The share price of DHFL plunged as much as 60 percent to hit a fresh 52-week low of Rs 246.25 amid high volumes before paring losses to end down 43 percent. Yes Bank slumped as much as 34 percent before recovering to close down 29 percent. Stocks of Indiabulls Housing Finance and LIC Housing Finance were also down by over 20 percent and 15 percent, respectively, at one point. Shares of Bajaj Finance and Bajaj Finserv too took a hit.
As a result, while some stores sold new games and machines, most retailers stopped selling video game consoles or reduced their stock significantly, reserving floor or shelf space for other products. This was the most formidable barrier that confronted Nintendo, as it tried to market its Famicom system in the United States. Retailer opposition to video games was directly responsible for causing Nintendo to brand its product an "Entertainment System" rather than a "console", using terms such as "control deck" and "Game Pak", as well as producing a toy robot called R.O.B. to convince toy retailers to allow it in their stores. Furthermore, the design for the Nintendo Entertainment System (NES) used a front-loading cartridge slot to mimic how video cassette recorders, popular at that time, were loaded, further pulling the NES away from previous console designs.
Indeed, Tesla’s performance has all the makings of a stock market crash chart to reflect the irrational exuberance of 2018. Investors have pushed Tesla’s stock market valuation to such a degree that it has infected the healthiest hedge fund. It’s a one-stock Black Monday warning! Note the Tesla stock market chart. It’s moving on hope and expectations alone; every time the quarter results are released, the stock tends to drop.
Hi Christine, I can’t offer advice. There is a lot of risk in 2020. Trudeau may botch the trade negotiations and that could could start a Toronto slide. Without the auto sector, Whitby and Oshawa could get hit hard. Good thing is Trudeau could be gone next year and the Americans might listen to a new conservative government. Harper’s already visited the back door at the white house. From here to 2020 could be rough in Canada. Good luck with your sale.
Finally, don't think you can avoid market crashes by getting out of stocks before one. That's "market timing," and it rarely works. Index-fund pioneer John Bogle has quipped, "Sure, it'd be great to get out of stocks at the high and jump back in at the low... [but] in 55 years in the business, I not only have never met anybody who knew how to do it, I've never met anybody who had met anybody who knew how to do it."
Its pretty obvious she's completely failed. She may as well have said she never wrote the current Brexit deal, Barnier did or Merkel did. In more enlightened times her head would be on a spike by now, down by the Thames. But what do we expect from just the latest traitor to Sovereignty on the list, that includes: Heath, Major, Brown and the rest . . We need a new broom to sweep all this rubbish away, once and for all . .
Japanese asset price bubble 1991 Lasting approximately twenty years, through at least the end of 2011, share and property price bubble bursts and turns into a long deflationary recession. Some of the key economic events during the collapse of the Japanese asset price bubble include the 1997 Asian financial crisis and the Dot-com bubble. In addition, more recent economic events, such as the late-2000s financial crisis and August 2011 stock markets fall have prolonged this period.
In the second half of 1982 the number of cartridges grew from 100 in June to more than 400 in December. Experts predicted a glut in 1983, with 10% of games producing 75% of sales. BYTE stated in December that "in 1982 few games broke new ground in either design or format ... If the public really likes an idea, it is milked for all it's worth, and numerous clones of a different color soon crowd the shelves. That is, until the public stops buying or something better comes along. Companies who believe that microcomputer games are the hula hoop of the 1980s only want to play Quick Profit." Bill Kunkel said in January 1983 that companies had "licensed everything that moves, walks, crawls, or tunnels beneath the earth. You have to wonder how tenuous the connection will be between the game and the movie Marathon Man. What are you going to do, present a video game root canal?"
On April 21, 2015, nearly five years after the incident, the U.S. Department of Justice laid "22 criminal counts, including fraud and market manipulation"  against Navinder Singh Sarao, a trader. Among the charges included was the use of spoofing algorithms; just prior to the Flash Crash, he placed thousands of E-mini S&P 500 stock index futures contracts which he planned on canceling later. These orders amounting to about "$200 million worth of bets that the market would fall" were "replaced or modified 19,000 times" before they were canceled. Spoofing, layering, and front running are now banned.
