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Monday, October 13. 2008

Stock correction is not a bad thing

It does seem that the Dow should be at 7000, because it's been a ten-year bubble from the trendline. Graph from Coyote, who explains. I am not inclined to own a stock unless the S&P drops to the 20-year trend: the odds of losing $ are too great. My tiny nest egg is in Vanguard bond funds until we see a serious correction.

 

Posted by The News Junkie in Hot News & Misc. Short Subjects at 07:09 | Comments (10) | Trackbacks (0)

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Excellent, excellent visual.
#1 mare on 2008-10-13 07:59 (Reply)
This graph proves that gloabal warming peeked in 2000. We are now going into a period of gloabal cooling, just look at that downward trend. I think today, after the G7 meeting, where real important people saved the world from another ice age, the warming trend will go up. This is to assure all squirrels that ther will be enough nuts to go around for everyone. We all know that squirrels panic when they don't have enough nuts. They commit suicide by throwing themselves in front of horse less carriages.
#2 jappy on 2008-10-13 08:18 (Reply)
ACORN can handle those nuts. When they sign those squirrels up, they can give them acorns instead of meth and Marlboros. What's up with the possum suicide, though? They eat bugs. Has global cooling killed all the bugs? I ask because a possum stood up in front of my car yesterday and yelled 'ALLAH DOW JONES!' just before I felt the 'tha-dumpety-dump'. I wasn't sad he cashed in his chips because a possum out in broad daylight has rabies which leads to psychorodentia.
`
#2.1 Meta on 2008-10-13 13:26 (Reply)
Meta, youze be way smarter then me! I think that dumpety- dump you felt was Luther pushing Humpty Dumpty off the wall. That egg didn't fall. He was pushed. Sounds like you ran into a Muslim possum. You guys have got to get me out of this nunnery. I'm losing it !!!
#2.1.1 jappy on 2008-10-13 14:24 (Reply)
Amen on Vanguard!
#3 Pat on 2008-10-13 08:58 (Reply)
One problem with the graph: the vertical scale should really be logarithmic, not linear as it is. That's because you're interested in the year-to-year percentage gain.

In other words, if you've doubled your money, you also expect to double your gains.

The linear scale doesn't show this, only the log scale.

If you make the plot with a log scale, you come up with something around 10000 on the Dow. Which means we're a little below the trend line, but not exceptionally so.

Because "markets will fluctuate."
#4 ChrisF on 2008-10-13 09:20 (Reply)
Chris, would appreciate your graph. Education makes for better decisions. More people making better decisions suggests a smoother market. Thanks!
#4.1 JAM on 2008-10-13 17:02 (Reply)
The world is not filled with people eager to hand you money.
#5 Ron Hardin (Link) on 2008-10-13 09:34 (Reply)
Wanna bet?
#5.1 Voluptuous slut on 2008-10-13 10:41 (Reply)
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=spx&time=&freq=
#6 Jack Reacher on 2008-10-14 21:40 (Reply)

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