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Stocks trampled as Nikkei crashes 13%
- teractiveodular 2y agoThis is mostly a reaction to the Bank of Japan raising interest rates to prop up the weak yen. Overall, the Nikkei is now back to where it was in October 2023, and still up almost 100% compared to its COVID lows in March 2020.
- listenallyall 2y ago...but also down about 20% from 1989 peak. Imagine holding stocks for 35 years and being in the red.
- quink 2y agoThat’s why you DCA and diversify… and don’t forget to account for distributions.
- listenallyall 2y agoDCA would just be throwing good money after bad. The Nikkei didn't crash hard then quickly start rising, it continued to lose value for 20 years.
- teractiveodular 2y agoAll things considered, time in market beats timing the market. The speculative bubble in Japan was of historic proportions and so is the stagnation that followed. Good thing there's no speculative bubbles at all in the world today (/me casts nervous glance at housing prices and AI)
- quink 2y agoStock exchange known for going sideways near where it was a year ago. Sounds like global discount season to me.
- triyambakam 2y agoWhy might this be affecting BTC?
- seper8 2y agoWhy wouldn't it?
- treme 2y agoMany investment strategies involve burrowing yen at low interest rate to place else where with higher roi.
- BLKNSLVR 2y agoMy media's telling me that US recession fears are affecting US stocks. And when US stocks are affected, the effect on cryptocurrencies is generally magnified since cryptocurrency is viewed as a risk asset, so one of the first to be sold off in a panic.
- Aardwolf 2y agoDo you have a view on which president candidate is causing the biggest recession fears, if any?
- BLKNSLVR 2y agoI think it's just the numbers causing the fear. I actually haven't thought about it in terms of presidential candidate selection. But to engage in conjecture, I'd very uncontroversially say that it's precisely split down party lines - if you're going to vote Democrat then you're going to thing the Republicans are more likely to make recession worse, and vice versa. Personally, I think parties and politicians are somewhat leaves on the stream of momentum and world events. They may have some control of variations in speed and direction, but nowhere near what they're blamed / given credit for. This recession is a predictable outcome of the global shake up caused by COVID, and particularly the money printing / incentive cheques, which was a political decision. But not doing it could have had a worse result, who knows? Japan's situation, Ukraine, and now Israel and Iran, those destabilising forces are going to do more to world economics than any individual politician or country (although the US's influence is outsized).
- posnet 2y ago15 Circuit breaker trips in derivatives. Most in a single day ever I think, fun. https://www.jpx.co.jp/english/markets/derivatives/scb-info/index.html https://www.jpx.co.jp/english/markets/derivatives/scb-info/i...
- drsim 2y agoIt’s scary headlines like this: ‘trampled’, ‘crashes’, that put off less informed, risk averse individuals on lower incomes/ net worth, from investing in stocks. It’s a shame, as ETFs, and hell, index funds if you must, outperform savings on a 3 year or even less horizon. Yes, my portfolio dropped 7% this month. I’m still up 6% YTD and 13% in the last 12 months. My horizon is well over 5 years. It would be an easy way to slow or even reduce my net worth if I were to put it all in a savings account. Yet this is what a lot of folks do, frightened by scary bombastic headlines without a balanced long sighted story. Current stock performance is very notable and newsworthy, yet lacks any narrative outside of short term performance.
- birracerveza 2y ago>I’m still up 6% YTD and 13% in the last 12 months. For now. It can still go lower.
- short_sells_poo 2y agoThe idea behind long term investment is that you hold a diversified basket of assets, add a little regularly and hold for >10 years. This smoothes out the various drawdowns quite a bit.
- bowsamic 2y agoThe only way it could not be is if this is "the end"
- michaelt 2y agoA country's financial markets can be moribund over the long term, without any sort of apocalypse. You could buy into the Nikkei at JP¥30,000 in 1988 and sell today for JP¥30,000 Invest in the FTSE 100 from 1984 until 2000, you saw 500% growth - a 10.5% annual return. Invest from 2000 until today and you saw 20% growth, a 0.7% annual return. The precise causes are debatable - but it's completely possible for a rich, western-style economy, with no great wars or huge natural disasters, to just sort of stop growing.
- rustcleaner 2y agoNice! Going to be looking for volatility to sell... Lots of panicked investors gonna be rushing for insurance tomorrow. :DDD
- short_sells_poo 2y agoThings get really out of hand when there's a big move outside of the US trading hours because liquidity is so thin. Usually it recovers of course, the scary thing is when it degenerates into a 2020 covid style selloff - 10% down day followed by a number of 10% down days.
- listenallyall 2y ago2020? go check out 1929-1932
- short_sells_poo 2y agoThose times are not coming back. We need to stop looking at market behavior 100 years ago. Modern markets and society function very-very differently. Even looking at 2008 as a model for how modern crises happen is very likely to give you incorrect conclusions. Everything has sped up drastically. Information (whether valid or invalid) is priced in vastly faster. In 2008 you had a month to buy various crisis insurance products (e.g. variance swaps), in 2020 you had days. The next crisis you might only have hours. Sure, fundamental human behavioral patterns stayed the same, but these are things like herding behavior (monkey see price go up, monkey buy, monkey see price go down, monkey sell), panics, various interests fanning the flames one way or another, etc. But the interconnectedness and the speed at which information travels across that interconnect has increased orders of magnitude just over the last decade. It's important to recognize that the increased processing speed has a non-linear impact on the system as a whole. New kinds of failure modes and boundary conditions arise that never happened before. New feedback loops get amplified and old ones stop working as they operated on different time scales.
