The Stock Market

Seems to me that the Fed is rly nervous

tripping over its words, knocking things over. buck up, fed!

i'm actually kinda pissed off about this -- if they make the deposit to my 401(k) today (as they should), then i'm buying HIGH ;_;

what's funny is that one day the dow does well, the papers all go "economy is great! ignore the naysayers!", then the next day it plunges 300 points and it's "1987 all over again??!?!??" then the next day it surges, etc. etc. etc.

http://en.wikipedia.org/wiki/Bipolar_disorder

what's funny is that one day the dow does well, the papers all go "economy is great! ignore the naysayers!", then the next day it plunges 300 points and it's "1987 all over again??!?!??" then the next day it surges, etc. etc. etc.

100% of what the financial presses say is designed to sell papers. Maybe 20% of this overlaps with what's actually useful and/or accurate.

And that's not even to mention the way the non-financial press covers the economy.

http://static.howstuffworks.com/gif/crack-15.jpg

I only have 401ks and IRAs. I'm not going to see that money for 40 years.

fed reserve and european central bank = the cash money brothers.

i cant see how this, when it plays out, is merely a recession

In Praise of a Virtual Crash

The interesting element in the tragicomedy on the stock exchanges in recent months is the uncertainty as to whether a catastrophe has occurred. Has there been a 'real' catastrophe? Will there be one? The answer is: the catastrophe is a virtual one, and there will be no real catastrophe because we live under the sign of virtual catastrophe. This is connected with a state of affairs which was shown up strikingly here: the discrepancy between the fictional economy and the real economy. It is this discrepancy which protects us from a real catastrophe of the productive economies. Is this a good or a bad thing? It is exactly the same as the discrepancy between orbital wars and land wars. Land wars go on everywhere, but nuclear war has not broken out. If the two were not disconnected, the nuclear confrontation would have erupted long since. We are dominated by bombs and virtual catastrophes which do not explode: the international stock market crash (this has not really eventuated and it will not), nuclear war, the third-world debt, and even the demographic time-bomb. One could, of course, argue that all these things will inevitably blow up in our faces one day, just as there has long been a prediction that, within the next fifty years, an earthquake will surely see California slide into the Pacific. But the facts are clear: we are in the situation where the catastrophe does not eventuate; in a situation of virtual catastrophe -- eternally virtual catastrophe.

This is how things are for us; it is the only reality objectively facing us: a wild, orbital round-dance of capital which, when it breaks down, produces no substantial disequilibrium in real economies (unlike the 1929 Crash, when the fictional and the real economies were by no means as disconnected, and, as a result, the catastrophe within the one had an impact on the other), either because real economies are themselves so speculative that they absorb more easily today what they could not absorb in 1929, or because the sphere of virtual capital has become so autonomous, so orbitalized, that it can in some cases proliferate -- or even devour itself -- without leaving any trace. It does, however, leave at least one catastrophic trace: the crash that has occurred has not been so much in the economy as in economic theory, which is now at a total loss before this explosion of its object. For everything has become a problem of communication. In the orbital sphere of capital, there is wonderfully good communication (the perverse computers and the 'golden boys,' who are themselves computing machines). This is the reason why it is in a permanently catastrophic state: the communications are too good. On the other hand, between the two spheres (of the virtual and the real), there is no longer any communication. Fortunately or otherwise. For it is this break between the two, this loss of a referent on the part of the virtual economy, which enables it to produce prodigious effects, but it is also this which protects the real economy from the catastrophes which may occur in the other sphere.

...There was, admittedly, a crisis in 1929, and an explosion at Hiroshima, and hence there was a moment when these two worlds explosively contaminated each other, a moment when the economic slump and nuclear warfare were real, but we should not be misled by this as to what was to follow. Capital has not lurched from one crisis to another, each worse than the last (as Marx argued it would), nor have we lurched from one war to another. The event took place once and that is all. What came after was something quite different: it was the hyper-realization of big finance capital, the hyper-realization of overkill capacity, both orbitalized above our heads and of course quite beyond our grasp, and a course which is, fortunately, also beyond the grasp of reality itself. Hyper-realized war and hyper-realized money circulate in an inaccessible space, but in doing so they leave the world just as it is. In the end, the economies continue to produce, whereas the tiniest logical consequence of the fluctuations in the fictional economy would long ago have sufficed to wipe them out (let us not forget that in the daily figures for international trade, only 100 billion dollars goes on commercial transactions, while capital movements stand at 900 billion).

