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I hate to be nitpicking about good news, but the S&P 500 is down less than 7% from it's peak, that's hardly a crash. Especially after gaining 26% over the previ

I hate to be nitpicking about good news, but the S&P 500 is down less than 7% from it's peak, that's hardly a crash. Especially after gaining 26% over the previous year. And, after increasing over 90% the last 5 years. Obviously, either way a decline in the stock market indexes is good news for almost everyone. I'm hoping for a real crash as I need to save lots more money, not just for my retirement but also for my kids college.

dvfjsdhgfv 9y ago
> Obviously, either way a decline in the stock market indexes is good news for almost everyone. I'm hoping for a real crash as I need to save lots more money, not just for my retirement but also for my kids college. Could you elaborate?
- lorenzq 9y ago
  You don't want to buy your groceries when they're not on sale.
  - optimuspaul 9y ago
    because that would be stealing? :p Seriously though, I think this is a bad analogy. I buy groceries when I need groceries, sales have little bearing on that. A car however, that is something that wait for a deal before I buy.
    - Normal_gaussian 9y ago
      My car costs me about the same as my groceries over the same period of time; they are very comparable in price. As for sales - buying in season and buying in bulk saves huge amounts of money, a larger %age than I expect to get off a special deal on a car.
      - marcosdumay 9y ago
        Closely controlling all of your grocery prices costs way more labor than closely controlling all of your car prices. That said, I do adjust the amount I buy from groceries based on the current price. It's a cheap (in labor) way to save on them, but has lower gains than actively searching for deals.
    - tialaramex 9y ago
      For groceries that don't keep, you are obliged to buy when you need them, although because humans are omnivores you _can_ choose to eat steak only when steak is cheap or eat raspberries only when raspberries are cheap and save quite a bit that way. However most peoples' grocery shopping includes staples that have a relatively long shelf life if stored sensibly. Those who aren't dirt poor can and should purchase larger volumes of these products at lower prices if they know lower prices are not always available. This is one of many ways that being poor is expensive, your financial status makes it impossible to invest up front on bulk items that would be cheaper over the medium term.
- valuearb 9y ago
  Buffett had a good quote about it once that I can't find now, but essentially during most of your life you will be a net buyer of stocks. Only at the end, during your retirement, will you be a net seller and only then will you want high prices. Until then, the less you pay for your stock purchases, the better your long term gains will be.
  - hsitz 9y ago
    Another way of thinking about it is: on average, stock value over the long term (20+ years) is very likely to be in range of, say, 5%/year, plus or minus (actual number is not that important for our purpose here), after adjusting for inflation. If stocks have been on a recent runup, gaining, say, 50% or 100% over a period of a few years, then they are very likely to grow more slowly than average (i.e., revert to the mean) over the coming years. If you buy during period of inflated prices you will realize a lower than average return if you're holding over the long term. Robert Shiller (Yale finance professor, of Case/Shiller housing index) likes to make the following analogy. Predicting the stock market is basically the opposite of predicting weather. With weather our short-term predictions can be fairly accurate, but our long term predictions are very poor. With the stock market it's the reverse, short-term predictions are worthless, but long term predictions are generally fairly accurate.
    - enoch_r 9y ago
      > they are very likely to grow more slowly than average (i.e., revert to the mean) I mostly agree with you, but this is basically the gambler's fallacy. If I'm flipping a coin every second for days, and I hit a run of 10 heads in a row, "reversion to the mean" just means that the next 10 flips are likely to be less extreme than the previous 10. It does not mean that I should expect "more tails than usual" for the next flips. We revert towards the mean, not past it.
      - poke111 9y ago
        No. The gambler's fallacy is when we ascribe dependency to independent events. Stock performance tomorrow is very much NOT independent of stock performance today, e.g. "market correction"
- IncRnd 9y ago
  The meaning is to Buy when the market dips, and sell when the market goes up.
tardo99 9y ago
Just wait.
- deleted 9y ago
  [deleted]
branchless 9y ago
Totally agreed. The run over the last 5 years is massive. A modest drop is hardly going to clean out most "investors". Most people won't benefit from the crash because they have no savings to buy the dip. What we need is jobs that pay and land prices that are not gouging productivity increases.
