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IBDvalueinvestin (99.67)

Market goes down twice as fast vs. going up.

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November 16, 2010 – Comments (3)

That is the one thing bears count on. Panic sellers always send the markets crashing down in such a quick fashion that it does not take long for 2 months of gains to evaporate before our eyes, like its happening right now in 4 of the last 5 trading days.

This type of action will never change throughout history unless they hardwire the human brain not to panic and that won't happen anytime soon.

3 Comments – Post Your Own

#1) On November 16, 2010 at 11:24 AM, davejh23 (< 20) wrote:

I don't think it's panic.  I'd say it's greed on the long-side that leads to quick sell-offs.  The market gets overextended, everyone knows that the market isn't reflecting fundamentals, and everyone gets jumpy...they want to hold on for more gains, but they know the market should be much lower...so when everyone bails the market returns to it's fair value.  Short term corrections signal a healthy market.  At major market tops (at the start of bear markets), fear/panic does play a roll...markets overshoot fair value and become extremely oversold...everything gets dragged down. 

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#2) On November 16, 2010 at 7:03 PM, XXX222 (< 20) wrote:

I don't know wheather we're starting the next inflation fear fueled rally or another leg downwards. Austrian Theory is telling me that markets should be much, much lower, and that the federal intervention will end up hurting markets in the long run, but recent market activity has been positive (discounting the last few days).

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#3) On November 17, 2010 at 12:40 AM, ElCid16 (96.81) wrote:

"Market goes down twice as fast vs. going up."

How fast does gold go down vs. up?  

 

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