# Has The Market Crash Finally Hit America? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 21, 2015, 10:01pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480 "2015-08-21T22:01:15Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [August 23, 2015, 9:29pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/41 "2015-08-23T21:29:54Z")
> [@Duckster](#): > > If the markets do not recover with a dead cat bounce, we are in freefall that will not stop for a while. I stand by my prediction the DJIA will hit 10,000. It would take a world event equal to the events of 2007-2009. Very unlikely. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [August 24, 2015, 12:49am UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/42 "2015-08-24T00:49:31Z")
> [@Duckster](#): > > I stand by my prediction the DJIA will hit 10,000. I will literally bet you anything I own that won’t happen within the next two years. I’ll bet money I DON’T have on that. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 24, 2015, 3:17am UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/43 "2015-08-24T03:17:27Z")
Dow 10k would be pretty terrifying - perhaps even test my resolve on my current asset allocation. But I’m still very much in the accumulation stage, so a nice bear over the next few years followed by a raging bull for the following few wouldn’t be the worst thing ever… sequence of returns can really shake up even the best laid plans. Isn’t something like market peak 2 years after retirement about the best-case scenario? Assuming you appropriately de-risk in to ITR’s favorite bond fund? Although I do find it a bit odd that one would boast about being in bonds compared to equities over the last few years… And just to provide some context (which may be up-thread), this latest “plunge” took the S&P 500 all the way down to where it was… oh, last December. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [August 24, 2015, 7:10am UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/44 "2015-08-24T07:10:32Z")
I agree that someone investing for the long term should generally prefer stocks to bonds, but I don’t think bond investments are as unwise as some claim. For one thing, the Efficient Market Hypothesis implies that bond yields are set to an appropriate (risk-adjusted) level compared with other investments. But more importantly each person must consider his own aversity to risk. As a thought experiment, imagine that you get up the nerve to plunge into the market and the market immediately falls another 15%! Do you consider selling? If you want to sell then, you probably shouldn’t have bought in the first place. I once read that for a mutual fund which returns 9% on average, the typical customer of that fund gets (much?) less than 8%. That’s because, contrary to behaviour in “ordinary” markets, many people in the stock market have a tendency to Buy High (excitement and greed) and Sell Low (fear); the typical mutual fund client will be trading in and out of the fund at the “wrong” times. Before making a major move into stocks, I recommend a person predict his own emotions and buy only if excessive fear won’t be a problem. ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [August 24, 2015, 1:46pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/45 "2015-08-24T13:46:08Z")
I can’t resist a great bargain. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [August 24, 2015, 3:01pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/46 "2015-08-24T15:01:47Z")
I’ll tell you the great thing about the DJIA going down over 1,000 at the open: it’s that when it later rebounds and is only down by about 500 you feel like you’re doing OK. 🆒 ---
**Author:** ![Habeed](https://avatars.discourse-cdn.com/v4/letter/h/a587f6/32.png) [@Habeed](https://boards.straightdope.com/u/Habeed)\ **Post date:** [August 24, 2015, 3:29pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/47 "2015-08-24T15:29:02Z")
So…I kind of wish I had actually bought some shorts now. I mean, I know, a broken clock and all, but man I could have made some money today. 1000 points is a lot, right? ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [August 24, 2015, 3:30pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/48 "2015-08-24T15:30:38Z")
> [@Fotheringay-Phipps](#): > > I’ll tell you the great thing about the DJIA going down over 1,000 at the open: it’s that when it later rebounds and is only down by about 500 you feel like you’re doing OK. 🆒 I’ve made $10,000 since 9:00am this morning! At this rate, I’m going to be a bazillionaire by Wednesday! ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [August 24, 2015, 3:34pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/49 "2015-08-24T15:34:19Z")
How will we know the bottom point? Is there a point at which all the computer trading programs say “buy”? ---
**Author:** ![Habeed](https://avatars.discourse-cdn.com/v4/letter/h/a587f6/32.png) [@Habeed](https://boards.straightdope.com/u/Habeed)\ **Post date:** [August 24, 2015, 3:38pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/50 "2015-08-24T15:38:47Z")
> [@ralph124c](#): > > How will we know the bottom point? Is there a point at which all the computer trading programs say “buy”? Makes you wonder. No computer program wants to be a sucker, though, so it’s probably based on derivatives or how fast things are plummeting. In a “run on the bank” market crash, the computer programs probably join the herd of panicked traders like everyone else. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [August 24, 2015, 4:34pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/51 "2015-08-24T16:34:10Z")