...When the debt becomes too burdensome we expel it into a virtual space, where it appears as a catastrophe frozen in orbit. The debt becomes a satellite of the earth, just as war has become a satellite of the earth, just as the billions of dollars of speculative capital have become a satellite-heap, revolving endlessly around the planet. And it is, no doubt, better that it should be that way. While they are revolving -- and even if they should explode in space (as the billions 'lost' in the 1987 crash did) -- the world is not changed by them, and this is the best we can hope for. The 'rational' hope of reconciling the fictional and real economies is entirely utopian: these billions of dollars exist only virtually; they cannot be transposed into the real economy. And a good thing too, for if they could by some miracle be re-injected into the production economies, that would spell real catastrophe. ...

-- Jean Baudrillard
March 2, 1988

wow he kind of recycled that "INVISIBLE CRASH/WAR" thing, no? baudrillard has the bullshitting skills that could have earned him serious bank in the city.

i cant see how this, when it plays out, is merely a recession

It's almost like you're looking forward to it ;)

The Sun comments box on all this is very entertaining right now.

Sell hell on Black Thursday
Why should people lose money because these spotty little stockbrokers have wet their nappies? These people are grossly overpaid parasites who have never done a day's work in their lives, so how on earth can they judge the performance of businesses where people really work?

baudrillard has the bullshitting skills that could have earned him serious bank in the city.

he woulda been great on the stand too. "your honor my next witness will demonstrate conclusively that the money my clients lost did not even exist."

recession????

woohoo i put loads of money in savings accounts and stuff

does that mean i'll be able to afford to buy a house soon?

is that how it works?

i'm fascinated by this whole stocks/shares thing, esp the spate of articles in sunday papers about the horrors of it all. but i dont really understand what it is, or how it works - can someone recommend an idiots guide to the whole thing?

and also a good book by say some 80s wall street guy who lived highs/lows, made millions, lost it all, etc

What's your most successful investment?

I've had my share of quick doubles and triples as a penny stock trader, but nothing that approaches a stock that I put my friend in, it was QBID, this was late '03, I got him in at .0001 and in 2 days it began moving up and was at .035 in a week. He invested a whopping $150 which would have been worth over $50,000 except he sold it the day after he bought it, for breakeven. I think in the entire index of pennies and pinksheet stocks there's only been like 2 that have exceeded that performance since.

haha, if the dude didn't sell at the right time, that's not "performance" at all!

I mean that's a little like saying "My most successful investment ever was that time I thought about buying IBM before it got huge"

can someone recommend an idiots guide to the whole thing?

http://ecx.images-amazon.com/images/I/61W6GM8VD7L._AA240_.jpg

oh noodle you are a one.

anyone got better suggestions?

James Cramer, Confessions of a Street Addict

a good book by say some 80s wall street guy who lived highs/lows, made millions, lost it all, etc

Victor Niederhoffer, Education of a Speculator actually fits that description more accurately (made/lost billions) but Cramer's book is a much snappier read.

yeah but jim cramer is a bastard

OTM freakshow

there are several good or at least interesting recommendations on barry ritholtz's site. I really am a slobbering bigpicture fanboy at this point. he should sell t-shirts.

Dailyspeculations.com for models + charts + spec musings galore.

To specs, "value trading" is a huge diss.

I'm a macro guy though. I put my money in mutual funds by sector and use spider/index funds as my "hedges." I don't have the time or the inclination to be a serious trader, especially with all the nasty stories I keep reading from my macro sources etc. what's the old stat, private traders only do 85% as well as the indices?

I "hedge" Spiders, Diamonds, and the Qs against foreign funds (Blackstone India closed-end ETF, Matthews India and U.S Global European emerging markets) and speculate on a bunch of single stocks that have been straight line tanking since January.

Yes, perhaps only 10% of private funds outperform. You're better off on the pass line at a crap table than using an FA, IMHO.

what's the old stat, private traders only do 85% as well as the indices?

I'd be surprised if it was even that high

bloodbath

Rolling US Economy Into The Shitbin Thread

from www.dailyspeculations.com

Path of Least Resistance, from Victor N1ederhoffer
March 11, 2008 | 4 Comments
The moves this Friday, Monday and Tuesday remind me of a good baseball swing, or for that matter what any good athlete does vis a vis economy of motion. Recapitulating exactly the Friday, Monday and Tuesday of the big French bank frontrunning move

Rodger B4stien replies:
The bigger question is whether this batter does what I too often did, which is once I found my stroke, I swung harder, many times losing my rhythm in the process.