Hi Gord. Thanks for this informative piece. Its best info I’ve found on the net. I plan to invest in a $250K – $300K property in Ontario without living in it as I am in UAE. Which town of Ontario do you suggest I should invest in to keep my rental income coming, along with chance of property appreciation. Toronto is surely very expensive now so we are think about these towns: Oshawa, Guelp, berries or Milton…what would you do if you had this much of savings and wanted to invest in Ontario Market for 2 years
This guideline has one exception: a stock market crash. If the market as a whole, measured by all three major indexes, loses hundreds of points (multiple percentage points), there's generally been a shock to the system, such as 9/11 or an unexpected political development or absolutely terrible economic news, such as the collapse of a major currency. In recent memory, bugs in automated, algorithmic trading have caused smaller crashes.
With that in mind, the fact is that the Buffett Indicator is at its highest point in history -- meaning that stocks have never been valued as high as they are now in terms of market cap to GDP. While this indicator doesn't necessarily mean that the tides will turn anytime in the near future, it may be a smart idea to start thinking a little defensively.
For example, he quotes the very low average household net worth?s of households. Households 45 to 54 have less than $200,000 mean net worth. But when median net worth is taken into account for the same group, the number is closer to $700,000. Doesn't this support current home prices while at the same time highlighting a bigger issue, the widening diversity of haves and have-nots in America? Also, San Diego is presented as the least affordable housing, $379,000 average home vs. $60,000 average income. That's a great fact but does it take into account the large military population that is generally lowly paid but highly transient that may be more renter than buyer in that area? I theorize that these many people are lowering average household income while substantially not trying to purchase homes.
One disconcerting aspect is that large avalanches, epic earthquakes or giant forest fires do not seem to be very special: They appear to be just less frequent, scaled-up versions of small ones. If this is true, then a stock market crash may not be special at all, but merely a larger-than-usual down day, and just as unpredictable. This would present a big challenge to traditional investment methods.
As an investment banker who buys blocks of mortgages around America this is an important subject as to whether the value of my collateral will deteriorate. Talbott does a good job presenting his case that there is a relationship between household income and housing prices. His point is well taken that low interest rates have fueled this boom and that when rates rise, housing prices will have to come down. So, from the perspective of his thesis, I found this to be well written and well documented even if I agree there is a risk but do not believe that it will be significant.
The US Fed meets on September 26th but the CME Fed tool is already indicating a probability of 95% for a rate hike by the Fed. That is not good news for the Indian markets. It will impel the RBI to front end another rate hike to prevent any risk of capital market outflows. Also higher Fed rates will lead to a stronger dollar and that by itself will put pressure on the INR, which is already vulnerable at this point of time.
It is not a big surprise, however, that many investors today remain interested in the forecasts of financial analysts regardless of their success. Humans in the past consulted oracles, crystal balls and tea leaves. It’s in our nature: As the proverb goes, “tell me a fact, and I'll learn; tell me a truth, and I’ll believe; but tell me a story and it will live in my heart forever.” We are attracted to story-telling, and when it comes to investing we seem to be searching for the most compelling narratives about the unknowable future, regardless of how accurate they turn out to be.
Stepping back from statistics and the numbers, it's a general perception that stock market crashes are a response to unexpected and severe bad news. That would make sense right? The market is a very sophisticated machine whereby each individual buyer and seller trades on their information and the result is a market price that is, in a sense, smarter than any individual.
I find it hard to believe inventory increased by 50 percent, do you have any numbers on that? To see why inventory is low you need to look at the number of sales as well. If we were selling many more homes that would indicate inventory is low because people are buying everything up, but sales are down. That indicates it is not investors buying everything, but there are simply not enough houses for sale. That is what I see in most markets. There are not enough houses for everyone who wants to buy.
Sixth, Europe, too, will experience slower growth, owing to monetary-policy tightening and trade frictions. Moreover, populist policies in countries such as Italy may lead to an unsustainable debt dynamic within the eurozone. The still-unresolved “doom loop” between governments and banks holding public debt will amplify the existential problems of an incomplete monetary union with inadequate risk-sharing. Under these conditions, another global downturn could prompt Italy and other countries to exit the eurozone altogether.
