ok. i don't know what will happen tomorrow. as we know, still today there is no clear explanation of 1987 crash (well, you may say there are theories, but to me none are completely convincing. so I think it is still quite a mystery.)
I think it IS far less severe. but I cann't say whether tomorrow it will still be quite less severe.
1987 Black Monday 23% drop in one day without real bad economical data. Did we experience any drop even close to that scale during the past few weeks? i'd say no.
OK I think you got it wrong. Nobody is saying we're having 1987 all over. Rather, what we said is now it looks like the prelude of the 1987 crash.
deleted.
[此贴子已经被作者于2006-5-25 23:42:09编辑过]
Your "philoshophy" is all empty, and is well documented in behaviour finance. Basically what you said is you've no idea what's going on and hope you're lucky. No surprise. When TIE put options clearly implied a 23% volatility, you insited any correction won't be >10%.
The BS model consistently underestimates the occurence of "small probability" events in US market, so much so that one school of people think it may misses a variable or two. I don't know what's the basis of your beliefs.
Easy, easy, guys. Just pure discussions. I like atmosphere here.
One factor leading to 1987 crach is immature program trading at that time, as cascade effect triggered a lot of sell orders and it is more like an liquidity-driven event. Today's market is far more sophiscated, so we might not see another 15%+ down day like this.
But, this economy has its own serious problems. Some are not seen even in past bubble bursts. Feds deliberately created another bubble and faked recovery after 00-02 crash. The net result is irreversible credit system failure. Although default rate is still at historical lows, we might see it creeping up in the near future. Current high GDP growth is generated by multiple expansion and cheap credit, not corporate re-investment. Real inflation-adjusted household income is declining year over year while nearly all asset prices are inflating. When an economy is trying to keep its growth with huge negative account balance and huge trade deficit, there're only 2 outlets: deflating asset prices, or deflating currency.
Easy, easy, guys. Just pure discussions. I like atmosphere here.
One factor leading to 1987 crach is immature program trading at that time, as cascade effect triggered a lot of sell orders and it is more like an liquidity-driven event. Today's market is far more sophiscated, so we might not see another 15%+ down day like this.
But, this economy has its own serious problems. Some are not seen even in past bubble bursts. Feds deliberately created another bubble and faked recovery after 00-02 crash. The net result is irreversible credit system failure. Although default rate is still at historical lows, we might see it creeping up in the near future. Current high GDP growth is generated by multiple expansion and cheap credit, not corporate re-investment. Real inflation-adjusted household income is declining year over year while nearly all asset prices are inflating. When an economy is trying to keep its growth with huge negative account balance and huge trade deficit, there're only 2 outlets: deflating asset prices, or deflating currency.
I agree with you on all opinions and discussions are welcomed. We certainly dont want to see another crash. I enclose a quote from economist Mark Rubinstein.
"Adherents of geometric Brownian motion or log normally distributed stock returns (one of the foundation blocks of modern finance) must ever after face a disturbing fact: assuming the hypothesis that stock index returns are log normally distributed with about a 20% annualized volatility, the probability that the stock marekt could fall 29% (the decline in S&P futures on October 19th, 1987) in a single day is 10-160. So improbable is such an event that it would not be anticipated to occur even if the stock market were to last for 20 billion years, the upper end of the currently estimated duration of the universe. Indeed, such an event should not occur even if the stock market were to enjoy a rebirth for 20 billion years in each of 20 billion big bangs."
In other words, the crash lies so far to the extreme of the bell shaped curve that the normal distribution is unable to account for it. It is an anomaly, an outlier, a paradox. If the normal distribution fails to explain real market conditions, the assumptions underpinning the application of the normal distribution to markets - investor rationality, efficient markets, and a random walk - find themselves being threatened.
There might be another outlets added besides deflating asset prices and deflating currency, is housing pop.
[此贴子已经被作者于2006-5-25 11:25:22编辑过]
Easy, easy, guys. Just pure discussions. I like atmosphere here.
One factor leading to 1987 crach is immature program trading at that time, as cascade effect triggered a lot of sell orders and it is more like an liquidity-driven event. Today's market is far more sophiscated, so we might not see another 15%+ down day like this.