t3po7re5 9y ago
There was a flash-crash that started around 3PM EST and recovered by 3:16
- ganeshkrishnan 9y ago
  This probably spiked the VIX The fear index went up like crazy
  - drchiu 9y ago
    Was 35 I think. They temporary halted inverse derivatives like SVXY.
    - daxorid 9y ago
      I highly doubt the halt will be very temporary. SVXY and XIV are undergoing forced unwinds after-hours and will very likely be terminated. XIV in particular terminates at an 80% position loss, per its prospectus.
      - Hasz 9y ago
        Credit Suisse is not obligated too, but it's likely they will.
        marshray 9y ago
        Even if it's all by the contract, one would suppose an issuer would think very hard before doing that. It could taint their brand, their other leveraged ETFs, or even bring down more regulations.
        cm2187 9y ago
        Barclays did that I think in 2011. Their ETN was badly designed, the termination event was based on an absolute $ price, not a % movement.
      - 9y ago
JKCalhoun 9y ago
Not a crash, but the gains of January have just been wiped out in the few days of February trading.
- zaroth 9y ago
  It is the nature of the stock market to make money slowly and take some of it back quickly. It corrects, retrenches, and in time, exceeds its prior high. Not trying to time the market is boring, and doesn’t sell clicks. But not trying to time the market is the only strategy guaranteed to win, unless an asteroid hits the planet, in which you don’t care about your USD anyway.
- exolymph 9y ago
  If you're a normal person, not a day-trader, the time horizon your investments should be on the order of years, not months. If you're a day-trader, then this is just one of the risks of that choice.
  - cinquemb 9y ago
    If you're a normal person, who had a decently sized/exposed market retirement account in 2007, it took you about a decade to get back to the same level, inflation adjusted. That's a lot of risk for chasing inflation adjusted returns… Not to mention, there are a couple short volitilty ETFs that will be terminated soon, hope some long term ETF buyers won't be exposed to them or any big names they are holding who were exposed, because we're not done yet…
    - refurb 9y ago
      If you're a normal person, who had a decently sized/exposed market retirement account in 2007, it took you about a decade to get back to the same level, inflation adjusted. Jesus! What was this average person invested in? From the bottom of the market to back to the prior peak was 3 years for me. And I was so heavy in equities I lost 1/3 of my portfolio's value. Where does this "decade" come from? The DJIA is nearly 90% higher than the peak pre-2008. And I know you said inflation, but that has been 1-2% per year since then.
quotha 9y ago
Nikkei 225 Hit All-Time High of 38,957.00 on December 29th, 1989.
- matwood 9y ago
  So are you making the case the US is going through a systemic change away from growth, and will start a multi-decade economic contraction?
  - astrodust 9y ago
    Even during the darkest days of the "lost decade" in Japan their companies never gave up on manufacturing and innovating. There were struggles, failures, but also successes. In that time Sony managed to dominate televisions and, later on, game consoles. The level of utter destruction the US economy will face if it continues to double down on hedge-fund style acquisition/mergering of every one plus dog is hard to fathom, but it will be considerable. The remaining manufacturers are being managed into the ground, everything they do is being out-sourced, "streamlined", and systematically destroyed. I wouldn't be surprised if the handful of companies that still make things in the US, like Ford, Boeing, and General Electric, are bought up, "reorganized" and sold off piecemeal, squeezing some juicy shareholder value out of them before throwing out the husk. You have to do more than "invest" in things in order to have a functional economy. Shares don't employ people, sales of product and services do, and if people can't afford those products or services because you laid them all off as a cost-saving measure then you're doomed.
    - DaniFong 9y ago
      This.
    - valuearb 9y ago
      Try building something without capital. It's really really hard.
      - astrodust 9y ago
eanzenberg 9y ago
That's great! I hope you feel good profiting off the market crashes that affect millions of people.
- dang 9y ago
  Personal attacks will get you banned here. We've warned you about this several times before. I don't want to ban you, but you do need to clean up your act if you want to keep commenting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

dvfjsdhgfv 9y ago

> Obviously, either way a decline in the stock market indexes is good news for almost everyone. I'm hoping for a real crash as I need to save lots more money, not just for my retirement but also for my kids college. Could you elaborate?

