Comments on: 5 Stages of Market Grief http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 17:26:45 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: zee ..... http://z-stock.blogspot.com/ http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77558 zee ..... http://z-stock.blogspot.com/ Fri, 18 Jan 2008 09:29:41 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77558 DOW at 11,200---now that's what i call acceptance---- coming to a theatre in your neighborhood---soon--- zee--http://z-stock.blogspot.com/ DOW at 11,200—now that’s what i call acceptance—-
coming to a theatre in your neighborhood—soon—
zee–http://z-stock.blogspot.com/

]]> By: The Big Picture http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77560 The Big Picture Tue, 08 Jan 2008 19:50:37 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77560 <strong>Stock Trader's Alamanac: Uh-Oh</strong> Dow is off another 180 as I type this, ostensibly on rumors of Countrywide Financial (CFC) bankruptcy. As I noted in May 2005, while sitting next to Angelo Mozila on Larry's show, I wanted nothing to do with the long side of that company. However, I do... Stock Trader’s Alamanac: Uh-Oh

Dow is off another 180 as I type this, ostensibly on rumors of Countrywide Financial (CFC) bankruptcy. As I noted in May 2005, while sitting next to Angelo Mozila on Larry’s show, I wanted nothing to do with the long side of that company. However, I do…

]]> By: POZ http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77557 POZ Tue, 08 Jan 2008 16:27:46 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77557 OK Barry, Since you have such depth of insight AND extesive experience in this area I expect a post declaring stage 5 acceptance as having been reached, so we can all invest our devalued dollars. OK Barry,
Since you have such depth of insight AND extesive experience in this area I expect a post declaring stage 5 acceptance as having been reached, so we can all invest our devalued dollars.

]]> By: DavidB http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77556 DavidB Tue, 08 Jan 2008 12:23:39 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77556 MS, If you are still following this thread I think these things can be translated into a chart. 1. Denial Charts still are going up and not reacting to bad news 2. Anger Charts start to top out and volatility increases. The volatility is more the sign than the topping as the news is starting to trigger more and more selling yet more buyers try to push the price back into a trend 3. Bargaining The chart begins to turn but you see snap back rallies as shorts pull back to protect capital and bulls 'buy the dips'. They even call the drops periods where 'stocks are on sale' 4. Depression(or recession) In all fairness we could also call this the recessionary stage to better align with the markets but this is the point where the rallies get weaker, the volume increases, the news turns negative and the shorts gain their control of the market. The bears pretty much run the trend and the bulls have either run out of money or they refuse to reallocate cash. This leads quickly to.... 5. Acceptance Basically 'stocks are in a freefall' and buyers can't be found. Volume has picked up as even the bulls with any money left now become bears. The media is carrying sandwich boards touting the end of the world and government officials are making pronouncements to calm the public while they accept business leaders behind closed doors willing to accept any deal with the devil they request to get jobs created. Again volume reaches its peak. Buyers go on strike and the market is finally allowed to find its mutually agreed upon fair market value of a share somewhere at the bottom MS,

If you are still following this thread I think these things can be translated into a chart.

1. Denial

Charts still are going up and not reacting to bad news

2. Anger

Charts start to top out and volatility increases. The volatility is more the sign than the topping as the news is starting to trigger more and more selling yet more buyers try to push the price back into a trend

3. Bargaining

The chart begins to turn but you see snap back rallies as shorts pull back to protect capital and bulls ‘buy the dips’. They even call the drops periods where ‘stocks are on sale’

4. Depression(or recession)

In all fairness we could also call this the recessionary stage to better align with the markets but this is the point where the rallies get weaker, the volume increases, the news turns negative and the shorts gain their control of the market. The bears pretty much run the trend and the bulls have either run out of money or they refuse to reallocate cash. This leads quickly to….