But, this economy has its own serious problems. Some are not seen even in past bubble bursts. Feds deliberately created another bubble and faked recovery after 00-02 crash. The net result is irreversible credit system failure. Although default rate is still at historical lows, we might see it creeping up in the near future. Current high GDP growth is generated by multiple expansion and cheap credit, not corporate re-investment. Real inflation-adjusted household income is declining year over year while nearly all asset prices are inflating. When an economy is trying to keep its growth with huge negative account balance and huge trade deficit, there're only 2 outlets: deflating asset prices, or deflating currency.
I agree with you on all opinions and discussions are welcomed. We certainly dont want to see another crash. I enclose a quote from economist Mark Rubinstein.
"Adherents of geometric Brownian motion or log normally distributed stock returns (one of the foundation blocks of modern finance) must ever after face a disturbing fact: assuming the hypothesis that stock index returns are log normally distributed with about a 20% annualized volatility, the probability that the stock marekt could fall 29% (the decline in S&P futures on October 19th, 1987) in a single day is 10-160. So improbable is such an event that it would not be anticipated to occur even if the stock market were to last for 20 billion years, the upper end of the currently estimated duration of the universe. Indeed, such an event should not occur even if the stock market were to enjoy a rebirth for 20 billion years in each of 20 billion big bangs."
In other words, the crash lies so far to the extreme of the bell shaped curve that the normal distribution is unable to account for it. It is an anomaly, an outlier, a paradox. If the normal distribution fails to explain real market conditions, the assumptions underpinning the application of the normal distribution to markets - investor rationality, efficient markets, and a random walk - find themselves being threatened.
There might be another outlets added besides deflating asset prices and deflating currency, is housing pop.
You mean housing pop or housing flop? I really believe the whole housing sector is facing an unavoidable correction in the next 12-18 months. Property prices are stagnated, sellers are desperate to rush for exits, rentals are picking up, stockholders of home builders are voting with their feet. Right now the whole real estate market feels like right before a major selloff.
You mean housing pop or housing flop? I really believe the whole housing sector is facing an unavoidable correction in the next 12-18 months. Property prices are stagnated, sellers are desperate to rush for exits, rentals are picking up, stockholders of home builders are voting with their feet. Right now the whole real estate market feels like right before a major selloff.
pretty much the same thing. just read the news not long ago about the decrease in existing house sales for the month of april. i've seen lots of houses put on sale for quite a long time and still on sale...
搬个小板凳在这里学习, 看你们讨论.
Your "philoshophy" is all empty, and is well documented in behaviour finance. Basically what you said is you've no idea what's going on and hope you're lucky. No surprise. When TIE put options clearly implied a 23% volatility, you insited any correction won't be >10%.
The BS model consistently underestimates the occurence of "small probability" events in US market, so much so that one school of people think it may misses a variable or two. I don't know what's the basis of your beliefs.
huh, my empty philosophy seemed to work for me pretty well.
your statement clearly proved my point.
and you ignored the fact that when I said i think a 10% correction the most, TIE price was 65, did u see a 65-6.5 = 58.5 (pre-split) correction? I say NO. and now the price is almost 74 (pre-split adjust, that is 36.78 as to now). that was before the huge run up. and Did i predict the huge run up? NO. when i saw it, I was out COMPLETELY 88. 87, 86. next day it was all the way up to 95!
Did u, sir, the scholar, predict the huge run up based on your model? NO! if you predict the huge run up, you were NEVER by put at 65? were you?
so i let market tell me it is time. I rided TIE from early Jan when it was 30ish, and all the way up to 87. and you on the other hand, sat on the 65 put till it rushed to 95!! you say your school sucks.
so please when you think you know too much, you probably know too little.
and I have always said I am extremely lucky this year that I caught TIE. But if you think I am ignorantly lucky, you are wrong. I kept making money in the down market. However, i have not caughte something like TIE after i sold it. I am constantly make money almost every day. Am I lucky or my EMPTY model actually works at least for ME?
whatever matter to you must be different from me. cuz I want to make money from the market. I made 550-600% just from TIE, you sir on the other hand, IF YOU DID sit on your put position made 20-30% on that position only. MY ACCOUNT up 550-600% this year!!
到底了
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