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Registered User
Joined: 2/18/2005
Posts: 8
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Well, that was ugly.
People are making much of the fact that Friday was the 20th anniversary of "Black Monday". But yesterday was Friday, not Monday:
Monday-Friday, October 12-16, 1987: Dow down 9.1 per cent.
Monday-Friday, October 15-19, 2007: Dow down 4.1 per cent.
Friday, October 16, 1987: Dow down 4.6 per cent.
Friday, October 19, 2007: Dow down 2.6 per cent.
Black Monday, October 19, 1987: Dow down 22.6 per cent.
Monday, October 22, 2007: Dow down/up ????
Granted, there are many differences between now and 1987. As I recall, people were very nervous going into the weekend of October 17, 1987; less so today. Still, Monday should be interesting.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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Well ...
I think that we would all agree that we have not yet really seen "fear" ....
We haven't seen mutual funds having to dump huge positions because their redemptions have eaten up all of their cash reserves ... etc ....
But hey ...
It's early yet ...
There's still hope ...
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Registered User
Joined: 5/1/2007
Posts: 158
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Fear? What about greed? I purchased QLD on Tuesday, then quickly bailed. A *bit* too quickly, but I wanted that cash to be available. Is that O positive on the street? Oh, only ketchup?
The CDO guys saw fear in August, but the rest of the market knows that this is a new pair'o'dime (usta be two cents in, but inflation ...)
I expect that it will *not* be business as usual up 7% in 4Q stock market this year.
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Registered User
Joined: 3/14/2005
Posts: 64
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I dont think you will see the funds dump and raise cash like they did in 1987. Recently the montra seems to be focused on selling asset allocation models that already contain cash and bonds so they can focus on alpha in the stock funds. Probably going to ride it out.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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Well ....
I don't think funds "dump" because they want to ....
But, instead, because redemptions force them to ....
But ... we still haven't seen anything that even resembles fear ... quite the contrary ...
Oil may be trading over $90 ... but until people see the $4+ gas at the pumps ... they don't believe that it's even a remote posiblity ....
The market used to be forward looking ....
But today ... it seems like it spends most of it's time focusing on trailing indicators ...
I think that this is mostly because no one really believes any longer that the market can go down ... and stay down ... for more than just a few months ...
Like any good pyramid scheme ... as long as you can keep new money pouring in ... it works ...
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