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5 Days That Taught Investors All They Need To Know
Yes, they are good reminder. If the investor stay put rather than pull ot at the bottom, they have since recovered and gained more (actually a lot more if they have cash to buy at the height of fear).
"This sage advice smacked me in the face Tuesday night, coming from a 20-year Wall Street trading veteran. After the craziness of the previous few trading days, he emailed to ask if I wanted to grab a drink. So we did."
1. Does the author identify the 20-year Wall Street veteran? Oldest trick in the (journalistic) book is fabricating interviews with presumed knowledgable individuals as a way of making your own conclusions more palatable to readers.
2. Note that he arrived at these conclusions over a drink(s). Booze usually makes me smarter too.
3. The title of the article is ludicrous on the surface. I've been investing, reading and following markets for at least 40 years. Still haven't learned everything I need to know.
I think we have all got into the habit of buying and selling mutual funds in the last 15 minutes. The lesson is don't try that (in the first or last minutes with ETFs or individual stocks
I'm trying to take a more sanguine view of the article. I assumed his title was referring to the past 5 days. Oops! Instead he's summarized 5 important days in market history, extracting a lesson from each (cute):
1. Valuations matter. 2. Diversification is important. 3. Pessimism and hysteria accompany market bottoms. 4. High-frequency trading causes distortions. 5. Appearances can be misleading (China as example). ---
#1 - Probably the most important point he offers. Valuations matter.
#2 - Subject to debate. For younger investors with very long (25+ year) time horizons an all-equity portfolio would be better in my opinion.
# 3 - This should be obvious to any seasoned investor or market watcher
#4 - True - but if you're a long term holder of good mutual funds, let the fund manager worry about it. I don't purchase individual securities, so I can't offer much here. But I'd expect that this development works against the "little guy" most of the time.
#5 From Mark Twain: "Moralizing, I observed, then, that all that glitters is not gold. Mr. Ballou said I could go further than that, and lay it up among my treasures of knowledge, that nothing that glitters is gold."
Comments
1. Does the author identify the 20-year Wall Street veteran? Oldest trick in the (journalistic) book is fabricating interviews with presumed knowledgable individuals as a way of making your own conclusions more palatable to readers.
2. Note that he arrived at these conclusions over a drink(s). Booze usually makes me smarter too.
3. The title of the article is ludicrous on the surface. I've been investing, reading and following markets for at least 40 years. Still haven't learned everything I need to know.
I'm trying to take a more sanguine view of the article. I assumed his title was referring to the past 5 days. Oops! Instead he's summarized 5 important days in market history, extracting a lesson from each (cute):
1. Valuations matter.
2. Diversification is important.
3. Pessimism and hysteria accompany market bottoms.
4. High-frequency trading causes distortions.
5. Appearances can be misleading (China as example).
---
#1 - Probably the most important point he offers. Valuations matter.
#2 - Subject to debate. For younger investors with very long (25+ year) time horizons an all-equity portfolio would be better in my opinion.
# 3 - This should be obvious to any seasoned investor or market watcher
#4 - True - but if you're a long term holder of good mutual funds, let the fund manager worry about it. I don't purchase individual securities, so I can't offer much here. But I'd expect that this development works against the "little guy" most of the time.
#5 From Mark Twain: "Moralizing, I observed, then, that all that glitters is not gold. Mr. Ballou said I could go further than that, and lay it up among my treasures of knowledge, that nothing that glitters is gold."