Really hard to believe the market could fall so far. A crash today of the same magnitude would mean a drop in the Dow of 5,200 points.

I started working at the CBOE just after the crash, and one of my first tasks was examining some of the trading cards for the many investigations that arose from the chaotic day. I didn't know much about stock options at that point, but I knew it wasn't good to be selling thousands of IBM puts at a teenie (1/16) and then buying them back for 90.

https://www.bloomberg.com/news/features ... rket-crash

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Wasn't the problem mostly with futures trading and deviations in those instruments from the underlying S&P 500 index?

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Hawaii (fuck) You

IIRC at the time they threw computer program trading under the bus as well.

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There are only two examples of infinity: The universe and human stupidity and I'm not sure about the universe.

Events like this are one of the reasons my plan is to just buy index funds with each pay period and set on them for the next 35 years before I retire (and then transition to bonds). The market will go up an down, will have recessions, and booms in that period, but I can expect to gain 8% per year over my lifetime in the market.

I just never understood the appeal day trading. Playing games like that is little more than gambling. It's way too high risk when you're talking about your retirement fund.

I honestly think John Bogle unlocked the best strategy for retirement investing decades ago.

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“When I walked in this morning, and saw the flag was at half mast, I thought 'alright another bureaucrat ate it.'" - Ron Swanson

Because we have kick ass dudes like Denis in the industry now, Black Monday will never happen again.

With my retirement money, I have always left it in on cruise control. And while the 2000 and 2009 lows were painful, they actually represented major buying opportunities. The dollar cost averaging strategy that comes with payroll deduction 401(k) investing is definitely appropriate for most individuals. For the first time in my working life, I am considering moving away from 100% equities in my retirement portfolio. The market is just so overvalued and set-up for a massive decline. It always seems like the euphoria lasts two years longer than it should. But to date I have stuck with my strategy as set out 18 years ago.

For those that like gambling in the market, just have a taxable brokerage account and make small plays. I don't recommend day trading, but it is fun to throw money at what look like overreactions to bad news. GE might be an example of that right now.

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Hawaii (fuck) You

Hah, I am not in the industry at all. I am merely educated in a way that qualifies me to work as an investment advisor or mutual fund manager. My work experience is in the financial lines insurance industry with a specialty in publicly traded companies and financial institutions.

My track record in trading of late has been poor as I continue to view the retail sector as oversold. But it has remained out of favor for some time.

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Hawaii (fuck) You

Racist.

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Power is always in the hands of the masses of men. What oppresses the masses is their own ignorance, their own short-sighted selfishness.
- Henry George

They weren't the cause, but they pushed everything further down with automatic selling that an actual person may have resisted.


Anyway, we got algos that are almost human for all that now. (I majored in "life experience")

Hard to believe it was that long ago. I was young then and didn't give it too much thought. And as I recall the market recovered pretty quickly.

Big market drops are just part of it and as previously mentioned represent buying opportunities.

As I get older I am trying to simplify into a mix of low-fee index, managed funds and ETFs held at Vanguard and thus no longer purchase individual stocks. However I hold a number of individual stocks in taxable accounts which I cannot sell without incurring an unpalatable capital gains tax bill. So there they sit.

We're at about 68/32 stocks/bonds, maybe a little high for my age but my wife and I tolerate the risk.

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"I honestly don't see a good bet on the board here."

Another thing I remember is that shortly thereafter, Trump's first book came out and he bragged about how he sold all his stocks just before the crash.

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I am not a fan of ETF's. If/when the market blows up and liquidity becomes an issue, you are going to see those things fail (in terms of midday trading) much like Auction Rate Securities failed in the February 2008. Like the ARS', ETF's provide the illusion of liquidity that will disappear when markets become volatile.

The cap gains tax is at a relatively attractive rate, but it is tough to give up the stock's value with a 20%-ish haircut. One good way to do it is to cull any losses you have to offset the gains.

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Hawaii (fuck) You

Let him release his 1987 schedule D.....well, we're waiting.

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Hawaii (fuck) You

Actually, the legend is that on Tuesday after the crash, it was a small, relatively obscure futures pit (the MMI) that led the comeback. Either way, it's usually impossible to point to whether the futures/derivatives were the cause of a big move or the other way around.

A good recap (from the 25th anniversary):

https://www.tastytrade.com/tt/shows/can ... cial-share

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I never put much thought into that drop because the market ended the year flat and that a lot of that drop seemed technical in nature. It is bubbles and fundamental factors that concern me much more. That was a very short lived dropped. Interesting nonetheless.

It worries me that these low interest rates are creating a mammoth bubble in risky asset classes.......

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Hawaii (fuck) You

this x1000.

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Ба́бушка гада́ла, да на́двое сказа́ла—то ли до́ждик, то ли снег, то ли бу́дет, то ли нет.

I've read that about ETFs. I cannot say I totally understand it but (and maybe I'm just sticking my head in the sand) I take solace in that I avoid sector ETFs (funds too, except for healthcare) so hopeful the ones I do have (i.e. S&P Midcap 400, etc) will remain at least more liquid. And I have never been a panic seller.

And indeed, I should just make a schedule try to offset some gains with losses and spread the sales out over a few years to minimize the pain.

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"I honestly don't see a good bet on the board here."

The index funds I own are all Vanguard S&P 500 funds. I feel those are pretty safe and have the long track record by this point. They have already ridden the great recession and those who held on and kept pouring in money through the market decline and recovery have really come well out. One of the Vanguard funds I am in has been around since 1976.

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“When I walked in this morning, and saw the flag was at half mast, I thought 'alright another bureaucrat ate it.'" - Ron Swanson

The only safe investment is Beanie Babies.

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You do not talk to me like that! I work too hard to deal with this stuff! I work too hard! I'm an important member of the CSFMB! I drive a Dodge Stratus!

1990's versions of tulips!

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There are only two examples of infinity: The universe and human stupidity and I'm not sure about the universe.

Donruss baseball cards.

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I cannot agree with you more. (I guess that's a kiss of death )

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There are only two examples of infinity: The universe and human stupidity and I'm not sure about the universe.

There is a big, and technical difference between traditional mutual funds including the aforementioned Vanguard Funds and ETF's. Open ended mutual funds are bought and sold from the fund itself after the markets are closed. ETF's trade throughout the day, but the underlying assets are not always liquid and are not traded in tandem with the ETF trading. It is done through a back end mechanism that involves lines of credit. Worse, there are many ETF's that are using leverage and derivatives to magnify returns.

Just keep my ETF warning in the back of your mind, and when they finally blow up and everyone says, "how did that happen", you heard it here first.

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Hawaii (fuck) You

Nah, you're a rational guy. I wish we were on the same side of the aisle more often.

I am doing ok with KSS, but FL is shafting me. It looks like a screaming buy, but alas, the market is much smarter than me. Thank goodness I got out of Macy's before that one imploded. I know folks that really love Macy's for the value of its real estate portfolio, but I just can't get my arms around its weak operating model.

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Hawaii (fuck) You

I am fully confident that I would be separated from my nest egg should I venture into trading for myself. It seems like sitting down to play poker as a loner at a table full of friends.

I know it is different but I remember hearing some of my friends working at CBOT talk about how they would carve up new guys.

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O judgment! Thou art fled to brutish beasts,
And men have lost their reason.