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What Happens If the Market Collapses?
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ten4one
Master |
29-Jun-2006 10:06
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Nothing is impossible especially so you're not the one doing it!!!! Mistakes made in different environments at different period may not be applicable today and maybe not a mistake anymore in today's Markets! Thus, not all 'Mistakes' were mistakes!!!!!!!!!! Damn! Just make a mistake telling you hahahaha! |
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dotted
Member |
27-Jun-2006 10:08
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sorry guys.. i just wanted to share some thought, did not intend to copy the last part about joining watever watevr... its not the aim... also Your best Teacher is the Market itself. that i agree too... expensive too... and a million is definitely come in handy to make more... as money makes more money... anyway, it is still possible to learn from others mistake so that we don't take them in the first place... :D |
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teeth53
Supreme |
24-Jun-2006 18:08
Yells: "don't learn through life, learn to grow with life " |
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If oni i have a few millions $. I can easy make a million and even more easy to lose another million after losing a million. |
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ten4one
Master |
23-Jun-2006 09:55
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Hi Lewsh88, Yup, your computer crashes' example has a similarity with a noisy market environments - "IGNORE" You won't get rich in $$$$$ though by reading or attending seminars. The Authors, the Publishers or the Seminar Speakers will be richer,,,hahahaha! Forget all those 'How to become' Books. Your best Teacher is the Market itself. BTW, if you've 2 millions $, making the next million is much easier! |
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teeth53
Supreme |
22-Jun-2006 21:19
Yells: "don't learn through life, learn to grow with life " |
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Hidden Gem oso have to take time to polish, maybe a long time, question is what happen when mkt crashes??? I die lah, can't see my ($) hidden gem. |
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tanglinboy
Elite |
22-Jun-2006 14:11
Yells: "hello!" |
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Haha... funny one. Yah.. I think there are some local players out there who promise FANTASTIC returns if you sign up with their programmes. Bull shit... if you ask me. |
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lewsh88
Senior |
22-Jun-2006 13:25
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Hi: Just heard on BBC this morning that many people have problems with their computers. They got "error messages" on their computer screens and start downloading PAID programs to solve their problems. Instead of solving their problems, they ended up with more problems. So, the lesson learnt is to ignore "error messages" unless the computer crashes! Similarly, if I have to pay to attend stock trading seminars/courses that promises to make me a millionaire and ended up losing money, then it would be better that I stayed at home. Anyway, here's a wise joke I picked up from a financial website: Q: "How do you make a million dollars in the stock market?" A: "Start with two million!" |
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ten4one
Master |
21-Jun-2006 13:35
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Hi dotted, Interesting post and should be lauded for the effort! In fact, there's nothing new about Markets collapsing or booming. It is happening all the time since the day Stock Market started - a cycle of boom and collaspe that keep on repeating.When you've seen the worst collaspe, the next cycle will be a better boom! The problem here is not many could survive a Market collaspe!!!! Only the fittest & the best survive!!! Hidden Gem - If so many people already knew it, it is therefore no more hidden! Remember a Gem takes time and skill to be 'polished' so that the shine will attract more suitors. I certainly do agree with you that a collaspe is an opportunity that comes once a long while. Therefore, prepare to strike once you're ready and strike hard! Cheers! |
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dotted
Member |
21-Jun-2006 11:42
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this story is 2moons old... i just read it and it sounded like the may bloodbath By Scary title, eh? I'll just go ahead and dial it up a notch (cue Emeril: "Bam!"): "What happens when the market collapses?" At some point in your investing career, it will happen. You will be caught unaware. In all likelihood, you're going to lose a great deal of money when it happens. When you least expect it The really frightening part, however, is that the market has shown a proclivity to collapse at points when everyone thinks things are going swimmingly -- like right now. On March 10, 2000, when the Nasdaq hit its all-time high, there were more scheduled IPOs than ever before. Investors and entrepreneurs alike wanted to earn windfalls from a market that defied gravity, just like Pierre Omidyar at eBay (Nasdaq: EBAY), Jerry Yang and David Filo at Yahoo! (Nasdaq: YHOO), and even the backers of the deplorable eToys and Beyond.com. These were good, good times. Then, suddenly, the train jumped the tracks. The pain of recession Throughout history, whenever this has happened, it feels like nothing will push share prices up. For every piece of bad news, companies will tank. Good news gets shrugged off. And these collapses can go on, not for days -- like the sudden malaise the markets endured this past September -- but for years. Procter & Gamble (NYSE: PG) began 1980 at the exact same price it had in 1972, while other phenomenal companies like IBM (NYSE: IBM) and General Electric (NYSE: GE) posted gains over those eight years of just 15% and 10%, respectively. Not per year, mind you, but total. That may seem like ancient history, but while the recession was happening, it felt like it would never end. Unfortunately, there's not a whole lot you can do about market collapses. Recessions will happen. Bear markets will come. There is something you can do to limit your exposure to them, however: maintain a low risk profile. Rate your risk Risk is something that too many investors ignore -- until, that is, they end up on the wrong end of it. The equation goes like so: "Higher Risk = Higher Return." Risk is not a dial, though. Higher risk can also mean grievous losses, and it's after just such an event that many investors determine that their appetite for risk wasn't so high after all. And at that point, it's too late. Risk can be defined many different ways, most of which are fairly inane. I define risk as the potential for permanent capital loss. Every time you buy shares of a company, you're buying it as it exists, plus some assumptions of future earnings and cash flow. The more expectations built into the future, the more risk you're taking. Apple Computer (Nasdaq: AAPL), for example, has had a golden couple of years, boosted by its must-have iPod and strong brand. But much of the value that is reflected in the stock price is based upon events that have not yet happened. That's risk. Similarly, Motley Fool Hidden Gems recommendations Blue Nile (Nasdaq: NILE) and Nuance Communications (Nasdaq: NUAN) have scant current earnings and enormous potential. Regardless of what you think of any of these companies, this fact alone makes them high-risk stocks. Should the market fall, they will be vulnerable. Bring it on All that said, I welcome a market collapse. OK, that's not entirely true. I'm a red-blooded portfolio checker, just like you, and I feel sick when my stocks are deep in the red. But in my job, and in my investing, I yearn for situations where the market has made companies cheap when they deserve better. When people were jumping off bridges in 1974 because the market was terrible, Warren Buffett was deploying hundreds of millions of dollars into opportunities that he considered to be nearly risk-free. You know why Warren Buffett is celebrated as one of the greatest investors in history? Well, in no small part, it's because of what he was doing in 1974 -- increasing his exposure to stocks without really increasing his level of risk. Call that the year that made Warren Buffett "WARREN BUFFETT." The Foolish bottom line I have no pretenses to be that guy or any other guy. But I do know that when the market collapses, I'll be buying. And I expect those who take the long view with me and Fool co-founder Tom Gardner at Hidden Gems to use any imminent market fall to help earn substantial future returns. Bill Mann is the co-advisor of Motley Fool Hidden Gems, the Fool's small-cap newsletter service. A brand-new issue, with two small-cap stock recommendations, releases today at 12 noon ET. A free 30-day trial to Hidden Gems gives you full privileges to the service, including today's picks. Though Bill likes to talk about market collapses, Hidden Gems is humming along since inception in July 2003 -- Tom and Bill's picks are outperforming the market at large by an average of 29 percentage points. Bill does not hold shares in any company mentioned in this article. eBay is a Stock Advisor recommendation. We're telling you all this because of the Fool's recession-proof disclosure policy. |
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