Today TSX Looses 300 Points

[danmand]

It sure is much quicker going from 15,000 to 6,500 than it is from 6,500 to 15,000. Must be the wind on the downside.

The mathematics of the stock market works this way:

A stock loses 20% and then gains 20%: result 96%

A stock loses 30% and then gains 30%: result 91%

A stock loses 40% and then gains 40%: result 84%

A stock loses 50% and then gains 50%: result 75%

etc.

 

[Schon]

After loosing over 500 Points on TSX Index in last two day's today it was a great miracle that finally at our TSX 9.4 point index was increase,
what a big joke going on in our economy I thought that the US President is visiting our country and our TSX would show some singnificant improvement but nothing happened!

 

[Rockslinger]

After loosing over 500 Points on the TSX Index in the last two day's it was a great miracle that the TSX gained 9.4 point today

BE PATIENT! It was only 6 months ago that the TSX hit an all time high of 15,000. It won't get back to that level overnight.

 

[fijiman]

He inherited a sizable sum of money from his late father. He also inherited a house from another relative. Long story short. He doesn't do anything for a living except spend all day watching the "ticker tape".

Why do you feel sorry for him exactly?

He was lucky enought to have inherited a large amount of overinflated assets, lives like a miser and contributes nothing to society except living off the fruit of his relative's former labour. Yet he is still presumably quite wealthy, with the only misfortune in his life being that his inherited fortune is now worth 30% less.

Sign me up for that sort of bad luck!

fj

 

[Rockslinger]

Why do you feel sorry for him exactly?

I see your point(s). I guess I feel sorry for him because he doesn't realize that the value of money is in spending it, not hoarding it. He will die a millionaire, no, a multi-millionaire but he will never have lived. He knows everything there is to know about HD TV but is too cheap to actually buy one. The very few times he goes SCing with us, he limits himself to 2 beers, no VIP dances and we have to cover his share of the taxi fare. The 30%-40% decline in his stock portfolio is absolutely killing him now.

 

[JohnLarue]

Kiss your pension goodby.

I feel sorry for my friend. During the past 5 years, he studiously reinvested all his profits back in the stock market. He never went SCing with the boys. He lived frugally. Doesn't even have a home computer, preferring to use a free one at the library. Kept his house at 65 degree in the Winter to save fuel. Now he is getting killed. He doesn't deserve this.

Its tough to feel sorry for your buddy when there are so many people who are suffering due to job losses and lost real estate values
They may not have risked any of their wealth in the stock market.
There are charities who had their asset base invested with Bernie Madoff.
I can be sympathetic for the recipients of those charities and the elderly who were given questionable investment advise by shysters in Financial planners suits, looking to pad their trailer fees
But your miser buddy??
No more so than than any other Joe who blindly bought into the market without understanding the risk.

In my opinion
The most important concept in investing is understanding risk
The second most important concept is asset allocation

Anyone who got wiped out worst than 35% probably either did not understand these concepts or ignored them

The stock market can be very cruel, especially to those that ignore risk

Have I suffered during this down turn? oh yes
Did I practice what I preached above? Not perfectly and it was painful, but it could have been much much worse

 

[Rockslinger]

Its tough to feel sorry for your buddy when there are so many people who are suffering due to job losses and lost real estate values
They may not have risked any of their wealth in the stock market.

Yep, I hear you. His "plight" is nothing compared to someone with a growing family who is suddenly unemployed with a mortgage to pay.

 

[Mencken]

The mathematics of the stock market works this way:

A stock loses 20% and then gains 20%: result 96%

A stock loses 30% and then gains 30%: result 91%

A stock loses 40% and then gains 40%: result 84%

A stock loses 50% and then gains 50%: result 75%

etc.

Also explains why those 2x beta products lose money for the investor under sideways market conditions.

 

[pokerdude]

It's only a matter of time before our housing values get crushed and people who got in at/near the peak get foreclosed on. I feel really bad for the old timers who had most of their cash in the market/bonds/home and listened to all the B.S their financial adviser gave them. Buy and Hold, Buy and Hold. Now it's Hold on for dear life.

I'm still fairly young and can bounce back. What's a guy who's 63 about to retire going to do?

 

[JohnLarue]

What's a guy who's 63 about to retire going to do?

A 63 year old should have had no more than about 20 to 30% of his assets in the stock market.
If he was 70% equities then he was foolish or had some extremely bad advice from his Financial Planner and should sue the bastard into oblivion

 

[Malibook]

Good luck suing a financial adviser for incompetence and bad advice.

Some people need to learn how to use a stop loss on their stocks and advisers.

 

[squash500]

A 63 year old should have had no more than about 20 to 30% of his assets in the stock market.
If he was 70% equities then he was foolish or had some extremely bad advice from his Financial Planner and should sue the bastard into oblivion

I agree with you JL . However, IMHO the 63 year old will have a heck of a time suing his financial planner or advisor.

Especially if the FA doctored the clients KYC---know your client form!

These FA often have expensive legal representation and drag these cases on for years.

After reading the book The Naked Investor by John Lawrence Reynolds I learned a lot about how the financial industry really works.

Actually the Naked Investor is quite an appropriate title for some terb readers---lol.

 

[Rockslinger]

The good news is that the floor for the TSX is zero. You can't go negative like those poor Lloyds of London Names in the 1980's who had unlimited personal liability.