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You don't make or lose money in the market based on the daily start and finish prices in the market, you make or lose money when you execute your trade, which h

You don't make or lose money in the market based on the daily start and finish prices in the market, you make or lose money when you execute your trade, which happens intra-day. The market might have "only" been down 347 points at the end of the session, but many investors bought or sold investments when the market was down 990 points. Coverage of this is not overblown, yesterdays events were extremely rare and quite damaging for many investors who were forced to sell at the low intra-day points in the market (via stop-losses and margin calls)

loumf 17y ago
Even so, Brian Williams compared it to 9/11 -- that's pretty over the top.
- jonknee 17y ago
  He compared the feeling of it--no one knowing what's happening, fear/chaos, etc. Not the after-effects.
brown9-2 17y ago
And how many investors were caught in margin calls? Surely a small minority participate in margin investing. If it was damaging for some people then it must have been equally profitable to those who held short positions and managed to close them out during the nosedive. My point isn't about making or losing money in a single afternoon, my point is that we as a society are placing way too much importance on the daily or intradaily movements of a single index, rather than taking the longterm view. Do we really think that the stock market is rational in the very short term? I think the events of the past 5 years have pretty thoroughly disproved that. Yes it was a rare event, and I suppose that is newsworthy in itself, but is it an important event? Edit: your point about how one loses money based on the intra-day ignores investors who have held positions for longer than the start of the day's trading session. If I'm up 200% over the past two years and I desire to continue to hold my positions, does a drop of 900 pts matter to me if the price rebounds at the end of the day or the end of the week? No.
- blantonl 17y ago
  You are exactly correct, there are two sides to every trade. The remarkable, important, newsworthy event was the extreme transfer of wealth that occurred yesterday. And you are also correct, buy and hold investors were not necessarily impacted. But the comment "a small minority participate in margin investing" is very incorrect - what do you think hedge funds do for a living? The individual investor makes up a very very very small percentage of volume on the exchanges. Institutional investors who borrow large amounts of money to amplify returns (read: hedge funds) make up a majority of the volume during periods of high volatility.
  - brown9-2 17y ago
    So I guess what I am asking is how important is it if a bunch of hedge funds have a very bad afternoon? Does it matter in the long-run? I suppose the answer is that "only time can tell". I just feel as if the media pays way too much attention to the daily movements of an index with just 30 stocks in it, and that they have trained our society to do the same. I fear that paying such a disproportionate amount of attention and importance to such a relatively-not-important thing such as the daily movement of the Dow index is ultimately bad for all of us, because it leads to poor decision-making.
yummyfajitas 17y ago
The market might have "only" been down 347 points at the end of the session, but many investors bought or sold investments when the market was down 990 points. Only the foolish ones. If you are long term investing, you can afford to wait a couple of days to see what happens as a result of that spike.

loumf 17y ago

Even so, Brian Williams compared it to 9/11 -- that's pretty over the top.

jonknee 17y ago
He compared the feeling of it--no one knowing what's happening, fear/chaos, etc. Not the after-effects.

brown9-2 17y ago

And how many investors were caught in margin calls? Surely a small minority participate in margin investing. If it was damaging for some people then it must have been equally profitable to those who held short positions and managed to close them out during the nosedive. My point isn't about making or losing money in a single afternoon, my point is that we as a society are placing way too much importance on the daily or intradaily movements of a single index, rather than taking the longterm view. Do we really think that the stock market is rational in the very short term? I think the events of the past 5 years have pretty thoroughly disproved that. Yes it was a rare event, and I suppose that is newsworthy in itself, but is it an important event? Edit: your point about how one loses money based on the intra-day ignores investors who have held positions for longer than the start of the day's trading session. If I'm up 200% over the past two years and I desire to continue to hold my positions, does a drop of 900 pts matter to me if the price rebounds at the end of the day or the end of the week? No.

blantonl 17y ago
You are exactly correct, there are two sides to every trade. The remarkable, important, newsworthy event was the extreme transfer of wealth that occurred yesterday. And you are also correct, buy and hold investors were not necessarily impacted. But the comment "a small minority participate in margin investing" is very incorrect - what do you think hedge funds do for a living? The individual investor makes up a very very very small percentage of volume on the exchanges. Institutional investors who borrow large amounts of money to amplify returns (read: hedge funds) make up a majority of the volume during periods of high volatility.
- brown9-2 17y ago
  So I guess what I am asking is how important is it if a bunch of hedge funds have a very bad afternoon? Does it matter in the long-run? I suppose the answer is that "only time can tell". I just feel as if the media pays way too much attention to the daily movements of an index with just 30 stocks in it, and that they have trained our society to do the same. I fear that paying such a disproportionate amount of attention and importance to such a relatively-not-important thing such as the daily movement of the Dow index is ultimately bad for all of us, because it leads to poor decision-making.

yummyfajitas 17y ago

The market might have "only" been down 347 points at the end of the session, but many investors bought or sold investments when the market was down 990 points. Only the foolish ones. If you are long term investing, you can afford to wait a couple of days to see what happens as a result of that spike.