stock market was up today...

[lawgator1]

You are both wrong and both right.

The market went down after Obama won because traders believed it would go down, and so they sold into it. Not based on Obama. But based on the assumption as to how the market would react.

The play's the thing.

 

[05_never_again]

You are both wrong and both right.

The market went down after Obama won because traders believed it would go down, and so they sold into it. Not based on Obama. But based on the assumption as to how the market would react.

The play's the thing.

The market in all likelihood was going to have one final flush regardless of who was elected. The stock market peaked in the summer of 2007 floundered around in a downtrend during the second half of 2007 and first half of 2008, then crashed in September 2008, then bled out until March 2009. The banks had just been bailed out, the real estate market was continuing its implosion, and the job losses peaked in early 2009. It was firmly in a bear market and already had crashed before he was even elected. I don't think Obama being elected had a thing to do with that final flush, and it certainly had nothing to do with the huge losses that had occurred prior to his election. IMO, a lot of the selling that occurred in Q4 2008/Q1 2009 were folks who only read the quarterly 401(k) statements and panic selling once their statements came in the mail. That always happens at market bottoms. The "Oh s**t, I was down 30% last year, I better sell!" people.

There's always volatility around elections, and the 2008 election took place in the middle of a financial crisis, so any volatility was magnified. To draw sweeping conclusions on the basis of 2 CNN articles that claim to know exactly why the market did what it did on those days is hilarious.

 

[Sea Ray]

You're debating why it went down. The fact is the market was going up until the day Obama was elected. Then it flipped. That's a fact.

 

[Velo Vol]

What are you saying? Just observing that the multiple is high?

And how rapidly it has gotten there. Think it's added $700 billion in little more than two months. Where does it start looking bubbly?

 

[Velo Vol]

IMO, a lot of the selling that occurred in Q4 2008/Q1 2009 were folks who only read the quarterly 401(k) statements and panic selling once their statements came in the mail. That always happens at market bottoms. The "Oh s**t, I was down 30% last year, I better sell!" people.

Did that happen this year?

 

[tennvols77]

2020 been great.

 

[05_never_again]

Did that happen this year?

You could have had some degree of panic retail selling at the start of Q2 because the March decline was so sudden and vicious; even higher velocity than the 1929 crash. The market bottomed on 3/23 and rallied into month-end, then the first week of April was kind of rocky, then it was off to the races. It's impossible to know for sure though.

I'd say any retail panic this time was tempered by the fact that the markets had fallen from what were all-time highs. in Fall 2008, the market crashed after it was already down about 30% from the previous high. A lot of people's portfolios by Q4 2008/Q1 2009 were down as much as 50% from the previous high in 2007, not to mention the value of their house had probably cratered too, perhaps also lost a job. A deep recession was in full swing when the market crashed, and many had reached their max pain threshold. This go around, I think people were obviously very rattled, but most probably held through it.

 

[85SugarVol]

So . . .

View attachment 302408

I don’t know. Wish I could call bubbles like some others on here can...

When it’s earnings slow and no longer support the multiple?

 

[TheColdVolTruth]

You're debating why it went down. The fact is the market was going up until the day Obama was elected. Then it flipped. That's a fact.

Now you're making **** up. The DJIA closed at 14000 in July, 2007.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
The index closed at 11000 in September, 2008, for a loss of more than 20% off the 07 high.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
The Dow closed at 9600 on election day in 2008.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
That is down 13% from just 6 weeks prior and over 30% down from the 07 high. To say the market went up until the day he was elected is simply not true. The Dow was down more than 30% in the year and a half prior to election day. It continued downward to the March, 2009 bottom before reversing, but it certainly wasn't going up until he was elected. I am far from an Obama supporter, but this is ignorant. The reasons for the market turmoil then and the ensuing response can be debated, but the closing prices on the DJIA cannot.

 

[Sea Ray]

Now you're making **** up. The DJIA closed at 14000 in July, 2007.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
The index closed at 11000 in September, 2008, for a loss of more than 20% off the 07 high.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
The Dow closed at 9600 on election day in 2008.
DJIA | Dow Jones Industrial Average Historical Prices - WSJ
That is down 13% from just 6 weeks prior and over 30% down from the 07 high. To say the market went up until the day he was elected is simply not true. The Dow was down more than 30% in the year and a half prior to election day. It continued downward to the March, 2009 bottom before reversing, but it certainly wasn't going up until he was elected. I am far from an Obama supporter, but this is ignorant. The reasons for the market turmoil then and the ensuing response can be debated, but the closing prices on the DJIA cannot.

I'm not making anything up. I documented everything. I documented that the market was on a nice week long rally before Obama won the election. If you didn't get that then you didn't read my links. So if the market was way up for a week, was it just coincidence that it dropped for the next 4 months?