- deleted 2y ago[deleted]
- defrost 2y agoSee Also: Japan stocks plunge as much as 7% as Asia shares extend sell-off (5 hours ago) https://news.ycombinator.com/item?id=41157605 https://news.ycombinator.com/item?id=41157605
- seydor 2y agoAnother volatile month, only to end higher in the end
- 0x008 2y agowhy do we have this sensationalist click-baity stock-market focused article on the HN front page?
- TMWNN 2y agoBlame Reuters for putting out what you describe as "clickbait". Or maybe, just maybe, a 13% one-day drop in the stock market of one of the world's largest economies is worth of discussion by HN?
- user42211 2y agoWhy would a high amount of trades trigger circuit breakers? That is just network traffic not power load, no?
- TaylorAlexander 2y agoI assume “circuit breakers” is a technical term for some automatic system that is built in to the market to activate if some condition occurs, to alter market behavior.
- iamacyborg 2y agoHigh amount of trades doesn’t, but the drops are what’s triggering the breakers.
- djsavvy 2y agoCircuit breakers are the term for exchanges shutting down trading if there’s unusual activity like too much of a price swing in one day.
- QuesnayJr 2y agoThey're not literal circuit breakers. "Circuit breaker" is the name for exchanges rules that stop trading when the price does something crazy.
- user42211 2y agoOk that makes sense thanks
- 7734128 2y agoNot literal circuit breakers.
- Ekaros 2y agoJapanese markets limit the maximum amount stock can move in single day. These limits are known as circuit breaks, basically when you get over current that is too much drop it shuts off. Not sure if there is same for other direction too.
- alecco 2y ago• NVIDIA $NVDA: -11% • Google $GOOGL: -11% • Apple $AAPL: -10% • Amazon $AMZN: -10% • Meta $META: -10% • Tesla $TSLA: -10% • Microsoft $MSFT: -9% https://x.com/WatcherGuru/status/1820355633008296324#m https://x.com/WatcherGuru/status/1820355633008296324#m
- sakopov 2y agoAll Mag7s are still very expensive, but you gotta nibble at the best names when you get an opportunity.
- baq 2y agoAt 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking? -- Scott McNealy, CEO of Sun Microsystems, ~2002
- nabla9 2y agoNvidia price is 33 times revenue. ;)
- baq 2y agoYes, if this really unwinds, there’ll be a lot of surprised people. Not my base case, though. Reflexivity would be really bad for the economy. Regulators won’t allow it.
- philsnow 2y ago> to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends My understanding is that a lot of (tech) investors these days do not want dividends, they want growth.
- victorbjorklund 2y agoPeople saying this is nothing. Yes, it is not productive for a longterm investor to focus on individual days (and I'm not panic selling now) but 13% down is a lot. The point isn't that 13% in itself is the end of the world (I'm still up 40% this year) but rather that it signals that the market thinks things are going to get bad. And that could be bad for our portfolios (and our jobs, etc).
- _gmax0 2y agoSurely this'll trigger unwinding of the options dispersion trades that have been rumored to have been building up.
- deleted 2y ago[deleted]
- nabla9 2y ago1. Japanese yen became strong, hurting Japanese exports. 2. US job market and high recession probability. US is in early months of recession. according to Sahm rule recession indicator https://fred.stlouisfed.org/series/SAHMCURRENT https://fred.stlouisfed.org/series/SAHMCURRENT
- swarnie 2y agoIts only given up 10 months of gains? In a 30-40 year investment span its a minor blip. Call me when WW3 kicks off (maybe Wednesday?) and then we'll talk about a crisis.
- physicsguy 2y agoPeople are unwinding trades because the BoJ put up interest rates as well...!
- frays 2y agoDoes this have anything to do with the Japanese Yen going up almost 13% relative to the USD in the last 30 days? https://i.imgur.com/vBKuj9n.png https://i.imgur.com/vBKuj9n.png
- physicsguy 2y agoThe BoJ put interest rates up last week, which surprised everyone because they've been an outlier for a long time in having negative interest rates and then a 0% rate. That strengthened the currency even more. If the yen strengthens, then it means the goods sold by Japanese companies become more expensive for foreign buyers, so they'll sell less and earn less. Along with fears of the US economy starting to struggle (worse than expected job figures last week) it's a perfect storm. Gains up to this year have been good so for many firms wanting to de-risk they can still sell now and still make a profit.
- dash2 2y agoOne story doing the rounds: the Japanese central bank was lending at roughly 0%. So the carry trade involved borrowing Yen, buying foreign currency, letting it appreciate (or investing it?) and paying back. Now the central bank has raised interest rates, so this trade is unwinding: the Yen is rising, and Japanese firms are selling their foreign investments to cover. (I hope I have this right.)
- masteruvpuppetz 2y agoSo many ppl made a lot of money at COVID dip in Mar-2020, I wonder how many more will make $$$ in this dip.
- banku_brougham 2y agonobody yet mentioned the Shiller CAPE yet, I think this discussion could benefit from some valuation talk. https://www.multpl.com/shiller-pe https://www.multpl.com/shiller-pe
- triyambakam 2y agoCan you explain what that is and means?
- banku_brougham 2y agoSure. Cyclically Adjusted Price over Earnings. Its a metric developed by econ researcher Robert Shiller, meant to aid those long term investment strategies by quantifying the idea of 'value'. Using 10-years of earnings helps to sidestep a lot of the problems of P/E as a snapshot. As the time series helps to show, 10-year returns are highly correlated to the price paid for those corporate earnings.
- ChrisArchitect 2y ago[dupe] https://news.ycombinator.com/item?id=41157605 https://news.ycombinator.com/item?id=41157605
- DaveScotty 2y ago[flagged]
- MELEKE 2y ago[dead]