Yes, the market will fall by about 10% about once a year on average. However, those bigger crashes where the market just carries on down that are prominent in market memory, are rare events. Since many statistical techniques are reliant on a lot of data for robustness, those same techniques may be out of their depth when examining crashes. In fact, these events seem to break the patterns that seem to govern the market most of the times.
So, when will the stock market crash again? There is no way to accurately predict a bear market. The FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) have led the bull market over the last 9 years. If these stocks fail to keep their earnings momentum going, investors may lose confidence in the market. So far only Facebook and Netflix have disappointed investors, while Apple remains as strong as ever.
Another criticism of certain conventional risk models, is that they regard market crashes as extremely unlikely. Market models suggested 2008 was an incredibly rare event. However, the 1930s crash was fairly similar. Having extremely improbable events just eighty years apart makes very little sense. Of course, we could be massively unlucky, but it is of course far more likely that the model is wrong. And by wrong, we should be clear that we mean inappropriate for the high stress environments of a crash. Most of the time these models hold up just fine, but at the extremes they don't.
That being said, the Buffett Indicator, while it's not a flawless indicator, does tend to peak during hot stock markets and bottom during weak markets. And as a general rule, if the indicator falls below 80%-90% or so, it has historically signaled that stocks are cheap. On the other hand, levels significantly higher than 100% can indicate stocks are expensive.
So, I should go ahead and take that last $15 I have in the bank out?? (better yet ill use it to fill up a gas can) Looks like this isn’t going to end well. The problem is the talking bimbos on the idiot box keep telling the lotus eaters of this world that everything is fine. (And they believe them!!) Have you tried to wake some of these people up to the fact that this will not end well?? My friends all thought I was crazy when I decided to move to the country to an off grid cabin in the woods two years ago, still not 100% ready but at least I don’t have to walk among them. God bless and prep on!
This book has lots of good statistical information to back up its premises...which seem to boil down to...Buy a home within your means (and he does define how to find that out, which is a good thing if you can't figure it out on your own)...Anticipate that the home market could go down as interest rates rise making your home harder to sell in a pinch (to his credit, he tells you how to avoid that too)...and a few other common sense rules of buying that could be applied to many things. If a person is going to spend 6 figures on anything, you would think that they would take the time to learn what they are doing, but it is obvious to the author and to many other people watchers in the world that too many people just don't put effort into watching where they put their money. So, if you are a person who carefully spends your money without rushing into any purchase, you probably have enough sense to not have to buy this book; and if you are person who is just the opposite, you probably aren't too concerned even now about learning anything about your home purchase, so you aren't even reading this review. Last note: if you were going to buy properties to use for investment purposes, this book could be of assistance. Hope this helps.
Thank you Andrea, you’re welcome! Amazing, and a beautfiul area to live. I’d like to drill down into all the LA communities. Incredible that your home appreciated that much over 2 years. Could you get a quote on the rental income upgrade and compare ROI? Are there local restrictions? I think selling is the right move for most, even if you don’t have an idea of where to move to right now. I guess it depends on your financial status and whether you need your jobs and whether you can take a sabbatical. If you hold on for the time it takes to the convert the garage, you could earn another 100k? The demand for rentals is expected to persist. A lot of buyers will like that separate living space even if they don’t rent it out. Are the rentals you could live with reasonably priced in your area of South Bay or will you have to do the long commute?
There is ongoing debate among economists and historians as to what role the crash played in subsequent economic, social, and political events. The Economist argued in a 1998 article that the Depression did not start with the stock market crash, nor was it clear at the time of the crash that a depression was starting. They asked, "Can a very serious Stock Exchange collapse produce a serious setback to industry when industrial production is for the most part in a healthy and balanced condition?" They argued that there must be some setback, but there was not yet sufficient evidence to prove that it would be long or would necessarily produce a general industrial depression.
In this book, published in 2003, Talbott predicted a housing crash that would start around 2005. In fact, the peak of the housing market was the summer of 2005. It took longer for the fall in prices to take down the whole economy. Talbott explained in an easy-to-understand way why it was inevitable that housing prices would fall and crash the economy. The advice over what to do about it wasn't as good as the prediction.
