Market Crash

Discussion in 'Trading' started by WmWaster, Jun 25, 2006.

  1. Why would you trade OR invest in the market?

    Are you afraid of market crash (ie the deadly bear :D )?

    How do you manage to avoid such a crash from injuring you badly?
  2. Let me give mine first.

    1) Probably no.
    - risk/money management will help me out before the crash occurs or become serious to hurt every investor.
    - bears can be my friends too. I can, say, short stocks and dance with bears.

    Risk/Money Management -
    Eg: if the drawdown goes too large, I will stop trading until I have found out the cause of this abnormal drawdown I encounter.

    Technical Signal -
    Technical analysis will tell.
    One simple indicator everyone can make use of is moving averages.

    How about yours?
  3. there wont be a market crash in a l000ng time..maybe never again

    the speculation phase of the US economy is ended in 2000 after 200+ years of progress beginning with the industrial revolution
  4. You dont think there will ever be another bubble in our lifetime?
  5. No there wont be. if you look at the nasdaq volume for example it has remained the same since 2000^IXIC&t=my

    That indicates that the markets are saturated and that any further gains (greater than 20%) are unlikely.
  6. Do you think there will never be another recession?
  7. Are you trying to say that technological progress in the US has stopped? I'm not sure what you mean by "speculation phase" of the us economy. There is a large amount of speculation in the markets. Are you differentiating between market speculation and economic speculation? Please explain.
  8. there will always be more inovation but the market speculation phase is over. there is no 'new money' left to go into the markets like there was in the past 20 years and even the past 200 years as well. The current money in the markets simply changes hands without actually resulting in a positive market direction. Everyone is fully vested and without new money markets cant go up.

    The main indexes such as NASDAq and DOW may never see new highs for a long time if ever. I can immagine the nasdaq still trading between 2000-2400 in 50 years.
  9. Spelunk


    I think you're missing a big point of why the long side of the
    market always wins in the end. INFLATION, with a fiat
    currency you can be assured of the market going up, it may
    not be worth any more but it will be up :)
  10. Managers of large pools of capital (pension, hedge, mutual funds) allocate their capital over a wide variety of assets, equity markets being only one of them, so there is room for further injection of capital into the equity markets.

    As for the total pool of capital available to be invested in the market. This may well fluctuate greatly in the near future. Many diff scenarios. Emerging markets may invest their oil surpluses, consider the idea posed by the former HarvardU. president of taking 1% of the dollar reserves of most emerging-market governments and INVESTING that money in the global markets in order to earn a return, rather than let it languish.

    and on...
    #10     Jun 26, 2006