3 ms·

And it's sort of self-fulfilling, right? If these stories have a big enough impact, a lot of people will buy the stocks and they will actually stop falling.

graeme 4y ago
Ultimately the stock prices respond to economic reality: profits and interest rates and growth levels The funny thing about headlines though is that often the reverse happens. Once everyone is crying doom, stocks go up. When people say it is time to buy, stocks go down. And in a bear market the bottom usually comes when no one is paying attention anymore. As an example after the financial crisis stocks bottom March 2009, after two years of falling and a good seven months after the big crisis.
- Cupertino95014 4y ago
  Exactly right. The bull market begins when the last seller has bailed out. So, has that happened yet?
  - medvezhenok 4y ago
    Common quote, doesn't have much to do with reality. Last 3 bottoms (2009, 2018, 2020) were manufactured because of regulatory changes.
    - Cupertino95014 4y ago
      right, politics is one thing that really drives the market, because (usually) you can't predict it. If you could, it would already be reflected in the prices.
- medvezhenok 4y ago
  March 2009 was not a "natural bottom", it was more of a bailout bottom - we now know it happened because of a change in the mark to market rules on bad assets that made possibility of more bankruptcies much less likely and stemmed contagion. Similarly in 2018 (FED pivot) and 2020 (QE infinity). You'd have to go back to 2002 possibly to find a more "natural", exhaustive bottom where sellers got tired.
scarface74 4y ago
The majority of money is in passively managed index funds. individual investors don’t move the market for the most part outside of the meme stock craze.
- deleted 4y ago
  [deleted]
baby-yoda 4y ago
IMO - Retail buys based off of articles in the Economist and stuff Cramer says. Institutional money will have different criteria for what constitutes "value" and where medium-long term speculation might be warranted. Based on the above the detrimental effects of a falling knife are clearly going to affect one group vs the other.

graeme 4y ago

Ultimately the stock prices respond to economic reality: profits and interest rates and growth levels The funny thing about headlines though is that often the reverse happens. Once everyone is crying doom, stocks go up. When people say it is time to buy, stocks go down. And in a bear market the bottom usually comes when no one is paying attention anymore. As an example after the financial crisis stocks bottom March 2009, after two years of falling and a good seven months after the big crisis.

Cupertino95014 4y ago
Exactly right. The bull market begins when the last seller has bailed out. So, has that happened yet?
- medvezhenok 4y ago
  Common quote, doesn't have much to do with reality. Last 3 bottoms (2009, 2018, 2020) were manufactured because of regulatory changes.
  - Cupertino95014 4y ago
    right, politics is one thing that really drives the market, because (usually) you can't predict it. If you could, it would already be reflected in the prices.
medvezhenok 4y ago
March 2009 was not a "natural bottom", it was more of a bailout bottom - we now know it happened because of a change in the mark to market rules on bad assets that made possibility of more bankruptcies much less likely and stemmed contagion. Similarly in 2018 (FED pivot) and 2020 (QE infinity). You'd have to go back to 2002 possibly to find a more "natural", exhaustive bottom where sellers got tired.

scarface74 4y ago

The majority of money is in passively managed index funds. individual investors don’t move the market for the most part outside of the meme stock craze.

deleted 4y ago
[deleted]

baby-yoda 4y ago

IMO - Retail buys based off of articles in the Economist and stuff Cramer says. Institutional money will have different criteria for what constitutes "value" and where medium-long term speculation might be warranted. Based on the above the detrimental effects of a falling knife are clearly going to affect one group vs the other.