“There’s no question when you look at last week, some of the selling is the result of programmatic selling because as volatility goes up, some of these algorithms force people to sell,” Solomon told CNBC’s Wilfred Frost. “Market structure can, at times, contribute to volatility and one of the things that we’re spending a bunch of time thinking about at the firm is how changes in market structure over the course of the last 10 years will affect market activity.”
The absurd result of valuable stocks being executed for a penny likely was attributable to the use of a practice called "stub quoting." When a market order is submitted for a stock, if available liquidity has already been taken out, the market order will seek the next available liquidity, regardless of price. When a market maker’s liquidity has been exhausted, or if it is unwilling to provide liquidity, it may at that time submit what is called a stub quote—for example, an offer to buy a given stock at a penny. A stub quote is essentially a place holder quote because that quote would never—it is thought—be reached. When a market order is seeking liquidity and the only liquidity available is a penny-priced stub quote, the market order, by its terms, will execute against the stub quote. In this respect, automated trading systems will follow their coded logic regardless of outcome, while human involvement likely would have prevented these orders from executing at absurd prices. As noted below, we are reviewing the practice of displaying stub quotes that are never intended to be executed.
Can I guarantee this approach will lead to the best results over the long-term? Of course not. But at least you'll be following a disciplined rational strategy rather than engaging in a never-ending guessing game of trying to decide when to get out of the market (and where to put your money once you do) and then trying to figure out when to get back in. That's a game you can't consistently win.
Marc, I hope you and your kids can stay in So Cal, but can you see how the money and people are being vilified for wanting to be part of California’s successful economy and lifestyle. The real villains are those who are preventing development. And that new development really drives the economy, thus giving California a chance to compete in the global age. Other cities in Canada and the UK have the same problem and in each case it’s politicians squeezing supply. And the actions they’re taking does point to a recession eventually. If California’s polticians remove constraints, you’ll have lower prices in San Diego, LA and the SF Bay Area. The market alway solves itself.
The New York Times then noted, "Automatic computerized traders on the stock market shut down as they detected the sharp rise in buying and selling". As computerized high-frequency traders exited the stock market, the resulting lack of liquidity "caused shares of some prominent companies like Procter & Gamble and Accenture to trade down as low as a penny or as high as $100,000". These extreme prices also resulted from "market internalizers", firms that usually trade with customer orders from their own inventory instead of sending those orders to exchanges, "routing 'most, if not all,' retail orders to the public markets—a flood of unusual selling pressure that sucked up more dwindling liquidity".
According to Lee, there are two key factors that will soon bring more institutional interest to the markets. First, it will be the upcoming launch of the digital assets platform Bakkt by the operator of major global exchange New York Stock Exchange (NYSE), Intercontinental Exchange (ICE). Announced in August this year, Bakkt recently confirmed a “target” launch date for Jan. 24, 2019.
Hi Kesh. You’re welcome. I can’t advise you however if you check the Toronto condo market during February, you’re giving the market time to bottom out. Anything under $500k will in extreme demand because of the stress test rules. $900 a square foot is scary, especially for a 1 bedroom. However, immigration is rising fast, there’s not much inventory, and there is a lot of reason to consider the possibility of a housing boom rather than a housing crash. The government doesn’t want to sincerely increase supply, so they’re going to try to kill demand. That’s where they run the risk of killing an economy that’s still dependent on real estate. But Millennials need somewhere to live as do all these new immigrants. The question you should consider before buying is will Trudeau and Wynne get routed out of office before they create a recession? Are you investing or do you need to live in the unit?
After a one-day recovery on October 30, where the Dow regained an additional 28.40 points, or 12 percent, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak (i.e., bear market rally) of 294.07 on April 17, 1930. The following year, the Dow embarked on another, much longer, steady slide from April 1931 to July 8, 1932, when it closed at 41.22—its lowest level of the 20th century, concluding an 89 percent loss rate for all of the market's stocks.
Using a simple options calculator (like that available at options-price.com) we can calculate how our put options purchased in the example above would perform after a 20% decline in the span of just a month. In this hypothetical example, SPY drops to 175 and implied volatility rises to 55 (for this example I took the VIX level of 45 in October 2002, as suggested by Spitznagel, and added 10 points for 10% out-of-the-money put options). Our puts have gone from $9 each in value to $328.10. We own 55 of them so they are now worth just over $18,000 in total.