lorenzq 9y ago
You don't want to buy your groceries when they're not on sale.
- optimuspaul 9y ago
  because that would be stealing? :p Seriously though, I think this is a bad analogy. I buy groceries when I need groceries, sales have little bearing on that. A car however, that is something that wait for a deal before I buy.
  - Normal_gaussian 9y ago
    My car costs me about the same as my groceries over the same period of time; they are very comparable in price. As for sales - buying in season and buying in bulk saves huge amounts of money, a larger %age than I expect to get off a special deal on a car.
    - marcosdumay 9y ago
      Closely controlling all of your grocery prices costs way more labor than closely controlling all of your car prices. That said, I do adjust the amount I buy from groceries based on the current price. It's a cheap (in labor) way to save on them, but has lower gains than actively searching for deals.
  - tialaramex 9y ago
    For groceries that don't keep, you are obliged to buy when you need them, although because humans are omnivores you _can_ choose to eat steak only when steak is cheap or eat raspberries only when raspberries are cheap and save quite a bit that way. However most peoples' grocery shopping includes staples that have a relatively long shelf life if stored sensibly. Those who aren't dirt poor can and should purchase larger volumes of these products at lower prices if they know lower prices are not always available. This is one of many ways that being poor is expensive, your financial status makes it impossible to invest up front on bulk items that would be cheaper over the medium term.
valuearb 9y ago
Buffett had a good quote about it once that I can't find now, but essentially during most of your life you will be a net buyer of stocks. Only at the end, during your retirement, will you be a net seller and only then will you want high prices. Until then, the less you pay for your stock purchases, the better your long term gains will be.
- hsitz 9y ago
  Another way of thinking about it is: on average, stock value over the long term (20+ years) is very likely to be in range of, say, 5%/year, plus or minus (actual number is not that important for our purpose here), after adjusting for inflation. If stocks have been on a recent runup, gaining, say, 50% or 100% over a period of a few years, then they are very likely to grow more slowly than average (i.e., revert to the mean) over the coming years. If you buy during period of inflated prices you will realize a lower than average return if you're holding over the long term. Robert Shiller (Yale finance professor, of Case/Shiller housing index) likes to make the following analogy. Predicting the stock market is basically the opposite of predicting weather. With weather our short-term predictions can be fairly accurate, but our long term predictions are very poor. With the stock market it's the reverse, short-term predictions are worthless, but long term predictions are generally fairly accurate.
  - enoch_r 9y ago
    > they are very likely to grow more slowly than average (i.e., revert to the mean) I mostly agree with you, but this is basically the gambler's fallacy. If I'm flipping a coin every second for days, and I hit a run of 10 heads in a row, "reversion to the mean" just means that the next 10 flips are likely to be less extreme than the previous 10. It does not mean that I should expect "more tails than usual" for the next flips. We revert towards the mean, not past it.
    - poke111 9y ago
      No. The gambler's fallacy is when we ascribe dependency to independent events. Stock performance tomorrow is very much NOT independent of stock performance today, e.g. "market correction"
IncRnd 9y ago
The meaning is to Buy when the market dips, and sell when the market goes up.

tardo99 9y ago

Just wait.

deleted 9y ago
[deleted]

branchless 9y ago

Totally agreed. The run over the last 5 years is massive. A modest drop is hardly going to clean out most "investors". Most people won't benefit from the crash because they have no savings to buy the dip. What we need is jobs that pay and land prices that are not gouging productivity increases.