> [@ITR\_champion](#): > > That line of argument has been true in the past, for the United States stock market. It is not true for all countries. It is not guaranteed to be true in the future. > > In 1990, Japan’s Nikkei index reached almost 40,000. Over the next couple years, it plunged, losing most of its value. Throughout the 1990’s, it hovered around 20,000. Today it is still below 20,000. So if you’d invested in Japanese stocks in 1990, you would have lost half of your money and never gotten it back. > > In the United States, we tend to think that we’re better than other countries. We’re larger, we have a more diversified economy, and we’re just plain smarter, so something like that couldn’t possibly happen to us. Maybe we’re right. On the other hand, maybe we’re wrong. I’ve decided not to gamble on it. This is simply my decision. I’m not critiquing anyone else’s decisions. I don’t have to believe in American exceptionalism to say that the numbers/history favors a diversified portfolio driven by equity gains. If there’s anything I feel to be “unique” about American markets, it’s the regulatory environment (imperfect though it is, it’s better than most of the world) and the fact that so many US equities have global markets for their products. Even in the case of Japan, though, I feel like our current-day snapshot is only part of the picture. If you compare Japan in 1990 to the US in 1929, you’re still better off in the market than out of it. There are no guarantees, of course, but I think the risk of being out of the market is still higher than the risk of being in it. ---
**Author:** ![Habeed](https://avatars.discourse-cdn.com/v4/letter/h/a587f6/32.png) [@Habeed](https://boards.straightdope.com/u/Habeed)\ **Post date:** [August 24, 2015, 5:23pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/52 "2015-08-24T17:23:35Z")
> [@dracoi](#): > > Even in the case of Japan, though, I feel like our current-day snapshot is only part of the picture. If you compare Japan in 1990 to the US in 1929, you’re still better off in the market than out of it. There are no guarantees, of course, but I think the risk of being out of the market is still higher than the risk of being in it. Not quite sure what you are saying. If you entered the market in Japan in 1989, buying stocks on the index evenly, you’d still be waiting on getting your money back today, as near as I can tell. You basically loaned money to someone who, after 25 years, has given half your money back. Not great, and you would have been better off stuffing it under a mattress. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [August 24, 2015, 6:10pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/53 "2015-08-24T18:10:59Z")
> [@Habeed](#): > > Not quite sure what you are saying. If you entered the market in Japan in 1989, buying stocks on the index evenly, you’d still be waiting on getting your money back today, as near as I can tell. You basically loaned money to someone who, after 25 years, has given half your money back. Not great, and you would have been better off stuffing it under a mattress. I’m saying that the market crash of 1929 in the US also had a very long period to recover from… but the people who said “It crashed and won’t come back” cost them more in eventual gains than what was lost in 1929. Here’s a [graph of the DJIA](https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average#/media/File:DJIA_historical_graph_to_jul11_%28log%29.svg) to illustrate what I mean. It took 25 years (give or take) to break even (ignoring any factor not clearly illustrated in that graph), and just 15 more years to go up 400%. If we were all sitting here in 1954 saying “25 years and it merely broke even! Stay away from the stock market.” we’d have been seriously kicking ourselves by 1969. So… history is not a predictor of future performance and all those provisos… it is a risk. It’s just a risk that pays off more often than not. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [August 24, 2015, 8:04pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/54 "2015-08-24T20:04:18Z")
> [@dracoi](#): > > … So… history is not a predictor of future performance and all those provisos… it is a risk. It’s just a risk that pays off more often than not. And right there your conclusion doesn’t follow from your premises. You meant: "So… history is not a predictor of future performance and all those provisos… it is a risk. It’s just a risk that [del]pays[/del] \*has paid \*off more often than not _in the past and I hope/expect that to continue_. Which is a reasonable thing to hope/expect \*if and only if \* you have reason to believe many of the conditions which \*did \*exist, \*still \*exist, and \*will continue \*to exist. FWIW, I agree with you that being out of the market is the biggest risk most US types face over the next 10-20 years. But there’s a lot about American exceptionalism that was well-founded between 1930 and, say, 2010 which is looking arguably less well-founded in 2020 and 2030. To simply ignore that while repeating a mantra about the Dow in the 1960s is silly. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [August 24, 2015, 8:56pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/55 "2015-08-24T20:56:29Z")
Yeah. This was a fun day. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [August 25, 2015, 1:42am UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/56 "2015-08-25T01:42:39Z")
> [@Jonathan\_Chance](#): > > Yeah. This was a fun day. One of my squadron mates decided when his time was up that he didn’t want to go to the airlines. He wanted to become a stock broker. This [Black Monday (1987) - Wikipedia](https://en.wikipedia.org/wiki/Black_Monday_(1987)) was his first day on the job at Merrill Lynch, then quite a powerhouse. We kidded him mercilessly about damn near destroying the Western world in the first few hours of his new career. Hey Bob, watcha got planned for an encore, eh??? etc. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [August 25, 2015, 8:34pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/57 "2015-08-25T20:34:40Z")
No dead cat bounce today. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [August 25, 2015, 8:36pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/58 "2015-08-25T20:36:26Z")
There was actually a huge dead cat bounce today. Problem was that - like other dead cats - after the initial bounce it turned around and fell again. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 26, 2015, 8:30pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/59 "2015-08-26T20:30:13Z")
So how high will this cat bounce, I wonder… ---
**Author:** ![Truman\_Burbank](https://avatars.discourse-cdn.com/v4/letter/t/ecc23a/32.png) [@Truman\_Burbank](https://boards.straightdope.com/u/Truman_Burbank)\ **Post date:** [August 27, 2015, 12:49pm UTC](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480/60 "2015-08-27T12:49:46Z")
Pretty good bounce yesterday (Wed), looking for something similar today. [Previous page](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480.md?page=2) [Next page](https://boards.straightdope.com/t/has-the-market-crash-finally-hit-america/728480.md?page=4)