 

[Sea Ray]

You're showing your ignorance. You obviously don't understand money, markets and the stock market. You also don't understand what was going on in Nov 2008. I will try one more time to educate you but my patience with ignorant people has its limits:



CNNMoney.com Market Report - Nov. 4, 2008

See the optimism in that article? Here's the very next day:



CNNMoney.com Market Report - Nov. 5, 2008

The market continued its decline for months

https://www.smh.com.au/business/us-stocks-drop-20-after-obama-takes-office-20090306-8qe5.html

Those are facts.

Note the huge rally right before Obama's election:

Stocks rallied last week at the end of one of the worst months in Wall Street history. For the week, the Dow was up 10.1%, the S&P 500 was up 9.5% and the Nasdaq had gained 9.8%.

By any measure, a gain of 10.1% is a huge gain for one week. Then the day after the election, things go down big time.

 

[TheColdVolTruth]

I'm not making anything up. I documented everything. I documented that the market was on a nice week long rally before Obama won the election. If you didn't get that then you didn't read my links. So if the market was way up for a week, was it just coincidence that it dropped for the next 4 months?

"A nice week long rally." LOL. That's a pretty good time horizon you have there. You "documented everything" by picking one week out of an 18 month slide. You can select short intervals in any market and create a talking point. The market dropped over 30% from mid 2007 to election day in 2008, and you want to believe a narrative that it turned solely on the election. Do you remember McCain suspending his campaign in October of 2008 to go back to DC for emergency economic measures? Hell, he wanted to cancel a debate due to the economic crisis. That was the climate leading up to that election. Either candidate was going to see some real market challenges after the election due to the economic collapse.

 

[05_never_again]

You're debating why it went down. The fact is the market was going up until the day Obama was elected. Then it flipped. That's a fact.

What the hell are you talking about? You are reading way too much into the price action on just 1 or 2 trading days. The way you're describing this, you make it seem like the market was straight up, making highs daily until Election Day, then went straight down. Do you even know or remember what the context was?

From October 2007 until the summer of 2008, the market steadily trended downward before crashing in late September/early October 2008, when Lehman and AIG collapsed. There was then a very brief rally in late October/early November; it re-tested the low from the initial selloff, plus there were more rate cuts (I assume this is what you mean by "the market was going up until the day Obama was elected").

The market had been selling off and continued to sell off after the election due to the collapse of Lehman and AIG and the near-collapse of several other investment banks, plus a very deep general economic recession.

 

[05_never_again]

Note the huge rally right before Obama's election:



By any measure, a gain of 10.1% is a huge gain for one week. Then the day after the election, things go down big time.

Reading CNN articles about one day in the stock market doesn't give you a good understanding of this stuff.

According to your logic, then you also have to say that Trump crashed the stock market after he was elected, because the futures were down several hundred points at one point the night of the election.

Think about your own argument for a second - you think Obama tanked the market, yet the market put in a very brief bottom and rallied into an election most people thought Obama was going to win. Nobody really thought McCain was going to win a week before the election. Wouldn't that mean that perhaps the markets wanted Obama to win? Not saying that's what I actually think, but playing devil's advocate.

 

[Rasputin_Vol]

Don’t know what kind of timeline they are held to. But not just ETFs, any Mutual Fund that tracks a Dow index as well. They all have to re-balance.

I checked the Diamonds, Exxon and the others are still listed as of today.

Ask @05_never_again
I think he assumes those ETFs and mutual funds don't have to have the underlying stocks anyways. Besides, your just looking at getting "exposure" to the Dow... you don't necessarily need the actual Dow stocks in the funds.

 

[Velo Vol]

Note the huge rally right before Obama's election:

By any measure, a gain of 10.1% is a huge gain for one week. Then the day after the election, things go down big time.

There was never a time when the smart money on Wall Street expected McCain to win. Obama was ahead in the polls the entire fall.

 

[05_never_again]

Ask @05_never_again
I think he assumes those ETFs and mutual funds don't have to have the underlying stocks anyways. Besides, your just looking at getting "exposure" to the Dow... you don't necessarily need the act Dow stocks in the funds.

Nope. I don't think you know how ETFs work. The ETF is a trust that does own the underlying stocks, just like GLD owns actual gold. What I'm saying is that you can't exchange a share in the ETF for shares of the underlying stocks, just like you can't exchange shares in GLD for the underlying gold. That's not how ETFs work, it's not how they're designed to work, and the ETF providers never have claimed that they work like that.

You're buying shares in a trust that owns the underlying assets, not the underlying assets themselves. The shares of the trust fluctuate in line with the value of the underlying assets and track it very closely.

If you want to own the underlying Dow stocks, you should buy the Dow stocks directly, just like if you want to own physical gold you should just buy the physical gold directly, not GLD.

