you (as I do) foresee a somewhat expedient recovery.

Yep, i've made a couple mistakes using stop loss by setting it too tight and regretting it. But thats not what Lew is asking. I think he wants to know in what circumstance you would use the limit stop loss vrs a stop loss .

[petegz28]

Originally Posted by lewdog

How do you guys determine whether to use a stop loss vs stop limit order?

Meh, use the stop loss. In a fast market a stop limit may not get filled. Of course in a fast market your market order could get a crap price. But it will get filled.

[Cornstock]

So maybe a new topic that hasn't been expanded on lately, for those of us who work with financial advisors:

We're entering a new market that we haven't been through for a while. Perhaps, gone are the days of blindly picking an ETF linked to the S&P500 and being able to return 20%.

In an era of potentially elusive returns, what advantage do you see in having an FA choose an allocation appropriate for you within a fund family and paying the sales charge for an A share, vs choosing an actively managed fund with a higher yearly wrap fee that can theoretically keep your portfolio constantly balanced, and (depending on how aggressive your strategy) position the portfolio to take advantage of opportunities based on that particular firm's research?

From a pure numbers perspective, an A share's upfront commission would buy you approximately 3 years worth of management in an actively managed portfolio. Since the actively managed portfolio assesses the fees as you go, more of your money is invested earlier on, so you're better able to capture gains early on.

After the first 3 years, is the fee worth it? If we look at the last couple years I wouldn't think so, but in a more challenging market that expertise may be able to seek out higher returns.

Thoughts?