t3po7re5 9y ago

There was a flash-crash that started around 3PM EST and recovered by 3:16

ganeshkrishnan 9y ago
This probably spiked the VIX The fear index went up like crazy
- drchiu 9y ago
  Was 35 I think. They temporary halted inverse derivatives like SVXY.
  - daxorid 9y ago
    I highly doubt the halt will be very temporary. SVXY and XIV are undergoing forced unwinds after-hours and will very likely be terminated. XIV in particular terminates at an 80% position loss, per its prospectus.
    - Hasz 9y ago
      Credit Suisse is not obligated too, but it's likely they will.
      - marshray 9y ago
        Even if it's all by the contract, one would suppose an issuer would think very hard before doing that. It could taint their brand, their other leveraged ETFs, or even bring down more regulations.
        cm2187 9y ago
        Barclays did that I think in 2011. Their ETN was badly designed, the termination event was based on an absolute $ price, not a % movement.
    - 9y ago

JKCalhoun 9y ago

Not a crash, but the gains of January have just been wiped out in the few days of February trading.

zaroth 9y ago
It is the nature of the stock market to make money slowly and take some of it back quickly. It corrects, retrenches, and in time, exceeds its prior high. Not trying to time the market is boring, and doesn’t sell clicks. But not trying to time the market is the only strategy guaranteed to win, unless an asteroid hits the planet, in which you don’t care about your USD anyway.
exolymph 9y ago
If you're a normal person, not a day-trader, the time horizon your investments should be on the order of years, not months. If you're a day-trader, then this is just one of the risks of that choice.
- cinquemb 9y ago
  If you're a normal person, who had a decently sized/exposed market retirement account in 2007, it took you about a decade to get back to the same level, inflation adjusted. That's a lot of risk for chasing inflation adjusted returns… Not to mention, there are a couple short volitilty ETFs that will be terminated soon, hope some long term ETF buyers won't be exposed to them or any big names they are holding who were exposed, because we're not done yet…
  - refurb 9y ago
    If you're a normal person, who had a decently sized/exposed market retirement account in 2007, it took you about a decade to get back to the same level, inflation adjusted. Jesus! What was this average person invested in? From the bottom of the market to back to the prior peak was 3 years for me. And I was so heavy in equities I lost 1/3 of my portfolio's value. Where does this "decade" come from? The DJIA is nearly 90% higher than the peak pre-2008. And I know you said inflation, but that has been 1-2% per year since then.

quotha 9y ago

Nikkei 225 Hit All-Time High of 38,957.00 on December 29th, 1989.

matwood 9y ago
So are you making the case the US is going through a systemic change away from growth, and will start a multi-decade economic contraction?
- astrodust 9y ago
  Even during the darkest days of the "lost decade" in Japan their companies never gave up on manufacturing and innovating. There were struggles, failures, but also successes. In that time Sony managed to dominate televisions and, later on, game consoles. The level of utter destruction the US economy will face if it continues to double down on hedge-fund style acquisition/mergering of every one plus dog is hard to fathom, but it will be considerable. The remaining manufacturers are being managed into the ground, everything they do is being out-sourced, "streamlined", and systematically destroyed. I wouldn't be surprised if the handful of companies that still make things in the US, like Ford, Boeing, and General Electric, are bought up, "reorganized" and sold off piecemeal, squeezing some juicy shareholder value out of them before throwing out the husk. You have to do more than "invest" in things in order to have a functional economy. Shares don't employ people, sales of product and services do, and if people can't afford those products or services because you laid them all off as a cost-saving measure then you're doomed.
  - DaniFong 9y ago
    This.
  - valuearb 9y ago
    Try building something without capital. It's really really hard.
    - astrodust 9y ago

eanzenberg 9y ago

That's great! I hope you feel good profiting off the market crashes that affect millions of people.

dang 9y ago
Personal attacks will get you banned here. We've warned you about this several times before. I don't want to ban you, but you do need to clean up your act if you want to keep commenting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html