US stock market crash tonight/tomorrow

[MarillionFan]

Dow hits new record on Trump bump - BBC News

Ah no Bob.

[tomtomagain]

You keep quiet about stuff like this. At least in open forum.
No risk , no fun

No share, no bragging rights when it turns out to be a 10-bagger.

But on a serious note. Small-cap shares ( AIM for example ) are highly, highly risky. They can move violently in either direction and small companies are much more sensitive to the general economy and to "bad news" than large, established companies.

For example if Apple has a problem and their shares start to tank you'll still be able to sell them. If LittleCo Inc hits a problem you can easily find that the whole market has dried up.

With regards to the crash of early 2000. Of course it is "obvious" today, 17 years later, that it was a complete bubble. But actually, thinking back, there wasn't that many people predicting it. There were plenty of people arguing why it would keep going.

Everyone thinks that when the crash comes they will quickly make it to the exit door. But of course when the crash comes EVERYONE is trying to get out the same door.

I sat with a friend in later 1999 and he showed me his portfolio. On one dot-com share alone he was £40k up. Cannot remember what it was. About 12 months later, after the carnage, I met up with him. Asked him how much he managed to get out with on that one share. Answer was "£-10k". He lost all the "profit", his initial investment AND of course when it was down 50% he thought "This is bound to go back up". So put more in. Eventually it was down 99.9%


Nobody predicts the crashes and nobody predicts the booms.

[tomtomagain]

There is a crash coming but not just yet.
It'll happen when Trump fooks up the economy by spending too much on infrastructure while not improving productivity.
Until then, make hay.

Come on. You know the rules.

No open-end predictions of doom allowed without a date range. We'll let you predict doom to the nearest year.

[diseasex]

No share, no bragging rights when it turns out to be a 10-bagger.

But on a serious note. Small-cap shares ( AIM for example ) are highly, highly risky. They can move violently in either direction and small companies are much more sensitive to the general economy and to "bad news" than large, established companies.

For example if Apple has a problem and their shares start to tank you'll still be able to sell them. If LittleCo Inc hits a problem you can easily find that the whole market has dried up.

With regards to the crash of early 2000. Of course it is "obvious" today, 17 years later, that it was a complete bubble. But actually, thinking back, there wasn't that many people predicting it. There were plenty of people arguing why it would keep going.

Everyone thinks that when the crash comes they will quickly make it to the exit door. But of course when the crash comes EVERYONE is trying to get out the same door.

I sat with a friend in later 1999 and he showed me his portfolio. On one dot-com share alone he was £40k up. Cannot remember what it was. About 12 months later, after the carnage, I met up with him. Asked him how much he managed to get out with on that one share. Answer was "£-10k". He lost all the "profit", his initial investment AND of course when it was down 50% he thought "This is bound to go back up". So put more in. Eventually it was down 99.9%


Nobody predicts the crashes and nobody predicts the booms.

Ok but you don't get one thing. I'm buying share in a business, a % of the company. I keep that business, be it years. I don't care about valuation (if it falls) , i care about how much money company can make, weather it would pay any dividends and if it's growing, and how much can it grow in 5 years.
Some people buy newsagent or petrol station , I buy undervalued (in my opinion) share in companies on stock market. Not playing (at least not much).

I have 1% stake in one business on LSE, and about 0.5% stake in that other business on NYSE, so technically I own 3 companies including my contracting limited

[diseasex]

Ok but you don't get one thing. I'm buying share in a business, a % of the company. I keep that business, be it years. I don't care about valuation (if it falls) , i care about how much money company can make, weather it would pay any dividends and if it's growing, and how much can it grow in 5 years.
Some people buy newsagent or petrol station , I buy undervalued (in my opinion) share in companies on stock market. Not playing (at least not much).

I have 1% stake in one business on LSE, and about 0.5% stake in that other business on NYSE, so technically I own 3 companies including my contracting limited

Doesn't that sound better than "I think trump will mess up the speach so I'm going to short US index"

[BlasterBates]

I sat with a friend in later 1999 and he showed me his portfolio. On one dot-com share alone he was £40k up. Cannot remember what it was. About 12 months later, after the carnage, I met up with him. Asked him how much he managed to get out with on that one share. Answer was "£-10k". He lost all the "profit", his initial investment AND of course when it was down 50% he thought "This is bound to go back up". So put more in. Eventually it was down 99.9%


Nobody predicts the crashes and nobody predicts the booms.

That isn't how to invest in shares

But you have a point. If you don't know what you're doing you need to buy into a fund or handover to a professional investment fund manager.

If you have the know how though you will earn 2 or 3% more than a managed fund, and it isn't "so difficult", but it's not "dead easy" either.

a) you need to be able to perform a quick analysis on company reports. If you're not downloading the company accounts before you invest and screening the company, you shouldn't really be buying its shares.

b) never ever put more than 10% of your portfolio in one share, if it's a big portfolio then no more than 5%.

c) buy over time. You're mate did due diligence on that one, but failed in you never catch a "falling knife" (see a)


Finally crashes are fantastic buying opportunities. It's the crashes that make you rich on the stock market

[tomtomagain]

Doesn't that sound better than "I think trump will mess up the speach so I'm going to short US index"

Honestly? No it doesn't.

It appears you are making a large punt on a one or two small-cap companies. Losing your shirt on penny-stocks as old as the stock market.

[tomtomagain]

That isn't how to invest in shares

I agree and that's why that's not how I invest.

But the point I was trying to make was that he got sucked into how great this company was, believed it was going to become a world beater and even when the paper profit evaporated and he was making a small loss he couldn't bring himself to exit his position with some of his original investment intact.

He got hooked on the illusion that it was worth the previous high valuation and believed that, that is what it would eventually return to. Even when the market was telling him otherwise. Eventually it was worth zero.

I don't believe that I have any special skill, insight or understanding that would allow me to pick a soon-to-be successful company before it was successful which is why I have always bought trackers. After 17 years of investing I am not about to change that strategy!

[diseasex]

I agree and that's why that's not how I invest.

But the point I was trying to make was that he got sucked into how great this company was, believed it was going to become a world beater and even when the paper profit evaporated and he was making a small loss he couldn't bring himself to exit his position with some of his original investment intact.

He got hooked on the illusion that it was worth the previous high valuation and believed that, that is what it would eventually return to. Even when the market was telling him otherwise. Eventually it was worth zero.

I don't believe that I have any special skill, insight or understanding that would allow me to pick a soon-to-be successful company before it was successful which is why I have always bought trackers. After 17 years of investing I am not about to change that strategy!

nice one. I'll start with trackers / bonds as soon as I've acumulated enough to sustain myself.

[tomtomagain]

I have 1% stake in one business on LSE, and about 0.5% stake in that other business on NYSE, so technically I own 3 companies including my contracting limited

Try this as a paper exercise.

Sit quietly in a room by yourself. Imagine that you've just lost 80% of your investment overnight. How do you feel?