 

[85SugarVol]

I have been on record stating that I thought Netflix was one of the FAANGs that could drop in a post Covid economy.

Will be interesting to see how many of their new subscribers they actually retain.

Netflix Stock Hits All-Time Highs as Subscribers Plan to Stay Post-Pandemic | The Motley Fool

 

[05_never_again]

I have been on record stating that I thought Netflix was one of the FAANGs that could drop in a post Covid economy.

Will be interesting to see how many of their new subscribers they actually retain.

Netflix Stock Hits All-Time Highs as Subscribers Plan to Stay Post-Pandemic | The Motley Fool

I see no reason why people will leave the service post-COVID. Cord cutting has been a thing for several years now anyway, and COVID is just accelerating it. Just like WFH; that's here to stay because we were moving in that direction anyway. However, whether NFLX is a buy at these levels, especially for a long-term investment is another question.

I'd contrast NFLX with some of other COVID trends, like people buying campers en masse because of travel concerns and vacations getting cancelled. Tons of people buying these things aren't really traditional campers and will eventually go back to their "normal" vacations in time. If you're in the market for a camper, you'll probably get a great deal 12-18 months from now as a bunch of people will be looking to unload them. Probably boats and jet skis too - a ton of people who don't typically camp or own a boat are buying recreational stuff like that now because their vacation got cancelled.

 

[Sea Ray]

There was never a time when the smart money on Wall Street expected McCain to win. Obama was ahead in the polls the entire fall.

Fact is the market dropped 20% after Obama was elected which is worse than any President ever. If you don't attribute that to him, that's on you.

 

[05_never_again]

Fact is the market dropped 20% after Obama was elected which is worse than any President ever. If you don't attribute that to him, that's on you.

The market went down 5% the last time I had a bad case of diarrhea. This was also when COVID first emerged, but if you don't attribute that to my health at the time, that's on you.

 

[Rasputin_Vol]

Nope. I don't think you know how ETFs work. The ETF is a trust that does own the underlying stocks, just like GLD owns actual gold. What I'm saying is that you can't exchange a share in the ETF for shares of the underlying stocks, just like you can't exchange shares in GLD for the underlying gold. That's not how ETFs work, it's not how they're designed to work, and the ETF providers never have claimed that they work like that.

Yes, you can redeem the shares for gold.

Creation and redemption

The Trust creates and redeems the Shares from time to time, but only in one or more Baskets (a Basket equals a block of 100,000 Shares). The creation and redemption of Baskets requires the delivery to the Trust or the distribution by the Trust of the amount of gold and any cash represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV of the number of Shares included in the Baskets being created or redeemed. Creations of Baskets may only be made after the requisite gold is deposited in the allocated account of the Trust. The initial amount of gold required for deposit with the Trust to create Shares for the period from the formation of the Trust to the first day of trading of the Shares on the NYSE was 10,000 ounces per Basket. The number of ounces of gold required to create a Basket or to be delivered upon the redemption of a Basket gradually decreases over time, due to the accrual of the Trust’s expenses and the sale of the Trust’s gold to pay the Trust’s expenses. Baskets may be created or redeemed only by Authorized Participants, who pay a transaction fee for each order to create or redeem Baskets and may sell the Shares included in the Baskets they create to other investors.

Gold exchange-traded funds (ETFs) give traders exposure to the price movements of gold without having to buy the physical underlying asset. Gold ETFs are typically structured as trusts. Under this structure, the ETF holds a certain number of gold bars for each share of the ETF issued

SPDR Gold Shares - GLD

The SPDR Gold Shares ETF (GLD) is one of the largest gold ETFs. As of June 2020, the fund held roughly 36.49 million ounces at vaults in London and other locations, for a net asset value (NAV) of $63.43 billion. Each share of the ETF is worth 0.093995 ounces of gold.

The ETF doesn't have nearly enough gold to cover each share of GLD. That is the point.

You've got today about 428,600,000 shares outstanding. That is equivalent to 4286 baskets. Meanwhile, 1 basket is 10,000 toz of gold. So that means that in order to be able to redeem 4286 baskets, they would need 42,860,000 toz of gold in their holdings. Yet, their actual holdings (as of a about 45 days ago) was 5 million toz short.

TRUST’S GOLD HOLDINGS AS OF JUNE 30, 2020

At June 30, 2020, the Custodian held 37,902,740.8 ounces of gold on behalf of the Trust, 100% of which is allocated gold in the form of good delivery gold bars

 

[Velo Vol]

Yes, you can redeem the shares for gold.

No.

 

[Rasputin_Vol]

No.

I just posted the prospectus, genius.

 

[Velo Vol]

I just posted the prospectus, genius.

OK, then post the section of the prospectus that details how John Smith, who owns five shares of GLD, can have his gold delivered to his house.