Posted on 02/06/2018 5:28:24 AM PST by EBH
The Stock Market and The Greater Fool Theory:
“The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. In other words, one may pay a price that seems “foolishly” high because one may rationally have the expectation that the item can be resold to a “greater fool” later.”
Here you can see that only in 2017 (The start of the Trump presidency) can you see the Fed raising rates at a very steep angle. There is no need to raise rates as inflation is very low.
The Fed will continue raising rates as they have SAID they will . They want to crash the stock market and real estate market to cause a recession to destroy Trump.
Noticed there is an absence of market analyst saying what a great buying opportunity this is.
Its about percentages! If the stock market has a record high, you can expect a “record correction” ... but in percentages they are relatively normal.
“”due to profit taking by liberal democrats””
HA! That would mean politicians as according to them, the middle class has been decimated by Republicans for years and they have nothing.....no investments/no profits!
BTW, once the price begins to slide downward through stop loss trigger prices, there is a quick buildup of sale orders which chase prices downward.
I never use stop loss orders for that reason.
As the market stands right now, I think traders are going to be testing the market for a bottom so they can jump in a pick up some bargains.
Soros at work? I have no idea how he manipulates markets and currencies but I’m sure he is at work - not even behind the scenes anymore - with Schiff as his puppet! Don’t even pretend to understand any of it except to know that there’s a whole lot of corruption going on!
Sudden markets drop happen when people stop expecting a drop, all caution is thrown aside and everyone gets on the band wagon. What we’re seeing is a herd panic. This drop will be sharp but short, and the market will “catch its breath”. This is how healthy markets behave.
No, he was whining.
In the business of buying cheap and selling dear, stock prices had become very very dear.
Just sell everything today, and buy it back next week.
Uh no, guess you didn’t read far enough of what I wrote.
Let me rephrase,
That bubble is going to need to deflate, I am grateful President Trump has taken steps to institute tax cuts and bring work back home as mitigating factors.
In all markets prices change depending on supply and demand. In free and healthy markets this is understood and accepted. In manipulated markets, whether by government or cabals, prices are manipulated artificially and it hard to discover the "real and true" value of a thing. Even in fair and open markets there are times when the price discovery/corrections get out of whack due to the emotional nature of people. Focus on fundamentals and this too shall pass.
I’ve heard several theories & no one thinks it’s just one thing.
One theory is that it’s a correction and will level off, another is the market reacting to possible rising inflation, another is that a new Federal Reserve Board Chairman was sworn in Monday, another is that investors are reacting to the market drop last week causing a big sell-off. I’m sure there are more. Whatever it is, the market hit 20,000 on Jan 25, 2017 and it’s now 24,340. We’re still way ahead of the game. The European markets are tumbling because of Wall St. so the market will react to that & is expected to go down again today.
Hang in there
Well, this time it was supposed to be different. It isn’t. High P/Es and very low but rising interest rates. There is only one direction for stock prices as we see over and over again. With a strong underlying economy after a correction to normal valuations - whatever that means - things should be fine.
I agree that course isn’t going to be easy these first 4 years with President Trump. And none of it will be his fault either. As I see it, it will all fall on the democrats heads as they are the one’s who created the bubble.
There are two other times in history it has peaked this much, 2000, and 1929. Remember what happened next.
The supply is fine but the credit markets are going to charge more interest. A lot of people buy stocks with loans (leverage) and are selling to pay off their margin accounts before the interest rates go up. This is part of the over supply of stocks with real buyers waiting to find the bottom before stepping up.
A lot of the irrational exuberance is the consequence of the QE put in place to ensure nothing bad happened that would interfere with the inevitable election of Her Holy Highness.
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