Stefan Jov4novich adds:
Chili Davis says he has the same problem. Each time he walked up to the plate, he would mutter to himself "70%, 70%." That was how hard he should swing to allow his stroke to do its work. That didn't keep him from over-swinging or from displaying his enormous strength when frustrated, but he says it helped. Once upon a time at Candlestick I saw Davis, while walking back to the dugout after striking out, raise one knee up to waist level and break his bat into two pieces. He didn't break stride.

I love N1ederhoffer.

So I have a question about stock "valuation":

In a large, publicly held company with widely dispersed shareholders, we pretty much accept that shares don't represent any kind of "control" for most holders, and also that they don't represent any kind of substantial right to profit-sharing (since dividends are generally either small or 0). So isn't most stock investment, whether short-term or "buy and hold" effectively speculation, and if so, doesn't the "value" of a share of stock derive purely from the future expectation of a higher value? And if so, what the fuck does it all mean?

Or does the fact that a stock share carries a kind of hypothetical control right (if someone were to buy up enough of them) give it a kind of stored/potential value that has some tangible connection to the actual value of the company as a going concern?

by value you mean dollars and cents or why someone would want to own it?
i think i know (or learned it before) but not sure if i understand the question

I mean dollars and cents but as a reflection of why someone would want to own it. I mean the only reason anyone pays $51 for a share of WhizCo is because they think they can sell it for more later, and this is true whether you plan to hold for 10 minutes or 20 years. So what does the price actually reflect other than a bet on a higher price, and if so isn't it just bets all the way down?

(the only reason unless someone is trying to buy a genuine ownership stake in a company)

i mean, it's basically just a claim to the company's future profits, right? those may or may not be paid out as dividends, but if they're not they are at least in theory being reinvested back into the company because it has such excellent, high-return uses for them.

it is just a bet or a way to have wealth that isn't cash unless you really want to have a controlling share. that's it, isn't it? you give them money to do stuff with the business and in exchange you get the chance that your share will eventually be worth more than what you paid for it (as opposed to buying an ownership stake in equipment or inventory or products, which could be arranged in another type of organization that's not a corporation). but different types of stockholders might see different value in the same thing. like a hedge fund for example would see more "value" in acquiring additional shares so it can manage the company. if you just want to sit on it, another share would be less valuable to you. right?

how latency arbitrage picks $3 billion from your pockets

http://www.dailyfinance.com/story/investing/rigged-market-latency-arbitrage-3-billion/19503388/

The practitioners of latency arbitrage make money in two ways: They locate their computers as close as they possibly can to the electronic exchanges that execute their trades, and they pay exchanges to give them actual stock price information before that raw data gets consolidated and sent to most other market players.

a latency as low as 100ms allows traders who have paid more for their closer spot to the exchange server can then generate revenue through automated short-sells predicting the other automated trades

$3 billion

Taking no risk at all, except for the $1.8 billion they pay to the exchanges each year to locate their servers right next to the exchange computers, these latency arbitrageurs make between one and three cents on each trade by getting that tiny jump on you. And despite the volatility in the broader markets during that time, the latency arbitrageurs have been steadily profitable for the last four years.

Maybe it's just me but these stock visualizations are pretty cool (requires java and flash)

FinViz Financial Visualizations
StockMapper.com Heat Maps (click on a market)

I kind of wish there was a stock mapper for uncommon stocks. Maybe there is?

I'm about to start a minimal amount of day trading. I know that June is a terrible time to start. Once my electronic funds transfer goes through on monday I will start trading with real money for the very first time.

Anyone have real tips or suggestions?

I kind of wish I had a way of keeping up on stock press releases. I can easily find stock news with google but I just want all the good press for individual stocks right when they come out. Most websites will post news on just a few stocks that are getting tons of press.

long position on silver

i would wait a few weeks (or months) before trading stocks though, until the greece situation is sorted out

"Sell in May then go away" has supportive history but I have to try to use my 100 commission free trades I get for a month after my initial funds transfer. Anyways, the thing about day trading is that you get a better outlook than with long trading because intraday trading is more predictable - especially when there is good press.

So starting monday I will change my username to account for the measly $700 initial investment and then I will periodically change my user name so that people will see how well I am doing :)

intraday trading is more predictable

fuck no, just look at today's dow chart

i guess it's probably easier to predict the next 4 weeks than the next 4 hours