5. Acceptance

Basically ‘stocks are in a freefall’ and buyers can’t be found. Volume has picked up as even the bulls with any money left now become bears. The media is carrying sandwich boards touting the end of the world and government officials are making pronouncements to calm the public while they accept business leaders behind closed doors willing to accept any deal with the devil they request to get jobs created. Again volume reaches its peak. Buyers go on strike and the market is finally allowed to find its mutually agreed upon fair market value of a share somewhere at the bottom

]]> By: James Cullen http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77555 James Cullen Tue, 08 Jan 2008 04:06:09 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77555 I find the Cramer point interesting when viewed in light of his reaction to the last rate cut in December - if you had to pick an emotion, it definitely showed acceptance. Hope the video works... http://www.cnbc.com/id/15840232?video=606994286&play=1 I find the Cramer point interesting when viewed in light of his reaction to the last rate cut in December – if you had to pick an emotion, it definitely showed acceptance.

Hope the video works…
http://www.cnbc.com/id/15840232?video=606994286&play=1

]]> By: Pat Gorup http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77554 Pat Gorup Mon, 07 Jan 2008 23:32:43 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77554 "With respect to inflationary concerns keeping the Fed from aggressively lowering rates, there is an excellent piece by Caroline Baum on Bloomberg on why inflation should not be of concern with declining home asset values, anemic money supply growth and tightening bank credit." --There have been several noted economists who have written articles that lowering rates will not solve any of these problems. To recap; lowering rates: 1) Will not revert "declining home asset values". 2) The money supply is hardly "anemic" as it doubles every 5 years. 3) Won't influence banks to loosen credit because they are too busy building reserves to deal with writedowns from off balance sheet transactions/assets and they don't trust each other. So, why cut? Oh yeah..so the market can rally again and postpone the inevitable. “With respect to inflationary concerns keeping the Fed from aggressively lowering rates, there is an excellent piece by Caroline Baum on Bloomberg on why inflation should not be of concern with declining home asset values, anemic money supply growth and tightening bank credit.”

–There have been several noted economists who have written articles that lowering rates will not solve any of these problems.

To recap; lowering rates:
1) Will not revert “declining home asset values”.
2) The money supply is hardly “anemic” as it doubles every 5 years.
3) Won’t influence banks to loosen credit because they are too busy building reserves to deal with writedowns from off balance sheet transactions/assets and they don’t trust each other.

So, why cut? Oh yeah..so the market can rally again and postpone the inevitable.

]]> By: D H http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77553 D H Mon, 07 Jan 2008 19:33:47 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77553 Looks like Ben Stein is changing his tune and admitting the economy is screwed. Seems like he is finally entering the "bargaining" stage: http://finance.yahoo.com/expert/article/yourlife/59999 Looks like Ben Stein is changing his tune and admitting the economy is screwed. Seems like he is finally entering the “bargaining” stage:

http://finance.yahoo.com/expert/article/yourlife/59999

]]> By: Kimo http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77552 Kimo Mon, 07 Jan 2008 19:25:03 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77552 I love this post and the comments... but what stage am I in, if I short this market from here to October??? Acceptance?? I love this post and the comments…

but what stage am I in, if I short this market from here to October??? Acceptance??

]]> By: v http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77551 v Mon, 07 Jan 2008 19:20:57 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77551 Wow. Incisive analysis piece. You have a high batting average BR, but you crushed this one out of the park. And may I add my own philosophically analytical comment here: In my opinion, one of the greatest accomplishments of (relatively) free markets is that they have turned mob rule into mob think. It is quite hard for an individual to profit criticizing mob rule; but a whole 'nother ball game when it comes to mob think. Wow. Incisive analysis piece. You have a high batting average BR, but you crushed this one out of the park.

And may I add my own philosophically analytical comment here:

In my opinion, one of the greatest accomplishments of (relatively) free markets is that they have turned mob rule into mob think. It is quite hard for an individual to profit criticizing mob rule; but a whole ‘nother ball game when it comes to mob think.

]]> By: Fred http://www.ritholtz.com/blog/2008/01/5-stages-of-market-grief/comment-page-1/#comment-77550 Fred Mon, 07 Jan 2008 18:23:35 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/07/5-stages-of-market-grief/#comment-77550 Is this your "Death of Equities" post? Is this your “Death of Equities” post?

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